Deutsche Bank Ag · XETR:DBK
Deutsche Bank — Q1 2008 Earnings Presentation
45 slides from Deutsche Bank's earnings presentation, Apr 29, 2008
Slide 1: 1Q2008 Results
1Q2008 Results Anthony di Iorio Chief Financial Officer 29 April 2008
Slide 2: Agenda
Agenda 1 Summary 2 Segment results 3 Risk, capital and liquidity management Investor Relations 04/08 · 2
Slide 3: 1Q2008 Highlights
1Q2008 Highlights Loss before income taxes of EUR 0.3 bn, after tax EUR 0.1 bn In CB&S loss before income taxes of EUR 1.6 bn, reflecting mark-downs of EUR 2.7 bn in Leveraged Finance, Commercial Real Estate, Residential Mortgage Backed Securities (Alt-A) Gain from application of fair value option o
Slide 4: Deutsche Bank results: 1Q2008 Summary
Deutsche Bank results: 1Q2008 Summary In EUR bn 1Q2008 1Q2008 vs. vs. 1Q2008 1Q2007 4Q2007 1Q2007 4Q2007 Net revenues 4.6 9.6 7.3 (52)% (37)% Provision for credit losses (0.1) (0.1) (0.3) 16 % (65)% Noninterest expenses (4.8) (6.3) (5.5) (25)% (14)% Income before income taxes (0.3) 3.2 1.4 Net incom
Slide 5: Costs down 25% vs. 1Q2007
Costs down 25% vs. 1Q2007 Noninterest expenses, in EUR bn (25)% 6.3 6.0 5.5 4.8 4.3 3.9 3.5 3.2 2.9 1.7 1.9 2.1 2.1 1.8 1.9 0.1 0.2 (0.1) 1Q 2Q 3Q 4Q 1Q 2007 2008 Compensation and benefits General and administrative expenses Other non-comp expenses* * Incl. policyholder benefits and claims, impairme
Slide 6: Agenda: Segment results
Agenda 1 Summary 2 Segment results 3 Risk, capital and liquidity management Investor Relations 04/08 · 6
Slide 7: Pre-tax results by segment
Pre-tax results by segment Income before income taxes, in EUR m CB&S GTB CI 2,181 17% 123% 679 214 250 305 (1,604) 1Q2007 1Q2008 1Q2007 1Q2008 1Q2007 1Q2008 AWM PBC C&A 0% 4% 293 304 188 188 (17) (72) 1Q2007 1Q2008 1Q2007 1Q2008 1Q2007 1Q2008 Investor Relations 04/08 · 7
Slide 8: CB&S: Loss before income taxes of EUR 1.6 bn
CB&S: Loss before income taxes of EUR 1.6 bn Results at a glance Condensed P&L Income before income taxes, in EUR m In EUR m Change vs. Key ratios, in % 1Q 2008 2,181 1Q2007 4Q2007 1,752 Revenues 880 (86)% (77)% 447 Provisions* 8 (61)% n.m. (179) Noninterest exp. (2,500) (37)% (21)% IBIT (1,604) n.m
Slide 9: Sales & Trading: Strength in some 'customer franchise' businesses
Sales & Trading: Strength in some ‘customer franchise’ businesses S&T equity 1Q2008 revenues, in EUR bn Gain from fair value on S&T debt all own debt would have added EUR 2 bn 3.5 (0.9) 2.1 (0.6) 0.7 1.3 FX / Rates / MM / Mark-downs in Credit / Reported Commodities / RMBS / CRE Designated S&T Equity
Slide 10: S&T debt: Development by business area
S&T debt: Development by business area S&T (debt and other products) Trends vs. 1Q2007 / key features Net revenues, in EUR m FX/Rates/MM Record revenues / customer volumes Well-positioned for major moves in currencies, interest rates (61)% FX: World #1 with 22% market share* RMBS Significant
Slide 11: S&T equity: Development by business area
S&T equity: Development by business area S&T (equity) Trends vs. 1Q2007 / key features Net revenues, in EUR m Equity Valuation losses from significant Derivatives market shifts against structural positions (57)% Lower activity in structured products 1,714 Cash Non-recurrence of 1Q2007 levels E
Slide 12: Origination & Advisory: Difficult market conditions continue
