Deutsche Bank Ag · XETR:DBK
Deutsche Bank — Q3 2023 Earnings Presentation
47 slides from Deutsche Bank's earnings presentation, Nov 2, 2023
Slide 1: Q3 2023 results
Deutsche Bank Investor Relations Q3 2023 results #PositiveImpact October 25, 2023 Deutsche Bank Investor Relations
Slide 2: Business momentum reflecting strategy execution
Business momentum reflecting strategy execution 9M 2023 Profit before tax of € 5.0bn after absorbing € 943m in nonoperating expenses € 22.2bn + 6% Net revenues 9M Δ YoY Sustained revenue momentum reflecting balanced business growth and benefits from substantial inflows in AuM and deposits, coupl
Slide 3: 2023 YTD results reflect resilient performance
2023 YTD results reflect resilient performance In € bn, unless stated otherwise Pre-provision profit1 Risk and balance sheet 28bps +5% Provision for Operating leverage of 4% in 9M 2023 when adjusted2 for 6.0 credit losses3 nonoperating costs and pro-rated bank levies 5.7 Continued revenue growth lea
Slide 4: Balanced revenue mix and continued franchise growth
Balanced revenue mix and continued franchise growth In € bn, unless stated otherwise Net revenues Last twelve months1 Corporate Bank Investment Bank Group 26.8 28.5 27.7 28.7 ~40% increase in incremental deals won with multinational 24% Leading Financing business contributed € 2.2bn of ~ 35% 9M
Slide 5: Continued accelerated execution with material progress on capital efficiency
Continued accelerated execution with material progress on capital efficiency Revenue growth Efficiency measures Capital efficiency 3.5-4.5% € 2.5bn € 25-30bn 2 Revenue CAGR 2021-2025 targeted Operational efficiencies targeted RWA reductions targeted Adjusted costs kept essentially flat vs. € 10bn of
Slide 6: Shifting gears to drive long-term value as Global Hausbank
Shifting gears to drive long-term value as Global Hausbank Franchise growth € 10bn Strong momentum enabling revenue Increased capital growth beyond targets efficiency target RWA forecast improvement ~€ 3bn Potential additional Disciplined capital allocation Investments in capital-light businesses, s
Slide 7: Group financials
Group financials Deutsche Bank Q3 2023 results 6 Investor Relations October 25, 2023
Slide 8: Key performance indicators
Key performance indicators In % Revenue CAGR1 9M 2023 LTM vs FY 2021 CIR development 85 75 73 Continued revenue growth momentum with CAGR of 6.9% vs 3.5-4.5% target 24.5 9.7 6.9 Cost/income ratio (CIR) and return on tangible equity (RoTE) are impacted by nonoperating (3.8) (6.4) costs; CIR and RoTE
Slide 9: Q3 2023 highlights
Q3 2023 highlights In € bn, unless stated otherwise Financial results Divisional revenues Key highlights Δ vs. Δ vs. Δ vs. Q3 2023 +3% +3% Q3 2022 Q2 2023 Q3 2022 Revenues higher compared to last Statement of income Revenues 7.1 3% (4)% 7.1 year, driven by strong momentum 6.9 in Corporate Bank and
Slide 10: Net interest margin (NIM)
Net interest margin (NIM) Divisional NIM development Group NIM development Key highlights Net interest margin1 Average interest earnings assets2, in € bn Increase in average interest Corporate Bank earning assets driven by deposit 4.13% 4.20% 3.94% growth in Q3 1.47% 1.51% 1.51% Corporate Bank N
Slide 11: Adjusted costs – Q3 2023 (YoY)
Adjusted costs – Q3 2023 (YoY) In € m, unless stated otherwise Key highlights Q3 2022 ex- 4,867 bank levies FX impact Compensation and benefits1 (80) 0 Adjusted costs ex-bank levies increased year on year by 2%, or 5% ex-FX impact Information technology (15) 5 Compensation and benefits flat to l
