Deutsche Bank Ag · XETR:DBK
Deutsche Bank — Investor Day (December 2019)
144 slides from Deutsche Bank's investor day presentation, Dec 10, 2019
Slide 1: Investor Deep Dive: How we compete to win
Investor Deep Dive How we compete to win Christian Sewing Chief Executive Officer 10 December 2019 Deutsche Bank Confidential
Slide 2: Recap of our strategy
ie. = our strategy. a a .
Slide 3: We are off to a good start
We are off to a good start Reduced Maintained De-risking of Capital Exiting Equities adjusted cost strong capital Release Unit Turned around trading with less Investment Bank knock-on impact € 21.5bn(1,2) CET1 ratio >13%(1) RWA <€ 52bn(1) Core Bank revenues Created Corporate Clients & employee Regul
Slide 4: Working to offset headwinds
Working to offset headwinds Lower for Slowing economic Geopolitical Increasing regulatory longer rates growth risks requirements ECB deposit rate(1), in % World trade, last 3 months(2), Number of pages per in % yoy regulatory filing(3) 0.4 6 5 100 0.3 4 80 0.2 3 60 0.1 2 40 Trade war 0.0 1 20 0 Poli
Slide 5: Our way to fundamentally transform the bank
Our way to fundamentally transform the bank FOUR BUSINESSES Refocus COMPETING TO WIN IMPROVE EFFICIENCY AND Restructure INFRASTRUCTURE Delivering returns for shareholders Reinvigorate LEADERSHIP AND SPIRIT Return FREE UP CAPITAL Christian Sewing 4 Investor Deep Dive, 10 December 2019
Slide 6: Refocus: Four businesses competing to win
Refocus: Four businesses competing to win What we promised in July Where we stand today Adjusted revenues(1) Adjusted profit before tax(2) Refocus Core Bank, in € bn 17.6 17.4 2.1 2.2 Exit loss making businesses 9M 2018 9M 2019 9M 2018 9M 2019 Focus on market leading businesses and more 23% 23% 31%
Slide 7: Restructure: Improve efficiency and infrastructure
Restructure: Improve efficiency and infrastructure What we promised in July Where we stand today % in controls(3) 3.8% 4.5% Restructure Adjusted cost(1), in € bn 5.7 5.6 5.5 5.4 Reduce adjusted cost 5.3 5.3 5.2 to € 17bn in 2022 Front-to-back cost reductions reflecting Q1 2018 Q2 2018 Q3 2018 Q4 201
Slide 8: Reinvigorate: Leadership and spirit
Reinvigorate: Leadership and spirit What we promised in July Where we stand today Operational losses, in € bn Red flags(1), in # Reinvigorate Change in conduct 3.1 1,433 New management team and structure with incremental skill- 406 358 0.7 set and improved 0.3 0.2 126 business focus 2016 2017 2018 9
Slide 9: Return: Free up capital
Return: Free up capital What we promised in July Where we stand today 13.4 >13.0 Return 11.8 11.6 CET 1 ratio, in % 0.25% Maintained robust balance Maintain at least 12.5% sheet including CET1 ratio through own strong CET 1 capital resources. Target ratio a 5% leverage ratio Q3 2019 2019 SREP SREP t
Slide 10: Dedicated transformation role to deliver on strategy
Dedicated transformation role to deliver on strategy Refocus Restructure Reinvigorate Return Costs, tech and Capital and Business model Clients, growth Leadership and infrastructure balance sheet transformation and innovation integrity culture efficiency efficiency Corporate banking One Bank IT and
Slide 11: Our path to sustainable profitability
Our path to sustainable profitability
Slide 12: What has changed since July
What has changed since July 2022 10Y interest rate Mitigating measures Strategy Updated announcement plan (July) (December) Pricing and charging for negative interest rates EUR 1.1% 0.5% ECB tiering Advise clients in migrating from deposits to higher yielding investment assets USD 2.7% 2.0% Improvem
Slide 13: Our path to improved Group profitability
(1) – (2) Our path to improved Group profitability Post-tax return on tangible equity, in % Additional measure: — Reduce € 1bn stranded costs in the Capital Release Unit (1)% 8% (1)-(2)% 2-3% 5% Additional measure: — Passing through negative interest rates 2-3% 0% 9M 2019 Revenue Cost Provision for
Slide 14: Grow the core: our Corporate Bank
Grow the core: our Corporate Bank 2018 – 2022 targeted revenue compound annual growth rate Strategic priorities Competitive advantages Leading indicators Loans, in € bn Integrated payments & FX +5% — Be the bank of solutions in 125 currencies choice for the Corporate 113 119 Treasurer — Capture the
Slide 15: Demonstrate resilience in our Investment Bank
Demonstrate resilience in our Investment Bank 2018 – 2022 targeted revenue compound annual growth rate Strategic priorities Competitive advantages(1) Leading indicators Adjusted costs(2), in € bn #1 #3 Globally in Credit (3) (6)% — Drive cost reductions 4.7 4.5 within infrastructure — Optimize fundi
Slide 16: Improve efficiency in our Private Bank
Improve efficiency in our Private Bank 2018 – 2022 targeted revenue compound annual growth rate Strategic priorities Competitive advantages(1) Leading indicators Cost synergies, in € bn #1Clients ~22m worldwide ~0.2 — Drive efficiencies, in particular in Germany — Monetize #1 position in Germany ~€
Slide 17: Delivering sustainable value in Asset Management
Delivering sustainable value in Asset Management 2018 – 2022 targeted revenue compound annual growth rate Strategic priorities Competitive advantages(1) Leading indicators Morningstar 4- and 5-star rated — Launch innovative products and maintain #1Asset Manager Retail funds strong performance track
Slide 18: Collaboration opportunities to drive growth
