Deutsche Bank Ag · XETR:DBK
Deutsche Bank — Q2 2024 Earnings Presentation
44 slides from Deutsche Bank's earnings presentation, Jul 24, 2024
Slide 1: Q2 2024 results
Deutsche Bank Investor Relations Q2 2024 results July 24, 2024
Slide 2: Strong business performance supports path to targets
Strong business performance supports path to targets H1 2024 Robust franchise momentum, with H1 revenues on track towards € 30bn full-year target € 15.4bn Revenues 12% year-on-year growth in commissions and fee income, with all businesses contributing and reflecting investments in strategic grow
Slide 3: Robust underlying profit driven by disciplined delivery
Robust underlying profit driven by disciplined delivery In € bn, unless stated otherwise Pre-provision profit1 Revenues Costs Year-on-year By division3 Adjusted costs +8% +17% Group 15.1 +2% 15.4 5.7% (2)% 4.7 +3% 15.4 CAGR, Q2 2024 LTM vs. FY 20214 69% 15.0 Cost/income ratio 10.3 10.1 ex-Postbank t
Slide 4: Strengthening franchise underpins revenue momentum
Strengthening franchise underpins revenue momentum H1 2024 Corporate Bank Investment Bank 16% increase year on year in incremental deals won O&A market share momentum maintained; H1 share with multinational clients >70bps higher vs. FY 2023, ranked 7th globally1 Strong momentum in commissions
Slide 5: Continued execution across strategic pillars
Continued execution across strategic pillars Revenue growth Efficiency measures Capital efficiency 5.5-6.5% € 2.5bn € 25-30bn 2 Revenue CAGR 2021-2025 targeted Operational efficiencies targeted RWA reductions targeted 5.7% revenue CAGR1 in Q2 2024 LTM vs. € 1.5bn delivered or expected savings from F
Slide 6: Global Hausbank strategy delivers franchise growth and improving financial performance
Global Hausbank strategy delivers franchise growth and improving financial performance Continued strong momentum across all businesses Resilient performance across divisions, reflecting growth driven by investments and sustained client momentum Diversified franchise delivers robust underlying operat
Slide 7: Group financials
Group financials Deutsche Bank. Investor Relations Q2 2024 results, July 24, 2024 6
Slide 8: Key performance indicators
Key performance indicators In % Revenue CAGR2 Q2 2024 LTM vs FY 2021 CIR development 75 75 78 Sustained revenue growth momentum with Group CAGR in line with updated target of 5.5-6.5%1 16.8 5.7 5.7 Cost/income ratio (CIR) and return on tangible 0.5 equity3 (RoTE) impacted by Postbank takeover (3.8)
Slide 9: Q2 2024 highlights
Q2 2024 highlights In € bn, unless stated otherwise Financial results Divisional revenues Key highlights Δ vs. Δ vs. Δ vs. Q2 2024 Q2 2023 Q1 2024 +2% +2% Q2 2023 Statement of income 7.6 Revenues 7.6 2% (2)% 7.4 Revenues ex-specific items1 7.6 2% (2)% Provision for credit losses 0.5 19% 8% Revenue
Slide 10: Net interest income (NII) / Net interest margin (NIM)
Net interest income (NII) / Net interest margin (NIM) In € bn, unless stated otherwise Group development Key banking book segment1 development 1.5% 1.4% 1.3% 1.3% 1.2% 4.2% 3.9% 4.1% 4.2% 4.1% Corporate Bank 3.6 0.3 3.3 3.2 3.1 3.0 1.3 1.2 1.3 1.3 1.3 0.1 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 2.3%
Slide 11: Adjusted costs – Q2 2024 (YoY)
Adjusted costs – Q2 2024 (YoY) In € bn, unless stated otherwise Key highlights Q2 2023 ex- 4,945 bank levies FX impact Compensation Adjusted costs in line with the run-rate guidance of and benefits1 7 172 around € 5.0bn per quarter; excluding bank levies adjusted costs increased by 2% year on year
