Deutsche Bank Ag · XETR:DBK
Deutsche Bank — Q4 2017 Earnings Presentation
37 slides from Deutsche Bank's earnings presentation, Feb 2, 2018
Slide 1: Deutsche Bank – Q4 & FY 2017 results
Deutsche Bank Deutsche Bank – Q4 & FY 2017 results 2 February 2018
Slide 2: Highlights
Highlights Improved profitability despite revenue headwinds Reduced costs in 2017, but more work to do Maintained high levels of liquidity and CET1 capital, supported by capital raise Success in resolving legacy litigation matters and continued investments in controls Progress in executing on busine
Slide 3: Group financial summary
Group financial summary € bn, unless stated otherwise Q4 2017 vs. FY 2017 vs. Q4 2017 Q4 2016 FY 2017 FY 2016 Q4 2016 FY 2016 Net revenues 5.7 7.1 (19)% 26.4 30.0 (12)% Provision for credit losses (0.1) (0.5) (74)% (0.5) (1.4) (62)% Noninterest expenses (6.9) (9.0) (23)% (24.6) (29.4) (16)% Profit &
Slide 4: Revenue drivers
Revenue drivers Revenues excluding noted items in € bn, unless stated otherwise FY 2017 YoY YoY drivers Higher funding costs, low volumes and volatility in trading and GTB CIB(1) 14.6 (2.2) (13)% perimeter adjustments PCB(2) 10.3 0.0 0% Revenues flat. Impact of low interest rates largely mitigated I
Slide 5: Noninterest expenses
Noninterest expenses € bn, unless stated otherwise (14)% € (4.1) 29.4 28.8 1.6 1.6 2.4 2.2 0.7 24.6 0.7 0.2 0.6 (19)% / € (1.7) Impairments 9.0 8.6 / Policyholder 1.1 benefits and claims 1.1 6.9 0.0 Litigation(1) 1.6 1.4 0.1 24.7 24.3 23.8 Restructuring and 0.1 0.1 5.7 0.0 0.0 0.1 0.4 severance 0.1
Slide 6: Adjusted costs
Adjusted costs(1) € m, unless stated otherwise Q4 2016 FY 2016 Key facts Q4 2017 vs Q4 2016 FX Q4 2017 YoY FY 2017 YoY ex FX(2) ex FX(2) — Compensation and benefits reflect return to a Compensation and 3,286 2,676 23% 12,069 11,503 5% normalized variable compensation framework benefits(3) for 2017 I
Slide 7: Common Equity Tier 1 capital and risk-weighted assets
Common Equity Tier 1 capital and risk-weighted assets CRD4, fully loaded, unless stated otherwise 13.8% CET1 ratio, fully loaded 14.0% — Q4 2017 CET1 capital down by € (0.6)bn on a FX 14.6% CET1 ratio, phase-in 14.8% neutral basis to € 48.4bn CET1, € bn — € (2.2)bn net loss in the quarter, including
Slide 8: Leverage
Leverage CRD4, fully loaded, unless stated otherwise 3.8% Leverage ratio, fully loaded 3.8% — Leverage exposure down € 25bn incl. € (11)bn FX 4.2% Leverage ratio, phase-in 4.1% benefit. The FX neutral exposure decrease is € 15bn Leverage exposure, € bn 12 — Volume growth in loans € 7bn, off-B/S € 3b
Slide 9: Segment results
Segment results Deutsche Bank Q4 & FY 2017 results 9 Investor Relations 2 February 2018
Slide 10: Corporate & Investment Bank (CIB)
Corporate & Investment Bank (CIB) € m, unless stated otherwise Income before income taxes Financial overview Q4 2017 Q4 2016 YoY FY 2017 FY 2016 YoY 1,705 Net revenues 2,732 3,270 (16)% 14,226 16,763 (15)% Prov. for credit losses (7) (303) (98)% (213) (816) (74)% 969 877 709 706 Noninterest expenses
Slide 11: CIB business unit revenues and YoY drivers
CIB business unit revenues and YoY drivers € m, unless stated otherwise Revenues Q4 2017 YoY revenue drivers Global Transaction Banking 4,421 Cash management revenues were slightly lower reflecting the impact of client, country and product exits in 2016, in addition to 3,942 adverse FX movements, la
Slide 12: CIB business unit revenues and YoY drivers (cont'd)
CIB business unit revenues and YoY drivers (cont’d) € m, unless stated otherwise Revenues Q4 2017 YoY revenue drivers Financing 2,375 2,231 Lower revenues from asset based financing as the prior year benefitted from very strong deal closures Investment grade lending revenues were significantly lower
Slide 13: Private & Commercial Bank (PCB)
