Record Profits for Allianz and Telekom Amid Continued Losses for European Central Bank

The German economy presents a bipolar picture at the beginning of 2026. On one hand, the largest stock market players, such as Allianz and Deutsche Telekom, are reporting historically high results. Allianz achieved an operating profit of around €17.4 billion, a result at the upper limit of expectations, driven mainly by the property and casualty insurance sector. Meanwhile, Deutsche Telekom recorded revenues of €119 billion, while simultaneously intensifying investments in fiber optic infrastructure. The company plans to bring modern connections to 25 million households by 2030, which is intended to solidify its market leadership position. Following the 2008 financial crisis, the insurance industry in Germany underwent rigorous restructuring, which is now bearing fruit in its high resilience to economic fluctuations and inflation.A completely different financial situation is presented by the European Central Bank. The institution ended 2025 with a loss of €1.25 billion. Although this is a significantly better result than the nearly €8 billion loss the previous year, it means another year without dividend payments to national central banks, including the Bundesbank. However, President Christine Lagarde emphasized the success in the fight against inflation, which has fallen from over 10% in 2022 to 1.7% at the beginning of 2026. The bank forecasts a return to profitability in 2026 or 2027, which will depend on the further shaping of interest rates. Optimism is also flowing from the real estate sector, where experts announced that the construction market in northern Germany has already passed the worst point of the crisis. The number of planned constructions in Hamburg is set to increase by over 100% in 2026 compared to the previous year. Similarly, the pharmaceutical industry recorded a 4.5% increase in production, benefiting from front-loading effects ahead of possible US tariff introductions. Despite these successes, stock market sentiment remains mixed, as seen in the declines of shares of companies like Hensoldt or Freenet, whose results did not meet investors' high expectations. „The ECB's decisive monetary policy response played a key role in bringing inflation back to the target level.” — Christine Lagarde In the technology and defense sectors, the situation is more varied. Engine manufacturer MTU Aero Engines and Britain's Rolls-Royce are reporting record order books, reflecting global increases in defense spending and a recovery in air transport. Rolls-Royce even announced a massive share buyback program worth up to $12 billion. Meanwhile, the software industry, represented by Salesforce or SAP, is grappling with valuation corrections; market analysts are even talking about a kind of "SaaS apocalypse," although industry leaders view the current declines as an investment opportunity.