Origination & Advisory: Difficult market conditions continue Origination & Advisory Trends vs. 1Q2007 / key features Net revenues, in EUR m Advisory High Yield / Further mark-downs reflect market Origination Lev. loans decline Some loss mitigation by NIM on 895 funded loans 797 824 Limited new
Slide 13: CDO sub-prime exposure – Trading
CDO sub-prime exposure – Trading Exposure Key features In EUR bn 31 Dec 07 31 Mar 08 Gross exposure represents long CDO positions Total Super Senior and Mezzanine in cash or synthetic form tranches: Sub-prime ABS CDO gross 2.9 1.8 Aggregates different vintages, locations, credit exposure ratings
Slide 14: Other U.S. residential mortgage business exposure
Other U.S. residential mortgage business exposure Exposure Key features In EUR bn 31 Dec 07 31 Mar 08 Predominantly AAA-rated securities based on Other U.S. residential mortgage Alt-A collateral gross assets Alt-A 7.8 5.2 Movements between 31 Dec 2007 and Sub-prime 0.2 0.2 31 Mar 2008 explained
Slide 15: Monoline exposure related to U.S. residential mortgages
Monoline exposure related to U.S. residential mortgages Exposure Key features In EUR bn Market value of Gross notional value In addition to our exposure related to U.S. bought protection of bought protection residential mortgages we had monoline 31 Dec 07 31 Mar 08 31 Dec 07 31 Mar 08 exposure of
Slide 16: 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 Dec 2007 total loans and loan commitments 17.2 15.5 FX (0.6) Other Sales (0.2) 2.0 Europe 31 Mar 2008 total loans and loan commitments 16.4 Gross mark-downs(2) 6.5 Germany (5.
Slide 17: Leveraged Finance exposure: Current status
Leveraged Finance exposure: Current status Composition of current loans and loan commitments In EUR bn 31 Dec 2007 total loans and loan commitments 36.2 16.6 FX (2.7) 30.2 Sales (0.4) 1.7 Loans held (2.9) Restructured (0.5) New Commitments 0.6 31 Mar 2008 total loans and loan commitments 33.1 16.5 G
Slide 18: Sustained momentum in 'stable' businesses
GTB Sustained momentum in ‘stable’ businesses AWM Income before income taxes PBC 2003 – 2007 Quarterly trend In EUR bn In EUR m >2x 7% 3.0 2.6 835 832 742 1.9 694 643 1.6 1.4 2003* 2004 2005 2006 2007 1Q 2Q 3Q 4Q 1Q * GTB adjusted for gain on sale of GSS 2007 2008 Note: 2003-2005 based on U.S. GAAP,
Slide 19: GTB: Pre-tax profit up 17% year-on-year
GTB: Pre-tax profit up 17% year-on-year Results at a glance Condensed P&L Income before income taxes, in EUR m In EUR m Change vs. Key ratios, in % 1Q 17% 2008 1Q2007 4Q2007 263 Revenues 661 8% 1% 247 250 214 222 Provisions* 3 n.m. n.m. Noninterest exp. (414) 4% (3)% IBIT 250 17% 13% Strong first
Slide 20: AWM: Pre-tax profit essentially unchanged from 1Q2007
AWM: Pre-tax profit essentially unchanged from 1Q2007 Results at a glance Condensed P&L Income before income taxes, in EUR m In EUR m Change vs. Key ratios, in % 1Q 2008 1Q2007 4Q2007 0% Revenues 1,001 (1)% (9)% 292 265 Provisions* (0) n.m. n.m. 188 188 169 Noninterest exp. (813) (0)% (13)% IBIT 188
Slide 21: PBC: A strong quarter
PBC: A strong quarter Results at a glance Condensed P&L Income before income taxes, in EUR m In EUR m Change vs. Key ratios, in % 1Q 2008 4% 1Q2007 4Q2007 Revenues 1,454 2% 1% 293 297 304 304 252 Provisions* (125) 7% (8)% Noninterest exp. (1,025) 1% (3)% IBIT 304 4% 20% 1Q 2Q 3Q 4Q 1Q Strong reven
Slide 22: Net inflows of EUR 11 bn in a difficult environment
