Four reasons why the skepticism is justified

• First, the third quarter shows how dependent Deutsche Bank is on its prime discipline in investment banking: bond trading. The pandemic gilded the division’s results for several quarters. But US competitors are benefiting more from the current boom in mergers and acquisitions.
  Deutsche Bank has also made more money in this discipline, but compared to bond trading, its advisory business is a dwarf. This also applies to private and corporate customer business, which could well need an adrenaline rush from rising interest rates.
• Second: Deutsche Bank may be making progress with its restructuring, but recently wobbled on the savings targets that earned it so much respect from investors: it has cashed its promise to reduce the spending base to 16.7 billion euros and is only striving to spend a maximum of 70 cents for every euro earned.
  Certainly useful, but more difficult to measure. The institute is currently reporting extra renovation costs that will save money in the medium term, but cannot yet be measured.
• Third: In the pandemic year 2020, Deutsche Bank benefited from the “home bonus”. No country in Europe launched such large rescue programs during the pandemic as Germany. This also relieved the banks’ loan books. The further the recovery in Europe progresses, the less the impact of this location advantage.
• Fourth: The pandemic-related dividend restrictions imposed by the European Central Bank will no longer apply. With this, Deutsche Bank has to measure itself again with international competitors, who are likely to give their shareholders much more generosity than they can possibly do themselves.
  As important as it is for CEO Christian Sewing to deliver on his own goals – to this day, no analyst believes that he will achieve his return target of eight percent in 2022, that is no longer enough for the stock market.

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