Deutsche Bank Ag · XETR:DBK
Deutsche Bank — Q3 2022 Earnings Presentation
46 slides from Deutsche Bank's earnings presentation, Oct 26, 2022
Slide 1: Q3 2022 results
Deutsche Bank Q3 2022 results October 26, 2022
Slide 2: Ongoing business momentum in line with 2022 targets
Ongoing business momentum in line with 2022 targets 9M 2022 Performance Profitability Resilience Group revenues of € 20.9bn, Significant improvement in Maintaining disciplined risk reflecting average growth of pre-provision profit management in uncertain 10% across four core market environment busin
Slide 3: Core businesses delivering strong results
Core businesses delivering strong results 9M 20221 Corporate Bank Higher interest rates and strong operating performance, with +20% 11% 65% increased business volumes Revenue RoTE CIR growth Continued client engagement and Investment Bank strength of risk management drove significantly higher FIC +8
Slide 4: Positive operating performance
Positive operating performance In € bn, unless stated otherwise Core Bank revenues1 Group noninterest expenses Group 19.5 20.9 20.9 CIR 82% 73% 73% Average1 7% (5)% +10% 20.9 15.9 19.5 0.5 15.2 0.2 Divisional growth rates 1.3 0.9 8.3 +8% Investment Bank 7.7 Corporate 4.6 +20% 3.8 14.1 14.2 Bank Stab
Slide 5: Significant improvement in pre-provision profit
Significant improvement in pre-provision profit Core Bank1, in € bn, unless stated otherwise RoTE (7.5)% 4.3% 7.5% 10.0% 6.4 Corporate Bank Investment Bank 1.6 Private Bank 4.6 Asset Management 4.1 0.7 Corporate & Other 0.7 3.6 3.4 3.2 1.4 0.4 1.7 0.7 0.7 0.4 0.2 0.7 0.7 0.4 0.5 (0.2) (0.7) (1.0) (1
Slide 6: Risk management actions support stable risk profile
Risk management actions support stable risk profile Provision for credit losses1 Early identification and management of risks risk management 24bps 8bps Risk monitoring via multiple downside analyses and stress tests Disciplined 9M 2022 9M 2021 Continued tight underwriting standards and portfolio ma
Slide 7: Sustainable Finance strategy well on track
Sustainable Finance strategy well on track In € bn, cumulative since 2020 Sustainable Finance1 volumes versus target Reported volumes by business and product type +8% +8% -10%2 >200 115 197 191 177 32 157 47 83 35 10 46 35 37 YE 2020 YE 2021 Q1 2022 Q2 2022 Q3 2022 YE 2022 Investment Bank Corporate
Slide 8: Strong business momentum despite challenging market
Strong business momentum despite challenging market Strong business performance validates 2022 financial goals Continued Core Bank revenue momentum Delivered positive operating leverage while supporting investments in controls Disciplined risk management and a stable risk profile, supported by a res
Slide 9: Q3 2022 Group financial highlights
Q3 2022 Group financial highlights In € m, unless stated otherwise Change in % Change in % Q3 2022 vs. Q3 2021 vs. Q2 2022 Revenues 6,918 15 4 Revenues Revenues ex-specific items1 6,715 12 1 Noninterest expenses 4,954 (8) 2 Costs Adjusted costs 4,878 (7) 2 Profit (loss) before tax 1,615 192 4 Profit
Slide 10: Q3 2022 Core Bank financial highlights
Q3 2022 Core Bank financial highlights In € bn, unless stated otherwise Change vs. Change vs. Q3 2022 Q3 2021 Q2 2022 Revenues 6.9 14% 4% Revenues ex-specific items1 6.7 11% 2% Noninterest expenses 4.7 (6)% 1% Adjusted costs 4.7 (5)% 2% Profit (loss) before tax 1.8 104% 6% Profit (loss) 1.4 142% 4%
Slide 11: Net interest margin (NIM)
Net interest margin (NIM) Evolution of Group NIM and average interest earning assets Comments Average interest earning assets, in € bn1 Net interest margin, in %2 1.47% 1.39% — NIM growth continues to be 1.23% supported by increases in EUR and 1.22% 1.19% 1.14% 1.15% 1.17% USD rates 1.11% 998 — NIM
