Deutsche Bank Ag · XETR:DBK
Deutsche Bank — Q4 2022 Earnings Presentation
69 slides from Deutsche Bank's earnings presentation, Feb 2, 2023
Slide 1: Q4/FY 2022 results
Deutsche Bank Q4/FY 2022 results February 2, 2023
Slide 2: Five decisive actions executed since July 2019 have transformed the Group
Five decisive actions executed since July 2019 have transformed the Group Create four Invest in Manage and client-centric Exit businesses Cut costs technology and liberate capital divisions growth Focus on four core Simplified setup Generated more than € 15bn of IT spend, Maintained stable
Slide 3: Positioned the Group for sustainable profitability, growth and greater resilience
Positioned the Group for sustainable profitability, growth and greater resilience FY 2022 Performance Profitability Resilience Revenues significantly above Progress on reducing expenses, Maintaining disciplined risk original expectations, reflecting with CIR in line with 2022 management throughout b
Slide 4: Revenue performance has exceeded expectations, reflecting refocused core businesses
Revenue performance has exceeded expectations, reflecting refocused core businesses Group revenue development Achievements since 2018 +7% € 27.2bn Group revenues at € 27.2bn are 9% higher than originally planned as part of Compete to win strategy for 2022 € 25.3bn 25.4 ~€ 25bn 24.0 Revenues are high
Slide 5: Reduced CIR by 18 percentage points since 2018
Reduced CIR by 18 percentage points since 2018 Cost/income ratio (CIR) development Achievements since 2018 (18)ppt Significantly reduced costs, while self- 108% funding transformation and platform investments Generated run-rate savings of more than 93% € 3bn by executing Compete to win transformatio
Slide 6: Diversified business with greater resilience
Diversified business with greater resilience Core Bank pre-provision profit1, in € bn, unless stated otherwise Core Bank 2.4% (7.4)% 4.0% 6.4% 11.3%3 RoTE, reported 7.8 3.8 5.3 5.0 3.8 2.4 3.3 3.9 1.1 1.4 1.3 1.0 2.6 0.9 0.6 0.8 1.0 0.6 0.1 0.4 1.0 0.8 0.5 0.6 0.7 (0.6) (0.4) (1.1) (1.3) (1.8) 20182
Slide 7: Four client-centric businesses with improved revenue growth and profitability
Four client-centric businesses with improved revenue growth and profitability Revenue CAGR1 CIR RoTE Enhanced value proposition, with Corporate Bank global network and capabilities, and 5% 74% 62% 9% 12% strengthened client franchise 20182 to 2022 2018 2022 2018 2022 Transformation of FIC business,
Slide 8: Targeted investments in technology and internal controls
Targeted investments in technology and internal controls In € bn, unless stated otherwise IT spend1 Key achievements Reengineering of FIC platform improves client ~€ 15bn cumulative since 2019 interaction and automates flow trading capability Empowering 4.0 business Ongoing transfer of DWS to an
Slide 9: Sustainable Finance volume target for 2022 exceeded
Sustainable Finance volume target for 2022 exceeded In € bn, cumulative since 2020 Sustainable Finance1 volumes vs. target Key sustainability highlights 215 >200 Importance of sustainability continues to 157 grow in management and businesses’ agenda 46 Overachieved Sustainable Finance volume YE 2020
Slide 10: Positioning as Global Hausbank enables sustainable growth
Positioning as Global Hausbank enables sustainable growth Key themes Platform positioned for growth Leverage tailwinds from interest rate sensitive products Macro shifts Deploy risk management expertise to support clients in volatile markets Intensify transition dialogue with corporate and private c
Slide 11: Confirmation of 2025 targets
Confirmation of 2025 targets Financial targets Capital objectives 3.5- >10% <62.5% ~13% 50% 4.5% Cost/income Total payout Post-tax RoTE Revenue CAGR CET1 ratio in 2025 2021-2025 ratio ratio in 2025 from 2025 Confirm 2025 target Increased revenue Reiterate CIR target, Aim to operate with a Confirm 20
