Deutsche Bank Ag · XETR:DBK
Deutsche Bank — Investor Day (December 2020)
35 slides from Deutsche Bank's investor day presentation, Dec 9, 2020
Slide 1: Investor Deep Dive
Investor Deep Dive James von Moltke Chief Financial Officer 9 December 2020 Deutsche Bank
Slide 2: Summary
Summary On track to achieve 2020 financial and transformation milestones Further improvements in core franchises largely offset additional headwinds Capital Release Unit wind-down continues – focus on reducing assets and costs Continued disciplined capital allocation Working towards 8% ROTE target i
Slide 3: Significant improvement in profitability
Significant improvement in profitability In € bn, unless stated otherwise Operating leverage(1) Adjusted profit before tax(2) Group 12% 11% Core Bank 40% 3.2 Core Bank 3% 2.3 (1)% Capital 2019 9M 2020 (1.7) (1.7) Release Unit 9M 2019 9M 2020 Note: Throughout this presentation totals may not sum due
Slide 4: On track to achieve financial milestones
On track to achieve financial milestones 9M 2020 2020 milestones Adjusted costs(1) € 14.9bn € 19.5bn Provision for credit losses 47bps 35 – 45bps (in bps of loans)(2) Leverage ratio(3) 4.4% 4.5% CET1 ratio 13.3% At least 12.5% Capital Release Unit RWA € 39bn € 38bn (1) 9M 2020 noninterest expenses:
Slide 5: Our path to higher returns
Our path to higher returns 2022 plan Revenues ~€ 24.4bn Adjusted cost(1) € 16.7bn RoTE Provision for credit losses € 1.2bn 8% Profit(2) € 4.5bn Average Tangibletangible equity equity € 50bn (1) Adjusted cost excluding transformation charges (2) Before noncontrolling interests and AT1 coupon payments
Slide 6: Working to offset additional revenue headwinds
Working to offset additional revenue headwinds In € bn ~0.1 ~0.8 ~0.2 ~0.6 Investment Bank ~(1.2) ~24.5 ~0.2 Other core businesses ~24.4 2022 revenue plan Revised Funding costs Passing through Additional interest 2022 revenue plan (Dec 2019) business outlook negative rate impact (Dec 2020) interest
Slide 7: Businesses delivering on growth initiatives
Businesses delivering on growth initiatives Client reengagement Focus on Asia Pacific Targeted transformation in Targeted growth FIC investments incl. payments Loan volume and Expand partnerships investment product growth Repricing ESG, alternatives and passive James von Moltke 6 Investor Deep Dive,
Slide 8: Updated revenue growth assumptions
Updated revenue growth assumptions Compound annual growth rate in revenues Updated plan 2018 – 2022 2018 – LTM(2) Q3 2020 (Dec 2019) LTM(2) Q3 2020 – 2022 2018 – 2022 Core Bank(1) 1% 2% 0% 1% Corporate Bank 3% (1)% 3% 1% Investment Bank 2% 10% (2)% 3% Private Bank 0% (3)% 2% 0% Asset Management 1% 3
Slide 9: Reducing our 2022 adjusted cost target
Reducing our 2022 adjusted cost target In € bn Adjusted costs ex transformation charges(1) (2.0) 21.5 ~(1.0) (1.8) 2022 adjusted cost target reduced 19.5 ~18.5 by € 0.3bn 16.7 ~80% of 2021 reductions already in run-rate 2021 plan includes investments in German retail IT integration 2019 2020 2021 20
Slide 10: All businesses executing on planned cost reductions
All businesses executing on planned cost reductions Adjusted costs excluding transformation charges, in € bn (3.3) 22.8 21.5 (2.8) 19.5 (0.5) (0.5) (0.8) 0.0 (0.3) (0.7) 16.7 Corporate Bank — Measures across infrastructure Investment — Technology and support costs Bank — Infrastructure and distribut
Slide 11: Continued disciplined cost management
Continued disciplined cost management In € bn 2020 target(1) 19.5 Compensation (1.4) and benefits — Compensation and benefit cost reduction primarily driven by smaller workforce. Focus on Information preserving revenue-generating (0.9) Technology capabilities — IT costs decline on greater Profession
Slide 12: Bank levies should decline
