Deutsche Bank Ag · XETR:DBK
Deutsche Bank — Investor Presentation (July 2007)
26 slides from Deutsche Bank's investor presentation, July 2007
Slide 1: Investor Meetings Frankfurt / London, June + July 2007
Deutsche Bank Anshu Jain Head of Global Markets Member of the Group Executive Committee Investor Meetings Frankfurt / London, June + July 2007
Slide 2: Deutsche Bank Group: Outstanding profit growth
Deutsche Bank Group: Outstanding profit growth In EUR bn 1st quarter Income before income taxes Net income 8.3 6.1 6.1 3.5 4.0 3.2 2.5 2.8 2.1 1.4 2.6 22% 29% 1.6 2003 2004 2005 2006 1Q2007 2003 2004 2005 2006 1Q2007 Note: 2003-2005 based on U.S. GAAP, 2006 onwards based on IFRS Investor Relations 0
Slide 3: Outperformance against key targets
Outperformance against key targets 1st quarter Pre-tax RoE (target definition)(1) Diluted EPS (target definition)(2) In % 1ppt In EUR 40 41 10.24 31 25 6.95 16 4.53 13 3.88 2.31 2.87 35% 2003 2004 2005 2006 1Q 1Q 2003 2004 2005 2006 1Q 2006 2007 2007 (1) 2003-2004 underlying; 2005 as per target defi
Slide 4: Delivery to shareholders
Delivery to shareholders Dividend per share Cash returned to shareholders In EUR In EUR bn 32% CAGR 4.00 12.9 Dividends 5.7 2.50 1.70 1.50 1.30 7.2 Share retirements 2002 2003 2004 2005 2006 2002 - 2006 Investor Relations 07/07 · 4
Slide 5: A leading global investment bank …
A leading global investment bank … Corporate Banking & Securities revenues 1Q2007, in EUR bn 7.2 Loan products 6.1 (2) 0.3 5.8 5.6 5.5 0.8 5.0 Investment banking 4.1 3.9 3.3 Sales & 5.1 Trading Goldman DB Morgan Citi JPMorgan Merrill Credit UBS Lehman Sachs (1) Stanley (1) Chase Lynch Suisse Brother
Slide 6: … and a market leader in sales and trading
… and a market leader in sales and trading Sales & Trading revenues 1Q2007, in EUR bn 5.9 5.1 2.4 4.4 Equity 3.9 3.9 1.7 1.7 3.3 3.1 1.1 3.1 1.8 2.7 Debt 1.2 1.9 1.3 1.0 3.5 3.4 2.7 2.9 2.1 2.0 1.7 1.4 1.6 Goldman DB Morgan Merrill Citi UBS JPMorgan Credit Lehman Sachs * Stanley * Lynch Chase Suisse
Slide 7: Global Markets has shown consistent, stable earnings growth across market cycles …
Global Markets has shown consistent, stable earnings growth across market cycles … DB rank 6 3 2 4 2 2 2 6 DB Sales & Trading revenues, 5 Peer average 5 4 4 in EUR bn 33 22 11 00 1Q 2Q 1Q 2Q 3Q 3Q 4Q 4Q 1Q 1Q 2Q 2Q 3Q 3Q 4Q 4Q 1Q 1Q 2Q 2Q 3Q 3Q 4Q 4Q 1Q 1Q 2Q 2Q 3Q 3Q 4Q 4Q 1Q 1Q 2Q 2Q 3Q 3Q 4Q4Q 1Q
Slide 8: ... thanks to a well diversified business portfolio
... thanks to a well diversified business portfolio Global Markets revenues, 2006 By Region By Product Prime Equity Brokerage Asia Pacific Prop Americas Structured Germany Equity Credit By Client Cash Equity Commod- Government ities Europe Money Corporates EM (ex Germany) Managers MM & FX Rates Hedg
Slide 9: Unquestionably, recent market conditions have been relatively benign for sales and trading
Unquestionably, recent market conditions have been relatively benign for sales and trading Tightening credit Rising equity Total industry Sales & Trading revenues spreads markets In EUR bn US IG MSCI World 114 132 174 Prop trading 32% Equity Derivs & Prime 15% Brokerage Cash Equities 2000 2002 2004
Slide 10: Secular trends shaping our industry: A revolution in asset management
Secular trends shaping our industry A revolution in asset management Asset management industry evolution, 2003-2006 CAGR 03-06 60% ETF ~USD 0.5 trillion 50% 40% 30% Migration of beta 20% Migration of alpha Alternative assets Traditional 10% (PE, HF, Real Estate, etc.) products ~USD 6.5 trillion ~USD
Slide 11: Secular trends shaping our industry: The growth of emerging markets
Secular trends shaping our industry The growth of emerging markets Financial markets growth in EM Asia DB EM footprint: comparison to peers has been rapid Financial stock growth (2000-2005) Financial stock as % of GDP (2005) 329% Moscow Warsaw Beijing 91% Shanghai 233% Mexico City Seoul Cairo Hong K
Slide 12: The growth of emerging markets (cont'd): Focus on India
Secular trends shaping our industry The growth of emerging markets (cont’d): Focus on India “Indian paper livens up derivatives market abroad” Derivatives The Economic Times, 12 April 2007 Physical footprint and product offering “Reserve Bank of India (RBI) keen to develop derivatives market” Financ
Slide 13: The development of complex asset-liability management solutions for insurers and pension funds
Secular trends shaping our industry The development of complex asset-liability management solutions for insurers and pension funds Insurance ALM Aggregate pension fund deficit In EUR bn Equities FI 0-10Y FI 10-30Y FI 30Y+ 30% 16% 11% 10 10 20 Liabilities deficit Deficit 90 Assets 100 Deficit in % 2%
