Coverage: Q2 2026 · Information to 25 September 2026
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Published: 25 September 2026 | Region: Europe | Country: Germany | Coverage: Q2 2026 (April–June 2026) | Classification: Premium Intelligence
Desk view — Germany, Q2 2026
- Rates are going up again. The ECB raised its deposit rate by 25 bp on 11 June 2026 and again on 10 September, to 2.50%, as the energy shock from the Middle East conflict kept inflation above target.
- The economy is holding up better than feared: real GDP grew 0.3% quarter on quarter in Q2 2026 after 0.4% in Q1, and German CPI inflation was 2.3% in June before rising to 2.9% in August.
- Earnings at the large groups are strong but uneven. Deutsche Bank, Commerzbank and DZ BANK posted record or near-record first halves; Helaba’s pre-tax profit fell 58% on commercial real estate charges and a weaker fair-value result.
- Asset quality is stable in aggregate (NPL ratio 1.84% at German significant institutions in Q2 2026) but commercial real estate is not: NPLs on CRE-collateralised loans reached 7.16%.
- Corporate credit has woken up. Loans from banks in Germany to non-financial corporations rose by €8.2 billion in Q2, after falling by €0.6 billion in Q1, and banks reported higher corporate loan demand.
Executive summary
German banks went through the second quarter of 2026 with good earnings and a sharp change in the rate outlook. After a year on hold at 2.00%, the European Central Bank raised its deposit facility rate to 2.25% on 11 June 2026 and to 2.50% on 10 September, citing the inflationary effect of the energy shock from the Middle East conflict. The German economy grew 0.3% quarter on quarter in Q2, after 0.4% in Q1, according to Destatis, driven primarily by exports.
Profitability at the country’s significant institutions improved: the ECB’s supervisory statistics show a return on equity of 7.52% for the first half of 2026 against 7.01% a year earlier, and first-half net profit of €13.11 billion. Capital is strong, with a CET1 ratio of 16.91%, and the headline NPL ratio has held at 1.84% for two quarters. The weak point is commercial real estate, where the NPL ratio reached 7.16% and provisions pushed Helaba’s first-half pre-tax profit down to €194 million. Corporate lending recovered noticeably in Q2, while household loan demand fell by the most in three years.