Deutsche Bank AG expects revenue to decline marginally this year as a trading boom in the wake of the pandemic peters out before growth resumes next year.

Germanys largest lender predicts that revenue in the investment bank will decline as volatility normalizes, it said in its annual report published Friday. Higher volumes and fees in the corporate and private bank will be offset by rate headwinds, while the asset management unit is expected to see slightly higher revenues.

Trading Dip

Deutsche Bank expects trading to dip and then to recover in 2022

Source: Deutsche Bank’s 2020 investor day presentation

Note: Figures for 2021 and 2022 are estimates based on DB presentation

Almost half-way into a deep restructuring of Deutsche Bank, Chief Executive Officer Christian Sewing is looking to focus more on growth after two years of deep cost cuts. He got an unexpected boost when the pandemic revived securities trading that had languished for years, helping the CEO maintain goals that many analysts had viewed as too ambitious. But the trading rally left him reliant on a unit he cut back, while the lending businesses at the center of his turnaround struggles with negative interest rates.

We had a strong start to 2021, Sewing said. However, we continue to expect investment bank revenues to decline year-on-year as industry volumes and volatility normalize from very high levels of activity in 2020.

The bank said previously it expects to be profitable again this year. It posted its first annual profit in six years in 2020, driven by the investment bank.

Read also: Deutsche Bank Rising Trader Bonuses Anger Lesser-Paid Staff

To retain top performers in the business, the unit saw an increase in its bonus pool of 46%, compared with a rise in variable compensation of 29% for the bank as a whole, to about 1.9 billion euros. Deutsche Bank initially planned to expand the entire pool by a third but had to scale back the plan after objections from the European Central Bank, Bloomberg News has reported.

The bonus increase balanced Deutsche Banks significantly improved financial performance, delivery against published targets and retention of top talent with the goal of maintaining capital strength, it said.

Analysts expect Deutsche Banks revenue to fall to 22.9 billion euros this year while they anticipate an increase in net income to about 800 million euros, according to the average forecast compiled by Bloomberg. Sewing has set a target of about 24.4 billion euros in 2022 revenue, compared with 24 billion euros last year.

(Adds bonuses from sixth paragraph)

    Before it’s here, it’s on the Bloomberg Terminal.