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 24 19 28 28 30 33 20 Q3 provisions lower than prior quarter as a result of reduced stage 1+2 351 372 401 provisions driven by model changes 350 63 245 and improved macro
Slide 13: Capital metrics
Capital metrics Movements in basis points (bps), unless stated otherwise, period end CET1 ratio Leverage ratio MREL/TLAC, in € bn 28 13.9% 6 4.7% Surplus above requirements 4.7% 13.8% (8) (2) 125 (1) (3) Senior 8 preferred1 17 Senior 33 non- 47 preferred Q2 2023 FX effect RWA Capital Q3 2023 Q2 2023
Slide 14: Effective capital management
Effective capital management Absorbing regulatory inflation Capital efficiency Basel III update (38)bps € 25-30bn 1 ~€ 15bn CET1 ratio reduction principally from model reviews RWA reductions targeted Latest estimate of Basel III impact on RWA Q3 2023 go-live impact of new wholesale and retail €
Slide 15: Segment results
Segment results Deutsche Bank Q3 2023 results 14 Investor Relations October 25, 2023
Slide 16: Corporate Bank
Corporate Bank In € m, unless stated otherwise Financial results Revenue performance Key highlights Δ vs. Δ vs. Δ vs. Q3 Q3 2023 Q3 2022 Q2 2023 2022 Revenues higher year on year driven by Corporate Treasury Services Statement of income increased interest rates and pricing discipline 1,049 11% 11%
Slide 17: Investment Bank
Investment Bank In € m, unless stated otherwise Financial results Revenue performance Key highlights Δ vs. Δ vs. Δ vs. Q3 Q3 2023 Q3 2022 Q2 2023 2022 Revenue essentially flat ex-specific items, FIC Sales & Trading Statement of income with lower FIC revenues against a strong 1,932 (12)% (12)% prio
Slide 18: Private Bank
Private Bank In € m, unless stated otherwise Financial results Revenue and AuM performance Key highlights Δ vs. Δ vs. Revenues Δ vs. Q3 Q3 2023 2022 Revenues increased year on year driven by Q3 2022 Q2 2023 higher interest income Germany Statement of income 1,497 PB 16% 16% Net interest income e
Slide 19: Asset Management
Asset Management In € m, unless stated otherwise Financial results Revenue and AuM performance Key highlights Δ vs. Δ vs. Revenues Δ vs. Q3 Q3 2023 Q3 2022 Q2 2023 2022 trans. Mgmt. Other fees fees Statement of income 589 (6)% Revenues 594 (10)% (4)% Perf. & Revenues ex-specific items1 594 (10)% (4)
Slide 20: Corporate & Other
Corporate & Other In € m, unless stated otherwise Financial results Profit (loss) before tax Key highlights Δ vs. Δ vs. Abs. Δ vs. Q3 2023 Q3 2022 Q2 2023 Q3 2022 Statement of income Funding & liquidity (59) (35) Loss before tax of € 195m includes positive 35 (36)% (59)% impact from valuation and
Slide 21: Outlook
Outlook Expect to achieve FY 2023 net revenues of € 29bn FY 2023 noninterest expenses slightly higher, attributable to higher nonoperating costs; adjusted costs essentially flat Provision for credit losses for FY 2023 expected at the upper end of 25-30bps guidance range Q4 2023 earnings likely impac
Slide 22: Appendix
Appendix Deutsche Bank Q3 2023 results 21 Investor Relations October 25, 2023
Slide 23: 2025 financial targets and capital objectives
2025 financial targets and capital objectives Financial targets Capital objectives 3.5- >10% <62.5% ~13% 50% 4.5% Cost/income Total payout Post-tax RoTE Revenue CAGR in 2025 2021-2025 ratio CET1 ratio ratio in 2025 from 2025 Well positioned to Increased revenue Reiterate CIR target, Aim to operate w
Slide 24: Definition of certain financial measures
Definition of certain financial measures Revenues 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 the business and are likely to distort an accurate assessment of the divisional
Slide 25: Sustainability