Collaboration opportunities to drive growth — Wealth and Entrepreneur Bank initiative — “Entrepreneur initiative“ — Partnership and referral model — Family office initiative — Risk management solutions for corporate clients — Corporate Finance for SME — Distribution of DWS funds through branches — D
Slide 19: Technology drives efficiency and future growth
Technology drives efficiency and future growth Existing platforms >85k active Autobahn users ~10bn tradable FX spot prices quoted daily Integrated payment and FX solutions in Tech-driven, (open) platform 125+ currencies banking in order to: - master flow efficiently - better understand client needs
Slide 20: On track to reach adjusted cost targets
On track to reach adjusted cost targets Adjusted costs ex transformation charges, in € bn Almost half of which already in run rate 23.9 22.8 (1.1) 21.5 (1.3) 19.5 (2.0) 17.0 (2.5) 2017 2018 2019 target (1) 2020 target (1) 2022 target (1) Excluding impact from Prime Finance platform to be transferred
Slide 21: We are managing the bank conservatively
We are managing the bank conservatively 2007 9M 2019 Net balance sheet assets(1), 1,495 1,019 in € bn Common Equity Tier 1 capital 8.6%(3) 13.4% ratio(2) Provision for credit losses as a 31bps 15bps % of loans Loans as a % of deposits(4) 44% 74% Most Stable Funding(5) 30% 80% (1) Net balance sheet o
Slide 22: Our targets
Our targets Stabilize, Cut costs Maintain capital discipline then grow revenues Maintain CET 1 ratio of at least Grow Group revenues to Reduce adjusted cost to 12.5% and free up capital for ~€ 24.5bn by 2022 € 17.0bn in 2022 distribution from 2022 Reaffirm our Return on Tangible Equity target of 8%
Slide 23: A new and better Deutsche Bank
A new and better Deutsche Bank
Slide 24: How we deliver
How we deliver Fixing the bank with existing capital resources no capital increase planned Restructuring decisively closing businesses, not trimming Realistic financial plans we deliver what we promise Accountability in short- and mid-term clear financial targets Addressing key concerns no compromis
Slide 25: Investor Deep Dive: James von Moltke, CFO
Investor Deep Dive James von Moltke Chief Financial Officer 10 December 2019 Deutsche Bank Confidential
Slide 26: Summary
Summary On track to reach short-term targets Affirming 8% return on tangible equity target for 2022 – working to fully overcome headwinds Cost reductions driven by infrastructure, technology, Capital Release Unit and German retail integration Disciplined capital management to maintain CET 1 ratio at
Slide 27: Stabilizing the Core Bank
Stabilizing the Core Bank Excluding specific items(1), in € bn Revenues(2) Adjusted profit before tax(3) 19.2 Capital 1.6 17.9 Release (70)% 0.5 Unit Core 2.1 2.2 Bank Core (1)% Bank 17.6 17.4 (1.0) Capital (1.7) Release Unit 9M 2018 9M 2019 9M 2018 9M 2019 Note: Throughout this presentation totals
Slide 28: All businesses support improving Core Bank profitability
All businesses support improving Core Bank profitability Post-tax return on tangible equity, in % 0% (1%) >9% 2% 2% 4% 1% 9M 2019 Core Corporate Investment Private Asset Corporate & 2022 Bank ex items(1) Bank Bank Bank Management Other Core Bank target (1) Items include specific revenue items, impai
Slide 29: Improving returns over time
Improving returns over time 2018 post-tax return on tangible equity(1) 2022 targeted post-tax return on tangible equity Private Bank 4% Private Bank 10-11% Corporate Bank 9% Corporate Bank 12-13% Investment Bank 2% Investment Bank 7-8% Asset Asset 19% >20% Management Management (1) 2018 post-tax ret
Slide 30: Targeted reallocation of resources
Targeted reallocation of resources Average allocated tangible shareholders equity Group Sales & Trading Asset 3% ~2ppt ~5% Management Corporate Bank 17% ~3ppt ~20% Private Bank 19% 37% ~6ppt ~25% Investment Bank 22% ~25% Investment Bank 39% ~1ppt ~6ppt ~45% ~23% Capital Release Capital Release 15% 2
Slide 31: Our path to improved Group profitability
(1) – (2) Our path to improved Group profitability Post-tax return on tangible equity, in % Additional measure: — Reduce € 1bn stranded costs in the Capital Release Unit (1)% 8% (1)-(2)% 2-3% 5% Additional measure: — Passing through negative interest rates 2-3% 0% 9M 2019 Revenue Cost Provision for
Slide 32: Mitigation measures to offset headwinds
Mitigation measures to offset headwinds In € bn, unless otherwise stated Current account 2022 Q3 2019 balances held above thresholds 259 Revenue plan (as of 8 July) ~25.0 10 >€ 2m Wealth 5 <€ 2m Management 6 >€ 2m Interest rate impact ~(0.9) 34 >€ 100k Change vs. July Private Bank More conservative
Slide 33: Updated revenue growth assumptions
Updated revenue growth assumptions Compound annual growth rate in revenues Strategy announcement Updated plan (July) Operating(1) Reported(2) 2018 – 2022 2018 – 2022 2% Core Bank 1% 3% Corporate Bank 3% 0% Investment Bank 2% 2% Private Bank 0% 2% Asset Management 1% (1) Excluding interest rate and b
Slide 34: Targeting a material reduction in adjusted costs
Targeting a material reduction in adjusted costs Adjusted costs ex transformation charges, in € bn 2019 target(1) 21.5 — Compensation and benefit cost reduction primarily driven by Compensation smaller workforce. Focus on ~(2.0) and benefits preserving revenue-generating capabilities IT costs ~(1.3)
Slide 35: Benefitting from investments in cost management tools
