The Deutsche Bank share price has done well in 2024, rising by over 30% after the company continued doing well. It rose to a high of €17.31 on December 16, up by over 300% from its lowest point in 2021.
Deutsche Bank business is thriving
Deutsche Bank has had a strong turnaround in the past few years under Christian Sewing, who became the Chief Executive Officer (CEO) in April 2018.
Sewing’s tenure started when the company was in trouble, with some analysts predicting its eventual demise. It also came at time when it was experiencing higher CEO turnover. It had Anshu Jain and Jurgen Fitschen as co-CEOs between 2012 and 2015 and John Cryan between 2015 and 2018.
Sewing has changed the bank significantly by simplifying its operations, strengthening its core banking operations, and reducing its reliance on volatile investment banking operations. This, in turn, has made it a more profitable company.
The bank also shrunk its Wall Street ambitions where it faced substantial competition from the likes of Goldman Sachs, Morgan Stanley, and JPMorgan. Its US ambitions were fraught with substantial losses, scandals, and management turmoil at the time.
The most recent results showed that Deutsche Bank’s business was doing well despite the turmoil in the German economy. Its revenue in the year’s first nine months stood at over €22.9 billion, and the firm expects it to hit €30 billion this year.
This growth was driven by the investment bank, which helped to offset a decline in the asset management, corporate bank, and private bank. The private bank had over €27 billion in inflows, while its asset management business had €67 billion, bringing the total to €963 billion.
Deutsche Bank has also become a more profitable. Its pre-provision profit for the first nine months was €7 billion, slightly higher than the €6 billion it made a year earlier.
Like other big European banks, the company has benefited from higher interest rates in Europe and other countries. It has also implemented structural hedging, which helps it to capture its profitability when rates fall.
Deutsche Bank share price has also done well because of its dividends and share buybacks. It spent €883 million in dividend payments and €675 million in share buybacks in 2023. It has also spent about €3.3 billion in capital distributions this year.
The company has room to grow its payouts since its CET1 ratio is 13.8%, higher than some European banks. By deploying the excess cash to dividends, it hopes to reduce the ratio to 13% in 2025.
The biggest risk for the company is the ongoing deterioration of the German economy as the automobile industry continues shrinking. This is notable since the sector supported the company for decades.
Deutsche Bank share price analysis
The weekly chart shows that the Deutsche Bank stock price has been in a strong uptrend in the past few years. This rebound started when the company bottomed at €4 in 2020 at the onset of the pandemic.
The stock has risen above the key resistance level at €13.50, its highest swing in February 2022. It formed a golden cross pattern in September 2023, partially explaining why the momentum continued.
Deutsche Bank stock has remained above the ascending trendline, which has connected the lowest swings since March last year.
The stock is also approaching the 61.8% Fibonacci Retracement level. Therefore, the stock will likely continue rising as bulls target the next key resistance point at €25, about 50% above the current level.
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