Company: ADZCF
Filing Date: 2025-03-13
Form Type: 20-F
Source: 0001159508-25-000020
Chunk: 14

Company: DEUTSCHE BANK AKTIENGESELLSCHAFT
Filing Date: 2025-03-13
Form: 20-F
Chunk 14
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 case of liquidation and therefore respective higher impacts on provisions for credit losses. Asset price reduction of collaterals could also lead to a potentially higher refinancing risk. A persistently higher than expected interest rate environment would also increase the risk of corrections in highly valued segments of risk asset markets, e.g. the technology segment of U.S. equity markets. A prolonged, more severe bout of volatility could adversely impact global monetary and credit conditions and Deutsche Bank’s business environment. Commercial real estate (CRE) markets remain under stress from the impact of higher interest rates, borrowing costs and tight lending conditions leading to ongoing pressure on collateral values, particularly in the office sector, and may result in higher-than-expected provisions for credit losses. Recent evidence suggests that CRE property prices and broader market conditions are stabilizing. The turn in the monetary cycle may help to support market sentiment and ease refinancing conditions from the second half of 2025 although refinancing risk remains elevated in the near term. The adjustment process in the office sector is expected to persist for the next several years.

| 13 |

| Deutsche Bank                   |
| Annual Report 2024 on Form 20-F |

Private capital markets, which include certain activities from non-bank financial institutions and private credit more broadly, may also be negatively impacted by higher-than-expected interest rates and weaker investor sentiment. The non-bank financial institutions sector is extremely broad with diverse risk profiles and vulnerabilities. A failure of one or multiple larger non-bank financial institutions has the potential to drive direct losses for banks including Deutsche Bank and other creditors or capital providers. Broader market instability with rising rates, risk aversion, market illiquidity and economic slowdown all increase the likelihood of failures occurring as returns drop and investors reallocate capital. Internal risk management approaches are commensurate to the risk profile of underlying counterparty and concentration risk exposures and although Deutsche Bank has not experienced any significant losses in the past, the bank may do so in the future. Overall, either in isolation or in combination with other risk factors such as the potential escalation of geopolitical risks (see below), the aforementioned risks could lead to a deterioration in Deutsche Bank’s portfolio quality and higher than expected credit losses as well as increased capital and liquidity demands as clients draw down on funding lines. Higher volatility in financial markets could lead to increased margin calls, higher market risk risk-weighted assets (RWA) and elevated valuation reserves. Negative impacts on investor appetite may also impact the Group’s ability to distribute and de-risk capital market commitments, which could potentially result in losses