Slide 12: Adjusted costs – Q3 2022 (YoY)
Adjusted costs – Q3 2022 (YoY) In € m, unless stated otherwise Q3 2022 year-on-year comments Q3 2021 ex- transformation 4,658 charges & bank levies FX impact Compensation 94 185 and benefits1 — Adjusted costs excluding transformation charges and bank levies were down 1% Information Technology 60 23
Slide 13: Adjusted costs – 9M 2022 (YoY)
Adjusted costs – 9M 2022 (YoY) In € m, unless stated otherwise 9M 2022 year-on-year comments 9M 2021 ex- transformation 14,060 charges & bank levies FX impact — Adjusted costs excluding transformation Compensation 223 398 charges and bank levies increased 1% and benefits1 year on year, and declined
Slide 14: Provision for credit losses
Provision for credit losses In € m Comments Stage 1+2 Stage 3 761 — Modest Stage 1+2 provisions — Predominantly driven by the further 252 deterioration of macroeconomic 506 forecasts 273 — Largely compensated by reduction of 230 251 350 overlays from previous periods and 292 13 further offset by imp
Slide 15: Capital ratios
Capital ratios Movements in basis points (bps), period end CET1 ratio Comments 13 13.3% 24 13.0% 0 — CET1 ratio up 37bps compared to Q2 2022: — 24bps from RWA reduction, primarily from credit and market risk RWA — 13bps from capital changes driven by strong Q3 2022 earnings net of deductions for div
Slide 16: Segment results
Segment results Deutsche Bank Q3 2022 results Investor Relations October 26, 2022
Slide 17: Corporate Bank
Corporate Bank In € m, unless stated otherwise Change in Change in % vs. % vs. Q3 2022 Q3 2021 Q2 2022 Q3 2022 year-on-year comments Revenues 1,564 25 1 Revenues — Revenues higher reflecting Revenues ex-specific items1 1,564 25 1 further improvements in the Noninterest expenses 991 2 3 interest rate
Slide 18: Q3 2022 Corporate Bank revenue performance
Q3 2022 Corporate Bank revenue performance In € m, unless stated otherwise X% X% Excluding specific items1 Change vs. Q3 2021 Q3 2022 year-on-year comments Corporate Treasury Services: Corporate Treasury Services 963 28% 28% — Revenues higher driven by further improvements in interest rates environm
Slide 19: Investment Bank
Investment Bank In € m, unless stated otherwise Change in Change in % vs. % vs. Q3 2022 Q3 2021 Q2 2022 Q3 2022 year-on-year comments Revenues 2,372 6 (10) Revenues — Revenues ex-specific items Revenues ex- specific items1 2,280 2 (13) essentially flat as significantly higher revenues in FIC were No
Slide 20: Q3 2022 Investment Bank revenue performance
Q3 2022 Investment Bank revenue performance In € m, unless stated otherwise X% X% Excluding specific items1 Change vs. Q3 2021 Q3 2022 year-on-year comments Fixed Income, Currency Sales & Trading: — Macro trading and Emerging Markets revenues Fixed Income, Currency significantly higher, with Rates r
Slide 21: Private Bank
Private Bank In € m, unless stated otherwise Change in Change in % vs. % vs. Q3 2022 Q3 2021 Q2 2022 Q3 2022 year-on-year comments Revenues 2,268 13 5 — Revenues up 5% ex-specific Revenues items and the net impact of the Revenues ex-specific items1 2,158 10 0 BGH ruling6, reflecting higher net inter
Slide 22: Q3 2022 Private Bank revenue performance
Q3 2022 Private Bank revenue performance In € m, unless stated otherwise X% X% Excluding specific items1 Change vs. Q3 2021 Q3 2022 year-on-year comments Private Bank Germany: — Revenues in Private Bank Germany stable adjusted for significantly reduced forgone Private Bank 1,291 8% 8% revenues relat
Slide 23: Asset Management
