Deutsche Bank Ag · XETR:DBK
Deutsche Bank — Debt Investor Presentation (February 2020)
40 slides from Deutsche Bank's debt investor presentation, Feb 3, 2020
Slide 1: Q4/FY 2019 Fixed Income Investor Conference Call
Deutsche Bank Q4/FY 2019 Fixed Income Investor Conference Call James von Moltke, Chief Financial Officer Dixit Joshi, Group Treasurer 3 February 2020
Slide 2: Agenda
Agenda 1 Q4/FY 2019 results 2 Capital, Liquidity and Issuance 3 Appendix Deutsche Bank Q4/FY 2019 Fixed Income Investor Call 2 Investor Relations 3 February 2020
Slide 3: Strong execution on our strategic transformation
Strong execution on our strategic transformation Disciplined execution drove in-line or outperformance against all financial targets 8th consecutive quarter of annual adjusted cost(1) reductions Risk weighted asset reductions in the Capital Release Unit ahead of target Clear signs of franchise stabi
Slide 4: Delivered on all objectives in 2019
Delivered on all objectives in 2019 2019 target 2019 Adjusted costs(1) € 21.5bn € 21.5bn CET 1 ratio >13% 13.6% Leverage ratio 4% 4.2% Capital Release Unit risk weighted assets 52 46 Capital Release Unit leverage exposure ~140 127 (1) Employees(2) <90k 87.6k Excluding transformation char
Slide 5: Q4 and FY 2019 Group financial highlights
Q4 and FY 2019 Group financial highlights In € m, unless stated otherwise Change in % Change in % Q4 2019 vs. Q4 2018 FY 2019 vs. FY 2018 Revenues 5,349. (4) 23,165. (8) Revenues of which: specific items(1) 34( (8)( Revenues ex. specific items 5,315( (1) 23,173( (6) Noninterest expenses 6,395( 13. 2
Slide 6: Transformation-related effects
Transformation-related effects In € bn 2019 – 2022 expected cumulative % of total Q4 2019 expenses in 2019 Deferred tax Deferred Tax Asset 2.8 0.4 3.4 82% asset valuation valuation adjustment adjustment Nonoperating Goodwill impairment - 1.0 100% costs(4) Restructuring & Goodwill 1.0 0.5 1.8 40% Sev
Slide 7: Stabilizing and building momentum in the Core Bank
Stabilizing and building momentum in the Core Bank In € bn Revenues ex. specific items(1) Adjusted profit (loss) before tax(2) 24.6 Capital 1.9 23.2 (83)% 0.3 Release Unit Core 2.6 2.8 Bank Core 22.8 22.7 0% Bank (1.4) Capital (2.4) Release Unit 2018 2019 2018 2019 (1) Specific items detailed on sli
Slide 8: 8th consecutive quarter of annual adjusted cost reductions
8th consecutive quarter of annual adjusted cost(1) reductions In € bn Adjusted cost ex. transformation charges(2) Full year adjusted cost development Bank levies 22.8 22.8 Transformation (6)% 1.1 charges 0.7 (0.3) 0.6 0.1 Global Prime Finance(3) Adjusted costs ex. 21.5 transformation charges and 5.7
Slide 9: Maintained strong CET1 ratio
Maintained strong CET1 ratio CET 1 ratio Capital Release Unit risk weighted assets (€ bn) 13.6% 13.4% 72 65 Target At least 12.5% (19) 2019 target 46 52 11.6% Maximum Distributable Amount (MDA)(1) Q2 2019 Core Bank Capital Regulatory Q4 2019 2018 Q2 2019 Q4 2019 Release impact Unit (1) Reduced Pilla
Slide 10: Key balance sheet and risk metrics remain strong
Key balance sheet and risk metrics remain strong 2019 Comment Reflects strong underwriting Provision for credit losses as a % of loans 17bps standards and low risk portfolios Loans as a % of deposits(1) 76% Supports continued loan growth Strong funding base due to Most stable funding(2) 83% structur
