Deutsche Bank Ag · XETR:DBK
Deutsche Bank — Q1 2021 Earnings Presentation
48 slides from Deutsche Bank's earnings presentation, Apr 28, 2021
Slide 1: Q1 2021 results
Deutsche Bank Q1 2021 results 28 April 2021
Slide 2: Disciplined execution drives transformation and materially improved profitability
Disciplined execution drives transformation and materially improved profitability Strong profitability driven by continued revenue improvement at Group and Core Bank Further progress against cost trajectory Robust balance sheet combined with prudent risk management Execution of strategic transformat
Slide 3: Q1 demonstrated progress against 2022 financial plan
Q1 demonstrated progress against 2022 financial plan 2022 targets and Q1 2020 Q1 2021 ambitions Revenues € 6.4bn € 7.2bn ~€ 24.4bn Adjusted costs ex transformation charges € 4.9bn(1) € 4.6bn(1) € 16.7bn Provision for credit losses € 0.5bn € 0.1bn € 1.2bn Cost/income ratio 89% 77% 70% Return on tangi
Slide 4: Progress on strategic priorities
Progress on strategic priorities Q1 2021 Corporate Bank Investment Bank € 83bn deposits under charging agreements with quarterly revenues of € 74m Double digit percentage revenue growth for the 6th consecutive quarter Progress in clearing payments via online marketplaces and expansion of partn
Slide 5: Growing revenues under refocused strategy
Growing revenues under refocused strategy Core Bank revenues(1) excluding specific items(2), in € bn Group 6.3 7.2 23.1 24.9 25.0 7% 23.3 7.1 5.2 12% 6.4 5.2 1.3 Corporate 1.3 Bank 10.1 7.3 3.1 Investment 2.3 Bank Private 8.2 8.1 2.2 2.2 Bank Asset Management 0.5 0.6 2.3 2.3 Q1 2020 Q1 2021 Last 12
Slide 6: Cost discipline continues for the 13th consecutive quarter
Cost discipline continues for the 13th consecutive quarter Adjusted cost excluding transformation charges(1), in € bn Bank levies(2) Prime Finance(3) 0.7 0.6 0.5 0.6 0.1 5.7 5.6 5.5 5.4 5.3 5.3 5.2 5.0 4.9 4.7 4.7 4.6 4.6 0.1 0.1 0.1 0.1 0.1 0.1 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2018 2019 2020
Slide 7: Strategic transformation drives higher profitability
Strategic transformation drives higher profitability In € bn, unless stated otherwise Last 12 months (LTM) adjusted profit (loss) before tax(1) 75% 5.3 Core Bank 4.2 3.7 2.7 3.0 3.1 2.4 Capital (2.0) (1.7) Release (2.1) (2.4) (2.4) (2.6) (2.7) Unit Q3 Q4 Q1 Q2 Q3 Q4 Q1 2019 2020 2021 (1) 2019 figure
Slide 8: Disciplined risk management
Disciplined risk management In € bn, unless stated otherwise Credit risk Market risk 32 13 13 17 41 6 4.3 4.0 1.8 3.8 3.6 1.4 2.2 1.9 0.5 0.5 0.7 0.1 2016 2017 2018 2019 2020 Q1 2021 2016 2017 2018 2019 2020 Q1 2021 Provisions for credit losses xx In bps of average loans(1) Market risk trading econo
Slide 9: Maintained strong balance sheet
Maintained strong balance sheet Q4 2020 Q1 2021 Common Equity Tier 1 330bps above regulatory 13.6% 13.7% capital ratio requirements(1) Stable and high quality funding Liquidity reserves € 243bn € 243bn base € 70bn above regulatory Liquidity coverage ratio 145% 146% requirements Provision for credit
Slide 10: Disciplined delivery of transformation agenda
Disciplined delivery of transformation agenda Q1 results support our path and Investor Deep Dive goals Improving client engagement and macroeconomic environment validates view on revenue trajectory Continued progress in our key deliverables to support cost and control items Recent Management B
Slide 11: Q1 2021 Group financial highlights
Q1 2021 Group financial highlights In € m, unless stated otherwise Change in % Change in % Q1 2021 vs. Q1 2020 vs. Q4 2020 Revenues 7,233 14 33 Revenues Revenues ex specific items(1) 7,222 15 31 Noninterest expenses 5,574 (1) 11 Costs Adjusted costs ex transformation charges(2) 5,322 (2) 14 Profit (