Private & Commercial Bank (PCB) € m, unless stated otherwise Income before income taxes Financial overview 1,439 Q4 2017 Q4 2016 YoY FY 2017 FY 2016 YoY Net revenues 2,313 3,205 (28)% 10,178 11,090 (8)% 700 Prov. for credit losses (123) (158) (22)% (313) (439) (29)% 367 399 332 382 Noninterest expen
Slide 14: PCB business unit revenues and YoY drivers
PCB business unit revenues and YoY drivers € m, unless stated otherwise Revenues(1) Q4 2017 YoY revenue drivers Private & Commercial Clients (PCC) 5,225 5,013 — Q4 2017 revenues down 14% mainly due to the negative impact of € 157m from the announced partial sale of the Polish retail business (14)% —
Slide 15: Deutsche Asset Management
Deutsche Asset Management € m, unless stated otherwise Income before income taxes Financial overview 725 Q4 2017 Q4 2016 YoY FY 2017 FY 2016 YoY Net revenues 621 799 (22)% 2,532 3,015 (16)% 215 234 181 195 Noninterest expenses (506) (1,551) (67)% (1,806) (3,220) (44)% 161 170 115 Adjusted costs (489
Slide 16: Consolidation & Adjustments (C&A)
Consolidation & Adjustments (C&A) € m, unless stated otherwise Income before income taxes Financial overview Q4 2017 Q4 2016 YoY FY 2017 FY 2016 YoY 57 42 44 IBIT (67) (425) (84)% (695) (541) 28% of which : (67) V&T differences(1) 51 (342) n.m. 49 (253) n.m. (2) CTA realisation / (32) (0) n.m. (213)
Slide 17: Outlook
Outlook 2018 Adjusted costs expected to be € ~23bn, reflecting IBIT positive impact of delayed business sales Credit costs and litigation expense likely to increase in 2018, but remain well below peak levels Restructuring costs in 2018 expected to be similar to 2017 Strong macro-economic backdrop wi
Slide 18: Appendix
Appendix Deutsche Bank Q4 & FY 2017 results 18 Investor Relations 2 February 2018
Slide 19: Appendix: Table of contents
Appendix: Table of contents P&L details Preliminary Additional Tier 1 payment capacity IFRS 9 impact CRD4 – Leverage exposure and risk-weighted assets Loan book Impaired loans Value-at-Risk Assets under Management Headcount Deutsche Bank Q4 & FY 2017 results 19 Investor Relations 2 February 2018
Slide 20: Profit & Loss
Profit & Loss €m Q4 2016 Q4 2016 Q4 2017 Q4 2017 Q4 2017 FY 2016 FY 2016 FY 2017 FY 2017 FY 2017 ex FX(1) vs. vs. ex FX(1) vs. vs. Q4 2016 Q4 2016 FY 2016 FY 2016 ex FX(1) ex FX(1) Net revenues 7,068 6,861 5,710 (19.2)% (16.8)% 30,014 29,760 26,447 (11.9)% (11.1)% Provision for credit losses (492) (
Slide 21: Reported and adjusted costs
Reported and adjusted costs € m, unless stated otherwise Noninterest expenses excl. compensation and benefits (in € bn) 29.4 Compensation and benefits (in € bn) 24.6 17.6 12.4 9.0 7.2 6.7 6.5 6.3 6.9 5.7 5.7 4.0 6.2 11.9 12.2 3.8 3.7 3.2 2.8 2.9 3.6 3.2 3.0 2.9 2.8 3.1 2.9 2.8 3.3 Q1 Q2 Q3 Q4 Q1 Q2
Slide 22: Litigation update
Litigation update € bn, unless stated otherwise Litigation provisions(1) Contingent liabilities(1) 2.3 2.0 2.5 1.6 30 Sep 2017 31 Dec 2017 30 Sep 2017 31 Dec 2017 Decrease due to settlement payments for major cases as well Includes possible obligations where an estimate can be made as releases for l
Slide 23: Provision for credit losses
Provision for credit losses €m Cost of risk DB Group(1) Non-Core Operations Unit PCB CIB 0.33% 0.33% 0.28% 0.28% 1,383 0.26% 128 439 0.13% 0.13% 0.13% 0.13% 0.11% 492 525 31 304 327 158 816 313 259 17 75 5 102 184 78 101 133 129 303 79 90 150 155 208 78 57 22 123 7 213 56 94 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Slide 24: Net interest income sensitivity
Net interest income sensitivity Hypothetical +100bps parallel shift impact by business line and major currency, € bn First year Second year 1.6 1.4 > 3M > 3M 0.3 0.6 EUR 0.9 0.7 0.7 0.7 1.1 3M 1.0 3M 0.3 USD 0.2 > 3M > 3M 0.1 0.2 0.1 0.0 0.1 0.1 3M 0.1 3M 0.2 PCB CIB Group PCB CIB Group Total 0.8 0.
