Deutsche Bank sees further reduction in provision for credit losses in future

Provision for credit losses was EUR 494M in the quarter, up from EUR 245M in the prior year quarter and up slightly from EUR 476M in the second quarter of 2024. Provisions for performing loans were EUR 12M, down from EUR 35M in the previous quarter. This reflected softer macro-economic forecasts and the recalibration of overlays, partially offset by portfolio movements since the second quarter. Provision for non-performing loans were EUR 482M, up from EUR 441M in the previous quarter. The quarter-on-quarter increase was driven predominantly by the Private Bank and included residual effects from remaining impacts from Postbank integration which are expected to normalize in the coming quarters, while overall portfolio quality remained largely stable. Provisions relating to commercial real estate were down 34% compared to the previous quarter and included provisions relating to expected sales in the fourth quarter. For the first nine months, provision for credit losses was EUR 1.4B, up from EUR 1B year on year. This development was substantially driven by certain larger corporate events, for which provisions are partly mitigated by offsetting hedges; residual impacts from the Postbank integration which are expected to decrease significantly going forward; and higher provisions in commercial real estate compared to the first nine months of 2023. The bank sees signs of stabilization in commercial real estate and expects this to support a further reduction in provisions in future quarters.