Thank you for joining us for our first quarter 2026 results call. As usual, our chief executive officer, Christian Sewing, will speak first, followed by our chief financial officer, Raja Akram. The presentation, as always, is available to download in the investor relations section of our website, db.com. Before we get started, let me just remind you that the presentation contains forward-looking statements which may not develop as we currently expect. We therefore ask you to take notice of the precautionary warning at the end of our material. With that, let me hand over to Christian.
Thank you, Ioana, and good morning from me. We are very pleased with our first quarter performance. We proved our resilience in an environment of heightened uncertainty and delivered record net profits as we continue to build on our strong foundations. Our financial strength enabled us to support clients to make a very solid start to this phase of our strategy and to create value for our shareholders. Both our key metrics improved over the already strong prior year quarter. Post-tax return on tangible equity rose to 12.7%, and our cost income ratio improved to below 59%. This gives us a strong start on our path towards our targets. We generated revenues of EUR 8.7 billion, up 2% or 6% excluding FX impacts, even against the strong performance in the prior year quarter, driven by focused growth areas and improving business mix.
Costs reflect disciplined execution of our strategy. We self-funded investments by realizing efficiencies as planned. Our capital position is solid. We finished the quarter with a CET1 ratio of 13.8%, well within our operating range of 13.5%-14%. Strong organic capital generation enabled us to support both business growth and deductions for distributions, which are in line with our new payout ratio of 60%. We also made good progress on the EUR 1 billion share buyback we announced last quarter. Around 60% is already completed, and we will update the market on the next distribution in respect of 2026 in due course. Let me now turn to the progress we made on scaling the global house bank on slide three. We see tangible progress across all three levers we outlined at the Investor Deep Dive last November.
In respect of focused growth, in our asset gathering businesses, we see clear momentum in both revenues and assets under management, driven by continued net inflows from clients. Strict capital discipline enabled us to deliver positive SVA in the quarter. We continue to reduce sub-hurdle mortgages in the Private Bank and redeploy resources to wealth management and within corporate lending. We also made progress on a scalable operating model, particularly in the Private Bank and Corporate Bank. We are using AI to accelerate core processes. For example, to significantly accelerate the credit process in the Corporate Bank, thus improving client experience, supporting growth and taking out costs. The franchise performance indicators we discussed in November are also demonstrating progress.
Assets under management increased nearly 9% to EUR 1.8 trillion year-on-year, or 1% during the quarter, as we attracted net flows of EUR 22 billion with around EUR 11 billion each in Private Bank and Asset Management. Loans grew to EUR 486 billion, up by around EUR 4 billion since a year ago or EUR 7 billion since the last quarter. Deposits were EUR 687 billion, up by EUR 22 billion or 3% since the first quarter last year and were broadly stable compared to the prior quarter. These developments were accompanied by strong performance across our businesses, as you can see on slide four. Looking at our divisional performance, two points are clear. First, earnings mix and balance are improving.
Our non-investment banking businesses with more predictable earning streams account for a larger share of group profits compared to the same quarter last year. Second, we have delivered strengths across the board with all businesses firing on all cylinders. All four divisions achieved a return on tangible equity of either close to or well above 13%. In the Private Bank, we made strong progress on our transformation agenda. We hired about 100 coverage staff with 80 already on board, and we are ahead of schedule on branch closures, with around 75% completed for 2026. The Private Bank increased client assets by EUR 30 billion since the start of the year, with net AUM inflows of EUR 11 billion, primarily driven by investment products. Asset Management achieved EUR 11 billion of total net flows, mainly in passive and cash.
DWS agreed to acquire a 40% minority stake in Nippon Life India Alternative Investment Fund , reinforcing our asset gathering capacity. Corporate Bank saw sustained momentum in growing business volumes year-on-year, with loans up 6% and deposits up 2%. Investment Bank performance was again very solid this quarter. We continue to support our clients in volatile markets, with client activity up 8% despite a very strong prior year. We are pushing forward the Investment Bank's commitment to innovative tech-led solutions. We launched a partnership with BlackRock, integrating our multi-award-winning House of FX technology suite into their Aladdin platform. This collaboration represents a significant step forward in delivering automated and cost-efficient FX solutions to the global Asset Management industry.