Slide 12: Core Bank financial highlights
Core Bank financial highlights Q1 2021, in € bn, unless stated otherwise Core Change vs. Change vs. Bank Q1 2020 Q4 2020 Revenues 7.2 12% 30% Revenues ex specific items(1) 7.1 12% 28% Noninterest expenses 5.1 3% 9% Adjusted costs ex transformation charges(2) 4.9 2% 12% Profit (loss) before tax (in €
Slide 13: Adjusted costs
Adjusted costs In € m Prime Finance(1) Cost/income Q1 2021 year on year comments ratio (adj.) Q1 2020 ex. transformation 5,354 98 5,452 86% charges Compensation — Lower compensation and benefits (87) and benefits(2) reflect workforce reductions Information Technology (23) — Continued reduction in IT
Slide 14: Provision for credit losses
Provision for credit losses In € m Comment Stage 1 + 2 Stage 3 761 252 — Q1 provisions significantly below the 506 previous quarters — Materially lower Stage 3 provisions 273 quarter on quarter across all businesses 230 251 from fewer impairment events, with the 247 further benefit of releases in th
Slide 15: Capital ratios
Capital ratios Movements in basis points, period end CET1 ratio — CET1 ratio up 9bps quarter on quarter 11 13.7% 13.6% — 11bps from RWA changes as lower market and (2) operational risk RWA outweigh credit risk increase (1) including TRIM impact for large corporates — (2)bps capital change from posit
Slide 16: Segment results
Segment results Deutsche Bank Q1 2021 results Investor Relations 28 April 2021
Slide 17: Corporate Bank
Corporate Bank In € m, unless stated otherwise Change in Change in % vs. % vs. Q1 2021 Q1 2020 Q4 2020 Q1 2021 year on year comments Revenues 1,313 (1) 7 — Revenues ex. specific items 2% Revenues higher excluding currency Revenues ex specific items(1) 1,313 (1) 6 translation effects Noninterest expe
Slide 18: Q1 2021 Corporate Bank revenue performance
Q1 2021 Corporate Bank revenue performance In € m X% X% Excluding specific items(1) Change vs. Q1 2020 Q1 2021 year on year drivers — Corporate Bank disclosure now reflects Corporate Treasury Services 796 (1)% (1)% revenues reported by client categories(2) — Corporate Treasury Services 2% higher exc
Slide 19: Investment Bank
Investment Bank In € m, unless stated otherwise Change in Change in % vs. % vs. Q1 2021 Q1 2020 Q4 2020 Q1 2021 year on year comments Revenues 3,097 32 64 Revenues — Significantly higher revenues Revenues ex specific items(1) 3,112 34 63 reflecting strong business performance and further progress No
Slide 20: Q1 2021 Investment Bank revenue performance
Q1 2021 Investment Bank revenue performance In € m X% X% Excluding specific items(1) Change vs. Q1 2020 Q1 2021 year on year drivers Fixed Income, Currency Sales & Trading: Fixed Income, Currency — Significantly higher Credit revenues reflecting Sales & Trading 2,478 34% 33% strong performance acros
Slide 21: Private Bank
Private Bank In € m, unless stated otherwise Change in Change in % vs. % vs. Q1 2021 Q1 2020 Q4 2020 Q1 2021 year on year comments Revenues 2,178 0 11 — Revenues essentially flat as Revenues Revenues ex specific items(1) 2,153 0 8 continued business growth and the benefits of TLTRO III offset Nonint
Slide 22: Q1 2021 Private Bank revenue performance
Q1 2021 Private Bank revenue performance In € m X% Excluding specific items(1) Change vs. Q1 2020 Q1 2021 year on year comments Private Bank Germany: — Revenues up 1% as continued strong business growth in investment, insurance and loan Private Bank products and the benefits from TLTRO III offset 1,
Slide 23: Asset Management
Asset Management In € m, unless stated otherwise Change in Change in % vs. % vs. Q1 2021 Q1 2020 Q4 2020 Q1 2021 year on year comments Revenues 637 23 6 Revenues Revenues ex specific items(1) 637 23 6 Noninterest expenses 405 8 2 — Revenues increased primarily driven by favorable change in fair of w
