S&P boosts Deutsche Bank

S&P said it raised its long-term issuer credit ratings on Deutsche Bank AG to A from A-, as well as the ratings on its branches, and its core European and U.S. subsidiaries. The agency also boosted the issue ratings on Deutsche Bank's senior unsecured (senior preferred), senior nonpreferred, tier 2 and additional tier 1 debt instruments by one notch.

“The rating action reflects Deutsche Bank's strengthened performance and resilience. The 2019-2022 transformation program established a more focused and profitable bank, and management is now focused on delivering franchise growth and operating leverage. Like those of peers, Deutsche Bank's retail and corporate banking activities have received a cyclical boost from higher interest rates that provides greater balance to the large investment bank division. We also see structural improvements, including more disciplined strategic execution and a stronger focus on cost efficiency,” the agency said in a press release.

However, S&P cautioned it sees “pockets of risk within the generally robust loan portfolio,” especially in the bank’s €32 billion non-recourse commercial real estate loan book.

The outlook is stable.

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