Deutsche Bank Outlook Lifted as Moody’s Sees Sustainable Rebound

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Deutsche Bank AG had the outlook on its credit rating lifted by Moody’s Investors Service, which said Germany’s largest bank may finally be able to execute on a strategic plan after years of setting targets and then missing them.

The lender’s “senior management and staff have laid the foundation for a sustainable turnaround,” Moody’s analyst Michael Rohr wrote in a note on Tuesday to explain his decision to lift the outlook to stable from negative. The bank “is solidly on track to achieving full execution of its proposed plans, in particular with regard to sustaining its revenue base in its fixed income-related businesses.”

The outlook upgrade comes less than a week after Deutsche Bank reported consensus-beating third-quarter results, driven by revenue growth in its trading unit, which has been boosted for the past year by a broad-based market rally. The results have helped Chief Executive Officer Christian Sewing persuade investors that his strategy, unveiled 16 months ago as the biggest overhaul in two decades, is on track.

“Continued and relentless execution will remain paramount in achieving the medium-term strategic milestones,” Moody’s said. “The coronavirus pandemic presents additional challenges” and compounds “earnings strain from the persistently ultra-low interest rates on its German banking franchise as well as its asset and wealth management operations.”

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