Deutsche Bank Ag · XETR:DBK
Deutsche Bank — Morgan Stanley European Financials Conference 2010
31 slides from Deutsche Bank's conference presentation, Mar 24, 2010
Slide 1: Dr Josef Ackermann, Morgan Stanley European Financials Conference
Deutsche Bank Deutsche Bank Dr Josef Ackermann Dr. Chairman of the Management Board and the Group Executive Committee Morgan Stanley European Financials Conference London, 24 March 2010
Slide 2: Agenda
Agenda 1 2009 a strong 2009: t base b for f profitable fit bl growth th 2 Implementing Phase 4 of our management agenda 3 Liquidity and funding: well well-placed placed to support Phase 4 4 The regulatory g y environment: key y constraints Investor Relations 03/10 · 2
Slide 3: 2009: a strong base for profitable growth
2009: a strong base for profitable growth 31 Dec 31 Dec 2008 2009 Income before income taxes (FY, in EUR bn) (5.7) 5.2 Profitability Net income (FY, in EUR bn) (3.9) 5.0 Pre-tax RoE (FY, target definition)(1) (20)% 15% p Tier 1 capital ratio 10.1% 12.6% Capital Core Tier 1 capital ratio 7.0% 8.7% st
Slide 4: Revenues and profits close to pre-crisis record levels
Revenues and profits close to pre-crisis record levels … In EUR bn Net revenues Net income Mark-downs Net revenues 6.1 6.5 2.3 (1) 1.5 5.0 3.5 2.5 1.4 7.5 28 5 28.5 30.8 25.6 28 0 28.0 21.3 21.9 13.6 (3.9) ‘03 ‘04 ‘05 ‘06 ‘07 ‘08 ‘09 ‘03 ‘04 ‘05 ‘06 ‘07 ‘08 ‘09 (1) Includes significant property impa
Slide 5: Simultaneously with significant leverage reduction
… simultaneously with significant leverage reduction … Assets Leverage ratio(1) U.S. GAAP pro-forma, in EUR bn Target: 25x (541)) (5 (14)x 1,433 37 36 1,338 1,318 32 1,030 983 28 928 915 891 25 24 25 23 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 2008 2009 2008 2009 (1) Total assets based on U.S
Slide 6: And our strongest capital ratios ever
… and our strongest capital ratios ever Tier 1 ratio, in % Core Tier 1 ratio, in % RWA, in EUR bn 12.6 11.7 11 0 11.0 10.3 10.1 10.2 9.2 9.3 Target: ≥10% 8.7 7.8 8.1 7.5 6.8 6.9 7.0 7.1 (43) 303 305 319 308 316 295 288 273 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 2008 2009 Tier 1 capital, in EUR bn 27 9 27.9 28 3 28
Slide 7: Well placed to deliver on Phase 4
Well placed to deliver on Phase 4 M Management t Agenda A d Phase Ph 4 2009 – 2011 Increase CIB profitability with Focus on core PCAM businesses renewed risk and balance sheet and home market leadership discipline Focus on Asia as a key driver Reinvigorate our of revenue growth performance culture I
Slide 8: Agenda
Agenda 1 2009 a strong 2009: t base b for f profitable fit bl growth th 2 Implementing Phase 4 of our management agenda 2011 potential in our core businesses Re-invigorating our performance culture 3 Liquidity and funding: well-placed to support Phase 4 4 The regulatory environment: key constraints
Slide 9: Phase 4: financial potential
Phase 4: financial potential Phase 4 potential 2011 Revenue growth p.a. ~ 8% Perrformance Income before income taxes, in EUR bn(1) ~ 10.0 R t Return on Equity E it (2) 25% over the cycle Cost / income ratio ~ 65% onstraints Tier 1 ratio ≥10% Leverage(3) ≤25x Co (1) Before Corporate Investments and C
Slide 10: Phase 4: assumptions for 2010 - 2011
Phase 4: assumptions for 2010 - 2011 No further major market dislocations Normalization of asset valuations Global revenue fee pool: CAGR of 9% to a level slightly below 9M2007 annualized Environmental Margins remain higher than pre-crisis Interest rates normalization from 2nd half 2010
Slide 11: Phase 4: clear profit targets for all businesses
Phase 4: clear profit targets for all businesses Income before income taxes, in EUR bn 2011 Analysts(1) Phase 4 2009 reported estimates potential Corporate Banking & Securities (CB&S) 3.5 4.5 6.3 Global Transaction Bank ((GTB)) 0.8 1.0 1.3 Asset and Wealth Management (AWM) 0.2 0.8 1.0 P i t & Busi
Slide 12: 2011 potential: CB&S / Global Markets
2011 potential: CB&S / Global Markets Income before income taxes, in EUR bn Risk Revenue development p Cost development p development p Margin / volume ~2.4 ~(1.6) ~(0.9) De-risking losses normalisation Legacy businesses Lower market volatility Strategic hiring Mark-downs Predominantly
Slide 13: 2011 potential: CB&S / Corporate Finance
2011 potential: CB&S / Corporate Finance Income before income taxes, in EUR bn Risk Revenue development p Cost development p development p Credit spreads tightening ~0.9 ~(0.4) ~0.0 Lower market volatility Lower hedge losses 0.9 0.6 0.4 Top-5 Key investments Strategic hires: 2.4 (M&A, FI
Slide 14: 2011 potential: Global Transaction Banking
2011 potential: Global Transaction Banking Income before income taxes, in EUR bn Cost Risk p Revenue development p development p development ~1.1 ~(0.5) ~(0.0) Supply Chain Finance Expansion in key Agency Securities growth regions Lending (e.g. Asia, Securities Clearing g MENA) Alternative
Slide 15: 2011 potential: Asset Management
2011 potential: Asset Management Assumes no appreciation of equity indices 2010 - 2011 Income before income taxes, in EUR m Risk Revenue development Cost development p development ~45 ~235 ~0 500 Rightsizing / Smartsourcing / RREEF-related losses Outsourcing (RREEF prop MM fund injections j g
