Deutsche Bank Ag · XETR:DBK
Deutsche Bank — Q3 2021 Earnings Presentation
50 slides from Deutsche Bank's earnings presentation, Oct 27, 2021
Slide 1: Q3 2021 results
Deutsche Bank Q3 2021 results 27 October 2021
Slide 2: Continued progress on the path to our strategic ambitions
Continued progress on the path to our strategic ambitions Q3 2021 Discipline Transformation Profitability Executing on existing and new Progress recognized by rating Continued revenue momentum cost saving measures agencies in normalized markets Full focus on delivering control Continued CRU de-lever
Slide 3: YTD performance demonstrates progress towards 2022 financial targets
YTD performance demonstrates progress towards 2022 financial targets 9M 2021 9M 2020 Revenues € 19.5bn € 18.6bn Adjusted costs ex transformation charges(1) € 14.4bn € 14.9bn Provision for credit losses € 0.3bn € 1.5bn Cost/income ratio 82% 87% Return on tangible equity(2) 5% 0% Core Bank return on t
Slide 4: Progress on strategic priorities in core businesses
Progress on strategic priorities in core businesses 9M 2021(1) Corporate Bank Investment Bank ✓ Executing on growth strategies, evidenced by strong loan growth and new partnerships ✓ Continued delivery of front to back efficiency via process improvements and FIC re-engineering program € 94bn deposit
Slide 5: Transformation drives growth and higher profitability
Transformation drives growth and higher profitability Last 12 months (LTM) adjusted(1) profit (loss) before tax(2), in € bn 70% 5.9 6.2 Core Bank 5.3 4.2 3.7 2.7 3.0 3.1 2.4 Capital (1.7) (1.4) (1.3) Release (2.1) (2.4) (2.4) (2.0) (2.6) (2.7) Unit Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2019 2020 2021 (1) Defin
Slide 6: Continued revenue momentum in the Core Bank
Continued revenue momentum in the Core Bank Core Bank revenues(1) excluding specific items(2), in € bn Group 5.9 6.0 23.2 23.8 25.0 1% +13% 11% 6.0 6.0 25.0 24.1 Corporate 22.4 1.3 1.3 5.0 Bank 5.2 5.3 Investment 2.4 2.2 8.8 9.7 Bank 6.7 Private 2.0 2.0 8.1 8.1 8.1 Bank Asset Management 0.6 0.7 2.2
Slide 7: Ongoing commitment to cost discipline
Ongoing commitment to cost discipline Last 12 months (LTM) noninterest expenses(1), in € bn CIR 104% 94% 84% -14% (14)% Estimated total transformation- 90% 24.3 related effects recognized 1.8 22.6 0.5 1.4 21.0 1.3 0.7 1.3 Additional transformation-related 21.9 ~€ 700m 19.9 effects to drive further c
Slide 8: Significant achievements in sustainable financing
Significant achievements in sustainable financing In € bn, cumulative Sustainable Finance(1) volumes reported vs. targets Key developments in businesses 125 >100 >150 200 Arranged 48 sustainable bonds across Investment sectors and currencies, totaling ~€ 48bn(2) Bank Targets Expanded ESG debt produc
Slide 9: Continued strategy execution drives transformation by 2022
Continued strategy execution drives transformation by 2022 Material improvement in Core Bank profitability and returns Businesses performing at or ahead of their planned jump off points for next year Transformation initiatives and additional cost saving measures support cost/income ratio target Tran
Slide 10: Q3 2021 Group financial highlights
Q3 2021 Group financial highlights In € m, unless stated otherwise Change in % Change in % Q3 2021 vs. Q3 2020 vs. Q2 2021 Revenues 6,040 2 (3) Revenues Revenues ex specific items(1) 6,014 1 (3) Noninterest expenses 5,369 4 7 Costs Adjusted costs ex transformation charges(2) 4,660 (3) 1 Profit (loss
Slide 11: 9M 2021 Group financial highlights
9M 2021 Group financial highlights In € m, unless stated otherwise Change in % 9M 2021 vs. 9M 2020 Revenues 19,510 5 Revenues Revenues ex specific items(1) 19,449 5 Noninterest expenses 15,941 (2) Costs Adjusted costs ex transformation charges(2) 14,610 (4) Profit (loss) before tax 3,308 n.m. Adjust
Slide 12: Q3/9M 2021 Core Bank financial highlights
Q3/9M 2021 Core Bank financial highlights In € bn, unless stated otherwise Change vs. Change vs. Q3 2021 Q3 2020 9M 2021 9M 2020 Revenues 6.1 2% 19.5 4% Revenues ex specific items(1) 6.0 1% 19.4 4% Noninterest expenses 5.1 5% 14.9 2% Adjusted costs ex transformation charges(2) 4.4 (1)% 13.7 (0)% Pro