Before I hand over to Raja, I want to share my thoughts on our strategic direction in a dynamic operating environment, where recent geopolitical developments continue to underscore the importance of resilience and disciplined execution, but also underline our global house bank strategy. While the outlook for the global economy might be uncertain, the current conflict underlines Europe's need for self-reliance and strategic autonomy and investment in defense and other capabilities. When it comes to Germany, we want to reiterate that despite lower growth estimates in 2026, our medium-term view is unchanged as there are tailwinds from fiscal stimulus, and we see scope for further measures going beyond the reform framework announced earlier this month. We will continue to actively leverage our leadership position in Germany. As we explained in November, we see significant growth opportunities, including private sector investments and reforms and defense and infrastructure plans.
For example, Deutsche Bank is part of a EUR 150 million long-term finance package for Quantum- Systems, a Munich-based aerial defense systems company. We remain focused on supporting our clients in this dynamic environment. The strengths of our balance sheet, combined with our service capabilities and strategic positioning, means we are best placed to advise clients at European and global levels. From a risk perspective, we have very limited direct exposure to the Middle East, and our portfolio performance remains well within our expectation, and we continue to monitor clients across industries. In line with our disciplined risk framework, we put in place a management overlay to reflect broader macroeconomic uncertainties. Looking ahead, we reaffirm our confidence in reaching our strategic goals and 2028 financial targets. Our first quarter results, with returns of 12.7%, show the strengths of our strategy.
Much of the upside we talked about in November is already visible, providing operational flexibility to reach our financial plan and create potential for further outperformance. We are encouraged by the progress made across our levers and the enhanced collaboration across our divisions. AI is advancing rapidly, and we are working closely across our businesses and functions to make sure we deliver maximum productivity, enhanced clients experience. We see positive momentum in our operating environment. For example, EU policymakers continue to focus on European and banking competitiveness, including a more integrated capital market that would be very beneficial for European banks and particular Deutsche Bank. To sum up, we are strongly positioned to execute our scaling the global house bank strategy and deliver on our targets. With that, let me hand over to Raja.
Thank you, Christian. It feels great to be beginning my role as CFO with such strong results. It comes as we move into the next phase of our strategy, and I'm excited to be part of this journey. Before I turn to the financials, a few comments on our revamped earnings deck. You will see some changes to the presentation format today, reflecting alignment with the strategy we outlined at our Investor Day and highlighting clear focus on execution, delivery, and accountability as we shift gears to scaling the global house bank. We promised in November that we'll give you regular updates on our performance indicators over the next three years, and this is what we are doing today. Let me now turn to the performance for the quarter.
We delivered a solid first quarter with net revenues of EUR 8.7 billion, a return on tangible equity of 12.7% while maintaining a strong CET1 ratio of 13.8%. Profit before tax increased 7% year-on-year with broad-based contributions across the divisions. I'm particularly pleased with the performance in the asset gathering businesses and the corresponding greater pre-tax contributions of the Private Bank and Asset Management, both of which saw strong growth. The Corporate Bank return on tangible equity and performance indicators demonstrate visible underlying momentum, while the Investment Bank performance was solid against a strong prior year quarter. We showed discipline on cost with the cost income ratio improving to 58.9%. FX had a continued negative impact on revenues and a positive effect on expenses this quarter.
On a net basis, these movements had a negative impact on profitability. We are introducing a new disclosure on appendix slide 23, which provides transparency on FX translation impacts for select P&L and balance sheet items to highlight how these impact operating performance. Overall, notwithstanding the FX headwinds and against a dynamic backdrop, revenues continue to grow faster than costs, reflecting disciplined execution against our strategy. Let me now turn to revenues in more detail, starting on slide eight. Net revenues were slightly higher year-on-year at EUR 8.7 billion, up 6% if adjusted for FX, reflecting growth across the franchise. We saw strong growth in the Private Bank underpinned by both personal banking and wealth management. Asset Management was also up and benefited from higher performance fees related to an infrastructure fund.
