Deutsche Bank Ag · XETR:DBK
Deutsche Bank — Q2 2019 Earnings Presentation
38 slides from Deutsche Bank's earnings presentation, Jul 24, 2019
Slide 1: Q2 2019 results
Deutsche Bank Q2 2019 results 24 July 2019
Slide 2: Driving execution of our transformation agenda
Driving execution of our transformation agenda Continued resilience of revenues in more controllable businesses Adjusted cost trajectory supports our material cost reduction target Execution of strategic realignment well underway Balance sheet and CET1 ratio remain robust Deutsche Bank Q2 2019 resul
Slide 3: Our new bank at a glance
Our new bank at a glance H1 2019 pro-forma financials(1), € bn, unless stated otherwise Group Core Bank YoY Capital Release Unit Revenues(2) 11.9 (3)% 12.6 0.6 of which Investment Bank 3.8 (12)% Adjusted costs(3) 11.6 9.6 (4)% 2.1 Cost income ratio 103% 90% 7 ppt n.m. Risk-weighted assets 347 282 4%
Slide 4: Resilient revenues in more controllable areas
Resilient revenues in more controllable areas € bn, revenues(1) excluding specific items(2) (5)% 13.1 1.1 12.4 Equities — Impact of challenging market conditions, perimeter adjustments in 2018 and uncertainty around our 0.8 Equities Market sensitive S&T recent strategic transformation in H1 2019 3.2
Slide 5: On track with adjusted cost reductions
On track with adjusted cost reductions € bn, adjusted costs Cost trajectory on track … … to deliver 2019 cost target 6.3 (0.2)(1) (1.3) Bank 5.9 Transformation levies 0.7 5.7 charges related 22.8 5.6 5.5 5.4 0.6 0.4 to adjusted cost 21.5(2) (0.6) H2 10.9 10.2 Adjusted costs 5.7 0.7 Bank ex 5.6 5.5 5
Slide 6: Focused on execution to fundamentally change the bank
Focused on execution to fundamentally change the bank Created Capital Release Unit with a dedicated management team Exited cash equities positions and begun process to shut down systems. Negotiations for the sale of Global Prime Finance & Electronic Equities ongoing More than 900 employees have eith
Slide 7: Progress towards near-term objectives
Progress towards near-term objectives 2019 2020 Adjusted cost € 21.5bn(1) € 19.5bn Near-term objectives CET1 ratio ~13% At least 12.5% Leverage ratio (fully loaded) 4% 4.5% Credit and Market risk-weighted CRU Derisking ~€ 20bn ~€ 10bn assets(2) Leverage exposure (fully loaded) € 119bn € 17bn Note: D
Slide 8: Q2 2019 Group financial highlights
Q2 2019 Group financial highlights € m, unless stated otherwise Higher / Higher / (lower) in % (lower) in % Q2 2019 vs. Q2 2018 vs. Q1 2019 Revenues Revenues 6,203. (6) (2) of which: Specific items(1) 109( (44) n.m. Noninterest expenses 6,987( 21. 18. Costs of which: Adjusted costs(2) 5,696( 2. (4)
Slide 9: Q2 2019 impact of transformation charges
Q2 2019 impact of transformation charges € m, unless stated otherwise Transformation Reported Excluding items Comment charges Revenues 6,203 - 6,203 Impairment of software and Adjusted costs(1) (5,696) (351) (5,345) provisions for existing service contracts Nonoperating costs(2) (1,292) (1,035) (256
Slide 10: Adjusted costs
Adjusted costs € m, FX adjusted (5)% (296) Q2 2019 YoY comments 5,641 351 5,696 95 5,345 (256) (69) (67) — Adjusted costs down 5% excluding transformation charges — 8% decline in compensation and Q2 2018 Compensation IT Professional Bank Q2 2019 Transformation Q2 2019 benefit costs mainly reflecting
Slide 11: Capital ratios
Capital ratios € bn except movements (in basis points) CET1 ratio — CET1 ratio declined by ~30 bps in the quarter, driven by two ECB 13.7% decisions related to regular reviews (~20 bps) as well as the payment (4) (2) of common share dividend and AT1 coupon in the quarter (~10 bps) 13.4% — Risk-weigh
Slide 12: Segment results
Segment results Deutsche Bank Q2 2019 results 12 Investor Relations 24 July 2019
Slide 13: Corporate & Investment Bank (CIB)
Corporate & Investment Bank (CIB) € m, unless stated otherwise Higher / (lower) in % vs. vs. Q2 2019 Q2 2018 Q1 2019 Q2 2019 YoY comments Revenues 2,942. (18) (12)) — Revenues impacted by strategic Revenues uncertainty in Equities during the quarter, of which: Specific items(1) 86. (24) n.m. lower m