Bank levies should decline In € bn 0.7 — Flat year-on-year despite reductions in balance 0.6 0.6 sheet, reflecting changes in the Single 2020 Resolution Board’s assessment basis and assumptions ~0.4 — Assumes a Single Resolution Fund (SRF) target fund size of € 55bn(1) ~0.3 — 2021 to benefit from re
Slide 13: Transformation-related effects
Transformation-related effects In € bn 2019-2022 expected Expected cumulative effects % of total Dec 2019 Dec 2020 incurred in estimate estimate 2019 – 2020 2.8 Deferred Tax Asset Deferred tax 3.4 3.1 94% asset valuation valuation adjustment adjustment Nonoperating Goodwill impairment 1.0 1.0 100% c
Slide 14: Consistent, focused execution
Capital Release Unit Consistent, focused execution In € bn, unless stated otherwise Risk weighted assets Achievements since 2018 (45)% 72 65 Liberating capital 56 46 44 43 € 33bn RWA reduction 39 2018 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Leverage exposure (68)% 281 249 Reducing low-yieldi
Slide 15: De-leveraging costs materially better than planned
Capital Release Unit De-leveraging costs materially better than planned In € m Revenue impact from de-leveraging events(1) 10 — Portfolio principally derivatives assets which are held at fair value 5 — Portfolio subject to regular independent price verification process using market price inputs 0 —
Slide 16: Continued focus on economically rational de-leveraging
Capital Release Unit Continued focus on economically rational de-leveraging In € bn, unless stated otherwise Approx. weighted Risk weighted assets Estimated year-end 2022 profile average life(1) 32 51 (in years) 46 38 32 Rates 6 Fixed — Assets structurally Income 2 challenging or Other 1 inefficient
Slide 17: Additional cost reductions
Capital Release Unit Additional cost reductions Adjusted costs excluding transformation charges, in € bn (1.5) 3.3 0.8 — Direct compensation and non-compensation 0.1 costs for portfolio expected to remain in 2022 2.6 — Business aligned service allocations of (1.0) 0.4 Tech, Operations and other Infr
Slide 18: Disciplined resource allocation
Disciplined resource allocation Average allocated tangible shareholders’ equity Asset 3% 3% 4% ~0ppt 4% ~5% Management Corporate Bank 18% 18% 19% ~20% ~1ppt 20% Private Bank 19% 19% 21% ~3ppt 24% ~25% Investment Bank 38% 40% 44% ~0ppt 44% 37% ~45% Sales & 31% Capital Release trading(1) 21% Sales & U
Slide 19: Improving returns over time
Improving returns over time 9M 2020 post-tax return 2022 targeted post-tax on tangible equity(1) return on tangible equity Private Private 2% 8-9% Bank Bank Corporate 4% Corporate 11-12% Bank Bank Investment Investment 11% 9.5-10.5% Bank Bank Asset Asset 22% >20% Management Management (1) Adjusted f
Slide 20: Our path to improved Core Bank returns
Our path to improved Core Bank returns Return on tangible equity >9% 1% 0% 2% (0%) 2% 6% 9M 2020 Corporate Investment Bank Private Asset Corporate 2022 Core Bank Bank Bank Management & Other Core Bank ex items(1) Plan (1) Adjusted for specific revenue items, impairments of goodwill and other intangi
Slide 21: Our path to improved Group profitability
(1) – (2) Our path to improved Group profitability Return on tangible equity Cost/ Income 87% 70% ratio(1) 8% 2% 0% 1% 4% 2% (1%) 9M 2020 Revenue Cost Provision for Other(3) Capital 2022 ex items(2) drivers drivers credit losses Release Unit Group target Core Bank (1) Cost/income ratio defined as to
Slide 22: Prudently deploying resources to offset headwinds
Prudently deploying resources to offset headwinds Net balance sheet(1) (€ bn) Leverage ratio (in %) Exclusion of certain central bank balances 995 ~980 5.0 ~930 ~4.5 4.4 Liquidity ~210 ~0.4 Reserves 253 0.4 ~(0.4) ~0.1 Trading and ~230 related assets 249 4.1 ~490 Loans 433 Other 60 ~50 Q3 2020 2022
Slide 23: Well positioned to offset regulatory headwinds
Well positioned to offset regulatory headwinds Risk weighted assets, in € bn 2028/ Guidance 2020 2021 2022 2023 2024 … 2029 July 2019 25 5 - 25 - Not given … 10 December 10% – 15% 15 15 - - 25 2019 … of RWA(1) 5 5 December 10% – 15% 10 15 5- - 25 2020 of RWA(1) … Principally EBA Basel 3 final rules
