Deutsche Bank AG · XETR:DBK
Deutsche Bank — Non-Deal Roadshow (February 2004)
33 slides from Deutsche Bank's roadshow presentation, Feb 18, 2004
Slide 1: Deutsche Bank Roadshow
Deutsche Bank Roadshow Dr. Clemens Börsig, CFO London, 18 – 20 February 2004
Slide 2: Agenda
Agenda 1 FY 2003 in summary 2 Successful transformation Increasing operating strength De-risking the Bank Strengthening strategic positions 3 Management Agenda Phase 2 Investor Relations 02/04 · 2
Slide 3: 2003 in summary
2003 in summary Record performance Underlying EUR EUR Net income pre-tax profit up 163% 3.6 bn up 244% 1.4 bn Underlying EUR Basic earnings EUR revenues up 9%* 21.9 bn per share up 281% 2.44 Management Agenda Phase 1: targets exceeded Deutsche Bank’s transformation strategy delivered excellent r
Slide 4: Growth in like-for-like revenues
Growth in like-for-like revenues Decline in net revenues due to non-underlying revenues, FX impact, and consolidations and deconsolidations In EUR bn 2002 2003 26.5 9% 3.8 22.8 1.9 21.3 2.7* (0.6) 20.1 21.9 Net Non-underlying Underlying Underlying Non-underlying Net revenues revenues revenues revenu
Slide 5: Underlying and reported profit 2002 / 2003
Underlying and reported profit 2002 / 2003 In EUR bn 2002 2003 (2.5) 4.7 163% 0.6 (1.4) 3.5 2.2 3.6 2.8 1.4 Income Non- Non- Underlying Underlying Non- Non- Income before income underlying underlying pre-tax pre-tax underlying underlying before income tax expense charges (1) earnings (2) profit prof
Slide 6: Underlying pre-tax profit by business
Underlying pre-tax profit by business In EUR bn Underlying pre-tax profit Segment 2002 2003 ∆ Corporate Banking & Securities 0.9 2.7 216% Global Transaction Banking 0.5 0.2 (56)% Corporate and Investment Bank 1.3 2.9 121% Asset and Wealth Management 0.4 0.7 60% Private & Business Clients 0.5 0.5 (14
Slide 7: Agenda
Agenda 1 FY 2003 in summary 2 Successful transformation Increasing operating strength De-risking the Bank Strengthening strategic positions 3 Management Agenda Phase 2 Investor Relations 02/04 · 7
Slide 8: Considerable improvement in underlying profitability ...
Considerable improvement in underlying profitability ... In EUR bn Underlying pre-tax profit Underlying pre-tax profit ex severance 163% 134% 4.3 3.6 2.1 1.7 1.8 1.4 2001 2002 2003 2001 2002 2003 Investor Relations 02/04 · 8
Slide 9: ... with significant rise in RoE and profit margin ...