Slide 12: Risk update
Risk update Deutsche Bank Q4/FY 2022 results 11 Investor Relations February 2, 2023
Slide 13: Ongoing disciplined risk management and strong balance sheet metrics
Ongoing disciplined risk management and strong balance sheet metrics 2022 Strong and stable balance sheet and sound liquidity CET1 ratio 13.4% metrics, positioned to navigate uncertainty Investments in risk framework, controls and technology Provision for credit losses as % of loans1 25bps facilitat
Slide 14: Navigating through an evolving risk environment
Navigating through an evolving risk environment External themes Impact — War in Ukraine has the potential to drive continued uncertainty Geopolitical developments — Although not the base case, an escalation of further geopolitical conflicts could cause significant downside effects — Macro-economic d
Slide 15: Disciplined risk framework provides the basis for managing through stress and uncertainty
Disciplined risk framework provides the basis for managing through times of stress and uncertainty — Group risk appetite calibrated to earnings capacity, capital adequacy and operational stability; appetite cascaded down to businesses Risk — Comprehensive credit and market risk limits across country
Slide 16: Conservative risk profile and diversified loan book across geographies, businesses and sectors
Conservative risk profile and diversified loan book across geographies, businesses and sectors Majority of lending in G7… …to lower risk obligors/products… …with strong collateral and diversification3 € 489bn € 489bn € 489bn € 158bn Other 2% 5% Other 8% 4% Asia Investment Bank 21% Energy & Utilities
Slide 17: Germany loan book
Confidence in German loan book driven by conservative lending standards and well-diversified exposures Loan book breakdown Commentary € 489bn — Portfolios (mortgages of € 156bn and consumer finance of € 16bn) display a sound risk profile, with stable default and recovery rates to date despite rising
Slide 18: Well-managed exposure across Commercial Real Estate and Leveraged Lending
Well-managed exposure across Commercial Real Estate and Leveraged Lending Focus area1 Commentary € 489bn — Spread across regions: 51% in the US, 36% in Europe and 13% in Asia — High credit quality and manageable exposure in diversified IB CRE, accounting for € 28.1bn with an LTV3 of 61% — Strong res
Slide 19: Continued active management of other risks
Continued active management of other risks Focus area Commentary — Successfully navigated an extremely volatile market; managing through a pandemic, the war in Ukraine as well as responding to rate changes and recession risks — Continue supporting clients while managing exposures and staying within
Slide 20: Sound track record in managing provision for credit losses
Sound track record in managing provision for credit losses through challenging and volatile period Net provision for credit losses development, in € m Provision for credit losses guidance1 vs. reported Stage 1+2 Stage 3 Guidance, in bps Reported, in bps 1,792 35-45 41 246 1,226 ~25 25 724 516 204 17
Slide 21: Summary
Summary Proactive and continuous identification and monitoring of risks Disciplined risk management provides a strong foundation to manage through times of stress and uncertainty Conservative risk profile and well-diversified loan book across clients, regions, products and businesses Low-risk and hi
Slide 22: Financials
Financials Deutsche Bank Q4/FY 2022 results 21 Investor Relations February 2, 2023
Slide 23: Delivering our transformation plan
