Deutsche Bank (NYSE:DB) warned in its annual report of a $30 billion exposure to private credit, highlighting growing concerns about lofty technology valuations, the sustainability of the current AI-driven capital spending cycle, and how these developments could affect business models and client credit risk.

The bank's Private Credit portfolio represents €25.9 billion ($29.8 billion) in loans at amortized cost. That’s up from €24.5 billion in 2024. Roughly 73% of this exposure consists of multi-asset lender facilities (ABS) backed by highly diversified mid-market corporate loans in both the U.S. and EU. These loans span various industry sectors, are structured with conservative advance rates of approximately 65%, and are almost entirely investment-grade rated.

The remainder is diversified across single and multi-asset lenders, Net Asset Value (NAV) Financing, Single Asset Financing, non-bank CRE lending, business development companies (BDC), and subscription finance.

During 2025, private credit and other non-bank financial institutions (NBFIs) faced pressure from higher interest rates, refinancing risks, and weak investor sentiment. Failures among several U.S. subprime ...