Slide 14: Q2 2019 CIB business unit revenue performance
Q2 2019 CIB business unit revenue performance € m, revenues X% Excluding specific items(1) Change YoY Q2 2019 YoY revenue drivers Global Transaction Banking: Global Transaction Banking 949 (6)% (0)% — Essentially flat YoY excluding a gain on sale in Q2 2018. Increases in Cash Management and Trade Fi
Slide 15: Private & Commercial Bank (PCB)
Private & Commercial Bank (PCB) € m, unless stated otherwise Higher / (lower) in % vs. vs. Q2 2019 Q2 2018 Q1 2019 Q2 2019 YoY comments Revenues 2,486 (2) (1) Revenues of which: Specific items(1) 23 (71) (47) of which: Exited businesses(2) 21 (67) (0) — 7% RoTE in Q2 and H1 2019 excluding € (557)m t
Slide 16: Q2 2019 PCB business unit performance
Q2 2019 PCB business unit performance € m, revenues X% Excluding specific items(1) Change YoY Q2 2019 YoY revenue drivers Private and Commercial Business 1,670 2% 2% Private and Commercial Business (Germany): (Germany) — Volume growth and re-pricing measures offset the continued deposit margin compr
Slide 17: Asset Management (AM)
Asset Management (AM) € m, unless stated otherwise Higher / (lower) in % vs. vs. Q2 2019 Q2 2018 Q1 2019 Q2 2019 YoY comments Revenues Revenues 593) 6. 13( — Revenue increase driven by higher performance fees — Increase in adjusted costs driven by Noninterest expenses 471) 7. 19. higher compensation
Slide 18: Corporate & Other (C&O)
Corporate & Other (C&O) €m Profit before tax Higher / (lower) vs. Q2 vs. Q1 Q2 2019 113 2018 2019 Profit before tax 113) 232) 117) Funding & liquidity 21) (11)) 34) Valuation & Timing differences(1) 239) 341) 197) (4) Shareholder expenses (130) (12)) (15)) Noncontrolling interest(2) 51) 3. 19) (119)
Slide 19: Outlook and near-term goals
Outlook and near-term goals Focus on executing against our near-term financial objectives as part of our strategic transformation Grow revenues in our more controllable businesses. Stabilize performance in market sensitive areas Ongoing cost discipline puts us on track to reach our € 21.5bn(1) adjus
Slide 20: Appendix
Appendix Deutsche Bank Q2 2019 results 20 Investor Relations 24 July 2019
Slide 21: Specific revenue items and adjusted costs
Specific revenue items and adjusted costs €m Q2 2019 Q2 2018 Q1 2019 CIB PCB AM C&O Group CIB PCB AM C&O Group CIB PCB AM C&O Group Revenues 2,942 2,486 593 182 6,203 3,578 2,542 561 (91) 6,590 3,328 2,513 525 (15) 6,351 DVA - CIB Other (15) - - - (15) 56 - - - 56 (49) - - - (49) Change in valuation
Slide 22: Specific revenue items and adjusted costs – H1 2019
Specific revenue items and adjusted costs – H1 2019 €m H1 2019 H1 2018 CIB PCB AM C&O Group CIB PCB AM C&O Group Revenues 6,270 4,999 1,118 166 12,554 7,424 5,182 1,106 (144) 13,567 DVA - CIB Other (64) - - - (64) 118 - - - 118 Change in valuation of an investment - Sales & Trading (FIC) 138 - - - 1
Slide 23: H1 2019 pro-forma financials
H1 2019 pro-forma financials € bn, unless stated otherwise Current structure Future structure Core Group CIB Core PCB Core AM Core C&O Core Group CRU CRU CRU CRU CRU Bank Bank Bank Bank Bank Net revenues 12.6 6.3 5.7 0.6 5.0 5.0 0.0 1.1 1.1 - 0.2 0.2 - 12.6 11.9 0.6 Of which: Investment Bank 3.8 3.8
Slide 24: H1 2018 pro-forma financials
H1 2018 pro-forma financials € bn, unless stated otherwise Current structure Future structure Core Group CIB Core PCB Core AM Core C&O Core Group CRU CRU CRU CRU CRU Bank Bank Bank Bank Bank Net revenues 13.6 7.4 6.3 1.1 5.2 5.1 0.1 1.1 1.1 - (0.1) (0.1) - 13.6 12.4 1.2 Of which: Investment Bank 4.3
Slide 25: Noninterest expense trends
Noninterest expense trends € m, unless stated otherwise Q2 Q1 Q2 Q2 YoY Q1 QoQ YoY 2018 QoQ 2019 2019 2018 ex FX 2019 ex FX ex FX(1) ex FX(1) Compensation and benefits 2,771 2,994 (7)% 3,027 (8)% 2,842 (2)% 2,843 (3)% IT costs 1,339 904 48% 911 47% 954 40% 951 41% Memo: IT costs excluding € 333m tra
Slide 26: Indicative regional currency mix Q2 2019
