Deutsche Bank Ag · XETR:DBK
Deutsche Bank — Investor Day (October 2015)
37 slides from Deutsche Bank's investor day presentation, Oct 29, 2015
Slide 1: Executing Strategy 2020
Deutsche Bank Executing Strategy 2020 London, 29 October 2015 John Cryan – Co-Chief Executive Officer Marcus Schenck – Chief Financial Officer Deutsche Bank John Cryan/Marcus Schenck 0 29 October 2015
Slide 2: Agenda
Agenda 1 Executing Strategy 2020 2 Financial profile Deutsche Bank John Cryan/Marcus Schenck 1 29 October 2015
Slide 3: In the next three years, we intend to make Deutsche Bank…
In the next three years, we intend to make Deutsche Bank… — Materially reduce number of products, clients and locations … Simpler & — Simplify structure with fewer legal entities more efficient — Manage towards competitive cost structure based on a more efficient infrastructure — Exit from higher ri
Slide 4: Strategic priorities of Strategy 2020
Strategy 2020: It is all about execution Targeted Execution plan 2018 financial impact Reposition — RWA and CRD4 exposure reductions Investment — Split division along client lines — Adjusted Costs(1) Strategic priorities of Strategy 2020 Banking — Exit selected Global Markets business lines and mark
Slide 5: Reorganised our operating divisions along our client lines
Reorganised our operating divisions along our client lines Current segments Future segments (effective 1Q2016) Sales & Trading Debt Global Markets Corporate Banking & Sales & Trading Equity Securities Corporate Finance Corporate and Investment Global Transaction Banking Global Transaction Banking Ba
Slide 6: One fully accountable new leadership team with all businesses and functions represented
One fully accountable new leadership team with all businesses and functions represented John Cryan Jürgen Fitschen Co-Chief Executive Officer Co-Chief Executive Officer Kim Hammonds Stuart Lewis Sylvie Matherat Chief Operating Officer Chief Risk Officer Chief Regulatory Officer Quintin Price Garth R
Slide 7: Top priority: Achieve structurally affordable cost base
Top priority: Achieve structurally affordable cost base In EUR bn Revenue expectations — Restructuring including country, client and product reductions to result in revenue loss Planned — Concurrent investments to drive growth in disposals(1) ~4 key areas like Transaction Banking, Asset Management,
Slide 8: How do we take out costs?
How do we take out costs? Planned key measures — Thorough review of client relationships in Global Markets and Corporate & Focus client base Investment Bank — Particular focus on reducing clients in high-risk operating countries — Streamline country presence through full exit or more focused and sma
Slide 9: Reduce complexity of our business
Reduce complexity of our business Planned focus on: Client base Product suite Country footprint GM / CIB client portfolio, in % — Exit a number of businesses: — Full exit from 10 countries to 100% 100% — Market-making be implemented within next ~20% uncleared CDS 36 months — Rates legacy (e.g. — Fur
Slide 10: Reduce complexity of our IT Infrastructure
Reduce complexity of our IT Infrastructure Key performance indicators 2015 2020 Plan Change Operating systems 45 4 ~90% End-of-life hardware / software 166 0 100% % virtualisation 46% 95% 49ppts Private cloud adoption 20% 80% 60ppts Intersystem reconciliations ~1,000 ~300 70% “Run the bank” costs ta
Slide 11: Control issues must be resolved
Control issues must be resolved In EUR bn Litigation — Insufficient controls and poor Reported net income behavior led to enormous litigation burden — Robust investment required to strengthen weak control infrastructure 2.6 4.0 — Know-Your-Customer and Anti- Money-Laundering infrastructure a priorit
Slide 12: Growing regulatory pressures will continue
Growing regulatory pressures will continue Issues DB intended response — Basel 4 — Fundamental Review of the Trading Book — EUR ~90 bn RWA reduction by 2018 before RWA inflation — Standardised Approach for RWA Counterparty Credit Risk and — Further portfolio optimisation in Global Inflation Credit R
Slide 13: Global Markets will remain core business but significant planned actions
