Deutsche Bank Ag · XETR:DBK
Deutsche Bank — Q4 2010 Earnings Presentation
53 slides from Deutsche Bank's earnings presentation, Feb 3, 2011
Slide 1: 4Q2010 Results
Deutsche Bank 4Q2010 Results Stefan Krause Chief Financial Officer Analyst Call, 3 February 2011 Deutsche Bank 4Q2010 results financial transparency. Investor Relations Stefan Krause, CFO
Slide 2: Agenda
Agenda 1 Group results 2 Segment results 3 Key current issues Deutsche Bank 4Q2010 results financial transparency. 2 Investor Relations Stefan Krause, CFO
Slide 3: Highlights
Highlights 4Q2010 4Q2009 Income before income taxes (in EUR bn) 0.7 0.8 Profita- Net income (in EUR bn) 0.6 1.3 bility Pre-tax RoE (target definition)(1) 6% 5% Diluted EPS (in EUR) 0.63 1.82 31 Dec 2010 30 Sep 2010 Tier 1 capital ratio 12.3% 11.5% Capital Core Tier 1 capital ratio 8.7% 7.6% Tier 1 c
Slide 4: Postbank consolidation impact
Postbank consolidation impact(1) In EUR m 4Q2010 Net revenues 414 Provision for credit losses (56) Compensation and benefits (145) Profita- General and administrative expenses (175) bility Total noninterest expenses (320) Minority interest (7) Income before income taxes, net of cost-to-achieve and o
Slide 5: Profitability
Profitability Income before income taxes Net income In EUR bn In EUR bn 2.8 1.8 1.5 1.3(2) 1.8 1.2 1.1 1.4 1.3 (2) 1.3 1.3 1.2 1.1 0.8 0.7 0.6 (1.0) (1.2) 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 2009 2010 2009 2010 Pre-tax return on equity(1), in % Effective tax rate, in % (2) (2) 22 15 15 9
Slide 6: Noninterest expenses
Noninterest expenses Acquisition-related cost: In EUR bn In EUR m 4Q2010 FY2010 Compensation and benefits PWM: Sal. Oppenheim / BHF 138 435 Compensation and benefits GTB: ABN AMRO 29 311 661 82 General and administrative expenses PBC: Postbank(2) 145 145 General and admin. expenses Other non-c
Slide 7: Capital ratios and risk-weighted assets
Capital ratios and risk-weighted assets 12.6 12.3 12.3 11.7 11.3 11.5 11.0 11.2 10.2 Target: ≥10% 8.7 8.7 8.1 8.7 7.8 7.5 7.5 7.6 7.1 316 346 295 288 273 292 303 277 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 2009 2010 Tier 1 ratio, in % Core Tier 1 ratio, in % RWA, in EUR bn Note: Tier 1 ratio = Tier 1 capital / RWA;
Slide 8: Tier 1 capital and RWA development
Tier 1 capital and RWA development In EUR bn Tier 1 capital RWA 0.6 0.5 0.0 42.6 9.8 7.5 346.2 60.4 (0.2) (1.2) (0.6) 31.8 277.1 3.1 30 Sep Rights Postbank Net FX Other 31 Dec 30 Sep FX Postbank(3) Credit Market Operational 31 Dec 2010 issue(1) effect income(2) effects 2010 2010 effects risk risk ri
Slide 9: Deutsche Bank's funding costs are a source of competitive advantage
Deutsche Bank‘s funding costs are a source of competitive advantage Funding cost development Observations In bps European Sovereign CDS — Challenging market conditions due to iTraxx Senior Financials economic concerns, regulatory 240 DB 5yr Senior CDS DB issuance spread developments and Eurozone dif
Slide 10: Agenda
Agenda 1 Group results 2 Segment results 3 Key current issues Deutsche Bank 4Q2010 results financial transparency. 10 Investor Relations Stefan Krause, CFO
Slide 11: Segment overview
Segment overview Income before income taxes, in EUR m 4Q2010 4Q2010 significant severance related to efficiency measures(4) 4Q2009 4Q2010 impact from acquisitions 625 EUR 104 m CB&S 398 2(1) 94 EUR 130 m GTB 180 (36) (180)(2) AWM 325 30(3) 222 PBC 47 (296) CI (103) 98 C&A (91) (1) ABN AMRO Netherlan