Benefitting from investments in cost management tools What? Benefits When? Identifies and tracks cost Tangible cost impact of Cost Catalyst reduction measures identified measures Initiated in Q2 2018 program Flagship program to drive Employee engagement cultural change Transparency on cost of Granul
Slide 36: Transformation costs to execute our strategy quickly
Transformation costs to execute our strategy quickly In € bn Change vs. 2019 – 2022 Strategy cumulative announcement expenses (July 2019) Deferred tax asset 2.8 Deferred Tax Asset valuation adjustment 3.4 - valuation adjustment Goodwill 1.0 0.3 impairment(1) Goodwill Software impairment 1.2 0.6 impa
Slide 37: Managing our capital position
Managing our capital position CET1 ratio outlook, in % Capital for future distribution from 2022 >13% 12.7% At least 12.5% 11.8% 11.6% Maximum Distributable Amount(1) 2019 Core Bank Capital Release Regulatory impact 2020 2021 capital accretion Unit net impact and beyond Note: 9M 2019 reported CET1 r
Slide 38: Well positioned to offset regulatory headwinds
Well positioned to offset regulatory headwinds Risk weighted assets, in € bn 2028/ Guidance 2020 2021 2022 2023 2024 … 2029 July 2019 25 5 - 25 - Not given … 10 December 10% – 15% 15 15 - - 25 2019 of RWA(1) … Principally EBA Basel 3 final rules Basel 3 final rules guideline (internal models) (outpu
Slide 39: Material improvement in leverage ratio planned
Material improvement in leverage ratio planned Leverage ratio (CRD 4, fully loaded), in % Phase 1: Run-down Phase 2: Capital generation ~€ 100bn planned reduction from Capital Release Unit, partially Retained earnings after distributions offset by select business growth ~5.0% 4.5% 0.5% 4.0% 0.5% 3.9
Slide 40: Near-term objectives
Near-term objectives 2019 2020 CET1 ratio >13% At least 12.5% Adjusted costs(1) € 21.5bn € 19.5bn Leverage ratio 4% 4.5% (1) Excluding transformation charges and impact from Prime Finance platform to be transferred to BNP Paribas James von Moltke 15 Investor Deep Dive, 10 December 2019
Slide 41: Financial targets
Financial targets 2022 Group return on tangible equity 8% Core Bank return on tangible equity >9% Adjusted costs € 17bn Cost income ratio 70% CET1 ratio At least 12.5% Leverage ratio ~5% James von Moltke 16 Investor Deep Dive, 10 December 2019
Slide 42: Appendix
Deutsche Bank Appendix
Slide 43: 9M 2019 specific revenue items and adjusted costs
9M 2019 specific revenue items and adjusted costs In € m 9M 2019 9M 2018 Core Core CB IB PB AM C&O Bank CRU Group CB IB PB AM C&O Bank CRU Group Revenues 3,920 5,443 6,311 1,662 95 17,431 385 17,816 3,857 6,087 6,617 1,673 (111) 18,122 1,619 19,741 (1) DVA - IB Other / CRU - (126) - - - (126) (19) (
Slide 44: 9M 2019 impact of transformation effects
9M 2019 impact of transformation effects In € m, unless otherwise stated Excluding Transformation transformation Reported effects effects Comment Revenues 17,816 - 17,816 Impairment of software and accelerated depreciation of real estate assets, legal fees related to Adjusted costs(1) (17,051) (537)
Slide 45: Overview of Corporate Bank / Private Bank refinements
Overview of Corporate Bank / Private Bank refinements In € m FY 2018 9M 2019 Core Core CB IB PB AM C&O CRU Group CB IB PB AM C&O CRU Group Bank Bank Net revenues 5,193 7,467 8,712 2,187 (120) 23,438 1,878 25,316 3,920 5,443 6,311 1,662 95 17,431 385 17,816 Corporate Bank / Private Bank 71 - (71) - -
Slide 46: Speaker biography
Speaker biography James von Moltke has been Chief Financial Officer and Member of the Management Board of Deutsche Bank AG since July 2017. Prior to joining Deutsche Bank, he was Treasurer of Citigroup. In this capacity he was responsible for capital and funding as well as liquidity and interest rat
Slide 47: CFO organisational structure
CFO organisational structure James von Moltke Chief CFO CFO Group Accounting Corporate Americas Finance Officer Bank CFO CFO Treasury Group Tax Investment Regions Bank Planning & Infra Performance Transfor- CFO DWS Mgt. mation CFO Investor CFO Infrastructure Relations Private Bank Regional / Legal G
Slide 48: Investor Deep Dive: Private Bank
Investor Deep Dive Private Bank Karl von Rohr Manfred Knof Ashok Aram Claudio de Sanctis 10 December 2019 Deutsche Bank Confidential
Slide 49: Summary
Summary FY 2018 9M 2019 Leading German and niche international retail bank with Revenues € 8.6bn € 6.3bn unique advisory capabilities coupled with a distinctive and (% of group) (34%) (35%) growing global wealth management platform Adjusted € 1.4bn adjusted cost base reduction opportunity driven by
Slide 50: Private Bank at a glance
Private Bank at a glance Global reach, ~22m ~€ 490bn ~€ 230bn >60 Top 5 ~€ 60bn Clients Assets under Loan Countries actively Eurozone countries Net liquidity deep roots in worldwide Management book served by GDP covered provider to group Europe Private Bank Private & Commercial Wealth Germany Busine
Slide 51: Significant progress towards our near-term objectives
Significant progress towards our near-term objectives 2016 2018 08th July 2019 2019 2020 Achievements Near-term objectives Track record of progress Reshaped operating model Accelerate German integration to ~€ 0.2bn cost synergies in 2019, deliver ~60%(1) of integration related through branch reduc
Slide 52: Our path to improved profitability
Our path to improved profitability Post-tax return on tangible equity(1), in % Cost/ income ~90% ~70% ratio Target: 2019–2022 € 1.4bn adj. cost reduction (2)% (2)-(3)% 10-11% 9% Target: 2019–2022 revenue CAGR 2%(3) 2-3% 4% 9M 2019 Revenue Cost Provision for Other(4) 2022 ex items(2) drivers drivers
