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 lenders heightened scrutiny of underwriting standards and fraud risks in the sector.

The Frankfurt-based lender said its direct exposure to NBFIs is limited, though indirect exposure could arise through counterparties and related portfolios. In a worsening scenario—especially alongside geopolitical shocks—these risks could lead to weaker portfolio quality, higher credit losses, and increased capital and liquidity demands as clients draw on funding lines.

Despite the risks, Deutsche said it plans to accelerate infrastructure investment. The bank also aims to expand private credit across its corporate and investment banking divisions and broaden its regional distribution.

The asset manager plans to accelerate infrastructure investments and expand private credit with the corporate and investment banks. The bank also plans to widen its distribution through "selective regional expansion."

Other banks have issued warnings or restricted lending in their private credit portfolios recently amid the sector frenzy. 

JPMorgan Chase & Co. (NYSE:JPM) has started restricting lending to loans associated with software companies in its private credit funds. JPMorgan’s private credit exposure totaled $22.2 billion in October 2025.

Meanwhile, Morgan Stanley curbed redemptions after investors sought to withdraw nearly 11% of shares from its North Haven Private Income Fund. Adhering to its quarterly limit, the fund fulfilled only 45.8% of those requests. This

On Friday, BlackRock (NYSE:BLK)  limited withdrawals from its $26 billion HPS Corporate Lending Fund after redemption requests surged to 9.3% of the fund's net asset value. The asset manager approved about $620 million in redemptions. The fund hit a 5% quarterly threshold, allowing it to restrict additional withdrawals.

Blackstone permitted investors to withdraw a larger-than-normal sum of $3.7 billion from its $82 billion BCRED fund, according to a recent filing. After receiving $2 billion in new inflows, net redemptions totaled approximately $1.7 billion.

Meanwhile, Cliffwater's investor redemption requests from its $33 billion private credit flagship fund have exceeded 7%, Bloomberg reported.

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