Indicative regional currency mix Q2 2019 Net revenues Total noninterest expenses 6% 8% 6% 9% Other(1) 15% 12% (1) 15% Other 23% 0% 4% 7% 19% 5% 25% 24% 29% 22% USD 39% USD 39% 20% 2% 21% 87% GBP 0% 79% GBP 28% 53% 54% 49% EUR 39% 43% EUR 18% CIB PCB AM Group CIB PCB AM Group Note: Classification is
Slide 27: Litigation update
Litigation update € bn, period end Litigation provisions(1) 2.0 1.2 1.2 ― Provisions increased by € 0.1bn predominately due 1.1 to additional charges relating to the Vestia matter, which settled on 12 July 2019 ― Provisions include approximately € 0.3bn related to settlements already achieved or agr
Slide 28: Loan book
Loan book € bn, period end Growth YoY QoQ 415 419 398 405 392 395 143 12% 1% Corporate & 135 140 127 128 132 Investment Banking 41 6% (2)% Wealth Management 37 39 39 40 42 PCB (International) 31 31 31 32 32 32 4% 1% PCB Germany 190 191 195 196 197 3% 0% 193 PCB (Exited) Corporate & Other 0 7 0 7 0 2
Slide 29: Loan book composition
Loan book composition IFRS loans at amortized cost, 30 June 2019 Corporate & Investment Bank Private & Commercial Bank Other Other Global Transaction Bank 1% — Well diversified loan portfolio 16% — ~2/3rd of the loan portfolio is in PCB, German mortgages largely consisting of mortgages and secured l
Slide 30: Provision for credit losses and stage 3 loans under IFRS 9
Provision for credit losses and stage 3 loans under IFRS 9 Provision for credit losses, € m Stage 3 at amortised cost under IFRS 9, € bn Corporate & Investment Bank (CIB) CIB (ex-POCI) Purchased or Originated Credit Impaired (POCI) Private & Commerical Bank (PCB) PCB (ex-POCI) Group 2.5% 2.4% 2.3% 2
Slide 31: Net interest income sensitivity
Net interest income sensitivity € bn, hypothetical +100 bps parallel shift impact First year Second year 1.9 1.7 1.0 0.8 0.8 0.9 PCB CIB Group PCB CIB Group > 3M 0.2 0.0 0.3 > 3M 0.5 0.1 0.6 EUR EUR ≤ 3M 0.6 0.6 1.2 ≤ 3M 0.5 0.6 1.1 > 3M 0.0 0.0 0.1 > 3M 0.0 0.1 0.1 USD USD ≤ 3M 0.0 0.1 0.1 ≤ 3M 0.0
Slide 32: Leverage exposure and Risk-weighted assets
Leverage exposure and Risk-weighted assets CRD4, fully loaded, € bn Leverage exposure Risk-weighted assets 347 347 84 Operational Risk RWA 84 64 64 1,345 1,304 Market Risk RWA 29 Trading assets 166 162 35 Credit valuation 6 adjustments Derivatives(1) 179 177 24 Lending 411 250 417 112 Lending commit
Slide 33: Level 3 assets
Level 3 assets € bn, as of 30 June 2019 Assets (total: € 24bn) Equity securities Mortgage backed securities Other 10 — Level 3 assets arise from the bank’s activities in 2 various markets, some of which are less liquid Derivative — Level 3 classification is not an indicator of risk or asset Debt 9 A
Slide 34: Trading book Value at Risk (VaR)
Trading book Value at Risk (VaR) € m, unless stated otherwise, DB Group, 99%, 1 day Stressed VaR(1) VaR Quarterly average ∅ 87 ∅ 81 ∅ 74 ∅ 95 ∅ 87 ∅ 79 ∅ 28 ∅ 26 ∅ 25 ∅ 30 ∅ 27 ∅ 28 130 110 90 70 50 30 10 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 (1) Stressed Value-at-Risk is calculated on the
Slide 35: Reconciliation of AM reported segment to DWS standalone
Reconciliation of AM reported segment to DWS standalone € m, unless stated otherwise Perimeter adjustments AM reported Other perimeter DWS reported Corporate items(1) Q2 2019 adjustments(2) Q2 2019 Revenues 593 16 (2) 608 Noninterest expenses (471) 0 21 (451) Noncontrolling interests (33) 33 0 0 Pro
Slide 36: Assets under Management – PCB
Assets under Management – PCB € bn Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Assets under Management 497 503 499 474 502 505 Breakdown Private and Commercial Business (Germany) 220 221 222 215 227 232 therein: Deposits(1) 114 114 114 115 120 123 therein: Investment Products(2) 107 107 108 99 1
Slide 37: Employees
Employees Full-time equivalents YoY ∆ Of which 30 Jun 2019 30 Jun 2018 Absolute 30 Sep 2018 31 Dec 2018 31 Mar 2019 disposals CIB 17,238 17,052 185 (42) 16,921 16,764 17,117 PCB 40,932 43,614 (2,682) (1,709) 43,449 41,687 41,392 AM 3,998 4,027 (30) (25) 4,032 4,031 4,055 C&O 28,698 30,735 (2,037) (1
Slide 38: 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