Deutsche Bank Surpasses Book Value for First Time Since 2008 Crisis

Deutsche Bank's stock has crossed its book value for the first time since the 2008 financial crisis, marking a significant milestone for Germany's largest bank. After 18 years of trading below asset value due to legal battles, restructuring failures, and missed earnings, the price-to-book ratio has finally broken even.

The bank's turnaround comes after a tumultuous period. In March 2020, its stock plummeted to €4.88, just 0.19 times book value, as COVID-19 froze the economy and legacy issues like ECB negative rates and restructuring costs weighed heavily. Today, Deutsche has doubled in value over the past year, riding a broader European banking sector rally.

Strategic shifts drove the recovery. Deutsche shuttered its equities trading unit, exited loss-heavy businesses, and doubled down on corporate banking and fixed-income trading. Legal clean-up, including settlements for mis-sold mortgage-backed securities, removed longstanding overhangs.

Yet challenges remain. Despite the rally, Deutsche's stock remains halfway below pre-2008 levels, with a current market cap of €65 billion versus €35 billion at the crisis trough. The bank still faces dead assets and investor skepticism after years of underperformance.