Deutsche Bank AG · XETR:DBK
Deutsche Bank — Q2 2008 Earnings Presentation
47 slides from Deutsche Bank's earnings presentation, Jul 31, 2008
Slide 1: 2Q2008 Results
2Q2008 Results Anthony di Iorio Chief Financial Officer 31 July 2008
Slide 2: Agenda
Agenda 1 Summary 2 Segment results 3 Risk, capital and liquidity management Investor Relations 07/08 · 2
Slide 3: 2Q2008 Highlights
2Q2008 Highlights Income before income taxes of EUR 0.6 bn Group performance Net income of EUR 0.6 bn Diluted EPS of EUR 1.27 CB&S: Loss before income taxes of EUR (0.3) bn, after mark-downs of EUR 2.3 bn Segment performance ‘Stable’ businesses: Income before income taxes of EUR 0.9 bn C
Slide 4: Deutsche Bank results: 2Q2008 Summary
Deutsche Bank results: 2Q2008 Summary In EUR bn 2Q2008 2Q2008 vs. vs. 2Q2008 2Q2007 1Q2008 2Q2007 1Q2008 Net revenues 5.4 8.8 4.6 (39)% 17 % Provision for credit losses (0.1) (0.1) (0.1) 67 % 18 % Noninterest expenses (4.6) (6.0) (4.8) (23)% (3)% Income before income taxes 0.6 2.7 (0.3) Net income 0
Slide 5: Reduction in exposures in key areas during the quarter
Reduction in exposures in key areas during the quarter In EUR bn Mark-downs Exposure net of hedges 31 Mar 2008 30 Jun 2008 Change 2Q2008 (1) CDO Subprime 0.0 1.8 1.4 (0.4) (1) Other U.S. RMBS 0.9 7.0 5.9 (1.2) (4) Monolines(2) 0.5 1.8 2.1 0.3 (3) (5) Commercial Real Estate 0.3 14.4 10.7 (3.7) (3) Le
Slide 6: Net revenues of EUR 5.4 bn in the quarter
Net revenues of EUR 5.4 bn in the quarter In EUR bn (45)% (39)% 18.4 9.6 8.8 7.3 10.0 5.1 5.4 4.6 1Q 2Q 3Q 4Q 1Q 2Q 1H 1H 2007 2008 2007 2008 Note: Figures may not add up due to rounding differences Investor Relations 07/08 · 6
Slide 7: Costs down 23% in the quarter, 24% in the half year
Costs down 23% in the quarter, 24% in the half year Noninterest expenses, in EUR bn (24)% (23)% 6.3 12.3 6.0 5.5 4.8 4.6 9.4 4.3 3.5 3.2 8.2 3.9 2.9 2.7 5.6 1.7 1.9 2.1 1.8 4.0 3.8 2.1 1.8 1.9 0.1 0.2 0.1 0.1 0.1 (0.1) 1Q 2Q 3Q 4Q 1Q 2Q 1H 1H 2007 2008 2007 2008 Compensation and benefits General and
Slide 8: Agenda: Segment results
Agenda 1 Summary 2 Segment results 3 Risk, capital and liquidity management Investor Relations 07/08 · 8
Slide 9: Pre-tax results by segment
Pre-tax results by segment Income before income taxes, in EUR m CB&S GTB CI 15% 18% 1,752 247 283 275 233 (311) 2Q2007 2Q2008 2Q2007 2Q2008 2Q2007 2Q2008 AWM PBC C&A (17)% 11% 292 297 328 242 (120) (176) 2Q2007 2Q2008 2Q2007 2Q2008 2Q2007 2Q2008 Investor Relations 07/08 · 9
Slide 10: CB&S in summary
CB&S in summary Results at a glance Condensed P&L Income before income taxes, in EUR m In EUR m Key ratios, in % 2Q Δ vs. 1H Δ vs. 2008 2Q2007 2008 1H2007 2,181 1,752 Revenues 2,183 (59)% 3,063 (73)% 447 Provisions* 14 (67)% 22 (65)% Noninterest exp. (2,511) (30)% (5,011) (34)% (179) (311) IBIT (311
Slide 11: CB&S revenue development and impact of mark-downs
CB&S revenue development and impact of mark-downs Revenues, in EUR bn Loan products / Other Origination & Advisory (16)% Sales & Trading 5.3 4.4 2.2 0.4 (2.3) 0.4 1.4 2Q2007 2Q2008 Total mark-downs 2Q2008 Reported ‘Pro-forma’ before (net of hedges) Reported mark-downs Note: Figures may not add up du
Slide 12: S&T debt: Revenues impacted by mark-downs of EUR 2.1 bn
S&T debt: Revenues impacted by mark-downs of EUR 2.1 bn S&T (debt and other products) Trends vs. 2Q2007 / key features Net revenues, in EUR m FX/Rates/MM Continued strong client flows across all products Favorable market positioning 3,354 (79)% Credit Reduced structured products activity 2,889
Slide 13: S&T equity: Performance driven by lower revenues in derivatives