Sustainability Q3 2023 highlights Recent achievements Sustainable Finance1 volumes Increased Sustainable Finance volumes by € 11bn to € 265bn1 (cumulative since 2020) Launched new € 400m loan portfolio in cooperation with the European Investment Bank to support mid-sized companies with their sus
Slide 26: Specific revenue items and adjusted costs – Q3 2023
Specific revenue items and adjusted costs – Q3 2023 In € m Q3 2023 Q3 2022 Q2 2023 CB IB PB AM C&O Group CB IB PB AM C&O Group CB IB PB AM C&O Group Revenues 1,889 2,271 2,343 594 35 7,132 1,564 2,372 2,267 661 55 6,918 1,943 2,361 2,400 620 85 7,409 DVA - IB Other / Legacy portfolios1 - 5 - - 1 6 -
Slide 27: Specific revenue items and adjusted costs – 9M 2023
Specific revenue items and adjusted costs – 9M 2023 In € m 9M 2023 9M 2022 CB IB PB AM C&O Group CB IB PB AM C&O Group Revenues 5,805 7,323 7,180 1,803 110 22,221 4,577 8,341 6,647 1,998 (667) 20,895 revenue items DVA - IB Other / Legacy portfolios1 - (19) - - 3 (16) - 95 - - (3) 92 Specific Sal. Op
Slide 28: Pre-provision profit, CAGR and operating leverage
Pre-provision profit, CAGR and operating leverage In € m, unless stated otherwise CAGR2 FY 2021 - 9M 2023 vs FY 2021 LTM Q3 2023 9M 2022 9M 2023 Q4 2022 Q1 2023 Q2 2023 Q3 2023 LTM Q3 2023 9M 2022 Net revenues Corporate Bank 5,153 1,760 1,973 1,943 1,889 7,565 24.5% 4,577 5,805 27% Investment Bank 9
Slide 29: Adjusted post-tax RoTE, CIR and operating leverage
Adjusted post-tax RoTE, CIR and operating leverage In € m, unless stated otherwise Q3 2022 Q3 2023 9M 2022 9M 2023 Profit (loss) before tax 1,615 1,723 4,820 4,980 (-) Restructuring & severance (30) (94) 16 (377) (-) Litigation (45) (105) (187) (566) Adjustments Nonoperating costs adjustment 75 199
Slide 30: Last 12 months (LTM) revenues reconciliation
Last 12 months (LTM) revenues reconciliation In € m, unless stated otherwise Q3 2022 Q3 2023 Q3 2022 Q3 2023 Q4 20211 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 LTM2 LTM3 LTM %-share4 LTM %-share4 Revenues Corporate Bank 1,352 1,462 1,551 1,564 1,760 1,973 1,943 1,889 5,929 7,565 21% 26
Slide 31: Indicative divisional currency mix
Indicative divisional currency mix Q3 2023 Net revenues Noninterest expenses 6% 2% 7% 9% 20% 14% 19% 16% 17% 21% 5% 5% 0% 15% 1% 28% 13% 17% 16% 31% 20% 0% 34% 33% 15% 6% 17% 1% 0% 87% 85% 68% 64% 38% 54% 55% 55% 46% 50% 12% CB IB PB AM Group CB IB PB AM Group EUR GBP USD Other1 Notes: classificatio
Slide 32: Net interest income sensitivity
Net interest income sensitivity Hypothetical +/-25bps shift in yield curve, in € m Net interest income (NII) sensitivity1 Key highlights +25bps shift in yield curve -25bps shift in yield curve ~100 ~145 Current observations on client ~100 pricing show a continued slower ~(105) ~(100) pass-through
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 401 Group stage 3 2.5% 2.5% 2.7% 2.7% 2.6% 350 351 372 loans at 41 141 amortized 13.2 78 12.5 1
Slide 34: Loan and deposit development
Loan and deposit development In € bn, unless stated otherwise, loan-to-deposit ratio 79% Loan development1,2 Key highlights QoQ YoY 503 489 488 482 485 (0)% (1)% Loans remained essentially flat during the quarter and year on Investment Bank 105 year adjusted for FX: 103 103 103 103 (0)% 5% Corpo
Slide 35: Loan book composition
Loan book composition Q3 2023, IFRS loans: € 485bn Key highlights Other 1 Other IB2 0% Well-diversified loan portfolio Leveraged Debt Capital Markets 10% 1% YTD FX impact on loan book is € 0.78bn Asset Backed Securities German Mortgages 6% 54% of loan portfolio in Private Bank, mainly consisti
Slide 36: Commercial Real Estate (CRE) 1 / 2