Global Markets will remain core business but significant planned actions Franchise strength Balanced portfolio of market leading products Deep client relationships Strong distribution teams Excellent risk management capabilities Planned actions Shown great adaptability to changing capital
Slide 14: Reallocating CB&S resources, primarily in Global Markets
Reallocating CB&S resources, primarily in Global Markets 3Q2015 – 2018 targeted change, in EUR bn RWA CRD4 Exposure Revenues Exit Market making uncleared CDS Rates legacy: e.g. uncleared Swaps with dealers ~(15) ~(40) ~(0.4) Agency RMBS trading High risk weight securitised trading Rationalise EM Deb
Slide 15: Corporate and Investment Banking: Continue to grow profitably
Corporate and Investment Banking: Continue to grow profitably — Combine Transaction Banking and Corporate Finance under common leadership — Continue to grow substantial Transaction Banking businesses with particular focus on core German market and Asia Pacific — Retain strength in Debt Capital Marke
Slide 16: Private, Wealth & Commercial Clients: Leverage the partnership to improve client focus
Private, Wealth & Commercial Clients: Leverage the partner- ship to improve client focus and realise cost synergies — Offer seamless client coverage with distinct Private Banking and Wealth “One Bank” in Germany Management approach — Complement the existing PBC affluent client business with (U)HNW f
Slide 17: Private, Wealth & Commercial Clients: Distinct client and product focus
Private, Wealth & Commercial Clients: Distinct client and product focus Estimated share of total revenues, FY2014 (Wealth Management and PBC pro-forma(1)) Product focus – targeted impact Private — Digitally enabled retail bank with reshaped branch Investment & Insurance network & formats and effic
Slide 18: Private, Wealth & Commercial Clients: Reshape PBC for lower costs and higher efficiency
Private, Wealth & Commercial Clients: Reshape PBC for lower costs and higher efficiency Key levers Targeted impact CRD4 leverage — Disposal of Postbank exposure Portfolio — Sale of stake in HuaXia Bank EUR ~(140) bn measures RWA — Consumer finance portfolio measures across Europe EUR ~(50) bn Gross
Slide 19: Planned disposal of Postbank
Planned disposal of Postbank Today Separate Optimise Execute — Squeeze-out — Develop and execute — Launch IPO or possible — Cease integration efforts restructuring plan sale especially in IT and — Digitalisation operations — Prepare IPO / sale process — Revert to stand-alone businesses — Maintain ef
Slide 20: Asset Management: global client franchise with strong growth momentum
Asset Management: global client franchise with strong growth momentum In EUR bn Net new assets Invested assets — Top 10 bank-owned 26 +14% global Asset 22 Manager(1) 721 748 657 644 — Strength across products, channels (27) and regions (39) — 146 4* and 5* 2012 2013 2014 Sep 2012 2013 2014 Sep 2015
Slide 21: Asset Management: strategic focus on institutional clients and funds
Asset Management: strategic focus on institutional clients and funds Asset Management Why we want to grow AM How we want to grow targets by 2018 Select examples: — AuM growth above Attractive industry market growth outlook — Expand innovative retirement (~6% rev. CAGR)(1) and Strategic Beta offering
Slide 22: NCOU: Accelerated wind-down
NCOU: Accelerated wind-down RWA, in EUR bn Planned measures 142 — Accelerated wind-down of NCOU targeted to be materially complete by 2016 — Estimated incremental IBIT impact from accelerated wind-down of EUR ~(1–2) bn; estimated to be accretive to CET1 ratio — Continued derisking of monoline 41 exp
Slide 23: Financial targets
Financial targets 2018 2020 CET 1 ratio, in % ≥ 12.5% Leverage ratio, in % ≥ 4.5% ≥ 5.0% Post-tax RoTE, in % >10% Aspiration to deliver competitive Dividend per share payout ratio Adjusted Costs(1), in EUR bn <22.0 CIR, in % ~70% ~65% RWA(2), in EUR bn ~320 ~310 Note: 2018/2020 targets are based on
Slide 24: Agenda
Agenda 1 Executing Strategy 2020 2 Financial profile Deutsche Bank John Cryan/Marcus Schenck 23 29 October 2015
Slide 25: Moving towards a cleaner cost definition