Slide 25: IBIT detail
IBIT detail €m Q4 2017 DVA and own credit Restructuring and IBIT Litigation Impairments(1) spreads severance CIB (733) (19) (1) (56) - PCB (659) - (429) 3 (12) Deutsche AM 115 - (10) (4) (3) C&A (67) 54 - (74) - NCOU - - - - - Group (1,345) 35 (440) (131) (15) Q4 2016 DVA and own credit Restructurin
Slide 26: IBIT detail
IBIT detail €m FY 2017 DVA and own credit Restructuring and IBIT Litigation Impairments(1) spreads severance CIB 877 (348) (152) (44) (6) PCB 382 - (399) (53) (12) Deutsche AM 725 - (18) (5) (3) C&A (695) (164) (2) (112) - NCOU - - - - - Group 1,289 (513) (570) (213) (21) FY 2016 DVA and own credit
Slide 27: Reconciliation from Deutsche AM reported segment to adjusted DWS standalone
Reconciliation from Deutsche AM reported segment to adjusted DWS standalone FY 2017 and FY 2016 DWS Perimeter adjustments Adjustments Adjusted DWS Deutsche AM standalone standalone Reported Sold & reported Other perimeter DB Group (4) 2017 2017 Abbey Life discontinued 2017 DWS specific (1) adjustmen
Slide 28: Preliminary Additional Tier 1 (AT1) payment capacity
Preliminary Additional Tier 1 (AT1) payment capacity €m 2017 unaudited 2016 2015 Comments Available Distributable Items ~500 514 234 HGB result driving ADI number Tier 1 interest expense add- Adds back prior year interest expenses for legacy and CRR- 694 724 858 back(1) compliant Additional Tier 1 i
Slide 29: Preliminary Day 1 impact of IFRS 9
Preliminary Day 1 impact of IFRS 9 Shareholders Equity € bn Classification & measurement Impairments IFRS 9 introduction changes accounting classification of (0.2) (0.1) certain portfolios/positions accelerates provisioning of credit (0.6) losses taking into account forward (0.8) 0.2 looking informa
Slide 30: Leverage exposure and risk-weighted assets
Leverage exposure and risk-weighted assets CRD4, fully loaded, € bn Leverage exposure vs. RWA(1) CRD4 – Leverage exposure RWA 1,420 1,395 253 253 Non-derivative trading assets 185 64 185 34 Market Risk RWA 31 64 CVA 6 Derivatives(2) 197 195 31 Lending 389 395 115 Reverse repo / 250 Credit Risk RWA 2
Slide 31: Loan book
Loan book € bn 429 433 428 414 413 403 400 406 CIB 154 158 154 147 137 134 138 145 PCC 119 119 120 119 121 121 121 121 WM 43 44 43 40 40 39 37 37 PB 104 105 105 105 105 106 108 109 NCOU 8 6 5 3 31-Mar 30-Jun 30-Sep 31-Dec 31-Mar 30-Jun 30-Sep 31-Dec 2016 2017 Note: Figures may not sum due to roundin
Slide 32: Impaired loans
Impaired loans(1) Period-end, € bn Non-Core Operations Unit PCB CIB x.x% Impaired loan ratio Deutsche Bank Group(2) 1.8% 1.7% 1.8% 1.8% 1.7% 1.7% 1.7% 1.5% 7.6 7.4 7.5 7.4 6.9 6.7 6.7 1.6 1.1 0.8 1.3 6.2 3.6 4.0 3.8 3.9 3.6 3.7 3.6 3.5 2.6 2.8 3.0 2.9 2.8 2.8 2.5 2.4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2016 201
Slide 33: Value-at-Risk
Value-at-Risk DB Group, 99%, 1 day, € m unless stated otherwise Average VaR Stressed VaR(1) € 1.2bn Sales & Trading revenues € 0.9bn 180 160 140 120 100 80 60 40 20 27 32 32 30 25 78 76 83 81 67 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 (1) Stressed Value-at-Risk is calculated on the same portfolio as
Slide 34: Assets under Management / Client Assets – PCB
Assets under Management / Client Assets – PCB € bn FY2015 Q1 2016 Q2 2016 Q3 2016 (3) Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Assets under Management 583 558 557 514 501 508 504 505 506 Assets under Administration (1) 188 187 194 189 194 198 201 206 217 Client Assets 771 744 751 703 694 706 705 711
Slide 35: Assets under Management – Deutsche AM
Assets under Management – Deutsche AM € bn Q4 2016 decline includes Abbey Life deconsolidation impact FY 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Assets under Management 744 711 719 715 706 723 711 711 702 Regional therein: Americas 233 214 216 206 210 212 197 195 193 the
Slide 36: Group headcount
Group headcount Full-time equivalents, at period end 31 Dec 2017 31 Dec 2016 31 Mar 2017 30 Jun 2017 30 Sep 2017 31 Dec 2017 vs. 31 Dec 2016 CIB 17,129 16,703 16,284 16,801 17,251 122 PCB 45,045 44,651 44,130 43,671 43,460 (1,584) Deutsche AM 3,888 3,823 3,799 3,842 3,803 (86) NCOU 116 - - - - (116)
Slide 37: Cautionary statements
Cautionary statements The figures in this presentation are preliminary and unaudited. Our Annual Report 2017 and SEC Form 20-F are scheduled to be published on 16 March 2018. This presentation contains forward-looking statements. Forward-looking statements are statements that are not historical fact