Slide 12: Sales & Trading debt and other products
Sales & Trading debt and other products Net revenues Key features In EUR bn Overall Charges related to Ocala Funding LLC — Solid fourth quarter despite difficult market environment Mark-downs Write-backs — Lower credit and rates revenues q-o-q due to subdued customer activity partially offset by goo
Slide 13: Sales & Trading equity
Sales & Trading equity Net revenues Key features In EUR m Overall — Good performance from all business areas q-o-q and y-o-y reflecting successful recalibration of the platform Cash Equities — Significantly higher revenues q-o-q and y-o-y reflecting 927 944 increased client activity and higher commi
Slide 14: Origination & Advisory
Origination & Advisory Net revenues Key features Overall In EUR m — Strong fourth quarter performance Advisory — Achieved target to become Top 5 during 2010 and gained the most Origination market share of any leading global IB 809 — Top 5 in all products, with notable improvements in ECM and M&A and
Slide 15: Global Transaction Banking
Global Transaction Banking Income before income taxes Key features In EUR m In EUR m 4Q10 3Q10 4Q09 FY10 FY09 Negative goodwill(1) 4Q2010 efficiency measures(2) Revenues 881 852 630 3,439 2,609 478 Provisions(3) (68) (44) (12) (140) (27) Noninterest exp. (719) (594) (438) (2,394) (1,788) IBIT 94 214
Slide 16: AWM: Influenced by investments
AWM: Influenced by investments Income before income taxes, in EUR m Asset Management (AM) Private Wealth Management (PWM) Specific items 50% 368 501 BHF impairment 62 200 335 Sal. Oppenheim / (1) BHF 306 135 36 268 301 33 (2) 164 (168) 2009 AM PWM AM Sal. Opp./ AM and PWM reported reported severance
Slide 17: Asset Management
Asset Management Income before income taxes Key features In EUR m In EUR m 4Q10 3Q10 4Q09 FY10 FY09 Reversal of impairment DWS Scudder Revenues 459 438 429 1,706 1,321 349 Provisions(3) (1) 0 0 (1) (0) 96 84 96 Noninterest exp. (362) (354) (82) (1,439) (1,164) 32 56 IBIT 96 84 349 268 164 58 (4) Inv
Slide 18: Private Wealth Management
Private Wealth Management Income before income taxes Key features In EUR m xx IBIT ex Sal. Oppenheim / BHF In EUR m 4Q10 3Q10 4Q09 FY10 FY09 38 27 77 47 49 Revenues 565 576 354 2,201 1,364 26 Sal. Oppenheim / BHF (180) Provisions(2) (16) (19) (3) (43) (16) Noninterest exp. (680) (566) (374) (2,326)
Slide 19: Private & Business Clients
Private & Business Clients Income before income taxes Key features In EUR m In EUR m 4Q10 3Q10 4Q09 FY10 FY09 Severance(1) Net Postbank contribution(2) Revenues 1,824 1,455 1,391 6,136 5,576 xx PBC reported Provisions(3) (240) (165) (198) (746) (790) Noninterest exp. (1,354) (1,045) (1,146) (4,493)
Slide 20: Agenda
Agenda 1 Group results 2 Segment results 3 Key current issues Deutsche Bank 4Q2010 results financial transparency. 20 Investor Relations Stefan Krause, CFO
Slide 21: Compensation update
Compensation update — German Institutsvergütungsverordnung (InstVV) came into effect on 12 October 2010, replacing guidelines from 2009 New regulations — Regulation is based on CRD 3 and CEBS guidelines — Stricter rules compared to overseas regulatory activities — As with previous rules, existing co
Slide 22: Cost development 4Q2010 vs. 3Q2010
