Deutsche Bank Ag · XETR:DBK

Deutsche Bank — 12. Handelsblatt Jahrestagung 2007

13 slides from Deutsche Bank's conference presentation, Sep 4, 2007

  1. Slide 1: The US sub-prime crisis and its implications

    The US sub-prime crisis and its implications Dr. Josef Ackermann 12. Handelsblatt Jahrestagung Frankfurt, 4th September 2007

  2. Slide 2: Agenda

    Agenda 1 What has happened ? 2 What caused it ? 3 What can we learn ? 4 What are the implications for the market ? 5 What is the impact on Deutsche Bank ? 12. Handelsblatt Jahrestagung · 4th September 2007 · 2

  3. Slide 3: US sub-prime crisis causes market turbulences

    1 What has happened ? US sub-prime crisis causes market turbulences US sub-prime crisis Contagion into global credit, … US sub-prime securitisation price index(1) Credit risk index(2) 80 450 70 60 350 50 250 40 30 150 Apr-07 May-07 Jun-07 Jul-07 Aug-07 Apr-07 May-07 Jun-07 Jul-07 Aug-07 … money mark

  4. Slide 4: The origins of the recent market turbulences

    2 What caused it ? The origins of the recent market turbulences „ Mis-pricing of credit risk „ Limited understanding of risk dispersal / amount of leverage „ Loss of trust and increasing nervousness „ Liquidity squeeze in money markets; flight to quality / less complex assets „ Technical sales trigg

  5. Slide 5: Mis-pricing of credit risk

    2 What caused it ? Mis-pricing of credit risk Tightening spreads in the credit markets … … and increasing loan-to-value ratios and declining lending standards in US sub-prime market(2) US credit spreads(1) (in bps) Loan-to-value (lhs) Lending standards (rhs) 400 88 90 350 87 80 300 86 - 267 bps 250

  6. Slide 6: Loss of trust and increasing nervousness

    2 What caused it ? Loss of trust and increasing nervousness “… franchise was largely destroyed …, by undermining the confidence of … business partners.” (broker report, 27.03.07) “Recent developments in the US sub-prime and other credit markets may trigger additional heavy losses in 2H 2007. We rema

  7. Slide 7: Liquidity squeeze in money markets as a consequence of technical sales and flight to quality

    2 What caused it ? Liquidity squeeze in money markets as a consequence of technical sales and flight to quality / less complex assets Money market rate movements Money market interest rate 2007, in % 6 Technical sales by institutional investors (primarily hedge funds); exits 90-day asset-backed CP r

  8. Slide 8: Lessons learned

    3 What can we learn ? Lessons learned „ Improving transparency around risk dispersal „ Greater focus on risk management „ Strengthening of liquidity management „ Coordinated action by central banks „ Greater vigilance by regulators „ Communication by market participants 12. Handelsblatt Jahrestagung

  9. Slide 9: Sub-prime risks are manageable

    4 What are the implications for the market ? Sub-prime risks are manageable Sub-prime crisis is manageable … … in context of the major capital markets Outstanding volume (in USD tn) Capitalisation (in USD tn)(2) ~50 ~85 ~35 ~10 ~7 ~1.2 ~1.0 ~1.5 (3) (4) (5) US sub- US asset- CDOs US MBS US Quoted sh

  10. Slide 10: Outlook

    4 What are the implications for the market ? Outlook „ Work-out of the sub-prime crisis in the USA „ Gradual stabilisation of the money and credit markets „ Declining consumer confidence in the USA „ Slight decline in global growth rates „ German economy on growth course 12. Handelsblatt Jahrestagun

  11. Slide 11: Environment for structured products and leveraged lending remains challenging

    5 What is the impact on Deutsche Bank ? Environment for structured products and leveraged lending remains challenging US asset-backed CP market US market for CDO issuance Outstanding volume 2007 (in USD bn) Monthly issuance 2007 (in USD bn) 1,152 1,135 42 41 40 1,108 30 1,072 27 1,051 1,058 1,064 1,

  12. Slide 12: Deutsche Bank exposures

    5 What is the impact on Deutsche Bank ? Deutsche Bank exposures „ DB is not exposed to further deterioration in US sub-prime mortgages across its books US sub-prime „ Exposure to US mortgage originators tightly managed and largely hedged „ Total assets in DB-sponsored conduits of EUR 32 bn „ Substan

  13. Slide 13: Cautionary statements

    Cautionary statements This presentation also 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 an

Deutsche Bank — 12. Handelsblatt Jahrestagung 2007 on 6ix