Deutsche Bank Hits Record €47 Billion Client Inflows; Sector Falls 7%

Deutsche Bank, Germany's biggest investment bank, attracted a record €47 billion from new clients during the third quarter. The lender also posted an after-tax profit of €1.9 billion.

But the wider banking sector remains under pressure. European bank shares have dropped 7% since the start of September.

Where Did Deutsche Bank’s €47 Billion Come From?

Of the total inflow, a record €31 billion flowed into the asset management division. The bulk of that was directed into passive funds, which mirror market indices at low cost.

These inflows generate fee income. Management fees at the division climbed 14% due to higher average assets under management, according to the bank.

DWS, the separately listed asset management unit, also announced record inflows for the first nine months on Wednesday.

A record €17 billion went to the Private Bank, which caters to retail and affluent clients.

“We see encouraging momentum in Germany, where increasing confidence among clients is creating further growth opportunities for us,” Christian Sewing, the bank’s CEO, said in a statement.

Can Europe’s Bank Stocks Recover on Results Like These?

Deutsche Bank's stock gained roughly 3% in Frankfurt trading on Wednesday morning. Later, its US-listed shares settled to a 1.6% increase at the time of writing.

Provisions for loan losses increased 20% year-over-year to €501 million. The bank attributed the rise to commercial property sales and a one-time client issue in Asia.

The next test for European banks is lending, a Reuters report indicated.

“The capital positions are strong, but the key thing is the lending activity picking up,” Reuters reported, citing Dorian Carrell, head of multi-asset income at Schroders.

Deutsche Bank's loan portfolio expanded 5% year-on-year, adding €22 billion.

European bank profits rose roughly 18% in the second quarter. However, Barclays fell short of expectations on October 22, causing the sector index to drop 2.7% that day.

A rise in bond yields, which pushed French borrowing costs above Italy's, also weighed on global bank stocks this month.

Deutsche Bank reaffirmed its target for 2026 revenue of over €33 billion. CEO Sewing also sees potential to exceed a 2028 goal for return on tangible equity above 13%, a measure of profitability on core capital.