Slide 53: € 1.4bn cost reduction program planned (2019 – 2022)
€ 1.4bn cost reduction program planned (2019 – 2022) Adjusted costs, in € bn Cost reduction as shown on New split of 8 July 2019 cost reduction Key measures — Reduction of distribution channel costs Private Bank — Building highly efficient end-to-end retail IT and operations platform Germany 0.6 1.0
Slide 54: Private Bank Germany
Private Bank Germany Manfred Knof
Slide 55: Business overview
Private Bank Germany Business overview Private Bank Germany’s leading retail bank ready to drive scale benefits from a single platform Germany Clients Products Distribution channels Revenues by client segment, 9M 2019 Client Business volume(1), Sep 2019 New business loan volume, 9M 2019 Investment B
Slide 56: Our competitive advantage
Private Bank Germany Our competitive advantage German Banking Market: Large, low return, low risk Private Bank Germany: Ready to deliver benefits of scale — Leveraging ~19m clients high quality clients - ~€ 51bn(1) Europe’s largest revenue pool delinquency ratio ~0.2%(4) — Two strong and complementa
Slide 57: Our path to improve shareholder returns
Private Bank Germany Our path to improve shareholder returns In € bn Reducing costs Stabilizing revenues Postbank integration Other measures +0% CAGR 0.2 0.2 1.0 0.2(2) 0.5(1) 0.1 0.3 0.5 0.4 2019 2020 2021-2022 2020-2022 Target 2019 Interest rate Operating Target 2022 headwinds growth 2022 Planned
Slide 58: Costs: Technology driven efficiencies are key
Private Bank Germany Costs: Technology driven efficiencies are key In € bn Adjusted costs(1) Driver Measures Impact(2) Indicative — Create one pure play end-to-end retail platform by Operations 2022 and Retail IT € ~0.4bn — Comprehensive recalibration of the Operations model delivering ~30% cost red
Slide 59: Revenues: Operating growth offsets headwinds
Private Bank Germany Revenues: Operating growth offsets headwinds In € bn Revenues(1) Driver Measures Indicative — Grow lending volume ~5% annual per year focused on Loans mortgages and consumer finance 0% CAGR Advisory — Convert >€ 10bn of deposits into commission and fee products 5.4 business — Gr
Slide 60: Private & Commercial Business International
Private & Commercial Business International Ashok Aram
Slide 61: Business overview
Private & Commercial Business International Business overview Private & Commercial A leading international advisory bank in major Eurozone markets, Business International with strong growth potential in India Regions Products Revenue distribution, 9M 2019 Revenue distribution, 9M 2019 Belgium Consum
Slide 62: Our competitive advantage
Private & Commercial Business International Our competitive advantage Strong brand recognition with target client groups #1 best international bank(1) #1 multichannel bank(2) Local branch network in affluent regions (e.g. Lombardia, Northern Spain, Belgium) #1 in service quality(3) Market leading cl
Slide 63: Revenues: our growth drivers
Private & Commercial Business International Revenues: our growth drivers In € bn Revenues Driver Measures Indicative Investment — Grow assets under management (4% CAGR(2)) leveraging on products our unique digital advisory tool and DB research capabilities 3% CAGR — Continue shift of consumer financ
Slide 64: Costs: investments paying off
Private & Commercial Business International Costs: investments paying off In € bn Adjusted costs(1) Driver Measures Impact(3) Indicative — Normalized investments ((12)% CAGR(2)) after Investments completion of platform implementation, especially in Italy (go-live in Q2 2020) € 0.07bn — Optimization
Slide 65: Wealth Management
Wealth Management Claudio de Sanctis
Slide 66: A unique client proposition
Wealth Management A unique client proposition Entrepreneurial families Sophisticated U/HNW Wealthy German clients with European connectivity investors +22% forecast growth of ~5% growth rate p.a. in Market Fastest growing client segment at opportunity global population worth Germany’s millionaires a
Slide 67: Business overview
Wealth Management Business overview Leading wealth manager focused on serving wealthy entrepreneurial Wealth Management families with sophisticated international needs Clients(1) Regions Products Client business volume(2), Sep 2019 Revenues ex specific items, 9M 2019 Revenues ex specific items, 9M 2
Slide 68: Holistic coverage of entrepreneurs and families
Wealth Management Holistic coverage of entrepreneurs and families Client example Bespoke One Bank coverage Corporate Investment Bank Bank European billionaire Cash Equity entrepreneurial family clearing issuance Looking for access to expert Liquidity Structured advice on: mgmt. lending solutions sol
Slide 69: Monetizing investments to drive growth
Wealth Management Monetizing investments to drive growth Coverage hiring Net new assets(3) Revenues Adjusted costs 9M 2019, Relationship Manager Ex specific items Ex transformation charges growth, in %(1) Δ € 9bn 5% 2% +8% ~0%(2) DB WM øPeers FY 2018 9M 2019 Q3 2018 Q3 2019 9M 2018 9M 2019 — Quality
Slide 70: Revenue growth in target segments
Wealth Management Revenue growth in target segments In € bn Revenues Driver Measures Indicative Strategic — Monetization of Relationship/Investment manager hires in 2019 growth (~90 Relationship/Investment Managers) initiatives 6% CAGR DB — Systematic coverage of clients across Wealth Management, 2.