Delivering our transformation plan 2018 to 2022 annual operating leverage1, in % Group RoTE development, in % Core Bank 2.4 (7.4) 4.0 6.4 11.3 9.4 8.5 3.8 (0.1) 0.2 5.2 5.3 4.2 3.1 (10.9) Corporate Investment Private Asset Group 2018 2019 2020 2021 2022 Bank Bank Bank Management Noninterest expenses
Slide 24: Q4/FY 2022 Group financial highlights
Q4/FY 2022 Group financial highlights In € m, unless stated otherwise Change in % Change in % Q4 2022 vs. Q4 2021 FY 2022 vs. FY 2021 Revenues 6,315 7 27,210 7 Revenues Revenues ex-specific items1 6,053 3 26,737 6 Noninterest expenses 5,189 (7) 20,390 (5) Costs Adjusted costs 4,885 (5) 19,915 (3) Pr
Slide 25: Q4/FY 2022 Core Bank financial highlights
Q4/FY 2022 Core Bank financial highlights In € bn, unless stated otherwise Change in % Change in % Q4 2022 vs. Q4 2021 FY 2022 vs. FY 2021 Revenues 6.3 7 27.2 7 Revenues ex-specific items1 6.1 3 26.8 6 Noninterest expenses 5.0 (4) 19.5 (3) Adjusted costs 4.7 (4) 19.1 (1) Profit (loss) before tax 1.0
Slide 26: Net interest margin (NIM)
Net interest margin (NIM) Evolution of Group NIM and average interest earning assets Commentary Average interest earning assets, in € bn1 Net interest margin, in %2 1.51% 1.47% 1.39% — NIM continues favorable trend 1.23% 1.22% driven by material EUR and USD rate 1.15% 1.17% 1.19% 1.11% rises in Q4 2
Slide 27: Net interest income (NII)
Net interest income (NII) In € bn, unless stated otherwise Evolution of interest-sensitive revenues at current forward rates vs. FY 2022 Gross impact Rate impact1 1.4 2.1 Funding offset2 (0.5) (1.1) Contribution to 2022 – 2025 CAGR net of Division funding impacts2 1.1 0.9 Corporate Bank ~2% 0.4 Net
Slide 28: Adjusted costs – 2018 to 2022
Adjusted costs – 2018 to 2022 In € m, unless stated otherwise 2018 to 2022 comments FY 2018 ex- transformation 22,120 charges & bank levies FX impact Compensation 300 (1,011) — Adjusted costs excluding transformation and benefits1 charges and bank levies reduced by Information Technology (480) € 3.1
Slide 29: Adjusted costs – FY 2022 and Q4 2022 (YoY)
Adjusted costs – FY 2022 and Q4 2022 (YoY) In € m, unless stated otherwise FY 2022 Q4 2022 FY/Q4 2021 ex-transformation 4,948 19,008 charges & bank levies Compensation 1 FX impact 268 399 FX impact 45 and benefits1 Information Technology 123 (69) 14 (39) 553 0% 94 (2)% Professional 27 (43) 4 (13) se
Slide 30: Efficiency measures: >€ 2bn cost saves planned for 2022-2025
Efficiency measures: >€ 2bn cost saves planned for 2022-2025 In € bn Savings and distribution1 2022 drivers 2023 – 2025 drivers Closure of additional retail branches Closed >110 retail branches in Germany and established 6 Private Banking Centers Implementation of new branch formats incl. Germ
Slide 31: Provision for credit losses
Provision for credit losses In € bn, unless stated otherwise Annual development Comments Capital Release Unit Investment Bank Corporate Bank Private Bank In bps of loans — FY provisions elevated vs. 2021 13 17 41 12 25 reflecting the impact of the war in 1.8 Ukraine and a weaker macroeconomic 0.0 en
Slide 32: Capital ratios
Capital ratios Movements in basis points (bps), period end CET1 ratio Comments 1336 3 13.4% 2 — CET1 ratio up by 3bps compared to Q3 2022: 13.3% (2) — 2bps from FX translation effects — (2)bps from RWA changes, reflecting higher market risk RWA partly offset by net reductions in credit risk RWA — 3b
Slide 33: Segment results
Segment results Deutsche Bank Q4/FY 2022 results 32 Investor Relations February 2, 2023
Slide 34: Corporate Bank
Corporate Bank In € m, unless stated otherwise Change in Change in % vs. % vs. Q4 2022 Q4 2021 FY 2022 FY 2021 FY 2022 year-on-year comments Revenues 1,760 30 6,335 l 23 — Revenues higher driven by Revenues increased interest rates and Revenues ex-specific items1 1,760 30 6,335 23 continued pricing
Slide 35: Q4 2022 Corporate Bank revenue performance
