Deutsche Bank Ag · XETR:DBK
Deutsche Bank — Q3 2012 Earnings Presentation
48 slides from Deutsche Bank's earnings presentation, Oct 30, 2012
Slide 1: 3Q2012 results
Deutsche Bank Deutsche Bank 3Q2012 results Stefan Krause, Chief Financial Officer
Slide 2: Agenda
Agenda 1 Group results 2 Segment g results 3 Key current issues Deutsche Bank Stefan Krause financial transparency. 2 Investor Relations 30 October 2012
Slide 3: Key take-aways
Key take-aways — Strong operating Group result — Almost one third of RWA equivalent reduction target to March 2013 achieved — Operational Excellence Program started — Non-Core Operations unit set-up in progress — Strong CB&S performance — Consistently high profitability in GTB — AWM integration unde
Slide 4: Overview
Overview 3Q2012 3Q2011 Income before income taxes (in EUR bn) 1.1 0.9 Net income (in EUR bn) 0.8 08 0.8 Profitability Pre-tax RoE (target definition)(1) 9.9% 7.2% Diluted EPS (in EUR) 0.78 0.74 30 Sep 2012 30 Jun 2012 Core Tier 1 capital ratio 10.7% 10.2% Capital Tier 1 capital ratio 14.2% 13.6% Cor
Slide 5: Net revenues
Net revenues In EUR bn 26.3 25.9 10 5 10.5 9.2 8.5 8.7 8.0 7.3 6.9 1Q 2Q 3Q 4Q 1Q 2Q 3Q 9M 9M 2011 2012 2011 2012 Deutsche Bank Stefan Krause financial transparency. 5 Investor Relations 30 October 2012
Slide 6: Provision for credit losses
Provision for credit losses In EUR m 1,300 1,287 Effect from Postbank releases shown as net interest income at DB Group / PBC level 78 311 Related to IAS 39 reclassified assets Includes EUR 61 m 384 in relation to 555 124 540 de-risking 464 463 24 91 419 373 82 111 64 18 230 (1) 314 100 (1) 1,209 79
Slide 7: Noninterest expenses
Noninterest expenses In EUR bn Compensation and benefits 2Q2012 3Q2012 Restructuring costs - 276 General and administrative expenses Additional severance - 44 20.6 Restructuring costs CtA related to OpEx - 320 19.3 CtA Postbank integration g 93 71 Other noninterest expenses(1) 10.3 10.3 7.1 6.7 7.0
Slide 8: Adjusted cost base development
Adjusted cost base development Noninterest expenses, expenses in EUR m 3Q2012 vs. 2Q2012 9M2012 vs. 9M2011 2Q2012 3Q2012 9M2011 9M2012 6,643 Reported 6,977 19,289 Reported 20,620 - CtA OpEx (320) - CtA OpEx (320) (93) CtA Postbank integration (71) (149) CtA Postbank integration (232) 4 Policyholder
Slide 9: Profitability
Profitability Income before income taxes Net income In EUR bn In EUR bn 30 3.0 2.1 1.8 1.9 12 1.2 1.4 1.0 1.1 0.9 0.8 0.7 0.8 0.2 (0.4) 1Q 2Q 3Q 4Q 1Q 2Q 3Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 2011 2012 2011 2012 Pre-tax return on equity(1), in % Effective tax rate, in % 24 14 7 (3) 14 7 8 29 31 18 153 25 31 33 FY
Slide 10: Capital ratios and risk-weighted assets
Capital ratios and risk-weighted assets Basel 2 Basel 2.5 14 0 14.0 13 8 13.8 14 2 14.2 13.4 13.4 13 6 13.6 12.9 12.3 Tier 1 ratio, in % 10.2 10.1 10.0 10.2 10.7 96 9.6 95 9.5 8.7 Core Tier 1 ratio, in % 381 368 373 366 346 338 328 320 RWA, in EUR bn 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 2010 2011 2012 Note: Tier
Slide 11: Core Tier 1 capital and RWA development