Slide 71: Business to self fund growth
Wealth Management Business to self fund growth In € bn Adjusted costs Driver Measures Impact(1) Indicative — Focus product offering Focus — Optimize less profitable relationships — Lean organization with local empowerment 0.0 (0.1) — Consolidation of office space (~10% reduction) Footprint — Head of
Slide 72: Key take-aways
Key take-aways Well on track to achieve near-term targets Clear growth and efficiency priorities for all businesses Targeted € 1.4bn of adjusted cost reduction by 2022 Operating revenue growth intended to offset interest rate headwinds Improve our return of tangible equity to targeted 10 – 11% in 20
Slide 73: Appendix
Deutsche Bank Appendix
Slide 74: Financial overview
Financial overview In € bn 2017 2018 9M 2018 9M 2019 Revenues 8.7 8.6 6.6 6.3 Revenues ex specific items(1) 8.3 8.3 6.3 6.2 Non interest expenses (8.1) (7.6) (5.6) (6.0) Adjusted costs (7.7) (7.6) (5.7) (5.5) Adj. costs ex transformation charges (7.7) (7.6) (5.7) (5.5) Profit before tax 0.3 0.7 0.7
Slide 75: Overview of Corporate Bank / Private Bank refinements
Overview of Corporate Bank / Private Bank refinements In € m FY 2018 9M 2019 Core Core CB IB PB AM C&O CRU Group CB IB PB AM C&O CRU Group Bank Bank Net revenues 5,193 7,467 8,712 2,187 (120) 23,438 1,878 25,316 3,920 5,443 6,311 1,662 95 17,431 385 17,816 CB / PB refinements 71 - (71) - - - - - 52
Slide 76: Speaker biography
Speaker biography In July 2019 Karl von Rohr took on responsibility for the Private Bank and Asset Management (DWS) as well as retaining regional responsibility for Germany. In addition he was responsible for Human Resources until November 1, 2019. Temporarily, he continues to be responsible for Leg
Slide 77: Speaker biography
Speaker biography Manfred Knof joined Deutsche Bank in August 2019 as Head of the Private Bank Germany and a member of the Group Management Committee. He has about 25 years of experience in the financial-services industry. Before joining Deutsche Bank, he was CEO of Allianz’s German business where h
Slide 78: Speaker biography
Speaker biography In November 2018 Ashok Aram additionally took over the responsibility for the Private & Commercial Business International. Since July 2019 he is a member of the Group Management Committee of Deutsche Bank. Became CEO for Europe, Middle East and Africa in November 2015. Joined Deuts
Slide 79: Speaker biography
Speaker biography Since November 2019 Claudio de Sanctis is Global Head of Wealth Management and a member of the Group Management Committee of Deutsche Bank. Additionally he is responsible for Switzerland as Chief Country Officer. Joined Deutsche Bank in December 2018 as Head of Deutsche Bank Wealth
Slide 80: Private Bank organisational structure
Private Bank organisational structure K. von Rohr Head of Private Bank Head of Head of Head of Head of Chief CFO/Head Chief Chief Head of Human Private Bank PCB (1) Wealth Digital of Business Risk Operating Strategy Resources/ Germany International Management Officer Insights Officer Officer DCO(2)
Slide 81: Investor Deep Dive: Corporate Bank
Investor Deep Dive Corporate Bank Stefan Hoops 10 December 2019 Deutsche Bank Confidential
Slide 82: Summary
Summary FY 2018 9M 2019 Revenues A scale player with innovative products, operating in an € 5.2bn € 4.0bn (% of (21%) (22%) attractive market Group) Adjusted Well positioned to benefit from the current macroeconomic costs(1) € 3.8bn € 3.0bn and geopolitical environment (% of (17%) (18%) Group) Risk
Slide 83: Well positioned in an attractive market
Well positioned in an attractive market Corporate Banking industry Our core competencies High barriers to market entry 1 2 — Clients require sophisticated solutions to complex needs Operating at the Leveraging our — Banks need to comply with strict and differing regulatory heart of our global networ
Slide 84: Corporate Bank at a glance
Corporate Bank at a glance Offering the full product suite for our clients globally Core strengths across our business Revenue breakdown by region(5) — #1 Euro & largest Non-US domiciled US$ clearer(1) 46% Cash 18% 15% — Integrated payments and FX solutions in 125+ Management currencies Americas Ger
Slide 85: Well placed to help clients in a complex environment
Well placed to help clients in a complex environment Our response — Clients need help to respond to a more complex world Slowing economic — Industry-leading credit and market risk capabilities growth / — Leading FX business in the Investment Bank Lower for longer rates Challenging — Seamless and eas
Slide 86: Limited sensitivity to further interest rate declines
Limited sensitivity to further interest rate declines 9M 2019 revenue composition Commission & Fees — Highly sticky fee income primarily from service fees and well established Remaining revenues long-term relationships Net Interest Income Commissions & — Primarily driven by lending margins Fees and
Slide 87: Partnering with our international clients globally
Partnering with our international clients globally Regional revenue break-down of multinational corporate clients(1) Clients headquartered in … Germany(2) 7% 30% Americas 41% APAC 22% 22% 18% 30% 8% 61% 13% EMEA ex Germany 33% 15% 16% 13% 14% 57% Americas Germany(2) EMEA ex Germany APAC Note: Global
Slide 88: Our path to improved profitability
Our path to improved profitability Post-tax return on tangible equity(1), in % Cost/ Income 77% ~60% ratio 0% 12-13% 3% (1)-(2)% 3-4% 7% 9M 2019 Revenue Cost Provision for Other(3) 2022 ex items(2) drivers drivers credit losses Target Outlook (1) 9M 2019 post-tax RoTE adjusted for (65)bps impact fro
Slide 89: Substantial revenue opportunities