Q4 2022 Corporate Bank revenue performance In € m, unless stated otherwise Change vs. Q4 2021 Q4 2022 year-on-year comments X% X% Excluding specific items1 Corporate Treasury Services 1,045 26% 26% Corporate Treasury Services: — Revenues higher driven by increased interest rates across all markets a
Slide 36: Investment Bank
Investment Bank In € m, unless stated otherwise Change in Change in % vs. % vs. Q4 2022 Q4 2021 FY 2022 FY 2021 FY 2022 year-on-year comments — Revenues slightly higher, as Revenues 1,675 (12) 10,016 4 significantly higher revenues in Revenues FIC were partially offset by a Revenues ex- specific ite
Slide 37: Q4 2022 Investment Bank revenue performance
Q4 2022 Investment Bank revenue performance In € m, unless stated otherwise Change vs. Q4 2021 Q4 2022 year-on-year comments X% X% Excluding specific items1 Fixed Income, Currency Sales & Trading: — Macro trading and Emerging Markets revenues significantly higher, driven by Fixed Income, Currency in
Slide 38: Private Bank
Private Bank In € m, unless stated otherwise Change in Change in % vs. % vs. Q4 2022 Q4 2021 FY 2022 FY 2021 FY 2022 year-on-year comments Revenues 2,507 23 9,155 11 — Revenues up 6% ex-specific Revenues items and the net impact of the Revenues ex-specific items1 2,196 8 8,725 7 BGH ruling6, due to
Slide 39: Q4 2022 Private Bank revenue performance
Q4 2022 Private Bank revenue performance In € m, unless stated otherwise Change vs. Q4 2021 Q4 2022 year-on-year comments X% X% Excluding specific items1 Private Bank Germany: — Revenues up 10% adjusted for net impacts related to the BGH ruling3 — Growth driven by higher net interest Private Bank in
Slide 40: Asset Management
Asset Management In € m, unless stated otherwise Change in Change in % vs. % vs. Q4 2022 Q4 2021 FY 2022 FY 2021 FY 2022 year-on-year comments Revenues 609 (23) 2,608 (4) — Revenues down 4% as higher management fees Revenues were more than offset by Revenues ex-specific items1 609 (23) 2,608 (4) low
Slide 41: Corporate & Other
Corporate & Other In € m Change vs. Change vs. Profit (loss) before tax Q4 2022 Q4 2021 FY 2022 FY 2021 Profit (loss) before tax (593) (274) (1,589) (447) (68) Funding & liquidity (56) 55 (334) (72) (320) (593) Valuation & timing 48 34 (122) (280) differences1 Shareholder expenses (123) 19 (506) (45
Slide 42: Capital Release Unit
Capital Release Unit In € m, unless stated otherwise Absolute Absolute change vs. change vs. Q4 2022 Q4 2021 FY 2022 FY 2021 FY 2022 year-on-year comments Revenues (12) (16) (28) (54) — Revenues were lower as the Revenues non-recurrence of Prime Finance cost recovery more Revenues ex-specific items1
Slide 43: Expected re-segmentation of Capital Release Unit in Corporate & Other
Expected re-segmentation of Capital Release Unit in Corporate & Other Delivery on targets Capital Release Unit (CRU) integration plan € 227 bn The CRU has achieved all the goals set for the division at the 2020 leverage exposure Investor Deep Dive, outperforming against its RWA and leverage reductio
Slide 44: Transitioning to Driver-Based Cost Management methodology from Q1 2023
Transitioning to best practice Driver-Based Cost Management methodology effective from Q1 2023 Implementation of new industry best practice Driver-Based Cost Management (DBCM) from Q1 2023 New allocation methodology applies to all infrastructure costs allocated to businesses including some costs pre
Slide 45: Our transformation created a solid foundation for further sustainable growth
Our transformation created a solid foundation for further sustainable growth Strategic objectives through Compete to win have delivered a transformed bank Complementary business mix has created a strong step-off to achieve further organic business growth; 2023 revenue expected to be in between of th
