Deutsche Bank Ag · XETR:DBK

Deutsche Bank — Morgan Stanley European Banks & Financials Conference 2008

29 slides from Deutsche Bank's conference presentation, Apr 1, 2008

  1. Slide 1: Deutsche Bank – Dr. Josef Ackermann

    AMENDED VERSION Deutsche Bank Dr. Josef Ackermann Chairman of the Management Board Morgan Stanley European Banks & Financials Conference London, 1 April 2008

  2. Slide 2: Agenda

    Agenda 1 2007: Solid performance in challenging markets 2 Transparency on key exposures 3 Strategic consistency Investor Relations 04/08 · 2

  3. Slide 3: A year of solid performance in challenging times

    A year of solid performance in challenging times In EUR bn Revenues Profit 8% 5% 30.7 8.3 8.7 28.5 6.1 6.5 7% 2006 2007 2006 2007 Income before income taxes Net income Investor Relations 04/08 · 3

  4. Slide 4: Five-year profit growth in our core businesses

    Five-year profit growth in our core businesses Income before income taxes, in EUR bn CIB PCAM 10% p.a. 15% p.a. 6.1 2.1 1.9 5.1 4.3 1.5 1.4 3.5 1.2 2.8 2003 2004 2005 2006 2007 2003 2004 2005 2006 2007 Note: 2003-2005 based on U.S. GAAP, 2003 based on structure as of 2005, 2004-2005 based on structu

  5. Slide 5: Continued leadership in investment banking

    Continued leadership in investment banking CB&S revenues FY2007, in EUR bn 25.7 Loan 16.5 16.3 products 12.3 11.9 Investment 10.4 banking Sales & Trading 2.9 (0.2) (1.1) Goldman DB JPMorgan Credit Lehman Morgan Citi UBS Merrill Sachs* Chase Suisse Brothers* Stanley* Lynch * Diverging fiscal year Not

  6. Slide 6: A major global asset gatherer

    A major global asset gatherer In EUR bn Net new money Invested assets FY2007 PCAM, per 31 Dec 2007 UBS 19 59 MER(1) 952 13 CS MS 27 JPM(2) GS Citi(2) LEH AM PWM PBC PCAM Asset Mgmt. Private Banking and others (1) Total Private Client Assets and 50% of BlackRock invested assets (2) Excluding PBC equi

  7. Slide 7: A year of substantial capital formation

    A year of substantial capital formation At year end Total shareholders’ equity Book value per share* Tier 1 capital In EUR bn In EUR In EUR bn 13% 12% 20% 37.0 77.54 28.3 32.8 69.48 23.5 2006 2007 2006 2007 2006 2007 * Book value per share is defined as shareholders’ equity divided by the number of

  8. Slide 8: Delivery on targets

    Delivery on targets Reported Target definition Pre-tax RoE Diluted EPS In % In EUR 33 29 54% p.a. 13.05 26 11.48 24 10.79 25% 16 6.95 10 4.53 2.31 2003 2004 2005 2006 2007 2003 2004 2005 2006 2007 Note: 2003-2005 based on U.S. GAAP, 2006 onwards based on IFRS Investor Relations 04/08 · 8

  9. Slide 9: Maintaining an attractive dividend policy

    Maintaining an attractive dividend policy Dividend per share, in EUR 3x 4.50 4.00 2.50 1.70 1.50 2003 2004 2005 2006 2007 Recommended Investor Relations 04/08 · 9

  10. Slide 10: Agenda

    Agenda 1 2007: Solid performance in challenging markets 2 Transparency on key exposures 3 Strategic consistency Investor Relations 04/08 · 10

  11. Slide 11: Our valuation approach

    Our valuation approach Assets Comments Collateralized Debt Obligations „ Almost 100% of all assets held in the trading book U.S. Mortgage Business „ All of them are marked-to-market Commercial Real Estate „ Continued to apply accounting and valuation principals consistently with prior periods Levera

  12. Slide 12: Sub-prime exposure

    Sub-prime exposure As at 31 Dec 2007 Exposure Key features In EUR bn Other CDO sub-prime „ Early defensive positioning 3.1 – Protection purchased 0.2 – Significant reductions during 2H2007 – Continued effort to reduce positions in 1Q2008 „ Net exposure = 100% default / zero recovery 2.9 0.2 1.2 „ Ne

  13. Slide 13: Non sub-prime exposure in our RMBS business

    Non sub-prime exposure in our RMBS business As at 31 Dec 2007 Exposure Key features In EUR bn Other „ Primarily due to acquisition of MortgageIT Alt-A 9.6 „ Predominantly AAA-rated securities based on 1.7 Alt-A collateral „ Significant sales activity during 2007 „ Basis risk between underlying expos

  14. Slide 14: Monoline exposure

    Monoline exposure As at 31 Dec 2007 Exposure Key features In EUR bn „ Exposure to U.S. residential mortgage EUR 1.1 bn 1.2 „ Additional net counterparty exposure to monoline insurers of EUR 1.2 bn 1.5 – From client activity i.e. CLO, CMBS – Other (student loans, public sector) 1.1 (0.8) „ Parts of t