Substantial revenue opportunities In € bn Revenues(1) Driver Measures Deposit — Passing on negative interest rates to partly compensate EUR strategy headwinds (~€ 25bn additional deposits in scope for 2020) 4% CAGR Payments — Grow platform, FinTech and eCommerce payment fees from 5.9 strategy less t
Slide 90: Bank of choice for Corporate Treasurer
Bank of choice for Corporate Treasurer Counterparty Risk Management FX Risk Management Risk Interest Rate Risk Solutions Management Supply Chain Financing Workflow Solutions Industry Trends Capital Markets Guidance Financing IoT, eCommerce, APIs Treasurer Financing Advisory Bank Financing Data Analy
Slide 91: Growth initiatives in Asia
Growth initiatives in Asia Strong regional capability APAC growth initiatives Enabling clients to harness opportunity in a dynamic environment Aligning capability with regional trends Regional Footprint Strengths Key regional trends 14 markets, more than 140 years Business model Infrastructure exp
Slide 92: Cost reduction driven mainly by infrastructure
Cost reduction driven mainly by infrastructure In € bn Adjusted costs(1) Driver Measures Impact(3) ex transformation charges Direct — Headcount efficiencies business up to driven — Various initiatives on non compensation cost € 0.1bn measures optimization (3)% CAGR 4.0 3.8 3.7 — Elimination of dupli
Slide 93: Key take-aways
Key take-aways Well positioned in an attractive, growing market High proportion of stable revenues, supported by global setup and limited interest rate sensitivity Revenue growth via selected strategic opportunities with continued cost discipline On track to reach 2022 RoTE target of 12 – 13% Stefan
Slide 94: Appendix
Deutsche Bank Appendix
Slide 95: Financial overview
Financial overview In € bn 2017 2018 9M 2018 9M 2019 Revenues 5.3 5.3 3.9 4.0 Revenues ex specific items 5.4 5.2 3.9 4.0 Noninterest expenses (3.9) (3.8) (2.9) (3.5) Adjusted costs (4.0) (3.8) (2.9) (3.0) Adj. costs ex transformation charges (4.0) (3.8) (2.9) (3.0) Profit before tax 1.5 1.3 0.9 0.2(
Slide 96: Overview of Corporate Bank / Private Bank refinements
Overview of Corporate Bank / Private Bank refinements In € m FY 2018 9M 2019 Core Core CB IB PB AM C&O CRU Group CB IB PB AM C&O CRU Group Bank Bank Net revenues 5,193 7,467 8,712 2,187 (120) 23,438 1,878 25,316 3,920 5,443 6,311 1,662 95 17,431 385 17,816 CB / PB refinements 71 - (71) - - - - - 52
Slide 97: Speaker biography
Speaker biography Stefan has been at Deutsche Bank since 2003 when he started in Structured Sales. In 2008 he moved to Credit Trading in New York and has since taken on various leadership roles across Sales, Trading and Structuring in the United States and Germany, including Global Head of Instituti
Slide 98: Corporate Bank – organisational structure
Corporate Bank – organisational structure Christian Sewing Stefan Hoops Coverage Americas APAC EMEA Regions Americas APAC EMEA Germany UK & Ireland ex. GY / UKI Cash Trade Finance Securities Trust & Agency Foreign Products Management Exchange & Lending Services Services Financial Functions COO Strat
Slide 99: Investor Deep Dive: Investment Bank
Investor Deep Dive Investment Bank Mark Fedorcik Ram Nayak 10 December 2019 Deutsche Bank Confidential
Slide 100: Summary
Summary FY 2018 9M 2019 Reduce costs to materially improve return on tangible Revenues € 7.5bn € 5.4bn equity to 7 – 8% (% of group) (30%) (31%) Adjusted € 6.2bn € 4.5bn Stabilize and grow revenues costs(1) (27%) (27%) (% of group) Risk We offer competitive products and have strong weighted € 124bn
Slide 101: Investment Bank at a glance
Investment Bank at a glance Deep institutional & Key corporate Global leader in Financing Global FX powerhouse strengths client franchise Fixed Income, Currency Sales & Trading(1) Origination & Advisory Revenues 9M 2019: € 4.3bn Revenues 9M 2019: € 1.3bn FX M&A ~15% Leveraged Well- ~25% Finance(2) d
Slide 102: Serving clients where we have a competitive advantage
Serving clients where we have a competitive advantage We have a strong franchise … Global leader in Global FX powerhouse Debt Origination expert Financing # 3 Global Credit # 2 Global FX # 1 EMEA(2) Leveraged Finance # 1 Commercial Real Estate # 1 Derivatives # 5 Global Leveraged Finance Financing &
Slide 103: Strategic priorities to improve return on tangible equity
Strategic priorities to improve return on tangible equity Reduce costs Reduce funding costs Stabilize our franchise and grow revenues Mark Fedorcik, Ram Nayak 4 Investor Deep Dive, 10 December 2019
Slide 104: Our path to improved profitability
Our path to improved profitability Post-tax return on tangible equity, in % Cost/ Income 86% <65% ratio (1%) (0-1)% 7-8% 4% 2-3% 3% 9M 2019 Revenue Cost Provision for Other(2) 2022 ex. items(1) drivers drivers credit losses Target Outlook 9M 2019 2022 RWA € 125bn ~€ 133bn Leverage € 494bn ~€ 450bn (
Slide 105: Reduce costs: progress and outlook
Reduce costs: progress and outlook Adjusted costs ex transformation charges(1), in € bn Phase 1 Phase 2 2017 – 2019 2020 – 2022 Primarily Front office Primarily Back office Cost reductions(2) 2017 – 2019 2020 – 2022 Front office Back office 6.5 ~0.6 ~1.2 (7)% 5.9 CAGR Front office 4.7 70% ~0.4 ~0.2
Slide 106: Reduce costs: specific initiatives
Reduce costs: specific initiatives Adjusted costs(1), in € bn Driver Measures Impact(2) — Front office restructuring largely completed Front Office € 0.2bn — Increase expense management discipline (7)% CAGR — Investment Bank technology 6.5 5.9 — Migrate to single platforms — Decommission application
Slide 107: Stabilize revenues: transform EMEA flow and refocus Emerging Markets
Stabilize revenues: transform EMEA flow and refocus Emerging Markets Investment Bank revenue Driver Measures composition(1), in € bn 6.1 5.6 — Turn around specific flow businesses — New leadership Grow revenue — Disciplined risk management in EMEA FIC — Automate and standardize flow businesses — Lev
