Deutsche Bank Ag · XETR:DBK
Deutsche Bank — Debt Investor Presentation (October 2021)
41 slides from Deutsche Bank's debt investor presentation, Oct 29, 2021
Slide 1: Q3 2021 Fixed Income Investor Conference Call
Deutsche Bank Q3 2021 Fixed Income Investor Conference Call 29 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: 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 5: 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 6: 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 7: Continued strategy execution drives transformation by 2022
Continued strategy execution drives transformation by 2022 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 Progress on remediating outstanding regulatory and control items
Slide 8: Strong momentum in all lending businesses during Q3
Strong momentum in all lending businesses during Q3 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 Corporat
Slide 9: Deposit charging to contribute ~€ 400m to 2021 revenues
Deposit charging to contribute ~€ 400m to 2021 revenues In € bn, unless otherwise stated 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 — Corporate Bank further grew 10
Slide 10: Sound liquidity and funding profile
Sound liquidity and funding profile Liquidity coverage ratio(1) Comments High-quality liquid assets, in € bn Surplus above requirements — Liquidity coverage ratio and HQLA decreased 151% 145% 146% 143% 137% ~130% during the quarter following continued loan growth across the businesses, partially off
Slide 11: CET1 ratio impacted by regulatory changes
CET1 ratio impacted by regulatory changes In € bn, except CET1 ratio movements (in basis points), period end, fully-loaded CET1 ratio Comments 13.2% 0 13.0% — Q3 2021 CET1 ratio down by (17)bps compared to Q2 (14) (3) 2021 mainly to increase in RWA: — (24)bps from EBA Guideline implementation offset
Slide 12: Capital ratios well above regulatory requirements
Capital ratios well above regulatory requirements(1) In %, as of 30 September 2021, phase-in view Comments 17.4 T2 2.1 243bps 15.0 AT1 2.3 — Buffer to total capital requirement decreased 2.6 T2 requirement(4) by 27bps to 243bps over the quarter: 258bps 2.0 — (17)bps relates to lower CET1 ratio AT1 r
Slide 13: Leverage ratio stable in Q3
Leverage ratio stable in Q3 In € bn, except movements (in bps), period end, fully-loaded 2 Comments 4.8% 4.8% (1) (2) Q2 2021 FX Effect Leverage Capital Q3 2021 exposure change — Leverage ratio unchanged in the quarter: change — (2)bps from FX translation effects Tier 1 52.5 0.3 - (0.1) 52.6 — 2bps
Slide 14: Significant buffer over loss absorbing capacity requirements
Significant buffer over loss absorbing capacity requirements Loss absorbing capacity, in € bn, as of 30 September 2021 Comments Surplus above requirement 114 Senior 5 preferred 22 Senior 37 47 43 — Q3 2021 available loss absorbing non- preferred capacity significantly above all regulatory requiremen
Slide 15: Balanced maturity profile provides flexibility in future
Balanced maturity profile provides flexibility in future In € bn, unless stated otherwise Covered Bonds Senior Structured/Preferred Senior Non-Preferred AT1 / T2 25 1 24 2 22 19 7 4 1 15-20 7 15 4 2 3-4 14 13 2 12 2 4-5 1 11 3 4 9 4 4 3 16 12 12 16 1 6-8 4 3 7 7 7 8 4 5 2 2-3 3 3 3 1 Q1-Q3 FY Issuan
Slide 16: Outlook
Outlook Resilient and low-risk balance sheet with high portion of stable funding Revenue performance developing in line with or better than previous 2022 ambitions Continued benign credit environment driving further improved CLP outlook Working to largely complete recognition of transformation-relat
Slide 17: Appendix
Appendix Deutsche Bank Q3 2021 Fixed Income Investor Call 16 Investor Relations 29 October 2021
Slide 18: 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 19: Conservatively managed balance sheet
Conservatively managed balance sheet Net(1) in € bn, as of 30 September 2021 Comments Assets Liabilities & equity 1,002 1,002 — Resilient balance sheet to navigate Trading and current environment Liquidity 151 related liabilities(3) reserves(2) 249 — Liquidity reserves account for 25% of net 46 Othe
Slide 20: Current ratings
Current ratings As of 29 October 2021 Moody‘s Investors S&P Global Fitch Ratings DBRS Services Ratings Counterparty obligations (e.g. deposits / structured notes / A2 BBB+(1) A- A (high) derivatives / swaps / trade finance obligations) Senior Preferred(2) A2 BBB+ A- A (low) Long- term unse- cured No
Slide 21: AT1 and Trust Preferred Securities outstanding
AT1 and Trust Preferred Securities outstanding(1) Regulatory Original Current Nominal Next call Subsequent call Issuer Type capital ISIN issuance coupon outstanding date period treatment(1) date Postbank Funding Trust I Legacy AT1 / -(2) DE000A0DEN75 0.165% € 300m 02 Dec 04 02 Dec 21 Semi-annually P
Slide 22: Additional funding disclosure
Additional funding disclosure Capital markets issuance outstanding, in € bn, Q3 2021 By product By currency Senior Senior Capital instruments EUR USD GBP Other non-preferred structured (T1/T2) Senior Covered preferred bonds 7 17 3 15 110 bn 55 110 bn 59 41 17 5 Deutsche Bank Q3 2021 Fixed Income Inv
Slide 23: 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 24: Loan book composition
Loan book composition Q3 2021, IFRS loans: € 456bn Capital Release Unit Other (1) IB Other(2) — Well diversified loan portfolio Leveraged Debt Capital Markets 1% 7% Asset Backed Securities 1% 1% — 55% of loan portfolio in Private Bank, 6% German Mortgages mainly consisting of German retail mortgages
Slide 25: Provision for credit losses
Provision for credit losses In € m Stage 1 + 2 Comment Stage 3 761 — Q3 provisions below prior year, reflecting overall benign credit environment 252 — Stage 3 provision increased sequentially, 506 mainly driven by implementation of EBA guidelines on Definition of Default, 273 leading to ECL model r
Slide 26: 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 27: 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 28: 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 29: 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 30: Simplified legal entity structure
Simplified legal entity structure Entities without Issuing Branches Subsidiaries Deutsche Bank AG entities direct issuance Germany activities Americas EMEA APAC DWS DB AG DB AG DB AG DB AG DB AG New London Singapore Hong Kong Sydney York Branch Branch Branch Branch Branch USA Great Britain Singapore
Slide 31: 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 32: 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 33: 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 34: 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 35: 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 36: 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 37: 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 38: 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 39: 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 40: 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 41: 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
Deutsche Bank — Debt Investor Presentation (October 2021) on 6ix