Slide 24: Managing our capital position
Managing our capital position CET1 ratio outlook, in % € 5bn capital to be returned to shareholders from 2022 ~(0.3) ~(0.4) ~1.2 13.3 ~13.0 ~(0.6) ~13.0 10.4% Maximum Distributable Amount(2) Q3 2020 2020 Core Bank Capital return Capital Release Regulatory 2022 capital to shareholders Unit net impact
Slide 25: Financial targets
Financial targets 2022 targets Group return on tangible equity 8% Core Bank return on tangible equity >9% Adjusted costs(1) € 16.7bn Cost income ratio 70% CET1 ratio >12.5% Leverage ratio ~4.5% (1) Adjusted costs excluding transformation charges James von Moltke 24 Investor Deep Dive, 9 December 202
Slide 26: Conclusion
Conclusion Dynamic approach to managing through changing macro-economic environment Maintain disciplined approach to capital allocation Continue to work towards 8% RoTE target € 5bn of capital for distribution to shareholders from 2022 James von Moltke 25 Investor Deep Dive, 9 December 2020
Slide 27: Appendix
Deutsche Bank Appendix
Slide 28: Speaker biography
Speaker biography James von Moltke has been Chief Financial Officer and Member of the Management Board of Deutsche Bank AG since July 2017. Prior to joining Deutsche Bank, he was Treasurer of Citigroup. In this capacity he was responsible for capital and funding as well as liquidity and interest rat
Slide 29: Specific revenue items and adjusted costs – 9M 2020
Specific revenue items and adjusted costs – 9M 2020 In € m 9M 2020 9M 2019 Core Core CB IB PB AM C&O CRU Group CB IB PB AM C&O CRU Group Bank Bank Revenues 3,915 7,396 6,144 1,631 (350) 18,735 (159) 18,575 3,958 5,494 6,203 1,662 103 17,420 396 17,816 DVA - IB Other / CRU - 29 - - - 29 (1) 28 - (126
Slide 30: Adjusted profit (loss) before tax (PBT)
Adjusted profit (loss) before tax (PBT) In € m 9M 2020 9M 2019 Specific Transfor- Specific Transfor- Reported Goodwill Restructuring Reported Goodwill Restructuring revenue mation Adjusted PBT revenue mation Adjusted PBT PBT impairments & severance PBT impairments & severance items charges items cha
Slide 31: Operating leverage
Operating leverage(1) In € m, unless stated otherwise Revenues FY 2019 vs. 9M 2020 vs. FY 2019 FY 2018 9M2020 9M 2019 FY 2018 9M 2019 Group - Revenues 23,165 25,316 (8)% 18,575 17,816 4% Specific revenue items (8) 691 n.m. 97 (42) n.m. Group revenues ex. specific items 23,173 24,625 (6)% 18,478 17,8
Slide 32: Adjusted return on tangible equity
Adjusted return on tangible equity In € m, unless stated otherwise 9M 2020 Core Bank Group Profit (loss) 1,719 435 Profit (loss) attributable to noncontrolling interests (87) (87) Profit (loss) attributable to additional equity components (249) (286) Profit (loss) attributable to Deutsche Bank share
Slide 33: Deposit charging
Deposit charging In € bn, unless otherwise stated Charging agreements(1) Q3 2020 deposit volumes by total client holdings Private Bank 274 Corporate Bank Private 13 >€ 2m Bank 76 50 <€ 2m 8 ~60 83 <€ 100k ~40 Corporate 31 >€ 20m ~30 68 Bank 61 <€ 20m 36 <€ 1m Q4 2019 Q1 2020 Q2 2020 Q3 2020 Euro Cur
Slide 34: Macroeconomic assumptions
Macroeconomic assumptions 2020 2021 2022 Global (4.8) 4.1 3.6 GDP growth GDP to recover to pre-COVID-19 (in %) levels only by early 2022 Germany (5.5) 4.1 2.8 2020 2021 2022 EUR (0.52) (0.54) (0.52) Interest rates (3 months, Lower for longer interest rates in %) USD 0.25 0.28 0.39 James von Moltke 3
Slide 35: Cautionary statements
Cautionary statements Non-IFRS Financial Measures This document contains non-IFRS financial measures. For a reconciliation to directly comparable figures reported under IFRS, to the extent such reconciliation not provided herein, please refer to the Financial Data Supplement which can be downloaded