Deutsche Bank Ag · XETR:DBK
Deutsche Bank — Q1 2019 Earnings Presentation
35 slides from Deutsche Bank's earnings presentation, Apr 26, 2019
Slide 1: Q1 2019 results
Deutsche Bank Q1 2019 results 26 April 2019
Slide 2: We remain committed to improving returns to shareholders
We remain committed to improving returns to shareholders Concluded that executing on own strategy provides superior returns with less execution risk Resilient revenues in less market sensitive businesses Volume growth and continued investments in key businesses Continued discipline in cost reduction
Slide 3: Resilient revenues in less market sensitive areas
Resilient revenues in less market sensitive areas € bn, revenues(1) excluding specific items(2) (5)% 6.7 0.6 6.3 Equities — Impact of 2018 perimeter adjustments 0.5 Equities Market sensitive S&T — Continued challenging market conditions — Impacted by market environment and perimeter 1.8 1.5 FIC (16)
Slide 4: Focused on growth and delivering on our promises
Focused on growth and delivering on our promises Focus areas Evidence — Growth in Global Transaction — GTB loan growth up by € 1bn QoQ Banking and FX — Integrated coverage model driving momentum in Corporate & — Integrating capital markets flow related revenues in GTB, FX, rates and Investment Bank
Slide 5: Well on track to achieve our adjusted cost target
Well on track to achieve our adjusted cost target € bn, adjusted costs(1) 5th consecutive quarterly reduction (ex bank levy) On track to deliver 2019 cost target (0.4) (1.1) 6.3 23.9 (1.0) 5.9 22.8 0.7 21.8 5.6 5.5 5.4 Bank 0.6 levy Q2-Q4 17.6 16.5 15.9 Adjusted costs 5.7 5.6 5.5 5.4 5.3 ex bank lev
Slide 6: Maintained strong balance sheet with prudent risk management
Maintained strong balance sheet with prudent risk management As of 31 Mar 2019 Comment Prudent management Common Equity Tier 1 capital ratio 13.7% of capital resources Excess above MREL Loss-absorbing capacity € 123bn requirement: € 19bn(1) Reflects strong underwriting Provision for credit losses as
Slide 7: Focused on delivering improved returns to shareholders
Focused on delivering improved returns to shareholders Post-tax return on tangible equity, in % / ~ / : progress towards full year objective Adjusted cost reductions (€ 1bn) — Balance — sheet and liquidity optimization (>€ 300m) >4% — Growth in stable businesses — Tax rate normalization (
Slide 8: Q1 2019 Group financial highlights
Q1 2019 Group financial highlights € m, unless stated otherwise Higher / Higher / (lower) in % (lower) in % Q1 2019 vs. Q1 2018 vs. Q4 2018 Revenues 6,351. (9) 14( Revenues of which: Specific items(1) 31( (90) (84) Noninterest expenses 5,919( (8) 5( Costs of which: Adjusted costs 5,930( (7) 9( Cost/
Slide 9: Adjusted costs
Adjusted costs € m, FX adjusted (8)% (544) Q1 2019 YoY comments 6,474 (178) (90) 5,930 — Q1 2019 adjusted costs € 0.5bn (87) (59) below prior year (130) — Fifth consecutive quarterly reduction of adjusted costs (excluding bank levies) Q1 2018 Compensation IT costs Professional Bank Other Q1 2019 — L
Slide 10: Capital ratios
Capital ratios CRD4, fully loaded, € bn except movements (in basis points) CET1 ratio — CET1 capital change including € (0.1)bn from IFRS 16 21 13.7% 13.6% adoption (3) 0 — Lower risk-weighted assets (RWA) driven by: — Market Risk RWA movement of € (7)bn reversing temporary increases recorded in Q4
Slide 11: Segment results
Segment results Deutsche Bank Q1 2019 results 11 Investor Relations 26 April 2019
Slide 12: Corporate & Investment Bank (CIB)
Corporate & Investment Bank (CIB) € m, unless stated otherwise Higher / (lower) in % vs. vs. Q1 2019 Q1 2018 Q4 2018 Q1 2019 YoY comments Revenues 3,328 (13) 28) Revenues — Q1 2019 revenues impacted by the of which: Specific items(1) (12) n.m. n.m. weaker environment for Sales & Trading, especially
