Deutsche Bank Ag · XETR:DBK
Deutsche Bank — Debt Investor Presentation (April 2020)
37 slides from Deutsche Bank's debt investor presentation, Apr 30, 2020
Slide 1: Q1 2020 Fixed Income Investor Conference Call
Deutsche Bank Q1 2020 Fixed Income Investor Conference Call 30 April 2020
Slide 2: Agenda
Agenda 1 Q1 2020 results 2 Balance sheet strength 3 Liquidity, Capital and Issuance 4 Appendix Deutsche Bank Q1 2020 Fixed Income Investor Call 2 Investor Relations 30 April 2020
Slide 3: Executing well in unprecedented conditions
Executing well in unprecedented conditions Robust group performance with significant increase in Core Bank revenues and profitability Strategic transformation ahead of plan and beneficial in current environment 9th consecutive quarter of annual adjusted cost reductions(1) – outperformance versus int
Slide 4: Q1 2020 Group financial highlights
Q1 2020 Group financial highlights In € m, unless stated otherwise Change in % Change in % Q1 2020 vs. Q1 2019 vs. Q4 2019 Revenues 6,350 (0) 19 Revenues of which: specific items(1) 76( Revenues ex. specific items 6,275( (1) 18 Noninterest expenses 5,638( (5) (12) Costs of which: Adjusted costs ex.
Slide 5: COVID-19 impact on financials
COVID-19 impact on financials Q1 2020 COVID-19 impact Drivers — Changes in macroeconomic environment — Rating migration Provisions for credit losses ~€ 260m — Drawdowns on committed credit facilities — Modest actual impairments — Drawdowns on committed credit facilities — Increase in capital deducti
Slide 6: Provision for credit losses
Provision for credit losses In € m, unless otherwise stated — Higher provision for credit losses driven by COVID- 19 pandemic 506 — Increased Stage 1 and 2 provisions related to 32 COVID-19 to reflect: — Updated approach in-line with ECB 229 guidance incorporating a three year average 245 macroecono
Slide 7: Growing revenues reflecting continued franchise momentum
Growing revenues reflecting continued franchise momentum Core Bank revenues(1) excluding specific items, in € bn 7% 6.4 — Repriced a further € 10bn of deposits in the quarter 5.9 — Good momentum on strategic priorities to develop platform, Corporate FinTech and ecommerce payments solutions (1)% 1.3
Slide 8: 9th consecutive quarter of annual adjusted cost reductions
9th consecutive quarter of annual adjusted cost(1) reductions Adjusted cost ex. transformation charges(2), in € bn Bank levies Global Prime Finance(3) 21.6 0.1 19.9 0.4 0.7 (0.4) 0.6 0.5 Q2 - Q4 15.6 14.1 € 19.5bn adjusted cost target ex. transformation 5.7 5.6 5.5 5.4 charges and 5.3 5.3 5.2 5.1 4.
Slide 9: Maintained strong balance sheet
Maintained strong balance sheet 2019 Q1 2020 Comment Common Equity Tier 1 capital 239bps above current regulatory 13.6% 12.8% ratio requirements € 18bn above most binding MREL Loss-absorbing capacity € 115bn € 112bn requirement Maintained a strong liquidity profile Liquidity Reserves € 222bn € 205bn
Slide 10: Well positioned in this crisis as Germany's leading bank
Well positioned in this crisis as Germany’s leading bank Announced government COVID-19 measures Corporate debt (% of GDP as of 2019) (% of GDP as of 2019) 22 155 Access point to state 122 14 sponsored lending as 12 ‘Hausbank’ to ~900k 82 75 corporate and commercial 69 59 8 clients 6 5 Leading German
Slide 11: Agenda
Agenda 1 Q1 2020 results 2 Balance sheet strength 3 Liquidity, Capital and Issuance 4 Appendix Deutsche Bank Q1 2020 Fixed Income Investor Call 11 Investor Relations 30 April 2020
Slide 12: Conservatively managed balance sheet
Conservatively managed balance sheet Net balance sheet(1), in € bn, as of 31 March 2020 Assets Liabilities & Equity 994 994 Liquidity Trading and — Balance sheet provides robust foundation to 205 174 reserves related liabilities(2) execute our transformation and manage through the current environmen
Slide 13: Low risk, well diversified loan portfolio