Core Tier 1 capital and RWA development Core Tier 1 capital RWA In EUR bn In EUR bn 1.0 39 3 39.3 0.7 (0.1) (0.1) 37.8 (0.2) 372.6 (0.7) 366.1 Includes Incl des EUR 0 0.7 7 bn with ith regard to de-risking of (5.1) (0.6) (0.1) securitization positions (1) (2) 30 Jun Net Dividend CDI Other FX Effect
Slide 12: Update on Core Tier 1 Ratio ambition under Basel 3
Update on Core Tier 1 Ratio ambition under Basel 3 Investor Day targets confirmed De-risking measures on track Basel 3 Core Tier 1 ratio, fully loaded — EUR 90 bn RWA equivalent reduction to be achieved by 31 March 2013, as announced at 10.7%(1) >10% Investor Day — EUR 25 bn already achieved as of 3
Slide 13: Agenda
Agenda 1 Group results 2 Segment g results 3 Key current issues Deutsche Bank Stefan Krause financial transparency. 13 Investor Relations 30 October 2012
Slide 14: Segment overview
Segment overview Income before income taxes, in EUR m 3Q2012 2Q2012 3Q2012 specific items EUR 229 m cost-to-achieve related CB&S 662 to OpEx program 357 EUR 285 m litigation charges GTB 340 309 EUR 91 m cost-to-achieve related AWM 64 to OpEx program 35 EUR 71 m cost-to-achieve cost to achieve relate
Slide 15: Corporate Banking & Securities
Corporate Banking & Securities Income before income taxes Key features In EUR m EUR EUR 229 185mmcost-to-achieve restructuring costs In EUR m 3Q12 vs. 3Q12 vs. 3Q12 3Q11 2Q12 related related pp p totoOpEx OpEx p program g g (2) program 3Q11 2Q12 2,287 Revenues 4,305 2,602 3,526 65 % 22 % Prov. for c
Slide 16: Sales & Trading debt and other products
Sales & Trading debt and other products Revenues Key features In EUR m 3Q12 vs. 3Q12 vs. Overall 3Q12 3Q11 2Q12 3Q11 2Q12 — Highest ever third quarter debt S&T revenues revenues, up q q-o-q o q and yy-o-y oy 3 691 3,691 Revenues due to improved market sentiment and higher client activity across 3,39
Slide 17: Sales & Trading equity
Sales & Trading equity Revenues Key features In EUR m 3Q12 vs. 3Q12 vs. Overall 3Q12 3Q11 2Q12 3Q11 2Q12 — R Revenues hi higher h b both th y-o-y and d q-o-q underpinned d i dbby strong t Revenues 943 performance in Cash Equities due to improved market sentiment in Prov. the for US credit and the EU
Slide 18: Origination & Advisory
Origination & Advisory Revenues Key features In EUR m 3Q12 vs. 3Q12 vs. Overall 3Q12 3Q11 2Q12 3Q11 2Q12 Origination — Very strong performance yy-o-y o y driven by higher primary issuance Advisory Revenues — Ranked No. 1 in EMEA Prov. for credit 717 714 Advisory 677 losses — Revenues up q-o-q and y-
Slide 19: Global Transaction Banking
Global Transaction Banking Income before income taxes Key features In EUR m In EUR m 3Q12 vs. 3Q12 vs. 3Q12 3Q11 2Q12 3Q11 2Q12 Revenues R 1 001 1,001 941 972 6% 3% 340 340 Prov. for credit (35) (41) (47) (16)% (27)% 306 309 losses 274 283 Noninterest exp. (626) (640)(2) (616) (2)% 2% 259 IBIT 340 2
Slide 20: Asset and Wealth Management
Asset and Wealth Management Income before income taxes Key features In EUR m In EUR m 3Q12 vs. 3Q12 vs. 3Q12 3Q11 2Q12 3Q11 2Q12 EUR 91 m cost-to-achieve Revenues 971 876 891 11 % 9% 227 related to OpEx program(2) Prov. for credit (14) (11) (14) 24 % 0% losses 190 186 Noninterest exp. (896) (680) (8