Slide 13: Q1 2019 CIB business unit performance
Q1 2019 CIB business unit performance € m, revenues X% Excluding specific items(1) Change YoY Q1 2019 YoY revenue drivers Global Transaction Banking: — Revenue growth driven by higher net Global Transaction Banking 975 6% 6% interest income, particularly in Cash Management Origination & Advisory: Or
Slide 14: Private & Commercial Bank (PCB)
Private & Commercial Bank (PCB) € m, unless stated otherwise Higher / (lower) in % vs. vs. Q1 2019 Q1 2018 Q4 2018 Q1 2019 YoY comments Revenues 2,513 (5) 2( Revenues of which: Specific items(1) 43 (75) (43) — Revenues flat excluding specific items of which: Exited businesses(2) 21 n.m. (34) as volu
Slide 15: Q1 2019 PCB business unit performance
Q1 2019 PCB business unit performance € m, revenues X% Excluding specific items(1) Change YoY Q1 2019 YoY revenue drivers Private and Commercial Business (Germany): Private and Commercial Business 1,707 (7)% 2% — Q1 2018 reported revenues included a (Germany) € 156m gain on a property sale — Excludi
Slide 16: Asset Management (AM)
Asset Management (AM) € m, unless stated otherwise Higher / (lower) in % vs. vs. Q1 2019 YoY comments Q1 2019 Q1 2018 Q4 2018 Revenues Revenues 525) (4) 2( — Revenues declined on lower management fees following market declines and net outflows in 2018 Noninterest expenses 398) (16) (7) — Management
Slide 17: Corporate & Other (C&O)
Corporate & Other (C&O) € m, unless stated otherwise Profit before tax Higher / (lower) vs. Q1 vs. Q4 Q1 2019 2018 2018 (4) Profit before tax (4) 163) 94) Funding & liquidity (13) 41) 44) Valuation & Timing differences(1) 41) 6) (56) (98) Shareholder expenses (115) (18) (8) Noncontrolling interest(2
Slide 18: Outlook
Outlook Working towards near-term targets – focused on factors within our direct control Well on track to reach adjusted cost target of € 21.8bn Expect to maintain a CET1 ratio above 13% and a strong liquidity profile Provisions for credit losses expected to remain in the mid-teens in terms of bps o
Slide 19: Appendix
Appendix Deutsche Bank Q1 2019 results 19 Investor Relations 26 April 2019
Slide 20: Specific revenue items and adjusted costs
Specific revenue items and adjusted costs €m Q1 2019 Q1 2018 Q4 2018 CIB PCB AM C&O Group CIB PCB AM C&O Group CIB PCB AM C&O Group Revenues 3,328 2,513 525 (15) 6,351 3,845 2,640 545 (54) 6,976 2,597 2,458 514 6 5,575 DVA (49) - - - (49) 61 - - - 61 67 - - - 67 - CIB Other Change in valuation of an
Slide 21: Reconciliation adjusted costs to noninterest expenses
Adjusted costs trends – Q1 2019 € m, unless stated otherwise Q1 Q4 Q1 Q1 YoY Q4 QoQ YoY 2018 ex QoQ 2018 ex 2019 2018 ex FX 2018 ex FX FX(1) FX(1) Compensation and benefits 2,842 2,960 (4)% 3,020 (6)% 2,824 1% 2,836 0% IT costs 954 1,022 (7)% 1,044 (9)% 957 (0)% 962 (1)% Professional service fees 31
Slide 22: Litigation update
Litigation update € bn, unless stated otherwise Litigation provisions(1) ― Further progress has been made in resolving legacy 7.6 matters throughout the quarter ― Decrease in provisions predominately due to payments for past settlements, releases for lower- than-expected settlements or agreements-in
Slide 23: Indicative regional currency mix Q1 2019
Indicative regional currency mix Q1 2019 Net revenues Total noninterest expenses 8% 6% 8% 6% 15% Other (1) 13% 3% 17% 4% Other (1) 24% 0% 19% 1% 28% 21% 13% 29% USD 30% USD 31% 16% 18% 1% GBP 0% 88% 86% GBP 35% 63% EUR 55% 50% 49% 45% EUR 18% CIB PCB AM Group CIB PCB AM Group Note: Classification is
Slide 24: Loan book