S&T equity: Performance driven by lower revenues in derivatives S&T (equity) Trends vs. 2Q2007 / key features Net revenues, in EUR m Equity Reduced customer activity in Derivatives structured products Small ongoing impact from correlation (41)% mark-downs 1,714 Cash 1,403 Equities Solid perfor
Slide 14: Origination & Advisory: Challenging market conditions persist
Origination & Advisory: Challenging market conditions persist Origination & Advisory Trends vs. 2Q2007 / key features Net revenues, in EUR m Advisory Advisory Revenues down in slower market Origination Strongest ever rankings in announced volumes: #4 globally; #2 in EMEA; (56)% #4 in U.S.* Inv
Slide 15: CDO subprime exposure – Trading
CDO subprime exposure – Trading Exposure Key features In EUR bn 31 Mar 08 30 Jun 08 Gross exposure represents long CDO positions Total Super Senior and Mezzanine in cash or synthetic form tranches: Subprime ABS CDO gross Aggregates different vintages, locations, credit 1.8 1.4 exposure ratings a
Slide 16: Other U.S. residential mortgage business exposure
Other U.S. residential mortgage business exposure Exposure Key features In EUR bn 31 Mar 08 30 Jun 08 Predominantly AAA-rated securities based on Other U.S. residential mortgage Alt-A collateral gross assets Alt-A 5.2 4.2 Basis risk between underlying and hedges Subprime 0.2 0.1 Other 1.6 1.6
Slide 17: Monoline exposure related to U.S. residential mortgages
Monoline exposure related to U.S. residential mortgages Exposure Key features In EUR bn Fair value of Gross notional value In addition to our exposure related to U.S. bought protection of bought protection residential mortgages we had “other” monoline 31 Mar 08 30 Jun 08 31 Mar 08 30 Jun 08 Super
Slide 18: Commercial Real Estate: Summary of traded whole loans
Commercial Real Estate: Summary of traded whole loans Composition of traded whole loans and loan commitments(1) In EUR bn 31 Mar 2008 total loans and loan commitments 16.4 FX 0.2 Purchases 0.7 Sales (1.5) 10.7 Risk reduction(2) (4.0) Other Europe / 1.6 Other 0.1 Asia / Pacific 30 Jun 2008 total loan
Slide 19: Leveraged Finance exposure: Current status
Leveraged Finance exposure: Current status Composition of current loans and loan commitments In EUR bn 31 Mar 2008 total loans and loan commitments 33.1 FX 0.3 Sales (7.2) 16.6 Restructured 0.1 24.5 New Commitments 1.0 1.4 Loans held (2.3) Cancelled (0.5) 30 Jun 2008 total loans and loan commitments
Slide 20: 'Stable' businesses: Continued solid performance
GTB ‘Stable’ businesses: Continued solid performance AWM Income before income taxes PBC 2003 – 2007 Quarterly trend In EUR bn In EUR m 835 832 854 2x 3.0 742 2.6 Ø: 751 695 643 1.9 1.6 1.4 2003* 2004 2005 2006 2007 1Q 2Q 3Q 4Q 1Q 2Q * GTB adjusted for gain on sale of GSS 2007 2008 Note: 2003-2005 ba
Slide 21: GTB: Sustained progress
GTB: Sustained progress Results at a glance Condensed P&L Income before income taxes, in EUR m In EUR m Key ratios, in % 2Q Δ vs. 1H Δ vs. 2008 2Q2007 2008 1H2007 15% Revenues 671 2% 1,331 5% 263 250 283 247 222 Provisions* (4) n.m. (2) 114% 214 Noninterest exp. (383) (7)% (796) (1)% IBIT 283 15% 53
Slide 22: AWM: Pre-tax profit of EUR 242 m
AWM: Pre-tax profit of EUR 242 m Results at a glance Condensed P&L Income before income taxes, in EUR m In EUR m Key ratios, in % 2Q Δ vs. 1H Δ vs. 2008 2Q2007 2008 1H2007 (17)% Revenues 962 (16)% 1,963 (9)% 292 265 242 Provisions* (1) n.m. (1) n.m. 188 169 188 Noninterest exp. (720) (15)% (1,533) (
Slide 23: PBC: Pre-tax profit up 11% to EUR 328 m
PBC: Pre-tax profit up 11% to EUR 328 m Results at a glance Condensed P&L Income before income taxes, in EUR m In EUR m Key ratios, in % 2Q Δ vs. 1H Δ vs. 2008 2Q2007 2008 1H2007 11% Revenues 1,478 2% 2,931 2% 304 304 328 293 297 252 Provisions* (144) 16% (269) 12% Noninterest exp. (1,006) (2)% (2,0
