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Top 3 Financial Stocks: Deutsche Bank
Deutsche Bank shares have dropped by 75% over the last six years. The largest German financial conglomerate lost ground after the debt crisis in the Eurozone when negative interest rates hit profit margins badly. Now, the situation is changing as the European Central Bank (ECB) may raise interest rates to 2% by the end of 2022. Deutsche Bank estimates that would bring an additional €700 million in 2022 and a further €2.5 billion in 2025. According to DB CFO’s estimates, the revenue may be generated between €26 billion and €27 billion.
ROTCE, or return on average tangible common shareholders’ equity ratio that is computed by dividing net earnings applicable to common shareholders by average monthly tangible common shareholders' equity, may hit 8% this year and 10% until2025. Rising interest rates led to an increase of deposits, even to a larger amount that was expected by the management in early 2022. If the target of increased deposits is met over the coming years it may mean that DB share prices may more than double.
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