Slide 14: Seven-fold derivatives growth over 8 years: DB outpacing market
Secular trends shaping our industry Seven-fold derivatives growth over 8 years: DB outpacing market Increased transaction volumes DB derivatives profitability Notional volume (in USD bn) 35% 26% 350 CAGR CAGR Equity Equity Credit Credit IR/FX Rates 50 1998 1999 2000 2001 2002 2003 2004 2005 2006 200
Slide 15: Global Markets is superbly positioned for stable growth
Strategic positioning Global Markets is superbly positioned for stable growth Sales & Trading (debt / equity) revenues Illustrative Equities Prop Credit Prop Proprietary risk Rates Prop Proprietary risk FX Prop Cash Equities Foreign Exchange Market access Market access Government Bonds Corporate Bon
Slide 16: We are strongest in large, high-growth markets
Strategic positioning We are strongest in large, high-growth markets Underweight In-line Overweight Strong competitive position US Equities International Equities Structured Credit in a significant market Products Cash Credit Prime Finance Structured Rates Underweight position Commodit
Slide 17: The combination of equities and fixed income, plus sustained investment, has realised efficiency gains
Focus on equities The combination of equities and fixed income, plus sustained investment, has realised efficiency gains DB Global Markets key metric evolution Drivers of performance 2004 2006 Improved connectivity of equity derivatives with broader distribution ~35% ~5 ppt Better linkages of pr
Slide 18: The importance of profitable growth
Focus on equities The importance of profitable growth Equity Sales & Trading profitability has significantly outpaced revenue growth Derivatives Revenues Revenue gap Equity Pre-tax profit Cost to acquire Pre-tax profit impact 27% Brokerage CAGR Revenue gap Prime Cost to acquire Pre-tax profit impact
Slide 19: Leadership in equity derivatives is core to our equities strategy
Focus on equities Leadership in equity derivatives is core to our equities strategy Equity Derivatives House of the Year in Europe Example transaction: Derivatives Week Awards, Nov 2006 Institutional = Top 2 Complex derivatives Best in Germany UK Hedge Fund Structured products European Awards, Nov 2
Slide 20: Room for further growth in prime finance
Focus on equities Room for further growth in prime finance DB Hedge fund market share examples Estimated Prime Finance revenues FY 2006 EU equity derivatives 11.0% EU equity 10.8% trading EU equity research 10.5% FX options 14.0% Rates 11.6% Credit 12.0% Note: Europe equities derivatives market shar
Slide 21: Focus on commodities: A short we intend to cover
Focus on commodities A short we intend to cover Estimated commodities revenue contribution Energy Risk Derivatives House of the Year, 2007 FY 2006 Debt Sales & Trading revenues, EUR bn Deal of the Year – Brimsdown, 2006 Commodities Best Investor Business, 2006 11.4 Debt S&T ex 2007 strategy commodit
Slide 22: Focus on quality of earnings: Risk management
Focus on quality of earnings Risk management Client-driven equity revenues Equity Sales & Trading revenues, in EUR m Equity prop-trading revenues Share of dedicated equity prop trading revenues 1,800 1,600 1,400 Ø 32% 1,200 1,000 Ø 21% 800 Ø 16% Ø 16% 600 400 200 0 (200) 1Q03 3Q03 1Q04 3Q04 1Q05 3Q0
Slide 23: Our businesses are not highly correlated either to markets or each other
Focus on quality of earnings Our businesses are not highly correlated either to markets or each other Weekly correlation of GM revenues and key market indicators: 2003 to 2006 GM revenues to market indicators Research Index GM revenues S&P BB Credit Commodities Commodities Hedge Fund MSCI World US 1
Slide 24: Principal investing: A mid-table position with which we are happy
Focus on quality of earnings Principal investing: A mid-table position with which we are happy Estimated cross-asset class proprietary and principal revenues, FY2006 Source: Coalition Investor Relations 07/07 · 24
Slide 25: Future prospects hinge on a trade-off between opposing forces
Future prospects hinge on a trade-off between opposing forces Growth drivers Risks to medium-term growth A revolution in asset management Severe, correlated market correction The growth of emerging markets Ongoing margin compression / The development of complex asset- commoditization liabi
Slide 26: Cautionary statements
Cautionary statements Unless otherwise indicated, the financial information provided herein has been prepared under the International Financial Reporting Standards (IFRS). It may be subject to adjustments based on the preparation of the full set of financial statements for 2007. The segment informat