Net inflows of EUR 11 bn in a difficult environment PCAM invested assets, in EUR bn Net new money 952 4 896 2 4 (42) (20) (5) EUR 11 bn 31 Dec Perfor- FX effect Other AM PWM PBC 31 Mar 2007 mance 2008 Note: Figures may not add up due to rounding differences Investor Relations 04/08 · 22
Slide 23: Agenda: Risk, capital and liquidity management
Agenda 1 Summary 2 Segment results 3 Risk, capital and liquidity management Investor Relations 04/08 · 23
Slide 24: Provisions rise modestly year-on-year
Provisions rise modestly year-on-year Single counterparty Provision for credit losses, in EUR m relationship 329 98 105 114 81 1Q 2Q 3Q 4Q 1Q 2007 2008 Thereof: CIB (20) (42) (19) 190 (11) 117 124 124 136 125 Thereof: PCAM Note: Divisional figures do not add up due to omission of Corporate Investmen
Slide 25: Problem loans relatively stable
Problem loans relatively stable Problem loans not considered Problem loans, in EUR bn impaired under IFRS IFRS impaired loans(1) IFRS impaired loans coverage ratio(2) 3.1 3.1 3.2 2.9 2.8 2.6 2.6 2.7 2.5 2.4 63% 66% 64% 64% 62% 31 Mar 30 Jun 30 Sep 31 Dec 31 Mar 2007 2008 (1) IFRS impaired loans incl
Slide 26: Tier I ratio of 9.2%
Tier I ratio of 9.2% Basel I Basel II 8.7 8.8 9% 8.4 8.6 9.2 Target range 8% 329 308 311 303 285 Tier I ratio, in % RWA, in EUR bn 31 Mar 30 Jun 30 Sep 31 Dec 31 Mar 2007 2008 Investor Relations 04/08 · 26
Slide 27: Unsecured funding base has grown, in quality and quantity
Unsecured funding base has grown, in quality and quantity Unsecured funding by source, in EUR bn 3% 511 526 104 153 358 + EUR 64 bn 422 30 Jun 2007 31 Mar 2008 Capital markets Short-term wholesale funding Retail deposits Fiduciary, clearing & other deposits Note: Figures may not add up due to roundi
Slide 28: A funding cost advantage for Deutsche Bank
A funding cost advantage for Deutsche Bank 5-year senior CDS, in bps 1 July 2007 25 April 2008 171 153 130 95 101 70 71 75 59 35 35 35 37 14 18 19 12 10 DB Credit UBS JPMorgan Goldman Citi Morgan Merrill Lehman Suisse Chase Sachs Stanley Lynch Brothers Source: Bloomberg, DB Investor Relations 04/08
Slide 29: Outlook
Outlook Capital, liquidity and Investment Banking 'Stable' businesses exposures Market conditions impact GTB: Further momentum Continue to focus on reducing structured credit exposures in critical areas Share gains in 'flow' products PBC: Returns on investments Growth in non-OECD markets
Slide 30: 1Q2008 Highlights
1Q2008 Highlights Loss before income taxes of EUR 0.3 bn, after tax EUR 0.1 bn In CB&S loss before income taxes of EUR 1.6 bn, reflecting mark-downs of EUR 2.7 bn in Leveraged Finance, Commercial Real Estate, Residential Mortgage Backed Securities (Alt-A) Gain from application of fair value option o
Slide 31: Additional information
financial Additional information A Passion to Perform. Deutsche Bank
Slide 32: Number of shares for EPS calculation
Number of shares for EPS calculation In million Average At end of period 1Q FY 1Q 31 Mar 31 Dec 31 Mar 2007 2007 2008 2007 2007 2008 Common shares issued 525 527 530 525 530 531 Total shares in treasury (27) (28) (31) (22) (29) (30) Common shares outstanding 498 499 500 503 501 500 (1) Forward purch
Slide 33: Group headcount
