Deutsche Bank Ag · XETR:DBK
Deutsche Bank — Non-Deal Roadshow (February 2009)
54 slides from Deutsche Bank's roadshow presentation, Feb 19, 2009
Slide 1: Stefan Krause, Chief Financial Officer, London
Deutsche Bank Stefan Krause Chief Financial Officer London, 17 – 19 February 2009
Slide 2: Results in summary
Results in summary Fourth quarter 2008: Net loss of EUR 4.8 bn Full year 2008: Net loss of EUR 3.9 bn Tier I capital ratio of 10 10.1%, 1% consistent with target Leverage ratio* ratio of 28 28, ahead of target Reduction of legacy g y exposure p in key y areas Significant reductioninAsse
Slide 3: Agenda
Agenda 1 FY 2008 and 4Q Q performance p 2 Capital, balance sheet and funding 3 Prospects for core businesses in 2009 Investor Relations 02/09 · 3
Slide 4: 2008 in context of Deutsche Bank's management agenda
2008 in context of Deutsche Bank’s Bank s management agenda In EUR bn Net revenues Net income Tier I capital Mark-downs Net revenues 6.5 31.1 6.1 2.3 28.3 28.5 26.5 30.7 25.6 3.5 22 7 22.7 23.5 21 6 21.6 21 9 21.9 21.3 21.9 2.5 18.7 1.4 7.0 0.4 13.5 (3.9) ‘02 ‘03 ‘04 ‘05 ‘06 ‘07 ‘08 ‘02 ‘03 ‘04 ‘05
Slide 5: Segment results: Fourth quarter
Segment results: Fourth quarter In EUR m CB&S GTB AWM PBC CI C&A Group R Revenues (3 774) (3,774) 751 588 1 410 1,410 28 112 (885) Provision for credit losses (358) (3) (13) (216) (1) (0) (591) Noninterest expenses (1,657) (457) (1,451) (1,143) (26) (11) (4,746) Income (loss) before (5,773) 291 (860
Slide 6: Drivers of fourth-quarter performance in summary
Drivers of fourth-quarter performance in summary IBIT*, Business in EUR bn Key drivers Global Markets: Business model exposed to exceptionally turbulent markets CB&S (5.8) Corporate Finance: Leveraged finance write write-backs backs counterbalance declines in Advisory, ECM Record revenues driv
Slide 7: CB&S: Losses in specific trading businesses
CB&S: Losses in specific trading businesses Revenues, in EUR bn 4Q2007 4Q2008 CB&S Total 4Q2007: EUR 3.8 bn 4Q2008: EUR (3.8) bn Leveraged Finance CDO Subprime (0.1) write-backs (net): 0.8 2.3 RMBS (0.2) CRE (0.2) 0.9 0.9 0.7 0.5 0.6 0.6 0.3 0.2 0.3 0.1 0.1 0.0 0 0 00 0.0 (0.4) (0.5) (0.3) ((1.1)) (
Slide 8: Unprecedented conditions in the quarter
Unprecedented conditions in the quarter Basis risk Correlation CDS bond-basis funding spread, in bps EURJPY-Nikkei correlation, in % 300 .90 225 150 70 .70 75 .50 0 (75) .30 30 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q Volatility Liquidity EuroStoxx volatility 3M Euribor – 3M Eonia swap rate, in bps 100 200 150 50 10
Slide 9: These conditions impacted Global Markets' business model
These conditions impacted Global Markets’ Markets business model … Business model positioning Impact Investment into flow products and technology 9 Reaped benefits of “Flight to quality” Risk transformation and distribution model 9 Limited “toxic asset” writedowns Broad product and geographical foot
Slide 10: Leading to losses in key trading businesses
… leading to losses in key trading businesses 4Q2008, in EUR bn Business Revenues DB positioning 4Q challenges Breakdown / inversion of Credit Trading Bond-CDS basis ((1.0)) Prop Extreme illiquidity Relative value strategies Correlation to HF strategies Specific positions Convertible dis
Slide 11: However, flow businesses performed well
However flow businesses performed well However, Revenue development, 2006-2008 Foreign Exchange Money Markets(1) x2.3 x3.6 2006 2007 2008 2006 2007 2008 Rates(2) +12% FX / MM / Rates 2007: ~30% of Global Markets revenues 2006 2007 2008 (1) Excluding prop (2) Core Rates Trading excluding municipals a