Low risk, well diversified loan portfolio In € bn, period end, loans at amortized cost 459 — Trade Finance and working capital, mainly short-term to German midcaps and global multinationals 131 Corporate Bank — Commercial Banking loans to midcap and SME clients in Germany — Concentration risk subjec
Slide 14: Limited exposure to focus industries
Limited exposure to focus industries Loans at amortized cost, period end Key focus — Well diversified across high quality properties Commercial industries: — Largely first lien, 60% average loan to value Real Estate(1) ~11% (€ 33bn) — Manageable exposure to hotels and retail mitigated by low LTVs an
Slide 15: Level 3 assets
Level 3 assets In € bn, as of 31 March 2020 Assets (total: € 28bn) Equity securities Mortgage backed securities — Level 3 is an indicator of valuation uncertainty and not of asset quality Other 10 2 — Increase in Level 3 assets in the quarter almost all in Debt derivative market values, driven by se
Slide 16: Agenda
Agenda 1 Q1 2020 results 2 Balance sheet strength 3 Liquidity, Capital and Issuance 4 Appendix Deutsche Bank Q1 2020 Fixed Income Investor Call 16 Investor Relations 30 April 2020
Slide 17: Maintaining a sound liquidity profile
Maintaining a sound liquidity profile Liquidity Reserves, € bn Cash and cash equivalents(1) Highly liquid and other securities(2) 260 246 243 222 205 >200 Temporary operating range — Reduced excess liquidity reserves and Liquidity 71% 64% 67% 60% 55% Coverage Ratio (LCR), mainly reflecting € 18bn of
Slide 18: CET1 ratio impacted by COVID-19 and regulatory changes
CET1 ratio impacted by COVID-19 and regulatory changes In € bn, except movements (in basis points), period end 13.6% (66) 0 — CET1 capital ratio declined by 79bps in the quarter (13) 12.8% — ~30bps from the new securitization framework — ~40bps due to COVID-19 pandemic, notably: — Client drawdowns d
Slide 19: Improved distance to regulatory capital requirements
Improved distance to regulatory capital requirements In %, as of 31 March 2020, phase-in view P2R CBR(1),(4) Minimum requirement ~€ 5bn above regulatory — Revisions to regulatory capital requirements(2) total capital requirement / including: 16.59 MDA(2) level — Changes in the composition of Pillar
Slide 20: Leverage exposure
Leverage exposure In € bn, except movements in (basis points), period end 4.2% (1) (26) 4.0% 6 — Leverage ratio declined by 21bps in the quarter — ~15bps due to COVID-19 impact including — ~€ 10bn net increase in leverage exposure from client drawdowns Q4 2019 FX Effect Leverage Capital Q1 2020 — ~€
Slide 21: Loss absorbing capacity well above all requirements
Loss absorbing capacity well above all requirements In € bn, unless stated otherwise, as of 31 March 2020 Deutsche Bank available MREL surplus / TLAC surplus TLAC/MREL MREL subordination surplus 112 — Deutsche Bank comfortably meets its MREL, 3 Plain-vanilla senior subordinated MREL and TLAC require
Slide 22: 2020 issuance plan
2020 issuance plan In € bn Issuance plan Contractual maturity profile(1) Covered Bonds Senior Structured / Preferred Senior Non-Preferred AT1 / Tier 2 25 4 17 2 15-20 4 14 3-5 10-15 1 13 1 4 10 2 3-4 5 9 5-7 18 1 3 5.6 3 8 4 8-10 0.8 0.5 2 5 3-6 8 3.1 4 4 1 1 1.2 2 3 Original 2020 Revised 2020 Q1 20
Slide 23: Summary & Outlook
Summary & Outlook Continued improvements in technology and new tools allow for better resource allocation and management Strong and low-risk balance sheet with high portion of stable funding sources Resources provide ability to support clients Continue to prudently manage balance sheet Will maintain
Slide 24: Agenda
Agenda 1 Q1 2020 results 2 Balance sheet strength 3 Liquidity, Capital and Issuance 4 Appendix Deutsche Bank Q1 2020 Fixed Income Investor Call 24 Investor Relations 30 April 2020
Slide 25: AT1 and Trust Preferred Securities outstanding