Slide 11: Our near-term objectives and financial targets
Our near-term objectives and financial targets 2020 2022 Adjusted costs(1) € 19.5bn € 17bn CET 1 ratio At least 12.5% At least 12.5% Leverage ratio 4.5% ~5% Group return on tangible equity 8% Core Bank return on tangible >9% equity Cost income ratio 70% (1) Excluding transformation charges and expen
Slide 12: Agenda
Agenda 1 Q4/FY 2019 results 2 Capital, Liquidity and Issuance 3 Appendix Deutsche Bank Q4/FY 2019 Fixed Income Investor Call 12 Investor Relations 3 February 2020
Slide 13: Significant progress during 2019
Significant progress during 2019 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Trading on senior FSB lowered G-SIB buffer preferred CDS requirement by 50bps started Available Distributable Items ECB reduced Pillar 2 FED released results on DB definition broadened under requirement (SREP) by USA’s
Slide 14: Transformation of the balance sheet
Transformation of the balance sheet Net assets(1), in € bn x Delta vs 2017 1,095 (14)% 946 280 Liquidity 222 reserves — Reduced net assets by € 150bn since 2017 as reductions in trading assets and liquidity partly offset loan growth Trading and — Reduced excess liquidity, ratio still 361 (33)% 242 R
Slide 15: Majority of the balance sheet funded by stable sources
Majority of the balance sheet funded by stable sources Net liabilities(1), in € bn x Delta vs 2017 1,095 (14)% 946 222 — Funding from most stable sources (44)% Trading and 124 related liabilities(2) above 80%(4) 51 45 Other liabilities(3) — Trading liabilities now account for less than 15% of net ba
Slide 16: CET1 capital ratio further improved
CET1 capital ratio further improved In € bn, except movements in basis points, period end 73 13.6% 13.4% (47) (2) — CET1 capital ratio increased by 24bps in the quarter as risk weighted asset reductions more Q3 2019 FX Effect RWA Capital Q4 2019 than offset the transformation effects on net change c
Slide 17: Delivering on announced leverage exposure reductions
Delivering on announced leverage exposure reductions In € bn, except movements in basis points, period end 37 4.2% 3.9% 1 — Leverage ratio up by 25 bps as exposure (13) reduction more than offset the transformation-related effects on net income — FX neutral leverage exposure decrease of Q3 2019 FX E
Slide 18: Loss absorbing capacity well above all requirements
Loss absorbing capacity well above all requirements In € bn, unless stated otherwise, as of 31 December 2019 Deutsche Bank available MREL surplus / TLAC TLAC/MREL(1) MREL subordination surplus surplus 115 Plain-vanilla senior 3 preferred debt — Surplus of € 30bn above MREL, our most +30 binding loss
Slide 19: Maintaining a prudent liquidity profile
Maintaining a prudent liquidity profile Liquidity Reserves, € bn Cash and cash equivalents(1) Highly liquid and other securities(2) 259 260 246 243 222 >200 71% 71% 64% 67% 60% — Significant progress in reducing liquidity reserves in the quarter towards our target, including € 29bn reduction in cash
Slide 20: 2020 issuance plan
2020 issuance plan In € bn Issuance plan Contractual maturity profile(1) TLTRO II Covered Bonds Senior Structured / Preferred Senior Non-Preferred AT1 / Tier 2 31 32 8 24 16 15-20 2 4 14 4 2 14 2 3-5 4 1 10 4 3-4 4 5 8 16 18 1 8-10 3.5 8 4 3 8 0.2 0.5 8 2 1 2.8 1 1 4 3 2019 Actuals 2020 Plan 2020 YT
Slide 21: Conclusion & Outlook