Cost development 4Q2010 vs. 3Q2010 Total non-interest expenses, in EUR bn 0.2 0.1 0.2 6.3 0.3 5.7 0.2 (0.05) (0.1) Other 0.2 General 0.15 net and impact 3.1 admini- 2.5 strative expenses Complexity 6.3 6.0 Reduction — CIB integration Program — Business growth Compen- — IT investments sation 3.0 3.1
Slide 23: Cost and staff development 2010 vs. 2009
Cost and staff development 2010 vs. 2009 Staff Cost development development Total non-interest expenses, in EUR bn Full-time equivalents 1.6 (1) 0.3 0.6 0.1 23.3 Infrastructure / other 20.1 0.6 0.5 (0.1) 0.5 CI 102,062 Other (0.3) PCAM 0.4 CIB General (0.3) and 10.1 77,053 33,499 admini- 8.4 Complex
Slide 24: Cost efficiency measures
Cost efficiency measures Complexity Reduction Program, CIB integration and Postbank integration In EUR m Gross cost savings 2500 Cost-to-achieve 2000 1500 1000 Net cost savings 500 0 2010 2011 2012 2013 2014 2015 Deutsche Bank 4Q2010 results financial transparency. 24 Investor Relations Stefan Kraus
Slide 25: Postbank: Capital consumption almost in line with estimate
Postbank: Capital consumption almost in line with estimate In EUR bn Capital consumption items Background As per As of In EUR bn Change of Control IR Roadshow Goodwill increased due to higher (outside-in, (22% take-up) 21% take-up) net FVAs primarily from market movements, insight into Postbank and
Slide 26: Mortgage Related Activities
Mortgage Related Activities In USD billions Mortgage Related Whole Loan Sales Securitization Product Key Points DB sells mortgages originated by a 3rd party or DB affiliate DB deposits mortgages — DB or its affiliates originated by a 3rd party or DB Role have also acted as an (e.g. mortgage loans or
Slide 27: Additional information
Deutsche Bank Additional information
Slide 28: Specific items 4Q2010
Specific items 4Q2010 In EUR m Noninterest expenses Business Revenues LLPs Comp & Gen. & admin Other non- Total Total benefits exp. interest exp. 4Q2010 Severance Group - - (354) - - (354) (354) Credit crisis related mark-ups CB&S 204 - - - - - 204 FV gains / (losses) on own debt GM / C&A 22 - - - -
Slide 29: Specific items FY2010
Specific items FY2010 In EUR m Noninterest expenses Business Revenues LLPs Comp & Gen. & admin Other non- Total Total benefits exp. interest exp. FY10 Postbank related charge CI (2,338) - - - - - (2,338) Severance Group - - (588) - - (588) (588) Ocala GM (358) - - - - - (358) Cosmopolitan impairment
Slide 30: Complexity reduction Program: Key levers
Complexity reduction Program: Key levers In EUR bn, initiatives decided, 2011 exit rate Lever Impact Sub-initiative lever & impact Examples – Standardization of Operating – Optimize GBS / GT Operating Model 0.2 Model – Finance offshoring Operating model & – Location/ offshoring/ outsourcing 0.1 – Re
Slide 31: CIB integration
CIB integration 2011 IBIT impact in EUR bn Cost Revenue synergies synergies ― Corporate coverage: Eliminate duplication of coverage teams ― Product: Eliminate duplication of risk taking activity across Corporate Finance and Markets, centralise lending activity Streamline ― Business Management: Right
Slide 32: Postbank Consolidation: Purchase Price Allocation (PPA)
Postbank Consolidation: Purchase Price Allocation (PPA) — IFRS 3 requires an acquirer to perform a Purchase Price Allocation (PPA) and take all assets & liabilities at Fair Value (FV) on its balance sheet upon change of control (one-time requirement) — Based on the accounting requirements for Postba
Slide 33: Fair Value Adjustments in context