Slide 13: Adjusted costs
Adjusted costs In € m, unless stated otherwise Prime Finance(1) Q3 2021 year on year comments Q3 2020 ex transformation 4,728 89 4,816 charges — Continued reduction of adjusted Compensation cost base (117) and benefits(2) — Lower compensation and benefits Information Technology 6 reflect reductions
Slide 14: Transformation-related effects
Transformation-related effects In € bn, unless stated otherwise 2019 – 2019 – 2022 Q3 2021 expected % of total cumulative cumulative 2019 – Q3 2021 impact impact Q3 2021 Nonoperating Goodwill impairment - 1.0 1.0 100% costs(1) Restructuring & severance 0.0 1.6 2.1 77% Pre-tax items Real estate charg
Slide 15: Provision for credit losses
Provision for credit losses In € m Stage 1 + 2 Q3 2021 comments Stage 3 761 — Q3 provisions below prior year, reflecting overall benign credit environment 252 — Stage 3 provision increased 506 sequentially, mainly driven by implementation of EBA guidelines on 273 Definition of Default, leading to EC
Slide 16: Capital ratios
Capital ratios Movements in basis points (bps), period end CET1 ratio Comments 13.2% 0 13.0% — Q3 2021 CET1 ratio down by 17bps compared to Q2 2021 mainly (14) (3) due to higher RWA: — (24)bps from EBA Guideline implementation offset by reduced Market Risk multiplier — 10bps from business growth mor
Slide 17: Segment results
Segment results Deutsche Bank Q3 2021 results Investor Relations 27 October 2021
Slide 18: Corporate Bank
Corporate Bank In € m, unless stated otherwise Change in Change in % vs. % vs. Q3 2021 Q3 2020 Q2 2021 Q3 2021 year on year comments Revenues 1,255 0 2 Revenues — Revenues essentially flat, but Revenues ex specific items(1) 1,255 0 2 improved excluding episodic items(7) as business growth and Nonint
Slide 19: Q3 2021 Corporate Bank revenue performance
Q3 2021 Corporate Bank revenue performance In € m, unless stated otherwise X% X% Excluding specific items(1) Change vs. Q3 2020 Q3 2021 year on year drivers — Corporate Treasury Services 1% Corporate Treasury Services 755 1% 1% higher as charging agreements and other business initiatives more than o
Slide 20: Investment Bank
Investment Bank In € m, unless stated otherwise Change in Change in % vs. % vs. Q3 2021 Q3 2020 Q2 2021 Q3 2021 year on year comments Revenues 2,227 (6) (7) — Slightly lower revenues reflecting Revenues Revenues ex specific items(1) 2,239 (5) (7) continued normalization of market conditions in Tradi
Slide 21: Q3 2021 Investment Bank revenue performance
Q3 2021 Investment Bank revenue performance In € m, unless stated otherwise X% X% Excluding specific items(1) Change vs. Q3 2020 Q3 2021 year on year drivers Fixed Income, Currency Sales & Trading: — Significantly higher revenues in Fixed Income, Currency Financing Sales & Trading 1,585 (12)% (13)%
Slide 22: Private Bank
Private Bank In € m, unless stated otherwise Change in Change in % vs. % vs. Q3 2021 Q3 2020 Q2 2021 Q3 2021 year on year comments Revenues 1,999 (2) (1) — Revenues up 1% ex specific Revenues Revenues ex specific items(1) 1,958 (4) (1) items and adjusted for € (94)m of foregone revenues due to BGH N
Slide 23: Q3 2021 Private Bank revenue performance
Q3 2021 Private Bank revenue performance In € m, unless stated otherwise X% Excluding specific items(1) Change vs. Q3 2020 Q3 2021 year on year comments Private Bank Germany: — Revenues up 1% if adjusted for impact of BGH Private Bank (6)% (6)% ruling(2) 1,196 Germany — Higher revenues from investme
Slide 24: Asset Management
Asset Management In € m, unless stated otherwise Change in Change in % vs. % vs. Q3 2021 Q3 2020 Q2 2021 Q3 2021 year on year comments Revenues 656 17 5 Revenues — Revenues up 17% on higher Revenues ex specific items(1) 656 17 5 management fees from market performance and continued Noninterest expen
Slide 25: Corporate & Other
Corporate & Other In € m Profit (loss) before tax Change Change vs. Q3 vs. Q2 Q3 2021 2020 2021 Profit (loss) before tax (605) (212) (566) (39) Funding & liquidity (54) (29) 6 Valuation & timing differences(1) 65 244 (18) Shareholder expenses (94) 13 19 (393) Noncontrolling interest(2) 39 (5) (8) Ot
Slide 26: Capital Release Unit