Slide 12: Provision for credit losses
Provision for credit losses In € m, unless stated otherwise Key highlights Stage 1+2 Stage 3 In bps of average loans annualized1 30 33 20 41 37 40 Q2 2024 provisions slightly higher sequentially due to higher Stage 1+2 charges resulting from net effect of 488 overlays and models enhancements, part
Slide 13: Capital metrics
Capital metrics Movements in basis points (bps), unless stated otherwise, period end CET1 ratio Leverage ratio MREL / TLAC, in € bn Surplus above requirements 4 6 13.5% 14 4.6% 13.4% 4.5% 1 (4) (2) 127 Senior preferred1 14 17 28 Senior non- 46 preferred Q1 2024 FX effect RWA Capital Q2 2024 Q1 2024
Slide 14: Segment results
Segment results Deutsche Bank. Investor Relations Q2 2024 results, July 24, 2024 13
Slide 15: Corporate Bank
Corporate Bank In € m, unless stated otherwise Financial results Revenue performance Key highlights Δ vs. Δ vs. Δ vs. Q2 Q2 2024 Q2 2023 Q1 2024 2023 Statement of income Corporate Revenues essentially flat year on year and up Treasury Services Revenues 1,922 (1)% 2% 1,058 (2)% (2)% sequentially, d
Slide 16: Investment Bank
Investment Bank In € m, unless stated otherwise Financial results Revenue performance Key highlights Δ vs. Δ vs. Δ vs. Q2 Q2 2024 Q2 2023 Q1 2024 Higher revenues year on year driven by ongoing 2023 recovery in O&A, with FIC essentially flat and client Fixed Income & Currencies Statement of income
Slide 17: Private Bank
Private Bank In € m, unless stated otherwise Financial results Revenue and AuM performance Key highlights Δ vs. Δ vs. Revenues Δ vs. Q2 Q2 2024 Q2 2023 Q1 2024 2023 Revenues essentially flat quarter on quarter with higher investment product revenues offset by Personal Banking Statement of income 1
Slide 18: Asset Management
Asset Management In € m, unless stated otherwise Financial results Revenue and AuM performance Key highlights Δ vs. Δ vs. Revenues Δ vs. Q2 Q2 2024 Q2 2023 Q1 2024 2023 trans. Mgmt. Other fees fees Statement of income 613 6% Revenues 663 7% 7% Significant improvement in profit before tax, up Perf.
Slide 19: Corporate & Other
Corporate & Other In € m, unless stated otherwise Financial results Profit (loss) before tax Key highlights Δ vs. Δ vs. Abs. Δ vs. Q2 2024 Q2 2023 Q1 2024 Q2 2023 Statement of income Funding & Loss before tax of € 1.5bn, compared to a loss Revenues 73 (15)% n.m. liquidity (46) (37) before tax of €
Slide 20: Outlook
Outlook Strong franchise momentum, reflecting investments, with businesses positioned for further growth Reconfirm guidance for quarterly run-rate of adjusted costs for the year at around € 5bn Full-year guidance for provision for credit losses revised to slightly above 30 basis points Solid capital
Slide 21: Appendix
Appendix Deutsche Bank. Investor Relations Q2 2024 results, July 24, 2024 20
Slide 22: 2025 financial targets and capital objectives
2025 financial targets and capital objectives Financial targets Capital objectives > 10% 5.5-6.5% < 62.5% ~ 13% 50% Post-tax RoTE Revenue CAGR Cost/income ratio CET1 ratio Total payout ratio in 2025 2021-2025 in 2025 from 2025 Well-positioned to Increased revenue Reiterate CIR target, Aim to operate
Slide 23: Committed to increasing shareholder distributions
Committed to increasing shareholder distributions Total payout1 Payout trajectory details Share buybacks Organic capital generation from net income and improved Executed in FY, in € m capital efficiency support shareholder distributions, as well as business growth potential +50% p.a. Upside 675 450
Slide 24: Sustainability
