Deutsche Bank saw its shares drop 4% on Thursday after the lender revealed details of its private credit holdings in its Annual Report 2025 and Pillar 3 Report 2025. The reports disclose that the institution's private credit exposure rose to €25.9 billion, up from €24.5 billion a year earlier.
Management flagged the rapid growth of the private credit market and the sector's relative opacity as a developing risk subject to heightened external scrutiny. The disclosure comes against a backdrop in which the broader private credit market, estimated at $1.8 trillion, has faced investor withdrawals following recent default events.
The bank said roughly 73% of its private credit portfolio is made up of multi-asset lender facilities that are backed by diversified mid-market corporate loans in the U.S. and EU. These facilities are managed with advance rates of about 65% and are described as almost entirely rated investment grade.
The remaining 27% of the exposure is allocated among a set of other private credit instruments, including single and multi-asset lenders' net asset value financing, single asset financing, non-bank commercial real estate lending, business development companies and subscription finance.
Deutsche Bank emphasized that it applies conservative underwriting standards to these exposures, noting specific consideration of sponsor and investor quality. The lender links advance rates to the risk profile of the underlying exposures and manages portfolios under dedicated risk appetite frameworks, which include regular stress testing.
Most of the private credit exposure is reported as loans at amortized cost within the Financial and Insurance Activities Industry Sector, where the bank records €129.8 billion in loans at amortized cost. An additional €2.5 billion of related exposures is shown across other categories.
Alongside private credit, the bank highlighted another emerging risk theme tied to the technology sector, specifically pointing to concerns about valuations and the durability of AI-led capital expenditure and the potential credit implications for clients.
Investors reacted to the expanded disclosure and the flagged risk themes, prompting the intraday share move. Deutsche Bank's reports present its current private credit positioning and internal controls but also acknowledge external pressures facing the asset class.
Further context
The reports detail the composition of the private credit book and the bank's approach to underwriting and risk management without introducing additional figures beyond those disclosed. Deutsche Bank frames the private credit portfolio as conservatively underwritten and actively monitored, while also noting market-wide stress points and valuation concerns in technology sectors that could affect client credit profiles.