Conclusion & Outlook Positive momentum supported by regulatory and legal changes Continued improvements in technology and new tools allow for better resource allocation Transformation of balance sheet and increase in stable funding sources Strong capital position gives further confidence in capital
Slide 22: Agenda
Agenda 1 Q4/FY 2019 results 2 Capital, Liquidity and Issuance 3 Appendix Deutsche Bank Q4/FY 2019 Fixed Income Investor Call 22 Investor Relations 3 February 2020
Slide 23: Regulatory capital requirements
Regulatory capital requirements SREP(1) vs CET1 Ratio Total capital requirements CET1 AT1 Tier 2 Contribution from legacy max. G-SIB/D-SIB buffer Pillar 2 Requirement X.X Tier 1 instruments Countercyclical Buffer Pillar 1 Requirement Capital Conservation Buffer ~17.1% ~17.1% 15.08% 1.84% 2.40% 0.56%
Slide 24: Preliminary Available Distributable Items for Additional Tier 1 instruments
Preliminary Available Distributable Items for Additional Tier 1 instruments In € m 2019 2018 unaudited Comments Available Distributable — The definition of Available Distributable Items 414 ~32,200 Items (ADI) (ADI) has been amended with the implementation of CRR II effective 27 June 2019, allowing
Slide 25: AT1 and Trust Preferred Securities outstanding
AT1 and Trust Preferred Securities outstanding(1) Regulatory Original Current Nominal Next call Subsequent Issuer Type capital ISIN issuance coupon outstanding date call period treatment(1) date DB Contingent Capital Trust II Legacy AT1 / -(2) US25153X2080 6.550% $ 800mn 23-May-07 24-Feb-20 Quarterl
Slide 26: Current Ratings
Current Ratings Moody‘s Investors S&P Global Fitch Ratings DBRS Services Ratings Counterparty obligations (e.g. Deposits / Structured Notes / A3 BBB+(1) BBB+ A (high) Derivatives / Swaps / Trade Finance obligations/ LOC‘s) Senior Preferred(2) A3 BBB+ BBB+ A (low) Long- term unse- cured Non-preferred
Slide 27: Rating landscape – senior debt ratings
Rating landscape – senior debt ratings Moody‘s S&P Operating company / Preferred Senior(1) Holding company / Non-preferred Senior(2) Rating scale EU Peers Swiss Peers US Peers Short-term Long-term BAR BNP HSBC SOC CS UBS BoA Citi GS JPM MS P/A-1 Aa2/AA P/A-1 Aa3/AA- P/A-1 A1/A+ P/A-1 A2/A P/A-2 A3/A
Slide 28: Capital Markets and Equity to MREL reconciliation
Capital Markets and Equity(1) to MREL reconciliation In € bn, as of 31 December 2019 Covered 179 bonds 21 (21) Structured notes 21 (21) Plain-vanilla 3 senior preferred (12) 4 (13) (0) 115 Plain-vanilla 3 senior preferred Plain-vanilla 64 senior Plain-vanilla non-preferred 56 senior non- preferred d
Slide 29: Loan book composition
Loan book composition As of 31 December 2019 — Well diversified Loan Portfolio Capital Release Unit Other(1) — The gross position of loans at amortized IB Other cost was € 434bn as of Q4 2019 Leveraged Debt Capital Markets 1% 6% Asset Backed Securities 1% 2% — More than half of the loan portfolio is
Slide 30: Provision for credit losses and stage 3 loans
Provision for credit losses and stage 3 loans Provision for credit losses, € m Stage 3 at amortised cost, € bn Private Bank Investment Bank PB (ex-POCI) CRU (ex-POCI) Corporate Bank Capital Release Unit CB (ex-POCI) Purchased or Originated Credit Impaired (POCI) IB (ex-POCI) Group Stage 3 2.3% 2.3%
Slide 31: Net interest income sensitivity