... with significant rise in RoE and profit margin ... Underlying performance ratios, in % Pre-tax return on equity(1) Pre-tax profit margin(2) 9ppt 10ppt 16 13 7 5 6 4 2001 2002 2003 2001 2002 2003 (1) Underlying pre-tax profit divided by average active equity (2) Underlying pre-tax profit divided
Slide 10: ... and costs reduced by EUR 6.0 bn since 2001
... and costs reduced by EUR 6.0 bn since 2001 Operating cost base, in EUR bn 23.3 Severance 0.5 (3.9) (6.0) 19.4 0.5 17.3 22.8 0.7 19.0 16.6 2001* 2002 2003 Underlying cost 89% 85% 79% income ratio * 2001 OCB pro forma, including full year net effect of Scudder / RREEF / Herold transaction (EUR 0.8
Slide 11: Effective capital management
Effective capital management RWA, in EUR bn Tier 1 ratio, in % ~40bps 305 (9)% 9.6 10.0 237 216 8.1 2001 2002 2003 2001 2002 2003 Investor Relations 02/04 · 11
Slide 12: Agenda
Agenda 1 FY 2003 in summary 2 Successful transformation Increasing operating strength De-risking the Bank Strengthening strategic positions 3 Management Agenda Phase 2 Investor Relations 02/04 · 12
Slide 13: Considerable progress in improving asset quality
Considerable progress in improving asset quality At year-end, in EUR bn Loans Problem loans 265 (14)% (39)% 12.7 172 10.8 148 6.6 44% 40% 43% 51% 57% 50% 2001 2002 2003* 2001 2002 2003 Deconsolidation German loans Coverage ratio * Includes Variable Interest Entities (VIE) consolidated under FIN 46 I
Slide 14: Risk provisions down by 50%
Risk provisions down by 50% Provision for credit losses, in EUR bn Provisioning rate, in bps(1) 2.1 (50)% 0.2 (2) 1.1 1.0 92 67 37 2001 2002 2003 (1) Provision for loan losses divided by average gross loans (2) Change in measurement of other inherent loss allowance Investor Relations 02/04 · 14
Slide 15: Disposal of non-core assets
Disposal of non-core assets At year-end, in EUR bn Alternative assets Industrial holdings – cost basis 11.9 (56)% (10)% 9.7 6.1 5.1 4.6 4.3 2001 2002 2003 2001 2002 2003 Investor Relations 02/04 · 15
Slide 16: Agenda
Agenda 1 FY 2003 in summary 2 Successful transformation Increasing operating strength De-risking the Bank Strengthening strategic positions 3 Management Agenda Phase 2 Investor Relations 02/04 · 16
Slide 17: CIB – Top tier investment bank
CIB – Top tier investment bank Net revenues FY2003: Other revenues CIB vs. major peers, in EUR bn GTB Transaction services Loan products 17.6 CB&S Investment banking 16.2 Sales & trading 14.2 1.9 11.7 1.5 10.0 1.5 6.9 9.2 Citigroup JPM Chase Goldman Morgan Lehman Sachs Stanley Brothers Note: Merrill
Slide 18: Leading Sales & Trading franchise with high efficiency on risk
Leading Sales & Trading franchise with high efficiency on risk In EUR bn 2003 Sales & Trading revenues 2003 Sales & Trading revenues vs. VaR High 1 Deutsche Bank Goldman Sachs Deutsche Bank 2 Goldman Sachs Morgan JPM Chase 3 Morgan Stanley Stanley Revenues 4 JPM Chase Citigroup* 5 Citigroup Lehman B
Slide 19: PCAM – a strong position in our businesses
PCAM – a strong position in our businesses Net revenues(1) FY2003: PCAM vs. major peers, in EUR bn Other (Mainly Cards / Consumer Finance) 45.4 PCS(2) AWM ex PCS PBC 15.4 9.7 8.2 9.0 0.2 3.6 4.1 1.6 4.4 Citigroup JPM Morgan Merrill State Goldman Chase Stanley Lynch Street(3) Sachs (1) Net of policyh
Slide 20: PCAM – a world leading asset gatherer
PCAM – a world leading asset gatherer PCAM invested assets, in EUR bn Deutsche Bank YoY development PCAM vs. major peers(1) As of 31 Dec 2003 1,011 Fidelity 2% (73) UBS(2) 16 872 Merrill Lynch (82) 856 State Street(3) Deutsche Bank 872 Morgan Stanley Credit Suisse Citigroup JPM Chase 31 Dec FX “Like
Slide 21: PCAM – transformation of the platform
PCAM – transformation of the platform AWM PBC In EUR m Severance Underlying pre-tax profit / severance Underlying pre-tax profit ex severance by segment, 2003 1,513 314 1,513 459 1,081 774 79 660 739 234 2001* 2002 2003 AWM PBC 2003 * Structure as of 31 Dec 2002; split AWM / PBC not available; repor
Slide 22: Deutsche Bank's achievement - the view of the market
Deutsche Bank’s achievement - the view of the market “Transformation is an over-used word. Only rarely does it genuinely encapsulate the essential nature and extent of major change. For one firm, however, the word perfectly describes the shift ... to a lean, aggressive, focused universal bank with a
Slide 23: Agenda
Agenda 1 FY 2003 in summary 2 Successful transformation Increasing operating strength De-risking the Bank Strengthening strategic positions 3 Management Agenda Phase 2 Investor Relations 02/04 · 23
Slide 24: Management Agenda Phase 2 – springboard for growth and 25% RoE
Management Agenda Phase 2 – springboard for growth and 25% RoE Maintaining strict cost, Capitalising on capital and risk discipline global leadership in CIB Establishing Delivering Deutsche Bank as the profitable growth in PCAM most reputable brand Investor Relations 02/04 · 24
Slide 25: After transformation, RoE target realistic with revenue growth of EUR 2 bn
After transformation, RoE target realistic with revenue growth of EUR 2 bn In EUR bn 13% Underlying return on equity, pre-tax 25% ~2.0 ~6.5 0.4 9% 0.8 3.6 (0.3) Underlying Adjustment Planned cost Lower provision Revenue Pro forma pre-tax profit for currency reduction for credit losses (at growth und
Slide 26: Strong revenue momentum in high margin products ...