Capital Release Unit In € m, unless stated otherwise Absolute Absolute change vs. change vs. Q3 2021 Q3 2020 Q2 2021 Q3 2021 comments Revenues (36) 0 (12) Revenues — Negative revenues in the quarter were Revenues ex specific items(1) (33) 1 (10) driven by funding, risk management and de-risking impa
Slide 27: Outlook
Outlook Revenue performance developing in line with or better than previous 2022 ambitions Continued benign credit environment driving further improved CLP outlook Continued focus on cost discipline to support cost/income ratio target delivery Working to largely complete recognition of transformatio
Slide 28: Appendix
Appendix Deutsche Bank Q3 2021 results Investor Relations 27 October 2021
Slide 29: Financial and regulatory targets for FY 2022
Financial and regulatory targets for FY 2022 Group post-tax return on average tangible equity 8% Core Bank post-tax return on average tangible equity >9% Cost/income ratio 70% Common Equity Tier 1 capital ratio >12.5% Leverage ratio (fully loaded) ~4.5% Deutsche Bank Q3 2021 results 28 Investor Rela
Slide 30: Sustainability at Deutsche Bank
Sustainability at Deutsche Bank Q3 2021 highlights Our key focus areas Recent achievements – Continued progress in sustainable financing, with cumulative volumes of € 125 bn(1) – Arranged several sovereign green bonds in September, among which: – the largest-ever green bond to date for UK Debt Manag
Slide 31: Definition of adjustments
Definition of adjustments Revenues excluding specific items are calculated by adjusting net revenues under IFRS for specific revenue items which Revenues generally fall outside the usual nature or scope of the business and are likely to distort an accurate assessment of the excluding specific divisi
Slide 32: Core Bank adjusted post-tax RoTE
Core Bank adjusted post-tax RoTE In € m, unless stated otherwise Q1 2020 Q2 2020 Q3 2020 9M 2020 Q1 2021 Q2 2021 Q3 2021 9M 2021 Profit (loss) 616 486 617 1,719 1,332 1,013 577 2,922 Profit (loss) attributable to noncontrolling interests (23) (32) (31) (87) (36) (33) (23) (92) Profit (loss) attribut
Slide 33: Specific revenue items and adjusted costs – Q3 2021
Specific revenue items and adjusted costs – Q3 2021 In € m Q3 2021 Q3 2020 Q2 2021 Core Core Core CB IB PB AM C&O CRU Group CB IB PB AM C&O CRU Group CB IB PB AM C&O CRU Group Bank Bank Bank Revenues 1,255 2,227 1,999 656 (61) 6,076 (36) 6,040 1,255 2,364 2,036 563 (243) 5,974 (36) 5,938 1,230 2,394
Slide 34: Specific revenue items and adjusted costs – 9M 2021
Specific revenue items and adjusted costs – 9M 2021 In € m 9M 2021 9M 2020 Core Core CB IB PB AM C&O CRU Group CB IB PB AM C&O CRU Group Bank Bank Revenues 3,798 7,718 6,195 1,919 (140) 19,489 21 19,510 3,920 7,394 6,162 1,631 (373) 18,735 (159) 18,575 DVA - IB Other / CRU - (37) - - - (37) (3) (39)
Slide 35: Adjusted profit (loss) before tax (PBT)
Adjusted profit (loss) before tax (PBT) In € m Q3 2021 Q3 2020 Specific Transfor- Specific Transfor- Reported Goodwill Restructuring Reported Goodwill Restructuring revenue mation Adjusted PBT revenue mation Adjusted PBT PBT impairments & severance PBT impairments & severance items charges(1) items
Slide 36: 9M Adjusted profit (loss) before tax (PBT)
9M Adjusted profit (loss) before tax (PBT) In € m 9M 2021 9M 2020 Specific Transfor- Specific Transfor- Reported Goodwill Restructuring Reported Goodwill Restructuring revenue mation Adjusted PBT revenue mation Adjusted PBT PBT impairments & severance PBT impairments & severance items charges(1) ite
Slide 37: Last 12 months (LTM) reconciliation
Last 12 months (LTM) reconciliation In € m Q3 2019 Q3 2020 Q3 2021 Q4 2018(1) Q1 2019(1) Q2 2019(1) Q3 2019(1) Q4 2019(1) Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 LTM(2) LTM(3) LTM(4) Revenues Core Bank 5,280 5,955 5,982 5,483 5,528 6,407 6,353 5,974 5,518 7,152 6,262 6,076 22,700 24,
Slide 38: Private Bank – Impact of BGH ruling
Private Bank – Impact of BGH ruling(1) In € m, unless stated otherwise Q3 2020 Q2 2021 Q3 2021 9M 2020 9M 2021 Revenues Net revenues 2,036 2,018 1,999 6,162 6,195 BGH ruling - impact of forgone revenues - 94 94 - 188 of which: Private Bank Germany - BGH ruling - impact of foregone revenues - 93 93 -
