Deutsche Bank shares dropped approximately 5% on Thursday after the bank's annual report drew attention to risks related to its growing private credit portfolio. The report said that the portfolio increased by about 6%, rising to nearly 26 billion euros in 2025 from 24.5 billion euros in 2024.
While the bank emphasised that it was not materially exposed to direct private-credit losses, the filing noted potential indirect credit risks stemming from connections between portfolios and counterparties. Those indirect channels, the bank said, were a focus for risk assessment because they can propagate stress across otherwise separate positions.
The disclosure arrived amid mounting investor concern over the broader private credit market, which the report and market commentary characterize as having about $2 trillion in assets. Investors have grown more wary after evidence of deteriorating credit quality in parts of the sector and after scrutiny of exposures to the software industry.
Deutsche Bank pointed to the failures of several sub-prime lenders in the United States as a catalyst for wider investor attention to private credit risks. According to the report, those events increased focus on underwriting standards and the potential for fraud risk within private credit transactions.
In response to those concerns, the bank reiterated that it applies conservative underwriting standards to its private credit holdings. The annual report disclosure follows a period of heightened scrutiny of the private credit sector as institutional investors and lenders reassess risk appetites and monitoring practices.
Analysts and market participants noted the share-price reaction reflected investor sensitivity to any suggestion of additional credit vulnerability, even when a firm states that direct exposures remain limited. The report’s language underscored both the growth of Deutsche Bank’s private credit book and the emphasis the bank places on assessing interconnected counterparty and portfolio risks.
Deutsche Bank’s filing did not quantify potential indirect exposures beyond noting the portfolio’s size and its growth rate, nor did it indicate any current material direct losses tied to private credit. The combination of a larger private credit position and heightened sectoral scrutiny appears to have been sufficient to prompt the market move on Thursday.
Clear summary: Deutsche Bank reported that its private credit portfolio grew to nearly 26 billion euros in 2025, up from 24.5 billion euros in 2024. The bank disclosed potential indirect credit risks through connected portfolios and counterparties but said it is not materially exposed to direct private-credit losses. The disclosure coincided with broader investor concerns about the $2 trillion private credit industry, including deteriorating credit quality and software-sector exposure.