Slide 16: 2011 potential: Private Wealth Management
2011 potential: Private Wealth Management Income before income taxes, excluding effects from Sal. Oppenheim, in EUR m Cost Risk p Revenue development p development p development ~310 ~(0) ~0 425 Increased volumes Global re-pricing New platform initiative project Double-size Asia Exit small
Slide 17: Sal. Oppenheim: dedicated strategy for each business activity
Sal Oppenheim: dedicated strategy for each business activity Sal. Cluster 1 Cluster 2 Cluster 3 Cluster 4 WM GER + AM Select WM / AM Other business GER/LUX international activities Wealth Management Switzerland IB (incl. attributable Wealth Management g G Germany overhead/IT) h d/IT) Asset Managemen
Slide 18: Asset base has remained stable
Asset base has remained stable In EUR bn AuM development Sal. Sal Oppenheim Group((1)) Observations In EUR bn 137.1 (2.7) (1.0) 3.7 137.1 AuM of core proposition ( l t 1 and (cluster d 2) overallll broadly stable BHF 39.1 40.9 SOPEP Sal. Opp. Institutional 4.7 4.7 S l O Sal. Opp. IB & other th 1
Slide 19: 2011 potential: Private & Business Clients
2011 potential: Private & Business Clients Income before income taxes, in EUR bn Risk Revenue development p Cost development p p development ~0.7 ~0.1 ~0.0 1.5 Severance / investments related to efficiency program One-off gain from LLP Optimization in: IT recalibration Hua Xia Head-office
Slide 20: Agenda
Agenda 1 2009 a strong 2009: t base b for f profitable fit bl growth th 2 Implementing Phase 4 of our management agenda 2011 potential in our core businesses Re-invigorating our performance culture 3 Liquidity and funding: well-placed to support Phase 4 4 The regulatory environment: key constraints
Slide 21: Performance culture: cost and infrastructure efficiency
Performance culture: cost and infrastructure efficiency Investor Day DB Group headcount Efficiency aspiration FTE att period FTE, i d end d 80,456 77,442 78,291 77,053 67,682 68 849 68,849 Renewed R d emphasis h i on costt 65,417 63,427 discipline and efficiency Continued focus on employee produ
Slide 22: Cost and infrastructure efficiency: examples of initiatives
Cost and infrastructure efficiency: examples of initiatives Illustrative In EUR m End 2011 potential Function / area Key levers run-rate run rate cost saving Technology / IT Functional alignment of IT operating model: Elimination of duplication Functional integration and standardisation of proce
Slide 23: Agenda
Agenda 1 2009 a strong 2009: t base b for f profitable fit bl growth th 2 Implementing Phase 4 of our management agenda 3 Liquidity and funding: well well-placed placed to support Phase 4 4 The regulatory g y environment: key y constraints Investor Relations 03/10 · 23
Slide 24: Modest reliance on short-term wholesale funding
Modest reliance on short-term wholesale funding In EUR bn Funding u d g sources sou ces overview o e e Liquidity qu d ty position pos t o 31 Dec 2008 (Total: EUR 857 bn) Reduced funding demand following 31 Dec 2009 (Total: EUR 777 bn) asset reductions 202 Conservative funding mix maintained 1691
Slide 25: Timely and well-priced funding through the crisis
Timely and well-priced funding through the crisis … Benchmark e c a issuance: ssua ce DB vs. s pee peers s(1) Bps over Euribor / Libor 350 350 DB 5yr EUR new issue spread DB 5yr senior CDS 300 European Peer 300 US Peer European Peer 250 Deutsche Bank 250 200 200 150 150 100 100 50 50 0 0 Jul-07 Oct-
Slide 26: And strong liquidity positions
… and strong liquidity positions Liquidity profile Strategic liquidity reserve As of December 2009, in EUR bn End 2007 – 2009, in EUR bn Assets 60 300 Equity q y 50 250 Liabilities Surplus Surplus 40 200 30 150 100 20 50 10 0 0 2yr 3yr 4yr 5yr 6yr 7yr 8yr 9yr 10yr Avoidance of mismatches Signifi
Slide 27: Agenda
Agenda 1 2009 a strong 2009: t base b for f profitable fit bl growth th 2 Implementing Phase 4 of our management agenda 3 Liquidity and funding: well well-placed placed to support Phase 4 4 The regulatory g y environment: key y constraints Investor Relations 03/10 · 27
Slide 28: The changing environment: capital
The changing environment: capital Capital demand / supply, 3Q2007 – 4Q2009 Key components I EUR bn In b Stressed Value-at-Risk Incremental risk charge Buffer to 10% % 71 7.1 68 6.8 BIS Tier 1 ratio Trading book securitization 4.2 6.5 Correlation trading 24.9 4.8 17.8 7.6 3.9 5.0 3.2 0.9 Rati
Slide 29: The changing environment: additional issues
The changing environment: additional issues C Consultation lt ti phase h P Proposal l / discussion di i phase h Basel Committee consultative document National capital requirements – Capital / capital eligibility – Structure and capitalization of legal entities – Leverage – Asset allocation – Liq
Slide 30: Key takeaways
Key takeaways Significant capital buffer Well-capitalized Future retained earnings potential Fresh capital p for buying y g new earnings g streams ((only) y) Substantial liquidity reserve Strong liquidity / funding Net long – funded in all maturities Profit growth of core businesses Clea
Slide 31: 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. them These statements are based on plans, estimates an
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