Deutsche Bank Lures Depositors With Higher Rates as Analysts Curb Enthusiasm

Deutsche Bank lifts one-year deposit rate to 2.70% to attract new cash, but analysts flag rising loan loss provisions and trade war risks as first-quarter record profits face scrutiny.

Germany’s largest lender is pulling in two directions at once. The retail arm is aggressively courting fresh cash with a sharply improved fixed-term deposit offer, while the corporate side faces growing skepticism from analysts who see cracks beneath a record-breaking first quarter.

The bank has lifted the interest rate on one-year fixed deposits to 2.70%, a jump of half a percentage point from its previous terms. The deal, available from €2,500, comes with a catch: the money must be new to the Deutsche Bank group. Legally structured as a savings deposit, the product requires customers to give three months’ written notice before maturity, or the contract automatically rolls over at the prevailing rate.

The deposit push comes as the bank’s latest risk report flags mounting macroeconomic threats. Management has explicitly warned that an escalation in global trade conflicts—particularly US tariffs and restrictive measures against China—could sour market sentiment. Tight labor markets add to inflation risks, potentially crimping loan growth and fueling defaults.

So far, those warnings remain theoretical. The first quarter delivered a net profit of €1.9 billion on total revenues of €8.7 billion, comfortably beating market expectations. The return on tangible equity hit 12.7%, while the cost-to-income ratio dropped to 58.9%. Management is sticking with its medium-term target of pushing that return above 13% by 2028.

But analysts are not buying the rosy narrative. Kepler Cheuvreux slashed its price target from €34 to €29.50, maintaining a “Hold” rating. The research house questions whether the recent profit surge is sustainable given the deteriorating credit environment. Provisions for loan losses jumped to €519 million in the first quarter, a red flag that market watchers interpret as a sign of pressure to come. Currency effects further weighed on operating results.

Barclays also trimmed its earnings estimates for 2027 and 2028. Analyst Flora Bocahut pointed to negative surprises buried in the quarterly report’s fine print, arguing that significant hurdles remain for any re-rating of the stock. She left her price target unchanged at €32.

The stock reflects the mixed signals. On Thursday, shares edged up to €27.45, but the year-to-date decline stands at roughly 18%. The relative strength index has surged to an extreme reading of 90 points, signaling a heavily overbought condition in the near term. The 50-day moving average, which the stock closed just above at €27.23 on Wednesday, offers a modest technical floor.

Shareholders have something to look forward to. The board has proposed a dividend of €1.00 per share for the upcoming annual general meeting on May 28. Management is also expected to provide further details on capital allocation, including the €1 billion share buyback program, which is already about 60% complete.