Group headcount Full-time equivalents, at period end 31 Mar 2008 vs. 31 Mar 30 Jun 30 Sep 31 Dec 31 Mar 31 Dec 2007 2007 2007 2007 2007 2008 Net of Total change de-/consoli- dation CIB 16,294 16,610 17,174 16,485 15,629 (856) (858) PCAM 29,371 29,811 30,524 30,759 31,231 472 438 Corporate 29 26 32 2
Slide 34: Invested assets report
Invested assets(1) report In EUR bn Net new 31 Mar 30 Jun 30 Sep 31 Dec 31 Mar money 2007 2007 2007 2007 2008 1Q2008 Asset and Wealth Management 747 765 759 749 698 7 Asset Management 553 564 561 555 516 2 Institutional 149 155 156 158 150 1 Retail 242 245 239 234 214 2 Alternatives 54 56 61 58 52 1
Slide 35: Regional invested assets – AM and PWM
Regional invested assets(1) – AM and PWM In EUR bn 31 Mar 08 31 Mar 30 Jun 30 Sep 31 Dec 31 Mar vs. 2007 2007 2007 2007 2008 31 Dec 07 Asset Management 553 564 561 555 516 (7)% Germany 249 265 265 264 252 (5)% UK 12 13 17 17 17 (0)% Rest of Europe 45 40 36 36 35 (3)% Americas 216 217 212 206 188 (9)
Slide 36: Regional net new money – AM and PWM
Regional net new money – AM and PWM In EUR bn 1Q2007 2Q2007 3Q2007 4Q2007 FY2007 1Q2008 Asset Management 4 6 12 5 27 2 Germany 8 11 (0) 1 20 2 UK 1 1 4 1 7 1 Rest of Europe (3) (6) 1 1 (7) (0) Americas (3) 1 4 1 3 0 Asia / Pacific 1 (1) 3 1 4 (0) Thereof: business sold* 13 4 - - - - Private Wealth M
Slide 37: Corporate Investments
Corporate Investments Results at a glance Condensed P&L (reported) Income before income taxes, in EUR m In EUR m Change vs. 1Q 2008 679 1Q2007 4Q2007 629 Revenues 705 61% n.m. Provisions* 0 n.m. n.m. 305 233 Noninterest exp. (26) (81)% (12)% 133 IBIT 679 123% n.m. 1Q 2Q 3Q 4Q 1Q 1Q2008 includes ga
Slide 38: Alternative assets exposure
Alternative assets exposure Book values, in EUR bn 3.9 3.7 3.7 0.6 CI 0.6 0.6 2.4 2.6 0.7 1.9 1.7 PCAM 0.7 1.9 1.0 1.0 1.4 1.4 CIB 0.8 0.9 1.1 31 Mar 30 Jun 30 Sep 31 Dec 31 Mar 2007 2008 Note: Figures may not add up due to rounding differences Investor Relations 04/08 · 38
Slide 39: Listed holdings: Unrealised gains of EUR 1.5 bn
Listed holdings: Unrealised gains of EUR 1.5 bn In EUR m Stake Market value (in %) 31 Mar 31 Mar 30 Jun 30 Sep 31 Dec 31 Mar 2008 2007 2007 2007 2007 2008 Daimler AG 2.9% 2,766 3,058 3,170 2,967 1,567 Allianz SE 1.5% 1,485 1,665 1,277 1,154 867 Linde AG 3.8% 1,010 1,114 929 789 571 Other n.m. 401 41
Slide 40: Loan book
Loan book In EUR bn 13% 201 209 193 195 186 100 107 CIB 91 97 97 94 96 98 100 102 PCAM 31 Mar 30 Jun 30 Sep 31 Dec 31 Mar 2007 2008 Note: Total incl. CI / Other, figures may not add up due to rounding differences Investor Relations 04/08 · 40
Slide 41: Risk
Risk VaR of CIB trading units (99%, 1 day), in EUR m EUR 5.1 bn Sales & Trading revenues EUR 2.1 bn 150 130 110 90 70 50 ∅ 77.5 ∅ 83.6 ∅ 90.5 ∅ 91.0 ∅ 117.8 1Q2007 2Q2007 3Q2007 4Q2007 1Q2008 Investor Relations 04/08 · 41
Slide 42: Update on share buybacks
Update on share buybacks Total repurchases 0.8 m In % of shares issued* 0.2 % Capital consumption EUR 0.1 bn Share Share price, in EUR Number of shares, in ‘000 buybacks 90 150 85 Weekly repurchase 80 volume (shares) 100 75 Average purchase price 70 65 EUR 76.73 50 60 Deutsche Bank 55 share price 50
Slide 43: 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 44: 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 shares Daimler, Linde and Allianz 854 854 Equity pick-up from Interhotel 178 125 Goodwill impairment (54) (54) Second
Slide 45: 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