Corporate Bank revenues were impacted as expected by FX and interest rate headwinds compared with the prior year period, which are already beginning to subside. Underlying business momentum is encouraging with an increase in both loans and deposits year-on-year. First quarter Investment Bank revenues were broadly flat year-on-year despite significant market volatility and FX headwinds. FICC revenues were essentially flat compared to a record prior year quarter, with IBCM slightly higher from improved debt and equity original performance. Looking at revenue composition, net interest income year-on-year revenue trends were impacted by accounting asymmetries which benefited net interest income and offset trading and other revenues. Even adjusting for this, net interest income still saw a solid increase driven by volume growth and hedge rollovers, with trading and other income broadly flat year-on-year.
Net commission and fee income performance showed continued strength, also benefiting from the higher performance in Asset Management. Overall, I'm very happy with the evolution of our revenues. Our non-investment banking businesses now contribute over 61% to our revenue mix. Let me now move to NII on slide nine. NII was strong at EUR 3.5 billion in the key banking book segments and other funding. Deposit-related NII has been stable over the past year as we have successfully offset the headwinds from interest rates with volume growth and our hedge portfolio and anticipate tailwinds going forward. Looking at the divisions, the Private Bank continued to show steady margin progression driven by increasing deposit revenues in both personal banking and wealth management. The Corporate Bank net interest income was stable, with clear signs of the rate headwinds on deposit NII diminishing compared to the prior quarter.
In FICC financing, revenues remained strong, supported by ongoing loan growth. For the full year 2026, we expect NII across key banking book segments and other funding to increase to around EUR 14 billion. The performance in the first quarter and the current view for the long-term rates gives us conviction for the 2028 targets we outlined at the IDD. You can find details of the benefit from the long-term hedge portfolio rollover on slide 25 of the appendix. Turning to slide 10, you will notice two changes. First, we are focusing on non-interest expense rather than adjusted costs, as we said we would at the investor day. Second, we're presenting non-interest expense using the same categories at the investor day. On that basis, non-interest expenses were down 2% year-over-year at around EUR 5.1 billion.
Incremental investments, particularly in technology and hiring across wealth management and IBCM, were largely offset by operating efficiencies, while volume-related growth and inflation-driven expenses were the other main drivers. Importantly, we delivered operating efficiencies of around EUR 100 million in the first quarter already, supporting our multi-year efficiency ambition. These included headcount and target operating model measures alongside non-comp optimization. In short, this reflects our disciplined cost and investment culture, keeping plans aligned with the external environment, focusing on execution, and developing capabilities to deliver our long-term targets. With that, let me turn to provision for credit losses on slide 11. Starting with asset quality, overall portfolio performance remains strong. Provision for credit losses was EUR 519 million , reflecting additional reserves on a single name CRE exposure in the Investment Bank. In addition, we took a decision to take a macroeconomic management overlay.
Excluding the single name item, CRE provisions would have been materially lower on the quarter. Our higher-risk CRE portfolio has materially reduced since 2022. The remaining risks focus on a small subset of existing defaults, which reinforces our confidence in the headwinds subsiding. As I mentioned, first quarter provisions include a EUR 90 million management overlay reflecting a forward-looking approach in a dynamic macroeconomic environment in light of the Middle East conflict. Adjusted for these effects, underlying portfolio performance is in line with expectations and supporting a normalized average run rate for provisions of roughly 30 basis points through 2028, as discussed at the Investor Day. Within private credit, performance is stable, with no losses, and the portfolio is broadly unchanged. We take a highly selective approach to do business and continue to apply disciplined underwriting standards.
The early transparency we provided last year and in our recent annual report came from a position of confidence in our portfolio. Turning to capital on slide 12. As with costs, you will see a change in presentations on this slide. We're putting greater focus on the CET1 ratio itself and the underlying drivers, with Risk-Weighted Assets shown as a key input given our growth agenda. Starting with the CET1 ratio, we ended the quarter at 13.8%, down 38 basis points compared to the fourth quarter, but squarely in line with our operating range. Net income, net of deductions for AT1 coupons contributed 53 basis points, while deductions for distributions of 32 basis points represent the 60% payout ratio from 2026. Other deductions of 11 basis points mainly relate to equity compensation, partly offset by reduced capital deduction items. Turning to Risk-Weighted Assets.