Slide 12: GTB: Another successful quarter and year
GTB: Another successful quarter and year Income before income taxes, in EUR m 2008 quarterly development 2004 – 2008 291 1,106 >4x 283 281 945 705 250 433 254 1Q 2Q 3Q 4Q 2004 2005 2006 2007 2008 Note: 2004-2005 based on U.S. GAAP and on structure as of 2006, 2006 onwards based on IFRS and on latest
Slide 13: AWM: Market conditions impacted full year 2008 results
AWM: Market conditions impacted full year 2008 results Income before income taxes Net new money In EUR m Reported In EUR bn (30)% Before specific items 646 27 15% 267 13 207 ARP/S 10 settlement EUR (0.1) bn Specific items In EUR bn DWS Scudder impairment (0.3) Infrastructure impairment (0.3) I
Slide 14: PBC: Lower investment product revenues and rise in provisions
PBC: Lower investment product revenues and rise in provisions Income before income taxes, in EUR m 328 304 262 4Q vs. 3Q2008: Operating items: Lower revenues from investment products and deposits & payments (175) Higher provision for credit losses (47) 51 Specific items: Severance related to e
Slide 15: Agenda
Agenda 1 FY 2008 and 4Q Q performance p 2 Capital, balance sheet and funding 3 Prospects for core businesses in 2009 Investor Relations 02/09 · 15
Slide 16: Capital ratios and RWA development
Capital ratios and RWA development 10.3 10.1 10.1 Target: 92 9.2 93 9.3 ~10% 10% 8.7 8.8 8.6 8.4 7.5 7.2 7.1 7.0 6.9 6.9 7.0 6.8 329 319 308 311 308 303 305 285 31 Mar 30 Jun 30 Sep 31 Dec 31 Mar 30 Jun 30 Sep 31 Dec 2007 2008 Tier I ratio, in % Core Tier I ratio, in % RWA, in EUR bn Note: 2007 base
Slide 17: Development of Tier I capital in fourth quarter 2008
Development of Tier I capital in fourth quarter 2008 In EUR bn 32.8 1.2 31.1 0.9 1.0 ((4.8)) 30 Sep Net Release of Contingent Other 31 Dec 2008 income dividend capital measures / 2008 accrual conversion effects Investor Relations 02/09 · 17
Slide 18: IFRS balance sheet: Development by category
IFRS balance sheet: Development by category Positive market values In EUR bn from derivatives Trading securities 1,624 Reverse repos / securities borrowed 2 202 2,202 Other trading assets 2,062 1,383 Loans des. at FV Other financial assets des. at FV through P&L 727 1,224 1,383 1,624 Financial asset
Slide 19: Derivative market values driven by certain factors
Derivative market values driven by certain factors In EUR bn Quarter-on-quarter development Key drivers Netting under U.S. GAAP ‘proforma’ Increase driven by sharp falls in USD and EUR U.S. GAAP ‘proforma’ interest Rates Volatile FX, Credit and Equity markets had a similar but smaller impact 68%
Slide 20: Development of total assets: IFRS and U.S. GAAP pro-forma
Development of total assets: IFRS and U.S. U S GAAP ‘pro-forma’ pro-forma Total assets, in EUR bn 30 Sep 2008 31 Dec 2008 2,202 2,062 2 062 (22)% 1,318 (620) (101) ((23)) 1 030 1,030 (1,097) (7) (69) IFRS Derivatives Pending Repo U.S. GAAP U.S. GAAP Repo Pending Derivatives IFRS netting (1) settleme
Slide 21: U.S. GAAP pro-forma assets: Analysis of managed reductions
U S GAAP ‘pro-forma’ U.S. pro-forma assets: Analysis of ‘managed managed reductions reductions’ In EUR bn ‘Managed reductions‘ 1 318 1,318 319 Positive market values from 107 derivatives 1,030 , Financial assets Trading securities 347 at FV through P&L 128 132 Other trading assets 69 Reverse repos /
Slide 22: Total assets: Analysis of major categories
Total assets: Analysis of major categories In EUR bn, as of 31 Dec 2008 2,202 g impact Netting p Positive market values from 1,224 1,030 derivatives (1,097) 128 Derivatives post-netting 1 Trading securities 205 205 Other trading assets 42 247 Non-derivative 2 Reverse repos / securities trading asset