Slide 24: Net new money
Net new money PCAM invested assets, in EUR bn Net new money 3 898 896 6 1 1 (7) (2) EUR 10 bn 31 Mar Perfor- FX effect Other AM PWM PBC 30 June 2008 mance 2008 Note: Figures may not add up due to rounding differences Investor Relations 07/08 · 24
Slide 25: Agenda: Risk, capital and liquidity management
Agenda 1 Summary 2 Segment results 3 Risk, capital and liquidity management Investor Relations 07/08 · 25
Slide 26: Provisions of EUR 135 m in the quarter
Provisions of EUR 135 m in the quarter Single counterparty Provision for credit losses, in EUR m relationship 329 249 178 135 98 105 114 81 1Q 2Q 3Q 4Q 1Q 2Q 1H 1H 2007 2008 2007 2008 Thereof: CIB (20) (42) (19) 190 (11) (9) (62) (20) 117 124 124 136 125 145 241 270 Thereof: PCAM Note: Divisional fi
Slide 27: Problem loans stable, with improved coverage ratio
Problem loans stable, with improved coverage ratio Problem loans not considered Problem loans, in EUR bn impaired under IFRS IFRS impaired loans(1) IFRS impaired loans coverage ratio(2) 3.2 3.3 3.1 3.1 2.9 2.8 2.6 2.6 2.7 2.5 2.5 2.4 63% 66% 64% 64% 62% 65% 31 Mar 30 Jun 30 Sep 31 Dec 31 Mar 30 Jun
Slide 28: Tier I ratio of 9.3%
Tier I ratio of 9.3% Basel I Basel II 9.2 9.3 9.3 8.7 8.8 8.6 9% 8.4 Target range 8% 329 308 311 303 305 285 Tier I ratio, in % RWA, in EUR bn 31 Mar 30 Jun 30 Sep 31 Dec 31 Mar 30 Jun 2007 2008 Investor Relations 07/08 · 28
Slide 29: Reduction in total assets
Financial assets at FV through P&L Securities borrowed / Reduction in total assets Loans central bank funds sold 2008, in EUR bn Cash and deposits from banks Other (314) (159) 2,305 2,150 1,991 (156) Positive 715 market values 1,677 from 640 1,562 derivatives 1,395 Trading 436 securities 415 207 207
Slide 30: Derivative market values and underlying credit risk
Derivative market values and underlying credit risk 30 June 2008, in EUR bn 640 (499) 77 (22) (36) (6) Derivatives Counterparty Exchange Collateral Sovereign & Underlying netting traded public sector credit risk derivatives Investor Relations 07/08 · 30
Slide 31: Strengthening the stable funding base
Strengthening the stable funding base Unsecured funding by source, in EUR bn 511 516 84 153 432 + 74 358 30 June 2007 30 June 2008 Capital markets Short-term wholesale funding Retail deposits Fiduciary, clearing & other deposits Note: Figures may not add up due to rounding differences Investor Relat
Slide 32: A funding cost advantage for Deutsche Bank
A funding cost advantage for Deutsche Bank 5-year senior CDS, in bps 1 July 2007 28 July 2008 364 342 252 138 144 100 105 63 70 35 35 35 37 14 18 10 19 12 Credit UBS JPMorgan Goldman Citi Morgan Merrill Lehman Suisse Chase Sachs Stanley Lynch Brothers Source: Bloomberg Investor Relations 07/08 · 32
Slide 33: 2Q2008 Highlights
2Q2008 Highlights Income before income taxes of EUR 0.6 bn Group performance Net income of EUR 0.6 bn Diluted EPS of EUR 1.27 CB&S: Loss before income taxes of EUR (0.3) bn, after mark-downs of EUR 2.3 bn Segment performance ‘Stable’ businesses: Income before income taxes of EUR 0.9 bn C
Slide 34: Additional information
financial Additional information A Passion to Perform. Deutsche Bank
Slide 35: Number of shares for EPS calculation
Number of shares for EPS calculation In million Average At end of period 2Q 1Q 2Q 30 Jun 31 Mar 30 Jun 2007 2008 2008 2007 2008 2008 Common shares issued 527 530 531 528 531 531 Total shares in treasury (26) (31) (28) (28) (30) (25) Common shares outstanding 501 500 503 500 500 505 (1) Forward purch
Slide 36: Group headcount