Net interest income sensitivity In € bn, hypothetical +100 bps parallel shift impact First year Second year 1.7 1.5 0.9 0.9 0.8 0.6 Retail Non-retail Group Retail Non-retail Group Maturity Maturity > 3M 0.3 0.1 0.3 > 3M 0.5 0.1 0.6 EUR EUR ≤ 3M 0.3 0.7 1.0 ≤ 3M 0.3 0.7 1.0 > 3M 0.0 0.0 0.1 > 3M 0.0
Slide 32: Level 3 assets
Level 3 assets In € bn, as of 31 December 2019 Assets (total: € 24bn) Equity securities Mortgage backed securities Other 10 2 — Level 3 assets arise from the bank’s activities in Derivative 9 Assets various markets, some of which are less liquid Debt securities 5 — Level 3 classification is not an i
Slide 33: Litigation update
Litigation update In € bn, period end Litigation provisions(1) 1.1 1.2 1.1 1.1 ― Provisions remained stable quarter-over-quarter, as new provisions were offset by decreases due to settlement payments ― Provisions include approximately € 0.1bn related to settlements already achieved or agreed in prin
Slide 34: Core Bank financial highlights
Core Bank financial highlights Q4 2019, in € bn, unless otherwise stated Core Change vs. Capital Release Bank Q4 2018 Unit Revenues 5.5 5% (0.2) Revenues ex. specific items 5.5 8% (0.2) Noninterest expenses 5.7 16% 0.7 Adjusted costs ex. transformation charges(1) 4.6 (2)% 0.5(3) Profit (loss) before
Slide 35: Adjusted profit (loss) before tax
Adjusted profit (loss) before tax In € m Q4 2019 Q4 2018 Transfor- Transfor- Revenue Goodwill Restructuring Revenue Goodwill Restructuring PBT reported mation PBT Adjusted PBT reported mation PBT Adjusted specific items impairments & severance specific items impairments & severance charges(1) charge
Slide 36: Specific revenue items – Q4 2019 / Q3 2019 / H2 2019
Specific revenue items – Q4 2019 / Q3 2019 / H2 2019 In € m Q4 2019 Q3 2019 H2 2019 Core Core Core CB IB PB AM C&O CRU Group CB IB PB AM C&O CRU Group CB IB PB AM C&O CRU Group Bank Bank Bank Revenues 1,291 1,520 1,986 671 59 5,528 (179) 5,349 1,335 1,646 2,037 543 (76) 5,484 (222) 5,262 2,626 3,166
Slide 37: Specific revenue items – FY 2019
Specific revenue items – FY 2019 In € m FY 2019 FY 2018 Core Core CB IB PB AM C&O CRU Group CB IB PB AM C&O CRU Group Bank Bank Revenues 5,264 6,961 8,245 2,332 155 22,957 208 23,165 5,263 7,467 8,641 2,187 (120) 23,438 1,878 25,316 (1) DVA - IB Other / CRU - (140) - - - (140) (35) (175) - 126 - - -
Slide 38: Adjusted costs – Q4 2019 / FY 2019
Adjusted costs – Q4 2019 / FY 2019 In € m Q4 2019 Q4 2018 Q3 2019 Core Core Core CB IB PB AM C&O CRU Group CB IB PB AM C&O CRU Group CB IB PB AM C&O CRU Group Bank Bank Bank Noninterest expenses 1,294 1,553 2,150 438 269 5,704 691 6,395 940 1,484 1,954 427 129 4,934 708 5,642 1,026 1,585 1,872 404 1
Slide 39: Definition of certain adjustments
Definition of certain adjustments Adjusted costs is calculated by deducting (i) impairment of goodwill and other intangible assets, (ii) litigation charges, net Adjusted costs and (iii) restructuring and severance from noninterest expenses under IFRS Revenues excluding specific items is calculated b
Slide 40: Cautionary statements
Cautionary statements The figures in this presentation are preliminary and unaudited. Our Annual Report 2019 and SEC Form 20-F are scheduled to be published on 20 March 2020. This presentation contains forward-looking statements. Forward-looking statements are statements that are not historical fact
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