Slide 23: U.S. GAAP pro-forma derivatives risk
1 U.S. GAAP ‘pro-forma’ pro forma derivatives risk – >50% of uncollateralised risk mitigated – remainder primarily with investment grade counterparts In EUR bn, as of 31 Dec 2008 Derivatives Portfolio – Credit Risk Overview Credit risk mitigants – EUR 67 bn includes: Non-cash collateral not netted
Slide 24: Non-derivative trading assets – risk reduction across all asset classes
2 Non-derivative Non derivative trading assets – risk reduction across all asset classes In EUR bn Non-derivative Non derivative trading assets as at 31 Dec 2008 >50% reduction in non non-derivative derivative trading assets 247 Assets 31 Mar 08 31 Dec 08 % change Government paper 154 60 (61)% & age
Slide 25: Reverse repo / sec borrowing – highly collateralised
3 Reverse repo / sec borrowing – highly collateralised / quality counterparts / conservative haircuts Collateral quality distribution(1) Risk mitigants In EUR bn, as of 31 Dec 2008 80% of uncollateralised trades with >AA counterparts 161 Conservative haircuts, tailored to counterparty risk profi
Slide 26: Composition of loan book demonstrates focus on diversification & risk mitigation
4 Composition of loan book demonstrates focus on diversification & risk mitigation In EUR bn, as of 31 Dec 2008 269 Low loan to value Substantially hedged Highly diversified Fully Short term / Substantially collateralised (61) on demand Liquid collateralised by Gov’t collateral Substantial ~50% secu
Slide 27: Provision for credit losses
Provision for credit losses Single Si l counterparty t t In EUR m relationship IAS 39 impact 1,076 591 257 5 185 612 329 236 105 114 135 72 98 81 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q Full year 2007 2008 2007 2008 Thereof: CIB (20) (42) (19) 190 (11) (9) 66 361 109 408 117 124 124 136 125 145 169 229 501 668 Ther
Slide 28: Assets and Liabilities: Funding analysis
Assets and Liabilities: Funding analysis Liquidity management view by product, as of 31 Dec 2008, in EUR bn 2 202 2,202 2 202 2,202 Derivatives & Derivatives & Settlement Balances(1) 1,264 1,210 Settlement Balances(1) Reverse Repo & 133 Repo & Other Secured 168 Other Secured 68 Trading Liabilities(2
Slide 29: Unsecured funding by source
Unsecured funding by source In EUR bn 511 498 Cash and liquidity reserves exceed 15% 73 short term short-term 153 30% wholesale funding 426 358 + 68 30 June 2007 31 December 2008 Capital markets Short-term wholesale funding Retail deposits Fiduciary, clearing & other deposits Note: Figures may not a
Slide 30: Deutsche Bank's funding position
Deutsche Bank’s Bank s funding position Modest additional capital market funding CDS spreads support funding cost advantage New issuance, in EUR bn 5-year senior CDS, in bps 1 July 2007 2 February 2009 381 54 45 295 306 263 163 167 171 127 16 106 70 19 35 35 14 13 18 11 10 12 8 2007 2008 Plan BNP JP
Slide 31: Agenda
Agenda 1 FY 2008 and 4Q Q performance p 2 Capital, balance sheet and funding 3 Prospects for core businesses in 2009 Investor Relations 02/09 · 31
Slide 32: Summary of near-term strategic initiatives
Summary of near-term strategic initiatives CB&S Recalibration of the investment banking business model GTB Continued growth initiatives AM: Reengineering business model to current market levels AWM PWM: Efficiency program / selective growth opportunities Growth G and efficiency ff program
Slide 33: Global Markets: Historical revenue composition
