Deutsche Bank outlines an ambitious growth strategy through 2028

On Thursday, the German bank announced a comprehensive set of targets aimed at boosting profitability and shareholder returns over the next few years. The plans, unveiled at a capital‑market briefing, signal a shift toward a more disciplined cost structure and an expanded focus on wealth management and investment services.

Key performance goals

  • Return on tangible equity: The bank now projects a return of over 13 % by 2028, up from the current level. This metric, which excludes goodwill and intangible assets, is intended to provide a clearer picture of the core business’s efficiency.
  • Cost‑to‑income ratio: A reduction in operating costs is a cornerstone of the strategy, with the management team pledging further savings that will complement the expected rise in revenue.
  • Dividends: A notable change is the projected increase in payout ratio to 60 % starting in 2026. The move reflects the bank’s confidence in its cash‑flow generation and its willingness to reward shareholders more generously.

Expansion of wealth management

In a related development, Deutsche Bank confirmed plans to recruit up to 250 new wealth‑management bankers across Germany, Italy, the UK, the Middle East, and Asia. The hires, most of which will begin next year, will strengthen the bank’s private‑banking footprint and support the broader growth agenda. Claudio de Sanctis, head of the private bank, noted that the expansion will be driven by an increasing demand for tailored investment solutions among high‑net‑worth clients.

Market reaction

The announcement has generated mixed responses from analysts and investors.

  • Jefferies maintains a “Hold” rating, citing a target price of €33.
  • RBC upgrades the stock to “Outperform”, reflecting optimism about the bank’s trajectory.
  • Other analysts, such as those from Wallstreet‑Online and Finanznachrichten, highlight uncertainty, noting that the stock has slipped on the day of the briefing. The market has yet to fully digest the potential upside of the new targets, which are expected to materialise only in the medium term.

Context and outlook

Deutsche Bank’s new objectives arrive as the institution seeks to rebound from a period of volatile earnings and to solidify its position in a competitive European banking landscape. The focus on cost optimisation, coupled with a renewed push into wealth management, aligns with industry trends that favour high‑margin advisory services over traditional fee‑based retail banking.

While the bank’s market‑cap remains sizeable at €60.8 bn, its current share price of €31.87 sits comfortably below the 52‑week high of €33.35 and above the low of €15.30 last year. The price‑earnings ratio of 12.81 suggests that investors are still cautious about the pace at which profitability gains will translate into earnings growth.

In summary, Deutsche Bank’s 2028 plan represents an ambitious attempt to drive higher returns and share‑holder value through disciplined cost management, revenue expansion, and strategic talent acquisition. Whether the market will fully embrace this new direction remains to be seen, but the bank’s leadership appears committed to repositioning itself as a “European champion” in the capital‑markets arena.