Moving towards a cleaner cost definition Noninterest expenses 2014, in EUR bn Policyholder 27.7 27.7 benefits and 0.5 0.4 New concept of “Adjusted claims / Impairments(1) Costs” with reduced carve-outs: Litigation(2) 2.0 2.0 — Litigation cost — Restructuring and severance Restructuring 0.4 & severan
Slide 26: 2015 noninterest expenses affected by one-off items
2015 noninterest expenses affected by one-off items Noninterest expenses, in EUR bn Disposals(1) — 2015 cost position hit by material ~4 one-offs: 9M2015 — EUR 5.8 bn goodwill / other Policyholder 5.9 benefits and intangibles impairment 29.8 claims/ (9M2015) Impairments(2) 27.7 — EUR 4 bn litigation
Slide 27: Adjusted Cost target EUR <22 bn in 2018
Adjusted Cost target EUR <22 bn in 2018 In EUR bn Intend to execute over the Disposals ~4(1) next 12 – 24 months 9M2015 Policyholder benefits and All goodwill in CB&S and claims / 5.9 PBC written down in 3Q2015 Impairments 9M2015 Litigation 4.0 ~0.6 Net cost reduction ~0.2 ~0.8 ~(1.5-2.5) Restructur
Slide 28: Key areas to achieve cost savings
Key areas to achieve cost savings Cumulative targeted savings 2015 – 2018, in EUR bn Target gross Measures savings — Focus Global Markets business model Expected restructuring — Re-shape Retail banking and severance cost Business — Reduce client footprint in Global Markets ~2.1 — Total 2015 – 2018:
Slide 29: ~9k internal FTE reductions planned
~9k internal FTE reductions planned Internal FTE, in 000s ~105 ~103 ~3 ~(20) ~86 ~(5) ~2 ~(6) ~77 ~(9) Total reduction in internal FTE FY15 Planned GTO Pro-forma Planned Baseline Business Business Infrastructure 2018 Plan Estimate(1) internalisation incl. GTO disposals(2) incl. reductions growth 201
Slide 30: RWA planned to be reduced materially but offset by regulatory inflation
RWA planned to be reduced materially but offset by regulatory inflation In EUR bn 408 ~(40) ~60+ ~(10) ~410+ ~(40) ~40+ ~360+ ~(30) ~20 ~320 3Q2015 Disposal of NCOU Global Business 2018 2015-2018 2018 2019/2020 Further 2020 Postbank wind-down Markets net growth / Target estimated Target estimated Gl
Slide 31: RWA inflation from regulatory requirements
RWA inflation from regulatory requirements(1) In EUR bn ~100+ Operational risk Market Risk Credit Risk Total estimated impact — Fundamental — SA CCR / — Additional own Review of the CRSA(2) Driver and industry Trading Book loss data — Floor assumed — Main impact on at 60 – 70% Global Markets Timing
Slide 32: Conservative capital growth achieves capital ratios
Conservative capital growth achieves capital ratios Minimum required CET1 capital to achieve target capital ratio In EUR bn Reported Minimum required CET1 capital — 3Q2015 – 2018: No growth in ~51-55 CET1 capital required to reach 12.5% CET1 ratio, assuming planned RWA reduction — By 2020: EUR ~4 –
Slide 33: Further exposure reduction planned to improve leverage ratio
Further exposure reduction planned to improve leverage ratio CRD4 exposure, in EUR bn 1,420 ~(140) — Leverage ratio target reflects likely EU regulatory requirements ~(60) and DB’s strategic ~90 ~1,250 ~1,250 objectives ~(70+) — Improvement principally driven by disposals and deleveraging — EUR 3 –
Slide 34: Pro forma funding remains robust and well positioned for new regulation
Pro forma funding remains robust and well positioned for new regulation External funding profile In EUR bn X% Most stable funding sources 977 843 ~850 — 2015 Funding Plan complete with EUR 33 bn raised vs EUR 30 – 35 bn target; Other 25% ~25% 29% 2016 requirements expected to be similar to 2015 75%
Slide 35: DB at a glance – where we are going
DB at a glance – where we are going Reported Group financial targets 2014 2018 2020 Simpler & CET 1 ratio 11.7% ≥12.5% more efficient Leverage ratio 3.5% ≥4.5% ≥5.0% Less risky Post-tax RoTE 3.5% >10% Aspiration to deliver competitive payout Dividend per share 0.75 ratio Better capitalised Costs(1),
Slide 36: Financial highlights in summary
Financial highlights in summary — Clear concept of Adjusted Costs — Limited adjustments to cost base to drive better cost discipline — Adjusted Cost reduction of EUR ~1 – 1.5 bn targeted by 2018 — Net cost reduction target (adjusted costs plus restructuring and severance) of EUR ~(1.5 – 2.5) bn by 2
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