Global Markets: Historical revenue composition Illustrative Revenue breakdown Examples Highly illiquid Credit Prop trading ~20% 15% ~15% positions iti Equity Prop trading Equity derivatives ~20% ~15% ~60% Money markets derivatives 60% ~60% FX d derivatives i ti ~60% Medium / ~55% high liqu
Slide 34: We have moved swiftly to recalibrate this model
We have moved swiftly to recalibrate this model Significant reduction in proprietary risk Continued management of legacy exposures Notional capital EPT EPT* U S RMBS exposures U.S. Hedges SABA* Net exposure (90)% (50)% Aug 07 Jan 08 Jun 08 Sep 08 Dec 08 Dec 07 Mar 08 Jun 08 Sep 08 Dec 08 Aggressive
Slide 35: Resulting in a shift in the Global Markets business model
Resulting in a shift in the Global Markets business model Shift in business model (revenue mix) Key actions Illustrative De-risk Highly illiquid Scale-back / eliminate illiquid prop activity ~5% 5% Sharply reduced retention of structured un- ~15% positions iti hedgeable risk Significant curtai
Slide 36: Corporate Finance: Recalibrating our platform
Corporate Finance: Recalibrating our platform Commercial Real Estate Reposition Reengineer Leveraged Finance Sectors: Financial Institutions, Natural Resources Countries: Selected Europe, China, Brazil Invest Products: M&A and ‘rescue’ advisory Maintain commitment to German mid-cap p A
Slide 37: Global Transaction Banking: Continued growth agenda
Global Transaction Banking: Continued growth agenda Increase penetration of existing client base in core markets Expansion into Leverage ‘flight to quality’ opportunities new markets Monitor opportunities to expand by bolt-on bolt on acquisition Target profitable lower mid-cap corporate clie
Slide 38: AWM will reposition its platforms to a changed environment
AWM will reposition its platforms to a changed environment Reengineer platform to restore operating leverage at current market levels: Reposition exposure to European money-market fund business Right-size RREEF / infrastructure Asset Downsize D i h hedge d ffund d platform l tf Management Ce
Slide 39: PBC: Respond to shifts in revenue mix
PBC: Respond to shifts in revenue mix mix, and leverage benefits of ‘flight to quality’ Shift in revenue mix Substantial capture of new clients and deposits Net revenues, in EUR bn Total clients, in m x Deposits(2), in EUR bn Germany 5.8 5.8 83 +19 Investment (15)% 64 products 0.8 14.6 13 8 13.8 Con
Slide 40: PBC: Implementation of Growth and Efficiency program
PBC: Implementation of ‘Growth Growth and Efficiency Efficiency’ program Advisory banking: Position for recovery in PBC investment products via selective investments Business Advisory Consumer Consumer banking: Position for margin model Banking Banking compression via cost-efficiency Efficiency
Slide 41: Business initiatives will be complemented by Group initiatives
Business initiatives will be complemented by Group initiatives Complexity Realign infrastructure complexity to recalibrated front-office requirements reduction Reap full infrastructure savings from front-office simplification Improve efficiency of outsourced functions Offshoring Additional o
Slide 42: Summary: Looking forward in 2009
Summary: Looking forward in 2009 Capital ratios remain solid Reduced exposure to legacy positions Trading g assets in key y areas have been significantly g y reduced Strong liquidity and funding base Cost-efficiency measures underway Repositioning businesses to the current environment In
Slide 43: Additional information
financial transparency. Additional information Roadshow A Passion to Perform. Deutsche Bank
Slide 44: FY2008 IAS 39 reclassifications