Fair Value Adjustments in context Postbank balance sheet as of change of control(1), in EUR bn xx Fair Value adjustments (pre-tax) 240 240 — Postbank carries more than 80% of Structured Credit Portfolio(2) (0.7) 1.1 its assets and liabilities at amortized cost. For PPA purposes all assets and liabil
Slide 34: Bank levies
Bank levies Overview ― Various countries considering the introduction of bank levies as a consequence of the financial crisis with no co-ordination at an international level ― To date levies have been proposed in Germany, U.K, France, Austria, Portugal, Hungary and Sweden in Europe. South Korea and
Slide 35: Loan book
Loan book In EUR bn xx IAS 39 impact on CIB loan book 38 37 35 34 34 35 32 27 411 8 CI 276 268 270 292 283 147 (2) CIB 263 261 14 11 10 10 13 13 13 (2) (1) PCAM ex 154 137 133 136 154 (2) 147 126 144 Postbank (1) (1) (1) 108 110 113 115 123 128 127 129 Postbank 31 Mar 30 Jun 30 Sep 31 Dec 31 Mar 30
Slide 36: Composition of loan book and provisions by category
Composition of loan book and provisions by category In EUR bn, as of 31 Dec 2010 xx DB 4Q2010 provision for credit losses ex. PB(1), in EUR m xx Postbank (PB) 4Q2010 provision for credit losses(1), in EUR m 349 IAS 39 reclassified assets Postbank 406 213 113 23 56 411 27 Postbank loans consolidated
Slide 37: Provision for credit losses
Provision for credit losses In EUR m Related to IAS 39 reclassified assets 2,630 1,000 544 560 1,274 526 362 406(1) 262 243 1,378 492 412 996 308 329 249 233 159 193 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q Full year 2009 2010 2009 2010 Thereof: CIB 357 0 779 0 323 0 357 0 90 0 77 0 179 0 143 1,816 488 169 221 214 2
Slide 38: Impaired loans
Impaired loans In EUR bn xx IAS 39 impact – IFRS impaired loans 7.2 7.4 7.4 7.4 6.7 6.8 6.3 4.5 1.1 2.6 2.6 2.8 2.9 2.8 2.7 1.2 50% 53% 46% 47% 46% 47% 48% 49% 31 Mar 30 Jun 30 Sep 31 Dec 31 Mar 30 Jun 30 Sep 31 Dec 2009 2010 IFRS impaired loans(1) IFRS impaired loans coverage ratio(2) (1) IFRS impa
Slide 39: Pro-forma impact of IAS 39 reclassifications
Pro-forma impact of IAS 39 reclassifications In EUR m Total Total FY2008 FY2009 1Q2010 2Q2010 3Q2010 4Q2010 FY2008 - FY2010 FY2010 Incremental reported income(1) (112) (1,238) (128) (83) (164) (35) (410) (1,760) Fair value P&L impact of reclassified assets 3,439 983 (279) 0 (93) 25 (346) 4,076 Net p
Slide 40: Monoline update
Monoline update Reduction since 1Q2009 peak Exposure adequately reserved In EUR bn(1) In EUR bn, as of 31 Dec 2010 Fair value after CVA CVA Fair value after CVA CVA 9.1 (53)% 7.6 5.9 5.6 Net exposure to non-investment grade: 5.2 5.1 6.8 4.5 4.3 EUR 0.8 bn 5.5 4.7 4.0 2.7 3.7 4.0 3.2 3.1 0.9 0.7 2.3
Slide 41: Value of Level 3 assets
Value of Level 3 assets(1) Asset classes 4Q2010 development In EUR bn — No significant movement in the Group level 3 asset balance between 3Q and 4Q2010 — Increase in AFS balance mainly due to the 58 consolidation of Postbank; this has been 3 4 47 47 offset by a reduction in the fair value of 6 3 de
Slide 42: Funding and liquidity
Funding and liquidity In EUR bn Funding sources overview Liquidity position 30 Sep 2010 (Total: EUR 919 bn) — Postbank acquisition significantly 31 Dec 2010 (Total: EUR 1,075 bn, excl. Postbank: EUR 897 bn) adds to stable funding sources Postbank 230 — Liquidity Reserves(3) exceed 111 EUR 145 bn as
Slide 43: Group headcount