Slide 39: Transformation-related effects
Transformation-related effects In € bn, unless stated otherwise 2019 – 2019 – 2022 cumulative Q3 2021 expected expenses % of total cumulative Q2 2021 Q3 2021 2019 – expenses disclosure ∆ disclosure Q3 2021 Deferred tax Deferred Tax Asset asset valuation 2.8 2.8 2.9 (0.0) 2.9 98% valuation adjustment
Slide 40: Deposit charging
Deposit charging In € bn, unless stated otherwise Quarterly charging Q3 2021 deposits by revenues, in € m Charging agreements(1) total client holdings(2) Comments — On track to reach updated 2022 revenue target already this year 108 122 146 — Corporate Bank further grew 12 110 131 94 28 revenues fro
Slide 41: Indicative divisional currency mix
Indicative divisional currency mix Q3 2021 Net revenues Noninterest expenses 10% 6% 6% 12% 9% 19% 18% 14% 5% 20% 20% 4% 0% 1% 21% 28% 21% 18% 15% 19% 0% 12% 1% 42% 35% 11% 7% 20% 85% 86% 66% 65% 61% 54% 55% 45% 48% 40% 0% 0% CB IB PB AM Group CB IB PB AM Group EUR GBP USD Other(1) Note: Classificati
Slide 42: Net interest income sensitivity
Net interest income sensitivity Hypothetical +100 bps parallel shift impact, in € bn First year Second year 1.2 0.7 0.7 0.5 0.4 0.3 Retail Non-retail Group Retail Non-retail Group Maturity Maturity > 3M 0.3 0.1 0.4 > 3M 0.6 0.2 0.7 EUR EUR ≤ 3M 0.1 0.2 0.2 ≤ 3M 0.1 0.2 0.3 > 3M 0.0 0.0 0.1 > 3M 0.1
Slide 43: Litigation update
Litigation update In € bn, period end Litigation provisions(1) Comments 1.0 0.8 0.8 0.9 1.0 ― Provisions increased modestly by € 0.1bn quarter Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 on quarter ― Contingent liabilities decreased by € 0.2bn quarter on quarter. Contingent liabilities include possible
Slide 44: Provision for credit losses and stage 3 loans
Provision for credit losses and stage 3 loans Provision for credit losses, in € m Stage 3 at amortized cost, in € bn Private Bank Investment Bank PB (ex-POCI) CRU (ex-POCI) Corporate Bank Capital Release Unit CB (ex-POCI) Purchased or Originated Credit Impaired (POCI) IB (ex-POCI) 273 251 Group Stag
Slide 45: Q3 2021 loan and deposit development
Q3 2021 loan and deposit development In € bn Loan developments Comments Change vs. FX adjusted Q2 2021 change — Continued growth in Private Bank mainly from mortgage lending Private Bank 250 3 2 — Corporate Bank benefitting from good client demand across all business segments Corporate Bank 119 3 2
Slide 46: Level 3 assets
Level 3 assets In € bn, as of 30 Sep 2021 Assets (total: € 24bn) Comments Equity securities Mortgage backed securities Other 10 2 Derivative 9 Assets Debt securities 5 — Level 3 is an indicator of valuation uncertainty and not of asset quality — The movements in Level 3 assets reflect that the portf
Slide 47: Leverage exposure and risk weighted assets
Leverage exposure and risk weighted assets CRD4, fully loaded, in € bn, period end Leverage exposure Risk weighted assets 351 351 65 Operational Risk RWA 65 1,100 1,105 Market Risk RWA Trading assets 109 119 31 22 Credit valuation 7 adjustments Derivatives(1) 146 134 25 Lending 432 444 129 250 Lendi
Slide 48: Trading book Value at Risk (VaR)
Trading book Value at Risk (VaR) DB Group, 99%, 1 day, in €m, unless stated otherwise Historical Simulation VaR Quarterly average 73 46 43 41 33 140 120 100 80 60 40 20 0 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Note: Deutsche Bank received regulatory approval for the Value at Risk model fo
Slide 49: Assets under management (AuM) – Private Bank
Assets under management (AuM) – Private Bank In € bn, unless stated otherwise IPB - Investment Products PB GY - Investment Products IPB - Deposits PB GY - Deposits AuM(1,2) – by business unit and product group +14% +1% 520 536 541 477 493 471 442 109 110 110 106 107 108 106 57 58 59 57 57 56 368 372
Slide 50: Cautionary statements
Cautionary statements This presentation contains forward-looking statements. Forward-looking statements are statements that are not historical facts; they include statements about our beliefs and expectations and the assumptions underlying them. These statements are based on plans, estimates and pro