Slide 108: Stabilize revenues: partner with the Corporate Bank and reduce funding costs
Stabilize revenues: partner with the Corporate Bank and reduce funding costs Investment Bank revenue Driver Measures composition(1), in € bn 6.1 5.6 — Build on existing areas of partnership Partnership — Payment-linked Foreign Exchange with — Risk / Treasury solutions Corporate Bank — Autobahn — Lev
Slide 109: Stabilize revenues: play to our strengths
Stabilize revenues: play to our strengths Investment Bank revenue Driver Measures composition(1), in € bn 6.1 5.6 Prioritize — Maintain underwriting standards and portfolio quality Financing — Deepen financing activities in asset backed markets businesses — Continue targeted investment in secured Co
Slide 110: Disciplined approach to lending
Disciplined approach to lending Q3 2019 loans at amortized cost(1), in € bn Measures Leveraged Debt Risk management Capital Markets — Well diversified across geographies and industries Commercial — Concentration risk managed within granular limit Other frameworks (with constraint on higher-risk segm
Slide 111: Key take-aways
Key take-aways Committed to reducing costs and to improving return on tangible equity to 7 – 8% in 2022 Stabilizing the franchise and setting solid foundations for growth Serving our clients and partnering with the Corporate Bank Mark Fedorcik, Ram Nayak 12 Investor Deep Dive, 10 December 2019
Slide 112: Appendix
Appendix
Slide 113: Financial overview
Financial overview In € bn 2017 2018 9M 2018 9M 2019 Revenues 8.3 7.5 6.1 5.4 Revenues ex specific items(1) 8.7 7.2 5.9 5.5 Noninterest expenses (6.7) (6.5) (5.0) (4.8) Adjusted costs (6.5) (6.2) (4.7) (4.6) Adj. costs ex transformation charges (6.5) (6.2) (4.7) (4.5) Profit before tax 1.5 0.9 1.0 0
Slide 114: Speaker biography
Speaker biography Mark Fedorcik joined Bankers Trust in 1995 before it was acquired by Deutsche Bank. Since then he has taken on various leadership roles within the Investment Bank, including Co-President of the Corporate & Investment Bank (CIB) in the Americas and Co-Head of Corporate Finance. Mark
Slide 115: Investor Deep Dive: Capital Release Unit
Investor Deep Dive Capital Release Unit Louise Kitchen 10 December 2019 Deutsche Bank Confidential
Slide 116: Summary
Summary Q3 2019 Revenues € (0.2)bn Allow group to fund transformation through existing capital resources Adjusted costs(1) € 0.6bn Execute on cost reduction program Leverage exposure € 177bn Execute on objectives while maintaining core client franchise and relationships Risk weighted € 56bn assets (
Slide 117: Capital Release Unit framework established
Capital Release Unit framework established Phase 1 Phase 2 Phase 3 (Set-Up) (Preparation) (Execution) — Established new division with — Set up standardized utility — Execute defined asset reduction team of wind-down experts functions (cross asset novation programs from 2020 teams) — Established risk
Slide 118: Asset composition
Asset composition Q2 2019, in € bn Weighted average life (in years) — Cash equities Equities 65 250 — Equity flow derivatives 2 — Equity exotic derivatives — Equity platforms 76 Finance Prime Operational Global Prime Finance and Electronic Equities platform Risk 33 1 — 61 Rates — Interest rate swaps
Slide 119: Asset Reduction on track
Asset Reduction on track In € bn Capital Release Unit strategic plan Risk weighted assets — Derivatives (by type, client, term) 72 65 — Credit assets (9) 56 52 — Platforms (e.g. Prime Finance, Portfolio Electronic Equities, warrants) 38 segmentation 32 — Joint ventures & equity stakes — Cash assets
Slide 120: Global Prime Finance transition to BNP Paribas
Global Prime Finance transition to BNP Paribas In € bn, unless otherwise stated Rationale Impact Process — Realize the value embedded in 2.1 — Transaction closed on 29th Deutsche Bank’s Prime Finance Risk November 2019 and Electronic Equities weighted ~0.5 platform: assets(1) — Deutsche Bank will co
Slide 121: Revenue Drivers
Revenue Drivers In € m Q3 2019 Expected Quarterly Revenues Description revenue Outlook (2020 – 2021) 2020 2021 – 2022 — Positive revenues from reimbursement from BNP Paribas — Income from business — Small income from loan portfolios retained for transition/ — Funding costs to decline as assets sale
Slide 122: Cost drivers
Cost drivers Adjusted costs ex transformation charges, in € bn 3.3 0.6 2.6 0.3 0.5 Cost reduction through transfer of Global Prime Finance and Electronic Equities to BNP Paribas 0.7 0.6 0.3 Reduction in Sales, Trading & Research staff following business exits 0.3 0.5 Reduction of Single Resolution F
Slide 123: Capital Release Unit wind-down broadly self-funding
Capital Release Unit wind-down broadly self-funding Estimated Capital Release Unit impact on group CET1 ratio, in basis points Net impact on ~20 ~0 ~(10) ~(20) group CET1 ratio Increase in Group CET1 of ~160bps due Risk weighted to reduction of risk ~85 asset reduction weighted assets ~50 ~20 ~5 ~(3
Slide 124: Key take-aways
Key take-aways Asset reduction framework in place for controlled, cost-effective release of capital and de-leveraging of the balance sheet Dedicated management team focused on wind-down mandate, notably simplification and expense elimination Declining loss profile and resource reductions support imp
Slide 125: Appendix
Deutsche Bank Appendix
Slide 126: Speaker biography
Speaker biography Louise leads the Capital Release Group. Louise has over twenty five years experience in the markets joining Deutsche Bank in 2005. Prior to 2005, Louise worked in Trading, Sales and Structuring roles at UBS and a number of companies in the energy sector. Since joining the bank, Lou