  15. Slide 15: Commercial Real Estate exposure

    Commercial Real Estate exposure As at 31 Dec 2007 Trading whole loan exposure Key features In EUR bn „ CRE overall profitable in 2007; mark-downs of EUR 386 m, partly offset by hedge gains 1.2 17.2 16.0 „ Regionally diversified portfolio with conservative 1.9 Other Europe loan to value but concentra

  16. Slide 16: Leveraged Finance exposure

    Leveraged Finance exposure As at 31 Dec 2007 Leveraged finance exposure* Key features In EUR bn „ Mark-downs (net of fees) in 2007: EUR 759 m 20.9 36.2 „ High proportion of U.S. exposure remains Asia/ Pacific unfunded; more than a half of the funded 0.6 9.0 Europe exposure is in European names „ Wid

  17. Slide 17: Agenda

    Agenda 1 2007: Solid performance in challenging markets 2 Transparency on key exposures 3 Strategic consistency Investor Relations 04/08 · 17

  18. Slide 18: Strategy: We stay the course

    Strategy: We stay the course Management Agenda Phase 3 2006 – 2008: Leveraging our global platform for accelerated growth Maintain our cost, risk, capital and Continue to invest in organic growth and regulatory discipline ‘bolt-on’ acquisitions Further grow our ‘stable’ businesses in Build on our co

  19. Slide 19: We maintained cost, risk, capital and regulatory discipline

    We maintained cost, risk, capital and regulatory discipline Cost Risk Capital Cost / income ratio, in % Problem loan ratio(1), in % Tier 1 ratio(2), in % Unrealised gains(3), in EUR bn Basel II 10.0 Tier I target ratio 4.5 8-9% 82 8.6 8.7 8.5 8.6 3.5 80 75 2.5 3.0 2.6 70 70 1.8 1.6 2.0 1.8 1.4 '03 '

  20. Slide 20: A funding cost advantage for Deutsche Bank

    A funding cost advantage for Deutsche Bank 5-year senior CDS, in bps 1 July 2007 28 March 2008 290 265 183 172 150 133 112 113 86 35 35 35 37 14 19 18 10 12 JPMorgan Credit UBS Goldman Morgan Citi Merrill Lehman Chase Suisse Sachs Stanley Lynch Brothers Source: Bloomberg Investor Relations 04/08 · 2

  21. Slide 21: Investing in growth by financing RWA increase

    Investing in growth by financing RWA increase … Risk-weighted assets under Basel I, at year end, in EUR bn 1.6 1.8 2.5 3.2 2.9 328 275 251 216 217 2003 2004 2005 2006 2007 x.x Return on RWA* (in %) * 2003-2005: Underlying pre-tax profit in % of average RWAs; 2003-2005 RWA based on U.S. GAAP; 2006-20

  22. Slide 22: … and expanding our global platform

    … and expanding our global platform Acquisitions, partnerships and organic investments 2007 / 08 UK „ Abbey Life portfolio China „ Tilney integration „ Increased stakes in Hua Xia and Harvest Fund Management USA Germany „ Local incorporation of „ Stake in Aldus Equity „ Berliner Bank Deutsche Bank (

  23. Slide 23: Strong geographical diversification

    Strong geographical diversification Net revenues(1) Income before income taxes(2) Asia / Pacific FY2007 Americas Europe (ex. Germany), MENA EUR 8.7 bn Germany EUR 31 bn 100% 21% 15% 3% 20% 39% EUR 10 bn 36% 4% 7% 20% 37% 69% 29% 1995 2007 Germany EMEA Americas Asia / Total (excl. Pacific Germany) (1

  24. Slide 24: Further growing our 'stable' businesses: sustained momentum

    Further growing our ‘stable’ businesses: sustained momentum … Income before income taxes, in EUR bn GTB AWM >2x 14% PBC 3.0 2.6 1.9 1.6 1.4 2003* 2004 2005 2006 2007 * GTB adjusted for gain on sale of GSS Note: 2003-2005 based on U.S. GAAP, 2003 based on structure as of 2005, 2004-2005 based on stru

  25. Slide 25: … with strong net new money inflows

    … with strong net new money inflows PCAM, in EUR bn 59 28 7 (43) (41) 2003* 2004 2005 2006 2007 * PWM not restated for Rüd Blass Investor Relations 04/08 · 25

  26. Slide 26: Building on competitive edge in investment banking

    Building on competitive edge in investment banking Sustained momentum in CB&S Robust business model 9 Net revenues, in EUR bn 9% p.a. „ Management stability 9 16.6 16.5 „ Tight risk and capital management 9 13.9 11.8 9 11.5 „ Diversification by product, region and client type „ Strong global network

  27. Slide 27: Deutsche Bank's focus in a challenging near-term environment

    Deutsche Bank’s focus in a challenging near-term environment „ Material change in environment since July 2007 Corporate Banking & „ Conditions likely to remain uncertain in 2008 Securities „ Focus: Gain market share „ Well-positioned in growth regions Global Transaction „ Sensitivity to interest rat

  28. Slide 28: Longer-term trends continue to favour Deutsche Bank

    Longer-term trends continue to favour Deutsche Bank Trend Features Deutsche Bank strengths „ Regional business diversification „ Growth of emerging markets „ Global network Globalisation „ Geographical boundaries disappear „ Global capital market access „ Global players act locally „ Local presence

  29. Slide 29: Cautionary statements

    Cautionary statements This presentation also 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 an

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