Asset Management In € m, unless stated otherwise Change in Change in % vs. % vs. Q3 2022 Q3 2021 Q2 2022 Q3 2022 year-on-year comments Revenues 661 1 1 — Revenues up 1% due to an Revenues increase in management and Revenues ex-specific items1 661 1 1 performance fees as well as impacts from FX movem
Slide 24: Corporate & Other
Corporate & Other In € m Profit (loss) before tax Change Change vs. vs. Q3 2022 Q3 2021 Q2 2022 Profit (loss) before tax (68) 537 430 (68) Funding & liquidity (24) 29 102 Valuation & timing differences1 199 134 384 Shareholder expenses (143) (49) (23) (498) Noncontrolling interest2 47 8 (1) (605) Ot
Slide 25: Capital Release Unit
Capital Release Unit In € m, unless stated otherwise Absolute Absolute change vs. change vs. Q3 2022 Q3 2021 Q2 2022 Q3 2022 year-on-year comments Revenues (17) 19 (24) — Revenues improved due to lower de- Revenues risking and funding impacts that more Revenues ex-specific items1 (19) 14 (28) than o
Slide 26: Outlook
Outlook Continued strong performance presents upside to 2022 year-end revenue guidance Focus remains on managing a resilient balance sheet; retaining CLP outlook of around 25bps for 2022 Ongoing improvement in operating leverage as transformation phase of our strategy nears completion Confident in p
Slide 27: Appendix
Appendix Deutsche Bank Q3 2022 results Investor Relations October 26, 2022
Slide 28: Sustainability at Deutsche Bank
Sustainability at Deutsche Bank Q3 2022 highlights Our key focus areas Recent achievements – Increase of cumulative volumes in sustainable financing and investment to € 197bn1; volume development reflects the implementation of the new Markets in Financial Instruments Directive (MiFID) Sustainable Fi
Slide 29: 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 Revenues generally fall outside the usual nature or scope of the business and are likely to distort an accurate assessment of the excluding
Slide 30: Specific revenue items and adjusted costs – Q3 2022
Specific revenue items and adjusted costs – Q3 2022 In € m Q3 2022 Q3 2021 Q2 2022 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 1,564 2,372 2,268 661 71 6,935 (17) 6,918 1,255 2,227 1,999 656 (61) 6,076 (36) 6,040 1,551 2,646 2,
Slide 31: Specific revenue items and adjusted costs – 9M 2022
Specific revenue items and adjusted costs – 9M 2022 In € m 9M 2022 9M 2021 Core Core CB IB PB AM C&O CRU Group CB IB PB AM C&O CRU Group Bank Bank Revenues 4,575 8,341 6,648 1,998 (652) 20,911 (16) 20,895 3,799 7,718 6,195 1,919 (141) 19,489 21 19,510 revenue items DVA - IB Other / CRU - 95 - - - 95
Slide 32: Private Bank – Impact of BGH ruling
Private Bank – Impact of BGH ruling1 In € m, unless stated otherwise Q3 2021 Q2 2022 Q3 2022 9M 2021 9M 2022 Revenues Net revenues 1,999 2,160 2,268 6,195 6,648 BGH ruling - impact of forgone revenues (net) 94 8 4 188 19 of which: Private Bank Germany - BGH ruling - impact of forgone revenues (net)
Slide 33: Transformation-related effects
Transformation-related effects In € bn, unless stated otherwise 2019 – 2019 – 2022 Q3 2022 expected % of total cumulative cumulative 2019 – Q3 2022 impact impact Q3 2022 Nonoperating Goodwill impairment3 - 1.0 1.0 100% costs1 Restructuring & severance4 0.0 1.8 2.0 95% Pre-tax items Real estate charg
Slide 34: Indicative divisional currency mix
Indicative divisional currency mix Q3 2022 Net revenues Noninterest expenses 4% 4% 9% 10% 9% 19% 18% 16% 17% 21% 6% 5% 0% 21% 1% 26% 29% 18% 19% 16% 29% 13% 35% 0% 15% 1% 6% 15% 0% 84% 84% 63% 62% 60% 36% 57% 54% 52% 49% 12% CB IB PB AM Group CB IB PB AM Group EUR GBP USD Other1 Note: Classification