Sustainability Q2 2024 highlights Recent achievements Sustainable Finance1 volumes Increased Sustainable Finance volumes by € 21bn to € 322bn1 (cumulative since 2020) 322 500 Involved as Senior Mandated Lead Arranger and Hedging Bank on H2 Green Steel’s € 4.2bn project financing for the world’s
Slide 25: Definition of certain financial measures
Definition of certain financial measures Revenues excluding specific items are calculated by adjusting net revenues under IFRS for specific revenue items which generally fall outside the usual nature or scope of Revenues excluding the business and are likely to distort an accurate assessment of the
Slide 26: Specific revenue items and adjusted costs – Q2 2024
Specific revenue items and adjusted costs – Q2 2024 In € m Q2 2024 Q2 2023 Q1 2024 CB IB PB AM C&O Group CB IB PB AM C&O Group CB IB PB AM C&O Group Revenues 1,922 2,599 2,332 663 73 7,589 1,943 2,361 2,400 620 85 7,409 1,878 3,047 2,378 617 (140) 7,779 revenue items Specific DVA - IB Other / Legacy
Slide 27: Pre-provision profit, CAGR and operating leverage
Pre-provision profit, CAGR and operating leverage In € m, unless stated otherwise CAGR2 FY 2021 – H1 2024 vs FY 2021 Q2 2024 LTM H1 2023 H1 2024 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q2 2024 LTM H1 2023 Net revenues Corporate Bank 5,153 1,889 1,911 1,878 1,922 7,601 16.8% 3,916 3,800 (3)% Investment Bank
Slide 28: Pre-provision profit, post-tax RoTE, CIR and operating leverage ex-Postbank takeover litigation provision
Pre-provision profit, post-tax RoTE, CIR and operating leverage ex-Postbank takeover litigation provision In € m, unless stated otherwise Q2 2023 Q2 2024 H1 2023 H1 2024 Pre-provision profit 1,806 887 4,030 3,362 Provision for credit losses (401) (476) (772) (915) Profit (loss) before tax 1,405 411
Slide 29: Indicative divisional currency mix
Indicative divisional currency mix Q2 2024 Net revenues Noninterest expenses 4% 4% 8% 9% 14% 15% 16% 13% 19% 18% 5% 0% 5% 22% 1% 27% 14% 16% 15% 28% 31% 0% 34% 15% 6% 15% 17% 1% 1% 87% 85% 65% 41% 59% 62% 58% 57% 52% 47% 13% CB IB PB AM Group CB IB PB AM Group EUR GBP USD Other1 Notes: classificatio
Slide 30: Net interest income (NII) sensitivity
Net interest income (NII) sensitivity Hypothetical +/-25bps shift in yield curve, in € m Net interest income (NII) sensitivity1 +25bps shift in yield curve -25bps shift in yield curve ~140 ~70 ~25 ~(35) ~(75) ~(145) 2025 2026 2027 Breakdown of sensitivity by currency for +25bps shift in yield curve
Slide 31: Loan and deposit development
Loan and deposit development In € bn, unless stated otherwise; loan-to-deposit ratio 75% Loan development1,2 Key highlights QoQ YoY 482 485 479 480 482 0% (1)% Loans remained stable during the quarter adjusted for FX: Investment Bank 103 103 101 103 106 2% 2% Good momentum in FIC Financing Sta
Slide 32: Loan book composition
Loan book composition Q2 2024, IFRS loans: € 482bn1 Key highlights Other2 Other IB3 0% Leveraged Debt Capital Markets 11% German Mortgages and 54% of loan portfolio in Private Bank, consisting of retail 1% Home Loans & Savings Asset Backed Securities mortgages mainly in Personal Banking (Germany)
Slide 33: Provision for credit losses and stage 3 loans
Provision for credit losses and stage 3 loans Provision for credit losses, in € m Stage 3 at amortized cost, in € bn Private Bank Corporate Bank Investment Bank PB (ex-POCI) CB (ex-POCI) IB (ex-POCI) POCI 488 476 Group stage 3 2.7% 2.6% 2.8% 3.1% 3.1% 439 401 loans at amortized 186 150 163 cost %2 1
Slide 34: Commercial Real Estate (CRE) 1 / 2