Group headcount Full-time equivalents, at period end 30 Jun 2008 vs. 30 Jun 31 Dec 31 Mar 30 Jun 31 Mar 2008 2007 2007 2008 2008 Net of Total de-/consoli- change dation CIB 16,663 16,510 15,638 15,613 (26) (26) PCAM 29,801 30,749 31,216 31,669 453 459 Corporate 26 29 29 28 (1) (1) Investments Infras
Slide 37: Invested assets report
Invested assets(1) report In EUR bn 31 Mar 30 Jun 30 Sep 31 Dec 31 Mar 30 Jun Net new money 2007 2007 2007 2007 2008 2008 2Q2008 1H2008 Asset and Wealth Management 747 765 759 749 698 700 8 15 Asset Management 553 564 561 555 516 515 1 4 Institutional 149 155 156 158 150 155 4 5 Retail 242 245 239 2
Slide 38: Regional invested assets – AM and PWM
Regional invested assets* – AM and PWM In EUR bn 30 Jun 08 31 Mar 30 Jun 30 Sep 31 Dec 31 Mar 30 Jun vs. 2007 2007 2007 2007 2008 2008 31 Mar 08 Asset Management 553 564 561 555 516 515 (0)% Germany 249 265 265 264 252 248 (2)% UK 11 13 17 17 17 17 (0)% Rest of Europe 46 40 37 37 36 34 (4)% Americas
Slide 39: Regional net new money – AM and PWM
Regional net new money – AM and PWM In EUR bn 1Q2007 2Q2007 3Q2007 4Q2007 FY2007 1Q2008 2Q2008 Asset Management 4 6 12 5 27 2 1 Germany 8 11 (0) 1 20 2 (3) UK 1 1 4 1 7 1 1 Rest of Europe (3) (6) 1 1 (7) (0) (1) Americas (3) 1 4 1 3 0 4 Asia / Pacific 1 (1) 3 1 4 (0) (0) Private Wealth Management 4
Slide 40: Corporate Investments
Corporate Investments Results at a glance Condensed P&L (reported) Income before income taxes, in EUR m In EUR m 2Q Δ vs. 1H Δ vs. 679 2008 2Q2007 2008 1H2007 629 Revenues 296 14% 1,001 44% Provisions* 1 n.m. 1 n.m. 305 275 233 Noninterest exp. (22) (31)% (48) (71)% 133 IBIT 275 18% 955 78% 1Q 2Q 3Q
Slide 41: Alternative assets exposure
Alternative assets exposure Book values, in EUR bn 3.9 3.8 3.7 3.7 0.6 0.4 CI 0.6 0.6 2.4 2.6 1.9 1.9 PCAM 0.7 0.7 1.7 1.9 1.0 1.0 1.4 1.4 1.5 CIB 0.8 0.9 1.1 31 Mar 30 Jun 30 Sep 31 Dec 31 Mar 30 Jun 2007 2008 Note: Figures may not add up due to rounding differences Investor Relations 07/08 · 41
Slide 42: Listed holdings: Unrealised gains of EUR 0.9 bn
Listed holdings: Unrealised gains of EUR 0.9 bn In EUR m Stake Market value (in %) 30 Jun 30 Jun 31 Dec 31 Mar 30 Jun 2008 2007 2007 2008 2008 Daimler AG 2.7% 3,058 2,967 1,567 1,027 Allianz SE 1.2% 1,665 1,154 867 584 Linde AG 3.8% 1,114 789 571 570 Other n.m. 416 171 141 122 Total market value 6,2
Slide 43: Loan book
Loan book In EUR bn 13% 209 217 193 195 201 186 107 112 CIB 97 97 100 91 94 96 98 100 102 105 PCAM 31 Mar 30 Jun 30 Sep 31 Dec 31 Mar 30 Jun 2007 2008 Note: Total includes CI / Other, figures may not add up due to rounding differences Investor Relations 07/08 · 43
Slide 44: Risk: VaR of CIB trading units
Risk VaR of CIB trading units (99%, 1 day), in EUR m EUR 4.3 bn Sales & Trading revenues EUR 1.4 bn 150 130 110 90 70 50 ∅ 83.6 ∅ 90.5 ∅ 91.0 ∅ 117.8 ∅ 112.5 2Q2007 3Q2007 4Q2007 1Q2008 2Q2008 Investor Relations 07/08 · 44
Slide 45: Our target definition
Our target definition Pre-tax return on equity (target definition) IBIT attributable to DB shareholders (target definition) IBIT attributable to DB shareholders (target definition) Reported income before income tax expense Less minority interest Average active equity IBIT attributable to DB sharehol
Slide 46: Items excluded in target definition
Items excluded in target definition 2007 2008 Pre-tax Post-tax Pre-tax Post-tax First quarter 252 197 First quarter 854 854 Gains from the sale of FIAT 128 126 Gains from the sale of Daimler, shares Linde and Allianz 854 854 Equity pick-up from Interhotel 178 125 Goodwill impairment (54) (54) Second
Slide 47: 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