Loan book € bn 415 398 405 392 395 Corporate & 135 140 127 128 132 Investment Banking Wealth Management 37 39 39 40 42 PCB (International) 31 31 31 32 32 PCB Germany(1) 190 191 193 195 196 PCB (Exited)(2) Corporate & Other(3) 0 7 0 7 0 2 0 2 2 2 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Note: Loan amo
Slide 25: Loan book composition
Loan book composition IFRS loans at amortized cost, 31 March 2019 Corporate & Investment Bank Private & Commercial Bank Global Transaction Bank — Well diversified Loan Portfolio — 2/3rd of the loan portfolio is in PCB, mainly 16% including German retail mortgages and German Wealth Management mortgag
Slide 26: Provision for credit losses and stage 3 loans under IFRS 9
Provision for credit losses and stage 3 loans under IFRS 9 Provision for credit losses, € m Stage 3 at amortised cost under IFRS 9, € bn Corporate & Investment Banking (CIB) CIB (ex-POCI) Purchased or Originated Credit Impaired (POCI) Private & Commerical Bank (PCB) PCB (ex-POCI) Group 252 Stage 3 a
Slide 27: Net interest income sensitivity
Net interest income sensitivity € bn, hypothetical +100bps parallel shift impact First year Second year 1.8 1.6 0.9 0.9 0.8 0.8 PCB CIB Group PCB CIB Group > 3M 0.3 0.1 0.4 > 3M 0.5 0.1 0.7 EUR EUR ≤ 3M 0.5 0.6 1.0 ≤ 3M 0.3 0.6 0.9 > 3M 0.0 0.0 0.1 > 3M 0.0 0.1 0.1 USD USD ≤ 3M 0.0 0.1 0.1 ≤ 3M 0.0
Slide 28: Leverage exposure and Risk-weighted assets
Leverage exposure and Risk-weighted assets CRD4, fully loaded, € bn Leverage exposure Risk-weighted assets 347 347 86 Operational Risk RWA 86 64 64 1,273 1,345 Trading assets 153 166 36 Market Risk RWA 31 CVA 7 Derivatives(1) 184 179 25 Lending 250 401 411 108 Lending Credit Risk RWA 224 commitments
Slide 29: Level 3 assets
Level 3 assets € bn, as of 31 March 2019 Assets (total: € 25bn) — Level 3 assets arise from the bank’s activities in various markets, some of which are less liquid — Level 3 assets are mainly booked in core Mortgage backed securities businesses Equity securities 1 1 — Level 3 classification is not a
Slide 30: Trading book Value at Risk
Trading book Value at Risk € m, unless stated otherwise, DB Group, 99%, 1 day Stressed VaR(1) VaR 130 110 90 70 50 30 10 Quarterly average ∅ 87 ∅ 81 ∅ 74 ∅ 95 ∅ 87 ∅ 28 ∅ 26 ∅ 25 ∅ 30 ∅ 27 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 (1) Stressed Value-at-Risk is calculated on the same portfolio as VaR b
Slide 31: Non-strategic legacy assets in CIB
Non-strategic legacy assets in CIB € bn Risk weighted assets excluding operational risk (30)% Background ― Non-strategic portfolio created to facilitate the 10 run-down of residual ex-CIB assets from NCOU 7 and other inventory not consistent with the CIB strategy Recent Performance ― Risk weighted a
Slide 32: Reconciliation of AM reported segment to DWS standalone
Reconciliation of AM reported segment to DWS standalone € m, unless stated otherwise Perimeter adjustments AM reported Sold & discontinued Other perimeter DWS reported Q1 2019 business(1) adjustments(2) Q1 2019 Revenues 525 (0) 9 534 Noninterest expenses (398) 0 11 (387) Noncontrolling interests (31
Slide 33: Assets under Management / Client Assets – PCB
Assets under Management / Client Assets – PCB € bn Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Assets under Management 497 503 499 474 502 Assets under Administration (1) 217 220 220 223 229 Client Assets 715 723 719 696 731 Private and Commercial Business (Germany) 329 333 338 334 347 Private and Comme
Slide 34: Employees
Employees Full-time equivalents YoY ∆ Of which 31 Mar 2019 31 Mar 2018 Absolute 30 Jun 2018 30 Sep 2018 31 Dec 2018 disposals CIB 17,117 17,892 (775) (132) 17,052 16,921 16,764 PCB 41,392 43,785 (2,393) (1,419) 43,614 43,449 41,687 AM 4,055 4,056 (1) (25) 4,027 4,032 4,031 C&O 28,900 31,397 (2,497)
Slide 35: 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