Commercial Real Estate (CRE) 1 / 2 CRE non-recourse portfolio: € 38bn € 31bn in scope of severe stress test2 Non-recourse € 38bn – 8% of total loans1 By region By region APAC APAC € 7bn deemed as lower risk, includes data centers EU and municipal social housing 7% 16% 1% CRE higher risk loans
Slide 35: Commercial Real Estate (CRE) 2 / 2
Commercial Real Estate (CRE) 2 / 2 US CRE in scope of severe stress test1: € 16bn US CRE loan risk management US CRE CLPs By type Office: € 7bn Modified loans, in € bn CLPs per quarter, in € m 12 130 Other 123 121 Other New York 17% 27% Office Miami 29% Philadelphia 3% 3% 74 45% 5% 5.3% 66 Boston Re
Slide 36: Level 3 assets and liabilities
Level 3 assets and liabilities As of June 30, 2024, in € bn Assets: € 25bn Liabilities: € 12bn Key highlights Other Other 0 Derivative Liabilities Level 3 is an indicator of valuation uncertainty 3 Derivative and not of asset quality Debt 8 Assets Debt Securities 4 securities 5 The Group classif
Slide 37: Leverage exposure and risk-weighted assets
Leverage exposure and risk-weighted assets CRD4, in € bn, period end Leverage exposure Risk-weighted assets 356 356 59 Operational risk RWA 59 1,254 1,262 Market risk RWA Trading assets 133 126 29 22 Credit valuation 4 128 17 adjustments Derivatives1 136 Lending 468 469 149 Lending commitments2 Cred
Slide 38: Litigation update
Litigation update In € bn, period end Litigation provisions Key highlights 2.7 1.5 1.6 1.3 1.3 Litigation provisions significantly increased by € 1.4bn quarter on quarter Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Contingent liabilities significantly decreased by € 1.4bn quarter on quarter; conting
Slide 39: Group Trading Book Value-at-Risk (VaR) and stressed Value-at-Risk (sVaR)
Group Trading Book Value-at-Risk (VaR) and stressed Value-at-Risk (sVaR) As of June 30, 2024, in € m, 99% confidence level Trading P&L1, VaR sVaR 400 160 300 174 162 172 200 120 121 100 80 0 44 34 34 -100 40 33 -200 0 -300 -400 (40) -500 (80) Q3 2023 Q4 20232 Q1 2024 Q2 2024 -600 1-d
Slide 40: Assets under management – Private Bank
Assets under management – Private Bank In € bn, unless stated otherwise AuM1,2 – by business unit and product group +9% +9% +1% +1% 568 579 606 613 565 94 97 102 102 103 113 115 112 116 119 62 63 63 Inv. Prod. 56 358 58 356 366 388 391 302 298 304 325 328 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 PeB
Slide 41: Assets under management – Asset Management
Assets under management – Asset Management In € bn, unless stated otherwise AuM development Quarterly mgmt. 27.4 Year-on-year 26.4 26.0 Quarter-on-quarter 26.4 fee margin, in bps 933 941 0 933 (19) 8 0 66 2 859 2 6 Q2 2023 Net flows FX Market Other Q2 2024 Q1 2024 Net flows FX Market Other Q2 2024 A
Slide 42: Footnotes 1 / 2
Footnotes 1 / 2 Slide 1 – Strong business performance supports path to targets Slide 9 – Net interest income (NII) / Net interest margin (NIM) 1. Defined on slide 24 and detailed on slide 25 1. Defined on slide 24 2. Throughout this presentation post-tax return on average tangible shareholders’ equi
Slide 43: Footnotes 2 / 2
Footnotes 2 / 2 Slide 17 – Asset Management Slide 31 – Loan book composition 1. Detailed on slides 25-26 1. Loan amounts are gross of allowances for loans 2. Detailed on slide 40 2. Mainly includes Corporate & Other and Institutional Client Services in the Corporate Bank 3. Post-tax return on averag
Slide 44: Cautionary statements
Cautionary statements Forward-looking 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