On Thursday, Deutsche Bank highlighted the auto sector as a significant risk, cautioning about potential challenges amidst Germany's planned defense and infrastructure investments. The bank cited factors like potential U.S. tariffs, economic difficulties, slow electric vehicle adoption, and competition from China.
Noteworthy car manufacturers such as Volkswagen and Mercedes-Benz are based in Germany. Volkswagen faced another challenging year.
Despite concerns, investor sentiment towards Deutsche Bank has improved recently due to a government spending agreement, boosting the economy.
Deutsche Bank's CEO, Christian Sewing, emphasized the positive impact of defense spending on the economy.
While the bank expects increased revenue in 2025, challenges persist due to a weak domestic economy and ongoing struggles in the car industry.
Deutsche Bank reported revenue growth last year but a decline in overall profit, citing higher bonuses and salaries. CEO Sewing is working towards ambitious profit and cost targets.
While the U.S. economy may slow and eurozone growth may rise, Germany is expected to lag behind, according to Deutsche Bank.
In addition to concerns about the auto sector, the bank also mentioned previous risks related to commercial real estate. Despite existing issues, the sector is anticipated to stabilize.
Deutsche Bank reassured that the auto sector's difficulties have had limited impact on its portfolio, accounting for approximately 1.5% of its total loans.