Slide 46: Appendix
Appendix Deutsche Bank Q4/FY 2022 results 45 Investor Relations February 2, 2023
Slide 47: Sustainability at Deutsche Bank
Sustainability at Deutsche Bank Q4 2022 highlights Our key focus areas Recent achievements — Increase of cumulative volumes in sustainable financing and investment by € 18bn to € 215bn1, reaching our three-year-target, announced 2020 — Deal highlights: Deutsche Bank acted as structuring advisor and
Slide 48: Definition of certain financial measures
Definition of certain financial measures 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
Slide 49: Specific revenue items and adjusted costs – Q4 2022
Specific revenue items and adjusted costs – Q4 2022 In € m Q4 2022 Q4 2021 Q3 2022 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 1,760 1,675 2,507 609 (225) 6,326 (12) 6,315 1,352 1,913 2,040 789 (199) 5,895 5 5,900 1,564 2,372 2
Slide 50: Specific revenue items and adjusted costs – FY 2022
Specific revenue items and adjusted costs – FY 2022 In € m FY 2022 FY 2021 Core Core CB IB PB AM C&O CRU Group CB IB PB AM C&O CRU Group Bank Bank Revenues 6,335 10,016 9,155 2,608 (877) 27,238 (28) 27,210 5,151 9,631 8,234 2,708 (340) 25,384 26 25,410 DVA - IB Other / CRU - 49 - - - 49 (6) 43 - (28
Slide 51: Pre-provision profit, CAGR and operating leverage
Pre-provision profit, CAGR and operating leverage In € m, unless stated otherwise FY 20182 FY 20192 FY 2020 FY 2021 FY 2022 CAGR3 2018 - 2022 Net revenues Corporate Bank 5,278 5,247 5,146 5,151 6,335 4.7% Investment Bank 7,561 7,023 9,286 9,631 10,016 7.3% Private Bank 8,520 8,239 8,126 8,234 9,155
Slide 52: Private Bank – Impact of BGH ruling
Private Bank – Impact of BGH ruling1 In € m, unless stated otherwise Q4 2021 Q3 2022 Q4 2022 FY 2021 FY 2022 Revenues Net revenues 2,040 2,268 2,507 8,234 9,155 BGH ruling - impact of forgone revenues (net) (34) 4 3 154 22 of which: Private Bank Germany - BGH ruling - impact of forgone revenues (net
Slide 53: Capital Release Unit pro-forma reconciliation
Capital Release Unit pro-forma reconciliation In € m, unless stated otherwise, FY 2022 As reported Pro-forma Core CB IB PB AM C&O CRU Group CB IB PB AM C&O Group Bank Revenues 6,335 10,016 9,155 2,608 (877) 27,238 (28) 27,210 6,335 10,016 9,155 2,608 (904) 27,210 Noninterest expenses 3,949 6,196 6,5
Slide 54: Capital Release Unit financial resources profile
Capital Release Unit financial resources profile Risk-weighted assets and leverage exposure by product type, in € bn, as of Q4 2022 Approx. weighted Year-end 2022 profile by product type average life1, in years 24.3 RWA ex 22.0 4.5 Operational — Derivatives portfolio (mainly Rates) risk 7 including
Slide 55: Transformation-related effects
Transformation-related effects In € bn 2019 to 2022 2019 2020 2021 2022 cumulative impact Nonoperating Goodwill impairment3 1.0 - - - 1.0 costs1 Restructuring & 0.7 0.7 0.5 (0.0) 1.9 severance4 Pre-tax items Real estate charges 0.1 0.2 0.3 - 0.6 Transformation charges2 Software impairment/ 1.0 0.2 0
Slide 56: Indicative divisional currency mix
Indicative divisional currency mix Q4 2022 Net revenues Noninterest expenses 7% 7% 3% 13% 11% 19% 17% 5% 19% 18% 15% 0% 18% 6% 2% 39% 15% 25% 22% 19% 0% 30% 14% 1% 38% 9% 0% 17% 12% 88% 81% 67% 60% 61% 53% 53% 42% 45% 45% 2% CB IB PB AM Group CB IB PB AM Group EUR GBP USD Other1 Note: Classification
Slide 57: 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) 1,226 IB (ex-POCI) Group stage
Slide 58: Litigation update
Litigation update In € bn, period end Litigation provisions1 Comments ― Provisions decreased modestly by € 0.1bn quarter on quarter 1.1 1.1 1.2 1.3 1.2 ― Contingent liabilities remained stable quarter on quarter; contingent liabilities include possible obligations where an estimate can be made and Q