RWAs increased by EUR 12 billion, excluding FX effects of EUR 2 billion. This was driven mainly by EUR 6 billion of business growth in credit RWA, notably in loans in Corporate Bank and the Investment Bank, but also from derivatives and secured funding transactions. Market risk contributed additional EUR 2 billion of RWA. Other include changes in operational risk RWAs and smaller effects from updates to existing models. As mentioned earlier, and building on performance indicators introduced at the IDD in November, we have also refined the divisional pages to sharpen the focus on execution and provide a clear view of our strategic progress. Let's now turn to divisional performance, starting with the Private Bank on slide 14. Private Bank delivered a strong first quarter performance with profit before tax up 39% year-on-year at a 7% operating leverage.
We are very pleased with the trajectory of revenues, expenses, and attracting new client assets, a key goal for us. Client assets increased by 4% sequentially to EUR 821 billion, or by 6% excluding market and FX impacts, of which EUR 694 billion were assets under management, which marks the highest level ever. Client activity remains strong, with net assets under management inflows of EUR 11 billion predominantly into higher fee investment products. Record revenues of EUR 2.6 billion, up 5% year-on-year, were driven by a 13% increase in net interest income and slightly higher net commission and fee income. Personal banking revenues increased by 5%, mainly from deposit revenue growth, partly offset by lower revenues from other banking services.
Wealth management revenues grew by 5%, driven by higher deposit revenues and continued growth in discretionary mandates and capital market products despite elevated market volatility late in the quarter. Non-interest expenses are slightly down 1%, mainly reflecting ongoing cost discipline, lower severances, as well as select targeted investments. The cost-income ratio improved by four percentage points to 67% for the quarter. We will continue with our investment initiatives in the Private Bank throughout the year, including hiring and wealth management. Lower provision for credit losses reflects improved credit quality. Let me also add that over the past two years, the Private Bank has more than doubled its return on tangible equity and reduced its cost-income ratio by 15 percentage points. Over the same period, client assets grew by 20%, driven in particular by a 24% increase in investment products.
In this first quarter alone, wealth management generated more than EUR 9 billion of investment product inflows, setting us up for a beat of 2025 inflows, nearly matching the full 2025 inflows in just the first quarter. These results underscore the strength of the business and its significant growth potential. Turning to slide 15 to Asset Management segment. Return on tangible equity improved by 27 percentage points to 50%, with profit before taxes increasing by 37% year-on-year, driven by higher revenues and lower costs. As a reminder, and as outlined at our investor day, the return on tangible equity calculation now reflects the full allocation of the regulatory capital minority interest benefit to the Asset Management segment.
Revenues rose by 10% versus the prior year quarter as performance fees increased significantly, primarily due to the earlier than anticipated recognition of significant fees from an infrastructure fund. This was supported by higher management fees reflecting an increase in average assets under management. Other revenues declined year-on-year, mainly reflecting valuation of guaranteed products. Non-interest expenses decreased by 5%, mainly due to lower variable compensation and a reduction in non-compensation expenses, including litigation. The combination of higher revenues and lower costs resulted in a cost income ratio of 55.5%, an improvement of almost nine percentage points compared to the prior year. Turning to flows. Quarterly net inflows amounted to EUR 11 billion, with long-term flows of around EUR 7 billion remaining a key growth driver, especially flows in passive products, including Xtrackers.
Cash had positive inflows of approximately EUR 5 billion as clients became more risk-averse due to the dynamic macro backdrop. Total assets under management increased further, driven by net inflows of EUR 11 billion and positive FX effects of EUR 8 billion, partially offset by negative market impacts of EUR 10 billion, primarily related to the recent market volatility. For further details, please see DWS's disclosure on the investor relations website. Let's move to the Corporate Bank on slide 16 before closing with the Investment Bank. The Corporate Bank started the year with a strong return on tangible equity of 14.8%, up compared to the prior year quarter and a cost income ratio of 63%. As previously discussed, Corporate Bank revenues will be impacted by FX and interest rate headwinds in the first half of the year. The end to that is clearly in sight.