Commercial Real Estate (CRE) 1 / 2 CRE non-recourse portfolio: € 40bn € 32bn in scope of severe stress test Non-recourse € 40bn – 8% of total loans1 By region By region € 7bn deemed as lower risk, includes data centers APAC APAC and municipal social housing EU 1% 8% 22% € 32bn in scope of dedi
Slide 37: Commercial Real Estate (CRE) 2 / 2
Commercial Real Estate (CRE) 2 / 2 US CRE in scope of severe stress test: € 18bn US CRE loan risk management US CRE CLPs By types Office: € 8bn Modified loans, in € bn CLPs per quarter, in € m 5.7 74 Other 66 Other 18% Office NY 28% Miami 31% 43% Philadelphia 3% 3% 40 Boston 5% 4% 35 5% CLP impact 2
Slide 38: Level 3 assets and liabilities
Level 3 assets and liabilities As of September 30, 2023, in € bn Assets: € 26bn Liabilities: € 12bn Key highlights Other Other 0 4 Derivative Liabilities Derivative Debt Securities Level 3 is an indicator of valuation uncertainty and 9 Assets 4 Debt not of asset quality securities 4 The Group cl
Slide 39: Leverage exposure and risk-weighted assets
Leverage exposure and risk-weighted assets CRD4, in € bn, period end Leverage exposure Risk-weighted assets 354 354 59 Operational risk RWA 59 1,236 1,235 Trading assets 108 111 Market risk RWA 32 23 Credit valuation 6 Derivatives1 128 131 23 adjustments Lending 487 250 473 145 Lending commitments2
Slide 40: Litigation update
Litigation update In € bn, period end Litigation provisions Key highlights 1.3 1.2 1.2 1.5 1.6 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Litigation provisions increased modestly by € 0.1bn quarter on quarter Contingent liabilities Contingent liabilities increased modestly by € 0.1bn quarter on qua
Slide 41: Postbank service remediation
Postbank service remediation Number of processes with operational backlogs One of the largest IT migration projects in the European banking sector; setting the foundation for a more digital bank offering at Postbank 22 50 billion records of 12 million Postbank customers were successfully migrated 12
Slide 42: Value-at-Risk / stressed Value-at-Risk (VaR / sVaR)
Value-at-Risk / stressed Value-at-Risk (VaR / sVaR) In € m, unless stated otherwise VaR, DB Group Trading book, 99%, 1 day Quarterly average 52 47 51 44 34 80 60 40 20 0 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Stressed VaR, DB Group Regulatory scope, 99%, 10 days Quarterly average 173 2
Slide 43: Assets under management – Private Bank
Assets under management – Private Bank In € bn, unless stated otherwise AuM1,2 – by business unit and product group +3% +1% Including € (15)bn disposal effect4 529 518 531 541 547 111 110 109 110 113 76 73 72 74 78 Inv. Prod. 121 342 127 336 135 350 139 358 138 359 221 209 215 220 218 Q3 2022 Q4 202
Slide 44: Assets under management – Asset Management
Assets under management – Asset Management In € bn, unless stated otherwise AuM development Quarterly mgmt. 29.0 Year-on-year 27.1 27.4 Quarter-on-quarter 27.1 fee margin, in bps 860 0 859 11 (13) 860 2 0 833 16 39 (28) Q3 2022 Net flows FX Market Other Q3 2023 Q2 2023 Net flows FX Market Other Q3 2
Slide 45: Footnotes 1 / 2
Footnotes 1 / 2 Slide 1 – Business momentum reflecting strategy execution Slide 12 – Capital metrics 1. Throughout this presentation post-tax return on average tangible shareholders’ equity (RoTE) is calculated on 1. Plain vanilla instruments and structured notes eligible for MREL net income after A
Slide 46: Footnotes 2 / 2
Footnotes 2 / 2 Slide 24 – Sustainability Slide 33 – Loan and deposit development 1. Cumulative figures include sustainable financing and investment activities as defined in DB’s Sustainable 1. Loans gross of allowances at amortized costs (IFRS 9) Finance Framework and related documents, which are p
Slide 47: 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