The Federal Reserve's 2025 stress test results, likely to be released on June 25, are expected to be positive for the broader bank group, with Morgan Stanley (MS), M&T Bank (MTB), and Wells Fargo (WFC) among the biggest potential beneficiaries, Deutsche Bank said in a report Wednesday.
Deutsche Bank expects capital requirements to decline this year due to a lower stress capital buffer, reversing much or all of the 50-basis-point increase seen in the 2024 stress test, the report said.
"The Fed will also likely telegraph more transparency going forward," Deutsche Bank said, adding that this move could allow banks to reduce management capital buffers over time.
In February, the Federal Reserve released stress test scenarios for 2025, featuring milder assumptions than the prior year -including less severe shocks to asset values, interest rates, inflation, credit spreads, and commodity prices- along with reduced stress in commercial real estate markets, Deutsche Bank said.
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