Slide 21: Asset Management
Asset Management Income before income taxes Key features In EUR m In EUR m 3Q12 vs. 3Q12 vs. 3Q12 3Q11 2Q12 3Q11 2Q12 EUR 55 m cost-to-achieve Revenues 463 397 396 17 % 17 % related to OpEx program(2) Prov. for credit 0 1 (0) (89)% n.m. losses 131 124 Noninterest exp. (424) (281) (366) 51 % 16 % 117
Slide 22: Private Wealth Management
Private Wealth Management Income before income taxes Key features In EUR m In EUR m 3Q12 vs. 3Q12 vs. 3Q12 3Q11 2Q12 3Q11 2Q12 EUR 36 m CtA related to Revenues 508 479 495 6% 3% OpEx program(2) Prov. for credit (14) (12) (14) 13 % 2% losses Noninterest exp. (471) (398) (477) 18 % (1)% 116 IBIT 26 69
Slide 23: Private & Business Clients
Private & Business Clients Income before income taxes Key features In EUR m In EUR m 3Q12 vs. 3Q12 vs. 3Q12 3Q11 2Q12 3Q11 2Q12 Cost-to-achieve Cost to achieve related to Negative impact from Greek Revenues 2,554 2,426 2,425 5% 5% Postbank integration (1) government bonds(1) Net HuaXia one-off gain
Slide 24: Consolidation & Adjustments
Consolidation & Adjustments In EUR m m, 3Q2012 Accounting asymmetry effect: osses reverse over time ― USD liquidity is partly raised by swapping EUR debt (held at cost) into USD in the basis swap market ― Basis swaps (held at mtm) are (332) sensitive to changes in USD/EUR (273) mid to long-term basi
Slide 25: Agenda
Agenda 1 Group results 2 Segment g results 3 Key current issues Deutsche Bank Stefan Krause financial transparency. 25 Investor Relations 30 October 2012
Slide 26: Balance sheet and risk weighted assets
Balance sheet and risk weighted assets XX RWA density incl. operational risk RWA(1) vs. balance sheet (adj. assets) XX RWA density excl. operational risk In EUR bn, as of 30 Sep 2012 ~29% 314 314 ~25% 1,281 , Avg RWA density Market Risk Non-derivative 64 69 ~27% 256 RWA 64 trading assets ~32% ~27% 2
Slide 27: Loan RWA under Basel 2
Loan RWA under Basel 2 As of 30 June 2012 Loans as % of balance sheet(1) Loan book by product Retail loans by region(2) Residential Mortgages 35% 34% % U.S. peers U.S. peers C Consumer U.S. peers Domestic Loans (US) 28% Other 87% 32% 36% Domestic (Germany) 77% 5% L Loan llosses (5 (5-y average))(3)
Slide 28: Market risk RWA and buffer against potential stress losses
Market risk RWA and buffer against potential stress losses Substantial buffer to potential market risks Deutsche Bank, EUR bn — EUR 64 bn RWA a result of B2.5 introduction and punitive VaR multiplier imposed by 31.12.10 B1 market risk RWA (1) 24 BaFin for historic model weakness in 2008/2009 B2.5 ma
Slide 29: Operational Excellence Program: Basis and phasing
Operational Excellence Program: Basis and phasing Noninterest expenses, expenses in EUR bn Savings and investment (CtA) ramp-up Starting and landing point until 2015 In EUR bn In EUR bn Cost/income ratio Annual run-rate savings aspiration 4.5 79% Cost/income ratio Planned one-off investment (CtA) (4