AT1 and Trust Preferred Securities outstanding(1) Regulatory Original Current Nominal Next call Subsequent Issuer Type capital ISIN issuance coupon outstanding date call period treatment(1) date Postbank Funding Trust I Legacy AT1 / -(2) DE000A0DEN75 0.059% € 300m 02-Dec-04 02-Jun-20 Semi-annually P
Slide 26: Current Ratings
Current Ratings Moody‘s Investors S&P Global Fitch Ratings DBRS Services Ratings Counterparty obligations (e.g. Deposits / Structured Notes / A3 BBB+(1) BBB+ A (high) Derivatives / Swaps / Trade Finance obligations/ LOC‘s) Senior Preferred(2) A3 BBB+ BBB+ A (low) Long- term unse- cured Non-preferred
Slide 27: Rating landscape – senior debt ratings
Rating landscape – senior debt ratings Moody‘s S&P Operating company / Preferred Senior(1) Holding company / Non-preferred Senior(2) Rating scale EU Peers Swiss Peers US Peers Short-term Long-term BAR BNP HSBC SOC CS UBS BoA Citi GS JPM MS P/A-1 Aa2/AA P/A-1 Aa3/AA- P/A-1 A1/A+ P/A-1 A2/A P/A-2 A3/A
Slide 28: Simplified legal entity structure
Simplified legal entity structure Issuing Deutsche Bank AG Germany entities Americas EMEA APAC DWS DB AG DB AG DB AG DB AG DB AG New London York Branch Singapore Hong Kong Sydney Branch Branch Branch Branch USA Great Britain Singapore Hong Kong Australia DB USA DB Privat- und Deutsche Bank DB Intern
Slide 29: Deposit charging
Deposit charging Quarterly revenue impact, € m 32 — Implemented charging agreements to pass through 16 negative interest rates to clients on a total of € 10bn of deposit balances in the quarter <10 — Deposit attrition better than forecast with lower than expected reduction in Euro deposits and growt
Slide 30: Provision for credit losses and stage 3 loans
Provision for credit losses and stage 3 loans Provision for credit losses, € m Stage 3 at amortised cost, € 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) Group Stage 3 2.3% 2.3%
Slide 31: Net interest income sensitivity
Net interest income sensitivity Hypothetical +100 bps parallel shift impact, in € bn First year Second year 1.4 1.1 0.8 0.6 0.6 0.5 Retail Non-retail Group Retail Non-retail Group Maturity Maturity > 3M 0.2 0.0 0.2 > 3M 0.5 0.0 0.5 EUR EUR ≤ 3M 0.3 0.5 0.8 ≤ 3M 0.3 0.5 0.7 > 3M 0.0 0.0 0.0 > 3M 0.0
Slide 32: Litigation update
Litigation update In € bn, period end Litigation provisions(1) ― Provisions decreased by € 0.1bn predominantly due to settlement payments 1.1 1.2 1.1 1.1 ― Contingent liabilities remained stable in the 1.0 quarter. Figure includes possible obligations where an estimate can be made and outflow is mor
Slide 33: Definition of certain adjustments
Definition of certain adjustments Adjusted costs is calculated by deducting (i) impairment of goodwill and other intangible assets, (ii) litigation charges, net Adjusted costs and (iii) restructuring and severance from noninterest expenses under IFRS Revenues excluding specific items is calculated b
Slide 34: Core Bank financial highlights
Core Bank financial highlights Q1 2020, in € bn, unless otherwise stated Core Change vs. Change vs. Capital Release Bank Q1 2019 Q4 2019 Unit Revenues 6.4 7% 16% (0.1) Revenues ex. specific items 6.4 7% 16% (0.1) Noninterest expenses 4.9 (1)% (13)% 0.7 Adjusted costs ex. transformation charges(1) 4.
Slide 35: Specific revenue items and Adjusted costs
Specific revenue items and Adjusted costs In € m Q1 2020 Q1 2019 Q4 2019 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 1,326 2,339 2,162 519 63 6,409 (59) 6,350 1,342 1,988 2,125 525 (16) 5,964 387 6,351 1,299 1,523 1,979 671 56
Slide 36: Adjusted profit (loss) before tax
Adjusted profit (loss) before tax In € m Q1 2020 Q1 2019 Transfor- Transfor- Revenue Goodwill Restructuring Revenue Goodwill Restructuring PBT reported mation PBT Adjusted PBT reported mation PBT Adjusted specific items impairments & severance specific items impairments & severance charges(1) charge
Slide 37: 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 (April 2020) on 6ix