Slide 127: Capital Release Unit organisational structure
Capital Release Unit organisational structure Frank Kuhnke Management Board Member for the Capital Release Unit Head of Global Prime Finance Head of Capital Release Group Transition Unit Louise Kitchen 12 Investor Deep Dive, 10 December 2019
Slide 128: Investor Deep Dive: Chief Risk Officer
Investor Deep Dive Stuart Lewis Chief Risk Officer 10 December 2019 Deutsche Bank Confidential
Slide 129: Summary
Summary Significantly reduced and transformed balance sheet Strengthened risk control environment and enhanced capabilities through investments Maintaining conservative risk profile with high underwriting standards and controlled risk appetite Stuart Lewis 1 Investor Deep Dive, 10 December 2019
Slide 130: Strengthened key balance sheet and risk metrics
Strengthened key balance sheet and risk metrics 2007 2015 9M 2019 Common Equity Tier 1 8.6%(2) 11.1% 13.4% capital ratio(1) Provision for credit losses 31bps 22bps 15bps as % of loans Average Value-at-Risk(3) € 86m € 43m € 30m Most Stable Funding(4) 30% 74% 80% Liquidity Reserves € 65bn € 215bn € 24
Slide 131: Further strengthening our control environment
Further strengthening our control environment In € bn, unless otherwise stated Adjusted costs Operational risk losses(2) Non-Financial Risk(1) Non-Legal Financial Risk(1) Legal 1.0 5.8 0.2 0.6 0.6 0.2 0.4 0.4 3.4 2013 2019 3.1 0.2 Outlook 0.2 Full time employees(1), in 000s 5.6 2.4 5.5 0.2 3.7 3.1 3
Slide 132: Increasing technology investments
Increasing technology investments ~€ 900m investments in Technology across Risk, Anti Financial Crime and Compliance in 2017 – 2019 Aggregate investments in Risk, Anti Financial Crime & Compliance Technology to increase further in 2020 Anti-Financial Crime Compliance Credit Risk Market Risk Daily na
Slide 133: Significantly reduced and transformed balance sheet
Significantly reduced and transformed balance sheet After netting(1), in € bn 1,495 65 Around a quarter of net balance sheet held in Liquidity Reserves 1,019 995 Liquidity Trading assets significantly reduced to less 243 Reserves than 30% of net balance sheet 294 Trading and related assets(2) Deriva
Slide 134: Managing Credit Risk: high credit quality
Managing Credit Risk: high credit quality Net Credit Loss Provisions, in € bn Net Credit Loss Provision peer(2) comparison, in bps Net CLP, in bps(1) 2015 – 2019 average mid-teens 44 28 22 33 13 13 15(1) or higher <30 1.4 350 19 300 1.1 Peers Deutsche Bank 1.0 250 200 150 0.5 0.5 0.5 100 50 Peers De
Slide 135: A low risk, well diversified loan portfolio
A low risk, well diversified loan portfolio IFRS loans at amortized cost, 30 September 2019 ~90% of our Loan Book is Investment Grade Largest three portfolios Private Bank Investment Bank Corporate Bank Capital Release Unit Other(1) German Mortgages — Average loan to value: 75% Capital Release Unit
Slide 136: Deep Dive: Investment banking portfolios
Deep Dive: Investment banking portfolios Asset-Backed Securities Commercial Real Estate Leveraged Debt Capital Markets 6% of Loans(1) / 2% of Group RWA 5% of Loans(1) / 2% of Group RWA 1% of Loans(1) / 3% of Group RWA (Loan growth YoY ex FX: ~€ 5.5bn) (Loan growth YoY ex FX: ~€ 2.0bn) (Loan growth Y
Slide 137: Level 3 assets: A small, but natural part of our business
Level 3 assets: A small, but natural part of our business In € bn Core Bank Capital Release Unit 4.3% of total assets 88 Equity securities Mortgage backed securities Other 1 0 2 10 Derivative Debt Assets securities 5 1.6% of total assets 25 7 18 7 Loans 2007 30 Sep 2019 Stuart Lewis 9 Investor Deep
Slide 138: Comprehensive stress testing to proactively manage downside risk
Comprehensive stress testing to proactively manage downside risk Comprehensive stress testing framework in place Key known and emerging risks Mitigating actions Group wide stress test Reviewed cyclical portfolios with (US – China) Trade War Frequency: Quarterly / Ad-Hoc selective de-risking Severe M
Slide 139: Key take-aways
Key take-aways Balance sheet and risk profile to remain robust through transformation period Improvements in controls and investments in non-financial risk function to reduce risk profile Maintain conservative underwriting standards and controlled risk appetite to support Group returns Stuart Lewis
Slide 140: Appendix
Deutsche Bank Appendix
Slide 141: Managing Market Risk: Trading book Value at Risk
Managing Market Risk: Trading book Value at Risk DB Group, 99%, 1 day, in € m, unless otherwise stated 200 average of quarter max of quarter min of quarter 150 yearly average 2019 100 50 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Trading VaR during 2019 ranged between € 22m a
Slide 142: Economic risk from derivatives exposure significantly smaller than headline number
Economic risk from derivatives exposure significantly smaller than headline number EU accounting standards inflate disclosed derivative assets, Commentary Q3 2019, in € bn — Unlike US GAAP, IFRS accounting does not allow for all Master Netting Agreements(2) to reduce derivative assets shown on the b
Slide 143: Speaker biography
Speaker biography Stuart Wilson Lewis became a member of our Management Board on June 1, 2012 and is our Chief Risk Officer. On July 7, 2019 he assumed responsibility for Compliance, Anti-Financial Crime and the Business Selection and Conflicts Office. He joined Deutsche Bank in 1996. Prior to assum
Slide 144: Cautionary statements
Cautionary statements Non-IFRS Financial Measures This document contains non-IFRS financial measures. For a reconciliation to directly comparable figures under IFRS, to the extent not provided herein, please refer to the Financial Data Supplement which can be downloaded from www.db.com/ir. Forward-L