Slide 24: Corporate & Other
Corporate & Other In € m Profit (loss) before tax Change Change vs. Q1 vs. Q4 Q1 2021 2020 2020 Profit (loss) before tax (178) (139) 154 (40) Funding & liquidity (36) 26 60 Valuation & Timing differences(1) (4) (194) 52 (178) Shareholder expenses (112) (20) (15) Noncontrolling interest(2) 50 17 (0)
Slide 25: Capital Release Unit
Capital Release Unit In € m, unless stated otherwise Absolute Absolute change vs. change vs. Q1 2021 Q1 2020 Q4 2020 Q1 2021 year on year comments Revenues 81 138 146 — Significant improvement in loss before tax driven by lower costs and positive Revenues revenues Revenues ex specific items(1) 79 16
Slide 26: Outlook
Outlook Improved revenue trajectory in the Core Bank, supporting 2022 target Revenue growth and cost discipline driving cost/income ratio towards 70% Improved credit environment leads to reduced CLP guidance of ~25bps for 2021 Continued prudent balance sheet management in line with objectives Contin
Slide 27: Appendix
Appendix Deutsche Bank Q1 2021 results Investor Relations 28 April 2021
Slide 28: Sustainability at Deutsche Bank
Sustainability at Deutsche Bank Our key focus areas Recent achievements – Issuance of second green bond raised $ 800mn – € 25bn in financing and investment achieved for Q1 2021 after € 46bn in all of 2020 Sustainable – Maintained leading position in the euro-denominated sustainable bond market (rank
Slide 29: 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 30: Core Bank adjusted post-tax RoTE
Core Bank adjusted post-tax RoTE In € m, unless stated otherwise Q1 2020 Q4 2020 Q1 2021 Profit (loss) 616 489 1,333 Profit (loss) attributable to noncontrolling interests (23) (42) (36) Profit (loss) attributable to additional equity components (73) (85) (85) Profit (loss) attributable to Deutsche
Slide 31: Specific revenue items and adjusted costs – Q1 2021
Specific revenue items and adjusted costs – Q1 2021 In € m Q1 2021 Q1 2020 Q4 2020 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 1,313 3,097 2,178 637 (74) 7,152 81 7,233 1,325 2,354 2,167 519 43 6,407 (57) 6,350 1,226 1,893 1,96
Slide 32: Reconciliation adjusted costs excluding transformation charges
Adjusted costs excluding transformation charges In € m, unless stated otherwise Q1 2021 Q1 2020 YoY Q4 2020 QoQ Compensation and benefits 2,589 2,675 (3)% 2,404 8% Adjusted costs excluding transformation Information Technology 887 911 (3)% 895 (1)% Professional service fees 206 220 (6)% 268 (23)% Oc
Slide 33: Adjusted profit (loss) before tax (PBT)
Adjusted profit (loss) before tax (PBT) In € m Q1 2021 Q1 2020 Transfor- Transfor- Specific Goodwill Restructuring Specific Goodwill Restructuring Reported PBT mation Adjusted PBT Reported PBT mation Adjusted PBT revenue items impairments & severance revenue items impairments & severance charges(1)
Slide 34: Last 12 months (LTM) reconciliation
Last 12 months (LTM) reconciliation In € m Q1 2020 Q1 2021 Q2 2019(1) Q3 2019(1) Q4 2019(1) Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 LTM(2) LTM(3) Revenues Core Bank 5,982 5,483 5,528 6,407 6,353 5,974 5,518 7,152 23,400 24,998 CRU 221 (220) (180) (57) (66) (36) (65) 81 (236) (87) Group 6,203 5,262 5
Slide 35: Transformation-related effects
Transformation-related effects In € bn 2019 – 2019 – 2022 Q1 2021 expected % of total cumulative cumulative 2019 – Q1 2021 expenses expenses Q1 2021 Deferred tax Deferred Tax Asset asset valuation 2.8 - 2.8 2.9 97% valuation adjustment adjustment Nonoperating Goodwill impairment - 1.0 1.0 100% costs
Slide 36: Deposit charging
