Company: ADZCF
Filing Date: 2025-03-13
Form Type: 20-F
Source: 0001159508-25-000020
Chunk: 80

Company: DEUTSCHE BANK AKTIENGESELLSCHAFT
Filing Date: 2025-03-13
Form: 20-F
Chunk 80
---
 the euro area continued to be broadly flat; however, did not contract. Both banks’ tightening credit standards and the weakening of credit demand have largely come to an end, and demand for residential mortgages picked up significantly towards the end of the year due to declining interest rates. The corporate finance business recovered from the sluggish previous two years, led by debt capital markets. Trading activities in equities significantly increased globally year on year and developed positively in fixed income. The global banking industry is expected to operate in a favorable environment in 2025. With stable global economic growth and a further moderate decline in interest rates, loan growth could pick up from low levels, while interest margins could come under some pressure. Nevertheless, revenues overall could maintain positive momentum. The favorable situation in capital markets is expected to continue which should benefit investment banking and trading activities. Asset quality of banks is expected to remain largely robust and profitability should therefore remain high. Coupled with strong capitalization, banks’ capital returns to shareholders both in form of dividends and share buybacks should therefore remain substantial. After more than a decade of increasing regulation, political focus is now gradually shifting towards enhancing competitiveness, which could lead to initiatives to ease rules or to tax cuts in some jurisdictions. Strong earnings and higher stock market valuations could support sector consolidation to accelerate growth, especially domestically. Main risks for the banking sector include elevated geopolitical risks, uncertainty about future policies of the new U.S. administration around international trade and energy, the potential for a correction of elevated stock market valuations and the risk of meaningful deterioration in credit quality if interest rates do not decline as much as expected or private-sector defaults require a sudden increase of loan loss provisions. Banks in Europe are expected to face stronger headwinds than their U.S. peers from declining interest rates and margins. Subdued economic activity in major economies are expected to limit business volume growth. However, fee and commission income could partially offset lower interest income as capital market activity may increase. In addition, political initiatives to promote the Savings and Investments Union, formerly known as Capital Markets Unionappear to be gaining more traction than in previous years and could lead to significant progress in some areas such as securitization. Nominal net income is expected to remain close to its all-time high. U.S. banks could substantially benefit from the new U.S. administration’s impetus for deregulation both of the real economy and also the financial system, although its extent is uncertain and any changes, if they materialize, may take time to feed through into results. A reduction in capital