FY2008 IAS 39 reclassifications In EUR bn FY2008 total impact from reclassifications Assets reclassified Assets reclassified Total in 3Q2008 in 4Q2008 (1) Net Revenues 2.3 1.2 3.6 Provision for credit losses (0.2) (0.1) (0.3) Noninterest expenses - - - Income before income taxes 2.2 1.1 3.3 RWA(2) 2
Slide 45: Value of Level 3 assets unchanged
Value of Level 3 assets((1)) unchanged Asset classes Comments In EUR bn Criteria for level 3 categorization unchanged 88 89 3 2 6 6 Key changes in composition year over year: 14 – Transfer from Level 2 to level 3 41 – Market volatility drives rises in derivative volumes 50 – IAS 39 reclassificat
Slide 46: Trading exposures in key areas
Trading exposures in key areas 31 Dec 2007 31 Dec 2008 In EUR bn CDO Subprime U S RMBS U.S. (70)% (59)% (50)% (65)% 9.7 29 2.9 4.8 0.9 1.2 3.6 0.5 1.3 Gross Net Gross Net CRE Leveraged Finance (73)% (83)% (98)% (98)% 17.2 15.4 36.2 34.9 4.6 (1),(2) 2.6 09 0.9 05 0.5 (1) Gross Net Gross Net CDO / RMB
Slide 47: Leveraged Finance exposure: Current status
Leveraged Finance exposure: Current status Composition of current loans and loan commitments In EUR bn 30 Sep 2008 total loans and loan commitments Funded 24.1 FX 0.2 Sales ((1.0)) Restructured 0.1 10.9 New Commitments 0.1 Cancelled (12.2) (1.0) 31 Dec 2008 total loans and loan commitments 11.3 Gros
Slide 48: Commercial Real Estate: Current status
Commercial Real Estate: Current status Composition of traded whole loans and loan commitments(1) In EUR bn 30 Sep 2008 traded loans at fair value(2) 12.4 Total IAS 39 reclass in 2008: EUR 6.9 bn FX (0.5) 2.6 Sales (1.8) Transfer to loans held (per IAS 39) (5.6) 0.5 Other Europe Other 0.1 31 Dec 2008
Slide 49: Monoline exposure related to U.S. residential mortgages
Monoline exposure related to U.S. U S residential mortgages Exposures in EUR bn Exposures, Breakdown Subprime Super Subprime Alt-A Senior Other FV prior to FV after By Notional Fair Value before credit provision Credit Monoline rating credit credit provision* provision* provision* AA Rated 1.6 (0.0)
Slide 50: Other monoline exposure
Other monoline exposure Exposures in EUR bn Exposures, Breakdown Corporate single CMBS Trust Preferred name / CDO and other CLOs FV prior to FV after Student Loans Other Credit Monoline rating credit credit provision* provision* provision* By Notional Fair Value before credit provision AA Rated 2.0
Slide 51: Invested assets report
Invested assets((1)) report In EUR bn Net new money 31 D Dec 31 M Mar 30 J Jun 30 S Sep 31 D Dec 2007 2008 2008 2008 2008 4Q2008 FY2008 Asset and Wealth Management 749 698 700 700 628 (23) (13) Asset Management 555 516 515 510 463 (15) (22) Institutional 158 150 155 156 159 9 10 Retail 234 214 211 1
Slide 52: Regional net new money – AM and PWM
Regional net new money – AM and PWM In EUR bn 4Q2007 FY2007 1Q2008 2Q2008 3Q2008 4Q2008 FY2008 Asset Management 5 27 2 1 (11) (15) (22) G Germany 1 20 2 (3) (7) (22) (29) UK 1 7 1 1 3 (1) 4 Rest of Europe 1 (7) (0) (1) 0 (1) (2) Americas 1 3 0 4 (6) 9 7 Asia / Pacific 1 4 (1) (0) (1) (1) (3) Private
Slide 53: Balance sheet leverage ratio (target definition)
Balance sheet leverage ratio (target definition) In EUR bn 31 Dec 30 Sep 2008 2008 Total assets (IFRS) 2,202 2,062 Adjust derivatives according to U.S. GAAP netting rules (1,097) (620) Adjust pending settlements according to U.S. GAAP netting rules (69) (101) Adjust repos according to U.S. GAAP nett
Slide 54: Cautionary statements
Cautionary statements Unless otherwise indicated, the financial information provided herein has been prepared under International Financial Reporting Standards (IFRS). (IFRS) It is preliminary and unaudited and may be subject to adjustments based on the preparation of the full set of financial state