Slide 35: 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 Investment Bank PB (ex-POCI) CRU (ex-POCI) Corporate Bank Capital Release Unit CB (ex-POCI) Purchased or Originated Credit Impaired (POCI) 350 IB (ex-POCI) Group Stage 3
Slide 36: Litigation update
Litigation update In € bn, period end Litigation provisions1 Comments 1.1 1.1 1.2 1.3 1.0 ― Provisions increased modestly by € 0.1bn Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 quarter on quarter ― Contingent liabilities remained stable quarter on quarter; contingent liabilities include possible obligat
Slide 37: Q3 2022 loan and deposit development
Q3 2022 loan and deposit development In € bn Loan development Comments QoQ YoY — Lending growth of € 2bn in the quarter adjusted 476 481 493 503 2% 10% for FX effects 456 6 4 1 105 — € 4bn growth in Private Bank driven by 7 93 94 99 6% 31% 80 collateralized lending in International Private 119 122 1
Slide 38: Net interest income sensitivity
Net interest income sensitivity Hypothetical +/-25bps shift in yield curve, in € m Net interest income (NII) sensitivity1,2 Comments +25bps shift in yield curve -25bps shift in yield curve TLTRO impact ~40 ~5 ~370 ~225 ~270 — Cumulative impact of current rate ~15 ~95 curve produces significantly mor
Slide 39: Evolution of market-implied interest rates
Evolution of market-implied interest rates In % ECB deposit facility rate Federal Reserve interest on reserve balances 4.0 4.0 3.0 3.0 2.0 2.0 1.0 1.0 0.0 0.0 01/23 07/23 01/24 07/24 01/25 01/23 07/23 01/24 07/24 01/25 EUR 10-year swap rate USD 10-year swap rate 5.0 5.0 4.0 4.0 3.0 3.0 2.0 2.0 1.0 1
Slide 40: Loan book composition
Loan book composition Q3 2022, IFRS loans: € 503bn Comments Other IB2 Other1 — Well-diversified loan portfolio Leveraged Debt Capital Markets 0% — YTD FX impact on loan book is € 19bn 9% 1% — 54% of loan portfolio in Private Bank, mainly Asset Backed Securities German Mortgages consisting of retail
Slide 41: Leverage exposure and risk-weighted assets
Leverage exposure and risk-weighted assets CRD4, in € bn, period end Leverage exposure Risk-weighted assets 369 369 58 Operational risk RWA 58 1,280 1,310 Market risk RWA Trading assets 103 110 33 25 Credit valuation 6 Derivatives1 148 154 28 adjustments Lending 503 508 146 Lending 250 commitments2
Slide 42: Level 3 assets
Level 3 assets In € bn, as of September 30, 2022 Assets (total: € 29bn) Comments Equity securities Mortgage backed securities Other 1 3 0 — Level 3 is an indicator of valuation uncertainty Debt and not of asset quality securities 5 12 Derivative — The Group classifies financial instruments as Assets
Slide 43: Value-at-Risk / stressed Value-at-Risk (VaR / sVaR)
Value-at-Risk / stressed Value-at-Risk (VaR / sVaR) In € m, unless stated otherwise Historical simulation VaR, DB Group Trading book, 99%, 1 day Quarterly average 33 34 30 47 52 80 60 40 20 0 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Historical simulation sVaR, DB Group Regulatory scope, 99%
Slide 44: Assets under management (AuM) – Private Bank
Assets under management (AuM) – Private Bank In € bn, unless stated otherwise IPB - Investment products PB GY - Investment products IPB - Deposits PB GY - Deposits AuM1,2 – by business unit and product group (3)% 0% 537 542 554 548 528 528 521 110 110 111 112 112 111 109 64 65 66 68 76 63 71 Inv. pr
Slide 45: Assets under management (AuM) – Asset Management
Assets under management (AuM) – Asset Management In € bn, unless stated otherwise AuM development Quarterly management 27.7 Year on year 29.0 fee margin, in bps 28.4 Quarter on quarter 29.0 61 23 880 (106) (31) (3) 833 833 8 833 2 1 Q3 2021 Net flows FX Market Other Q3 2022 Q2 2022 Net flows FX Mark
Slide 46: 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