Group headcount Full-time equivalents, at period end 31 Dec 2010 vs. 31 Dec 2010 vs. 31 Dec 31 Mar 30 Jun 30 Sep 31 Dec 30 Sep 2010 31 Dec 2009 2009 2010 2010 2010 2010 Net of Net of Total Total de-/consoli- de-/consoli- change change dation dation CIB 14,191 14,381 15,609 16,112 15,943 (169) (169)
Slide 44: Number of shares for EPS calculation
Number of shares for EPS calculation In million Average At end of period FY FY 4Q 31 Dec 30 Sep 31 Dec 2009 2010 2010 2009 2010 2010 Common shares issued(1) 673 741 913 683 683 929 Total shares in treasury (4) (4) (6) (1) (4) (10) Common shares outstanding 669 737 907 682 679 919 Vested share awards
Slide 45: Invested assets report
Invested assets(1) report In EUR bn 31 Dec 31 Mar 30 Jun 30 Sep 31 Dec Net new money 2009 2010 2010 2010 2010 4Q2010 FY2010 Asset and Wealth Management 686 853 870 846 873 4 (3) Asset Management 496 537 551 532 550 4 (1) Institutional 173 180 177 169 175 6 (2) Retail 166 174 174 170 178 (0) (5) Alte
Slide 46: Regional invested assets – AM and PWM
Regional invested assets(1) – AM and PWM In EUR bn 31 Dec 10 31 Dec 31 Mar 30 Jun 30 Sep 31 Dec vs. 2009 2010 2010 2010 2010 31 Dec 09 Asset Management 496 537 551 532 550 11 % Germany 214 239 239 239 244 14 % UK 21 21 22 22 25 18 % Rest of Europe 30 33 34 34 34 11 % Americas 209 223 234 217 223 7%
Slide 47: Regional net new money – AM and PWM
Regional net new money – AM and PWM In EUR bn 4Q2009 FY2009 1Q2010 2Q2010 3Q2010 4Q2010 FY2010 Asset Management 9 9 4 (12) 2 4 (1) Germany 1 (2) 4 0 (1) 3 6 UK 4 5 (0) 1 1 3 4 Rest of Europe (0) (1) 1 (1) (0) (1) (1) Americas 5 7 0 (11) 3 (1) (9) Asia / Pacific 0 (0) (1) (0) (1) 2 (0) Private Wealth
Slide 48: Asset and Wealth Management: P&L at a glance
Asset and Wealth Management: P&L at a glance In EUR m 4Q2010 vs. 4Q2010 vs. 4Q2010 4Q2009 3Q2010 4Q2009 3Q2010 Net revenues 1,023 783 1,014 31% 1% Provision for credit losses (17) (3) (19) n.m. (11)% Noninterest expenses (1,042) (456) (921) 128% 13% Income before income taxes (36) 325 78 n.m. n.m. P
Slide 49: Corporate Investments
Corporate Investments Income before income taxes Key features In EUR m — Mark-to-market losses on put/call options related to Deutsche Postbank AG prior to consolidation 377 — Net losses related to consolidated 117 investments that include The 65 47 Cosmopolitan Resort and Casino property which open
Slide 50: VaR of CIB trading units
VaR of CIB trading units 99%, 1 day, in EUR m VaR of CIB trading units Constant VaR of CIB trading units(1) EUR 1.9 bn Sales & Trading revenues EUR 2.4 bn 180 160 140 120 100 80 60 40 20 108 116 102 87 78 36 47 49 46 45 4Q2009 1Q2010 2Q2010 3Q2010 4Q2010 (1) Constant VaR is an approximation of how t
Slide 51: Total assets (adjusted)
Total assets (adjusted) Ex. Postbank: In EUR bn 1,019 1,211 64 Derivatives post-netting 1,044 Positive market values 238 from derivatives 71 Derivatives post-netting 271 Trading assets Trading securities 33 Financial assets 244 Trading at FV through P&L 275 129 assets 23 Other trading assets 30 12 R
Slide 52: Balance sheet leverage ratio (target definition)
Balance sheet leverage ratio (target definition) In EUR bn 2009 2010 31 Mar 30 Jun 30 Sep 31 Dec 31 Mar 30 Jun 30 Sep 31 Dec Total assets (IFRS) 2,103 1,733 1,660 1,501 1,670 1,926 1,958 1,906 Adjustment for additional derivatives netting (1,019) (681) (617) (533) (559) (735) (760) (602) Adjustment
Slide 53: 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