Deposit charging In € bn, unless otherwise stated Quarterly charging Charging agreements(1) Q1 2021 deposits by revenues, in € m total client holdings(2) — Performing well against updated revenue targets due to higher than expected client acceptance 140 132 — More than 85% of volumes in scope of cha
Slide 37: Indicative divisional currency mix
Indicative divisional currency mix Q1 2021 Net revenues Total noninterest expenses 8% 8% 5% 10% 13% 13% 17% 16% 14% Other (1) 21% Other (1) 4% 4% 1% 0% 19% 25% 13% 20% 15% 18% USD 0% USD 32% GBP 12% 1% 5% 37% GBP 16% 18% 86% 87% 0% EUR 70% 67% 41% 61% EUR 64% 53% 51% 42% 14% CB IB PB AM Group CB IB
Slide 38: Net interest income sensitivity
Net interest income sensitivity Hypothetical +100 bps parallel shift impact, in € bn First year Second year 1.3 0.8 0.8 0.5 0.5 0.4 Retail Non-retail Group Retail Non-retail Group Maturity Maturity > 3M 0.3 0.1 0.3 > 3M 0.5 0.2 0.7 EUR EUR ≤ 3M 0.2 0.2 0.4 ≤ 3M 0.3 0.2 0.4 > 3M 0.0 0.0 0.1 > 3M 0.1
Slide 39: Litigation update
Litigation update In € bn, period end Litigation provisions(1) 1.0 1.1 1.0 ― Provisions remained stable quarter on quarter, 0.8 0.8 with new provisions being offset by provision releases as a result of settlement payments and Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 favorable court rulings ― Continge
Slide 40: 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) 761 Group Stage 3 29 2.2
Slide 41: Loan book
Loan book In € bn, period end 459 442 433 440 432 Corporate Treasury 109 Services 99 94 94 96 Business Banking 21 21 21 21 21 Investment Bank 87 80 73 69 71 International 76 77 80 76 75 Private Bank Private Bank 161 152 155 158 162 Germany Capital Release Unit Other (1) 3 3 10 10 8 3 8 3 7 3 Q1 2020
Slide 42: Loan book composition
Loan book composition Q1 2021, IFRS loans: € 440bn Capital Release Unit Other (1) IB Other(2) — Well diversified loan portfolio Leveraged Debt Capital Markets 1% 6% — 55% of loan portfolio in Private Bank, Asset Backed Securities 2% 1% mainly consisting of German retail 5% German Mortgages IB - Comm
Slide 43: Level 3 assets
Level 3 assets As of 31 Mar 2021, in € bn Assets (total: € 22bn) Equity securities Mortgage backed securities Other 10 1 Debt Derivative securities 4 8 Assets — Level 3 is an indicator of valuation uncertainty and not of asset quality — The decrease in Level 3 assets reflects: — Portfolios are not s
Slide 44: Leverage exposure and risk weighted assets
Leverage exposure and risk weighted assets CRD4, fully loaded, in € bn, period end Leverage exposure Risk weighted assets 330 330 66 Operational Risk RWA 66 1,078 1,105 Market Risk RWA 23 Trading assets 105 107 29 Credit valuation 8 adjustments Derivatives(1) 141 148 27 Lending 428 250 436 116 Lendi
Slide 45: Trading book Value at Risk
Trading book Value at Risk DB Group, 99%, 1 day, in € m, unless stated otherwise Historical Simulation VaR Quarterly average ∅ 35 ∅ 82 ∅ 73 ∅ 46 ∅ 43 140 120 100 80 60 40 20 0 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Note: Deutsche Bank received regulatory approval for the Value at Risk model for Ris
Slide 46: Corporate Bank at a glance
Corporate Bank at a glance FY 2020 and Q1 2021 revenues ex specific items FY 2020 Revenues Q1 2021 Revenues (share of total) (share of total) Institutional Cash Institutional Cash Institutional Management Institutional Management Client Services Client Services Trust & Agency Trust & Agency Services
Slide 47: Assets under Management – Private Bank
Assets under Management – Private Bank In € bn Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Assets under Management 442 471 477 493 519 Private Bank Germany 197 209 212 222 231 therein: Deposits (1) 106 106 107 108 109 therein: Investment products (2) 91 103 106 114 122 International Private Bank 245 263
Slide 48: 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