Strong revenue momentum in high margin products ... Growth products in all businesses (revenue growth 2003 vs. 2002) Credit Trading (GCF) 125% AM Hedge Funds 97% Convertibles (Equities) 88% Derivatives (Equities) 48% Commercial Mortgage Backed Securities 46% New Issues Syndicate 41% AM Real Estate 3
Slide 27: ... targeted by systematic growth initiatives across the group
... targeted by systematic growth initiatives across the group EXAMPLES Continue investing in our best-in-class derivatives businesses Global Markets Closing the product and distribution gap to top 3 in U.S. fixed income Consolidating leadership positions in high margin businesses Global Equit
Slide 28: Additional information
financial transparency. Additional information l : ‘Wis SS fy ~ 7 3 ™~ \N IFR “Bankof the Year 2003” Deutsche Bank
Slide 29: Definitions used in this presentation
Definitions used in this presentation Underlying pre-tax profit Operating cost base Reported net revenues Reported noninterest expenses - Net gains / losses on securities available for sale / - Policyholder benefits and claims(2) industrial holdings incl. hedging - Restructuring activities - Signifi
Slide 30: Group P&L – highlights
Group P&L – highlights In EUR bn 2002 2003 ∆ Total revenues 26.5 21.3 (20)% Underlying revenues 22.8 21.9 (4)% / 9%(3) Provision for credit losses (2.1) (1.1) (50)% Operating cost base (19.4) (17.3) (11)% Other costs (1.4) (0.2) (87)% Income before income tax expense 3.5 2.8 (22)% Underlying pre-tax
Slide 31: Listed holdings: Unrealised net gains of EUR 1.8 bn
Listed holdings: Unrealised net gains of EUR 1.8 bn Stake, in % Market value, in EUR m 31 Dec 31 Dec 31 Mar 30 Jun 30 Sep 31 Dec 2003 2002 2003 2003 2003 2003 DaimlerChrysler AG 11.8 3,403 3,223 3,619 3,595 4,445 Allianz AG 2.5 753 402 695 725 965 Linde AG 10.0 401 346 383 420 509 Südzucker AG 4.8 1
Slide 32: Number of shares for EPS calculation
Number of shares for EPS calculation In million Average At end of period 31 Dec 30 Sep 31 Dec FY2003 3Q2003 4Q2003 2002 2003 2003 Shares issued 597 582 582 622 582 582 Total shares in treasury (20) (3) (12) (36) (6) (17) SFAS 150 effect (23) (47) (44) - (44) (44) Vested share awards* 5 3 3 6 3 3 Bas
Slide 33: Cautionary statement regarding forward-looking statements and non-U.S. GAAP financial measures
Cautionary statement regarding forward-looking statements and non-U.S. GAAP financial measures This presentation contains forward-looking statements. Forward-looking statements are statements that are not historical facts, including statements about our beliefs and expectations. Any statement in thi