Slide 30: Independent expert panel reviews our compensation structure and governance
Independent expert panel reviews our compensation structure and governance Objectives — Benchmark the Bank’s compensation systems against industry best practice Dr. Jürgen Hambrecht Chairman of the panel and regulatory requirements and former CEO of BASF — Formulate F l core principles i i l andd mi
Slide 31: Additional Information
Deutsche Bank Additional Information
Slide 32: Funding profile
Funding profile As at 31 Dec 2007 As at 30 Sep 2012 Total: EUR 1,206 bn 30% (EUR 361 bn) of Total: EUR 1,174 bn(2) 59% (EUR 689 bn) of Financing overall funding from Financing overall funding from Vehicles Vehicles 5% mostt stable t bl funding f di most stable funding f nding 2% sources(1) sources C
Slide 33: Funding activities update
Funding activities update Funding cost development Observations In bps 400 — Continued to issue at attractive European Peer CDS(1) US P Peer CDS(2) levels in 3Q2012 Q 360 DB 5yr Senior CDS 320 DB issuance spread(3) — Funding plan of EUR 15 bn DB issuance activity completed in September 280 240 — Iss
Slide 34: Corporate Investments
Corporate Investments Income before income taxes Key features In EUR m In EUR m 3Q12 vs. 3Q12 vs. 3Q12 3Q11 2Q12 3Q11 2Q12 Revenues 241 213 262 13 % (8)% Prov. for credit (0) (0) (2) (14)% (94)% losses Noninterest exp. (341) (299) (330) 14 % 3% IBIT (100) (85) (70) 17 % 43 % (85) (70) (100) (165) (1
Slide 35: PBC business division performance
PBC business division performance In EUR m, m post-minorities post minorities Impact from Cost-to- Greek 1) Reported IBIT achieve related PPA Hua Xia Adjusted IBIT government to Postbank bonds 1Q2011 231 (38) 269 2Q2011 124 (42) (35) 201 3Q2011 132 (11) (35) 178 Advisory Banking 4Q2011 85 (9) (73) 1
Slide 36: Impaired loans
Impaired loans In EUR bn IFRS impaired loans (1) Relating to IAS 39 loans Effect from Postbank (2) 9.4 9.8 10.2 9.2 8.5 7.6 2.0 2.0 2.2 2.1 1.8 1 8 1.3 1.5 1.4 1.8 2.0 0.8 1.1 5.5 5.6 5.9 5.8 5.8 6.1 30 Jun 30 Sep 31 Dec 31 Mar 30 Jun 30 Sep 2011 2012 Cov. ratio DB(3) 46% 45% 44% 44% 45% 45% (1) IFR
Slide 37: Loan book
Loan book In EUR bn IAS 39 impact on CIB loan book 25 23 23 23 23 23 19 398 398 416 417 412 415 408 11 11 10 7 7 3 3 CI 151 146 151 144 135 135 150 24 25 27 29 28 30 30 CIB 230 230 230 231 AWM 228 227 229 PBC 31 30 30 31 31 30 30 Mar Jun Sep Dec Mar Jun Sep 2011 2012 Germany excl. Financial Institut
Slide 38: Composition of loan book and provisions by category
Composition of loan book and provisions by category In EUR bn, bn as of 30 September 2012 ... DB 3Q2012 provision for credit losses((1)) ex. ex PB PB, in EUR m ... Postbank (PB) 3Q2012 provision for credit losses(1)(2), in EUR m 446 IAS 39 reclassified assets Postbank 555 111 109 145 189 408 Low l
Slide 39: Total assets (adjusted)
Total assets (adjusted) In EUR bn 1,296 1,281 Positive market values from derivatives 72 Derivatives post- 72 Derivatives post- netting netting Trading securities 221 228 Financial assets 248 Trading assets 256 Trading assets at FV through P&L Other trading assets 27 28 Reverse repos / securities bo
