Deutsche Bank (DB.US) CEO warns: Trading business is weaker than expected, relying on FIC income to make up for it.

Christian Sewing, CEO of Deutsche Bank Aktiengesellschaft (DB.US), stated on Thursday that the financing and advisory business of Deutsche Bank Aktiengesellschaft is not as strong as initially expected earlier in the year. Sewing mentioned at a financial conference that the second quarter's trading business will be weaker than what the executives had anticipated at the beginning of 2025, as companies have postponed decisions following the U.S. tariff policy. However, he also expressed that the performance of the trading business should be able to compensate for the weaker-than-expected performance of the company's trading and securities issuance advisory business. Sewing stated, "Is the financing and advisory business performing weaker than we initially imagined? Yes. But to be honest, what we're talking about is a lot of transactions being delayed, not canceled." With market volatility triggered by U.S. President Donald Trump's tariffs on trading partners and concerns about economic growth slowing down, this year has seen a slowdown in trading. Other major banks, including Bank of America Corp(BAC.US), have also issued warnings of business slowdown. Sewing expressed optimism towards Deutsche Bank Aktiengesellschaft's other business lines, such as corporate banking and retail banking, and stated that the bank will stick to its goals. He mentioned that Deutsche Bank Aktiengesellschaft's fixed income and currency traders have overcome the volatility at the start of the second quarter and are expected to achieve better performance compared to the same period last year. Sewing stated that the revenue of the trading department will increase by a "low single-digit" percentage from the second quarter of last year. This slightly falls short compared to expectations, as analysts surveyed by Bloomberg currently predict an increase exceeding 8%. "We had a very difficult start in the first 15 days of April, but we ultimately overcame the challenges," he said. "By the end of April, we were already saying that we had returned to the state we wanted to be in." He emphasized that the performance of the trading business should be able to compensate for the weaker-than-expected performance of the company's trading and securities issuance advisory business. His comments highlight the impact of the potential effects of the tariffs announced by the Trump administration in April, which shook the markets and prompted companies to delay stock and bond issuances. This year is crucial for Deutsche Bank Aktiengesellschaft as it faces deadlines to achieve ambitious cost and profit targets. Company filings show that in the second quarter of last year, Deutsche Bank Aktiengesellschaft's investment banking business generated revenue of 26 billion euros (equivalent to 29.9 billion dollars), with nearly 80% coming from the FIC (Fixed Income, Currency, and Commodities) department. Sewing stated that the broader investment banking business will operate at a level "in line with the second quarter of last year."