On a reported basis, revenues in the first quarter were down 3% versus the prior year period. Adjusted for FX movements, Corporate Bank revenues were up 1% year-on-year and 5% growth in net commission and fee income, and 2% growth net interest income, offset by a mark-to-market adjustment and an investment. This mark has already partially reversed in April given improved market conditions. In terms of business performance, Corporate Treasury Services and Business Banking benefited from interest rate hedges and higher business volumes. While Institution Client Services revenues were lower driven by FX movements and the aforementioned mark-to-market. Business volumes were strong, with average deposits and loans both higher year-on-year and sequentially, and spot deposit balances normalizing from the elevated levels at the year-end.
Compared to the prior year and adjusted for FX movements, deposits increased by 5% on the spot and 8% on an average basis, primarily driven by higher site deposits in corporate cash management. Loans were up by 8% with strong growth in trade finance. Non-interest expenses were essentially flat as volume-related growth and investments into our platforms were offset by FX movements. Provision for credit losses was lower during the quarter despite the management overlay reflecting the quality of our book. Looking ahead, we expect revenues to improve sequentially from here with an expected revenue growth in the mid-single digits on a reported basis as we exit the year supported by both fee and NII income. I'll now turn to the Investment Bank on slide 17.
Revenues for the first quarter were essentially flat year-on-year despite the impact of macroeconomic and significant FX headwinds and against a record first quarter of 2025 in FIC. FIC markets were slightly lower year-on-year due to the reduced revenues and rates, partially mitigated by strength in FX. Overall, the business demonstrated resilient performance in volatile markets. FIC financing continued to grow year-on-year with revenues increasing 7%. Moving to IBCM, revenues were slightly higher, driven by improved performance in debt and equity origination. The prior year was impacted by a loss on the sale and markdown of a specific loan in LDCM. We continue to see strength in investment-grade debt, with the business increasing market share by 50 basis points compared to the full year 2025.
While the business did see a clear impact to the capital market issuance activity in the last few weeks of the quarter as a result of the Middle East conflict, market sentiment has improved in April, with the pipeline for the second quarter pointing towards revenue growth year-on-year. Non-interest expenses were essentially flat on year-on-year, with targeted investments and higher than other expenses offset by favorable FX impacts. Provision for credit losses was EUR 290 million, driven by the larger single name exposure in the management overlay I mentioned earlier. With that, I will turn to the outlook on slide 18. Looking ahead, I'd like to close with the following.
First, we are confident in our revenue ambition of around EUR 33 billion, supported by key banking book NII and other funding growing to around EUR 14 billion, as well as growth in net commission and fee income. The expectations around interest rates are a tailwind and adding to our conviction around this number. Second, as demonstrated, we remain firmly committed to disciplined strategy execution. On cost and our investment plans, we confirm our expense guidance for 2026 and expect a gradual increase throughout the year in line with what we said at the Investor Day while retaining flexibility. In the second quarter, we expect increases in expenses, including from restructuring and severance costs in the Private Bank to support our business-led front-to-back optimization agenda and generate in-year efficiencies as well as hiring across divisions. Third, we reiterate our guidance for provision for credit losses for 2026.
Asset quality remains strong and portfolios are performing in line with expectations. We remain vigilant given the evolving macroeconomic environment and took a management overlay, which may not be eventually needed when the Middle East situation normalizes. Fourth, we are comfortable with the trajectory and profitability and continue to expect strong operating performance in 2026. Finally, we want to deliver attractive capital returns going forward, which is why we increased our payout ratio to 60% and started to make deductions in CET1 capital to this ratio already in the first quarter. As we move through the year, we are intensifying our focus on a scalable operating model, carefully phasing investments with clear emphasis on accelerating structural efficiencies and disciplined cost control. This further strengthens our intent to deliver productivity and efficiency beyond the commitments we made for 2028.
As I finish my first quarter as CFO with a better view of the capabilities and opportunities since the Investor Day, taken together with our first quarter performance, I remain confident that with the strength of our franchise, the discipline of our execution, and the resilience of our business model, we are in a good place. From my perspective, we're just getting started. We have everything we need to deliver. I'm exceptionally pleased that the business mix shift we had envisioned and planned for is already becoming visible. With that, we look forward to your questions.