Slide 59: Q4 2022 loan and deposit development
Q4 2022 loan and deposit development In € bn Loan development Comments QoQ YoY — Lending reduction of € 2bn in the quarter 476 481 493 503 489 -3% 3% adjusted for FX effects due to episodic effects 105 — € 5bn reduction in Corporate Bank lending 93 94 99 103 -2% 11% from active portfolio management
Slide 60: TLTRO development and forecast
TLTRO development and forecast In € bn TLTRO outstanding, period end TLTRO prepayment in January 2023 TLTRO contractual maturity in period 0 0 0 0 6 4 4 3 1 10 5 45 45 34 29 23 19 15 12 10 0 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q3 2024 Deutsche Bank Q4/FY 2022 resu
Slide 61: Net interest income sensitivity
Net interest income sensitivity Hypothetical +/-25bps shift in yield curve, in € m Net interest income (NII) sensitivity1 Comments +25bps shift in yield curve -25bps shift in yield curve ~260 ~180 ~130 — NII increases with higher rates ~(120) ~(130) — Longer term, the impact is dominated by ~(260) h
Slide 62: Evolution of market-implied interest rates
Evolution of market-implied interest rates In % ECB deposit facility rate Federal Reserve interest on reserve balances 5.0 5.0 4.0 4.0 3.0 3.0 2.0 2.0 1.0 1.0 0.0 0.0 04/23 07/23 10/23 01/24 04/24 07/24 10/24 01/25 04/23 07/23 10/23 01/24 04/24 07/24 10/24 01/25 EUR 10-year swap rate USD 10-year swa
Slide 63: Loan book composition
Loan book composition Q4 2022, IFRS loans: € 489bn Comments Other IB2 Other1 Leveraged Debt Capital Markets 0% 9% Asset Backed Securities 1% — Well diversified loan portfolio German Mortgages 7% — YTD FX impact on loan book is € 6.5bn 32% — 54% of loan portfolio in Private Bank, mainly IB - Commerci
Slide 64: Leverage exposure and risk-weighted assets
Leverage exposure and risk-weighted assets CRD4, in € bn, period end Leverage exposure Risk-weighted assets 360 360 58 Operational risk RWA 58 1,310 1,240 92 Market risk RWA Trading assets 110 35 26 Credit valuation 6 Derivatives1 154 130 adjustments 24 Lending 508 494 144 Lending 250 commitments2 C
Slide 65: Level 3 assets
Level 3 assets In € bn, as of December 31, 2022 Assets (total: € 27bn) Comments Equity securities Mortgage backed securities 1 Other 3 0 Derivative 10 Assets Debt — Level 3 is an indicator of valuation uncertainty securities 5 and not of asset quality — The Group classifies financial instruments as
Slide 66: Value-at-Risk/stressed Value-at-Risk (VaR/sVaR)
Value-at-Risk/stressed Value-at-Risk (VaR/sVaR) In € m, unless stated otherwise VaR, DB Group Trading book, 99%, 1 day Quarterly average 34 30 47 52 47 80 60 40 20 0 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Stressed VaR, DB Group Regulatory scope, 99%, 10 days Quarterly average 188 223
Slide 67: Assets under management (AuM) – Private Bank
Assets under management (AuM) – Private Bank In € bn, unless stated otherwise AuM1,2 – by business unit and product group +1% ex € (15)bn disposal effect4 IPB - Investment Products IPB - Deposits PB GY - Investment Products PB GY - Deposits (6)% (2)% 537 542 554 548 528 528 521 518 110 110 111 112 1
Slide 68: Assets under management (AuM) – Asset Management
Assets under management (AuM) – Asset Management In € bn, unless stated otherwise AuM development Quarterly mgmt. 27.6 Year on year 28.1 fee margin, in bps 29.0 Quarter on quarter 28.1 928 833 (2) (20) 22 821 (1) (108) (30) 21 821 0 Q4 2021 Net flows FX Market Other Q4 2022 Q3 2022 Net flows FX Mark
Slide 69: Cautionary statements
Cautionary statements The figures in this presentation are preliminary and unaudited. Our Annual Report 2022 and SEC Form 20-F are scheduled to be published on March 17, 2023. Forward-looking statements This presentation contains forward-looking statements. Forward-looking statements are statements