Slide 40: IAS 39 reclassification
IAS 39 reclassification Carrying value vs. fair value 3Q2012 developments In EUR bn — The gap between carrying value and fair value has decreased by EUR 0.5 bn in 3Q2012 Sales & Trading - Debt Origination & Advisory — Decrease of fair value by EUR 2.8 bn largely 31 Dec 31 Dec 31 Dec 31 Mar 30 Jun 30
Slide 41: Group headcount
Group headcount Full-time Full time equivalents, at period end 30 Sep 2012 31 Dec 2010 31 Dec 2011 31 Mar 2012 30 Jun 2012 30 Sep 2012 vs. 30 Jun 2012 CB&S 11,091 10,767 10,259 10,080 9,864 (216) GTB 4,525 4,420 4,414 4,465 4,514 49 AWM 6,986 6,909 6,902 6,891 6,767 (124) PBC(1) 43,801 42,138 42,288
Slide 42: Number of shares
Number of shares In million Average used for EPS End of period numbers calculation 31 Dec 31 Dec 30 Sep FY2010 FY2011 3Q2012 2010 2011 2012 Common shares issued(1) 741 929 929 929 929 929 T t l shares Total h in i ttreasury (4) (17) (8) (10) (25) (4) Common shares outstanding 737 913 922 919 905 926
Slide 43: Balance sheet leverage ratio (target definition)
Balance sheet leverage ratio (target definition) In EUR bn 2010 2011 2012 31 Dec 31 Mar 30 Jun 30 Sep 31 Dec 31 Mar 30 Jun 30 Sep Total assets (IFRS) 1 906 1,906 1 842 1,842 1 850 1,850 2 282 2,282 2 164 2,164 2 103 2,103 2 241 2,241 2 186 2,186 Adjustment for additional derivatives netting (601) (5
Slide 44: Invested assets report
Invested assets report In EUR bn Net new money 30 Sep 2011 31 Dec 2011 31 Mar 2012 30 Jun 2012 30 Sep 2012 3Q2012 9M2012 Asset and Wealth Management 780 813 820 831 849 (5) (13) A Asset tMManagementt 516 544 542 547 554 (10) (25) Institutional 162 174 174 173 176 2 (4) Retail 157 164 169 166 177 (3)
Slide 45: Regional invested assets - AM and PWM
Regional invested assets - AM and PWM In EUR bn 30 Sep 2012 30 Sep 2012 30 Sep 2011 31 Dec 2011 31 Mar 2012 30 Jun 2012 30 Sep 2012 vs. vs. 30 Jun 2012 30 Dec 2011 Asset Management 516 544 542 547 554 1% 2% (1) G Germany 234 240 247 244 250 2% 4% UK 22 26 25 24 25 3% (3)% Rest of Europe 29 30 31 32
Slide 46: Regional net new money - AM and PWM
Regional net new money - AM and PWM In EUR bn 3Q2011 4Q2011 1Q2012 2Q2012 3Q2012 9M2011 9M2012 Asset Management (11) 8 (10) (6) (10) (22) (25) (1) G Germany (3) 0 (1) (1) (9) (4) (11) UK (2) 4 0 (0) 0 (3) (0) Rest of Europe 0 (0) (0) (0) (1) (3) (1) Americas_Region (6) 5 (7) (4) (0) (13) (11) Asia P
Slide 47: VaR of CIB trading units
VaR of CIB trading units 99%, 1 day, in EUR m VaR of CIB trading units Constant VaR of CIB trading units(1) EUR 1.9 bn Sales & Trading g revenues EUR 3.1 bn 120 100 80 60 40 20 3Q2011 4Q2011 1Q2012 2Q2012 3Q2012 76 56 55 56 55 43 29 29 29 29 (1) Constant VaR is an approximation o
Slide 48: Cautionary statements
Cautionary statements This presentation contains forward-looking statements. Forward-looking statements are statements that are not historical facts;; they y include statements about our beliefs and expectations p and the assumptions p underlying y g them. These statements are based on plans, estima