Deutsche Bank Ag · XETR:DBK
Deutsche Bank — Q3 2014 Earnings Presentation
51 slides from Deutsche Bank's earnings presentation, Oct 29, 2014
Slide 1: Deutsche Bank 3Q2014 results
Deutsche Bank Deutsche Bank 3Q2014 results 29 October 2014
Slide 2: Key Group financial highlights
Key Group financial highlights In EUR bn, unless otherwise stated Group Core Bank (1) 3Q2014 3Q2013 3Q2014 3Q2013 Income before income taxes 0.3 0.0 1.3 1.2 Net income (0.1) 0.1 n.a. n.a. Diluted EPS (in EUR) (0.07) 0.04 n.a. n.a. Profitability Post-tax return on average active equity(2) (0.6)% 0.3%
Slide 3: Agenda
Agenda 1 Key current themes Comprehensive Assessment Capital / Leverage Litigation 2 Group results 3 Segment results Deutsche Bank 3Q2014 results financial transparency. 3 Investor Relations 29 October 2014
Slide 4: Comprehensive Assessment: Summary of results
Comprehensive Assessment: Summary of results AQR Baseline Scenario(3) Adverse Scenario(3) Key highlights YE 2013 2016E 2016E — Minor AQR adjustments of EUR 14.56% 252m 13.33% — Stress test: 12.55% CET1 ratio in 2.01% baseline scenario, 455 percentage points above threshold Buffer of 10.39% Buffer of
Slide 5: Capital: Some uncertainties removed, but headwinds remain
Capital: Some uncertainties removed, but headwinds remain Events in the quarter Outlook Capital Further headwinds expected from: — EBA Regulatory Technical No adjustments necessary from Asset Quality Review / Stress Standards, e.g. Prudent Valuation: Test on 3Q14 reported CET1 capital or CRD 4 lever
Slide 6: Capital: Common Equity Tier 1 and RWA development
Capital: Common Equity Tier 1 and RWA development CRD4, fully-loaded Common Equity Tier 1 capital RWA In EUR bn In EUR bn 11.5% 11.5% 1.3 10.0 46.0 1.0 46.0 (0.1) (3.2) 4.9 401.5 (0.3) (0.3) 398.7 (0.2) (10.1) (1) (2) (1) (4) (3) 30 Jun Net Dividend Equity Other FX effect 30 Sep 30 Jun FX effect Cre
Slide 7: Leverage: New rules applied, de-leveraging continued
Leverage: New rules applied, de-leveraging continued CRD4, fully-loaded 3Q2014 (previous rules) 3Q2014 (revised rules) CRD4 FX Movements x% Leverage ratio, CRD4 FX Movements x% Leverage ratio, exposure (net of FX) fully loaded Exposure (net of FX) fully loaded In EUR bn 3.0% 3.4% 3.3% 3.2% 3.2% FX n
Slide 8: Litigation: Update
Litigation: Update In EUR bn Mortgage repurchase Litigation reserves Contingent liabilities demands/reserves In USD Demands Reserves 3.0 3.2 4.6 4.5 2.2 1.7 0.5 0.5 30 Jun 2014 30 Sep 2014 30 Jun 2014 30 Sep 2014 30 Jun 2014 30 Sep 2014 — Net litigation reserves were up — This includes possible obli
Slide 9: Agenda
Agenda 1 Key current themes 2 Group results 3 Segment results Deutsche Bank 3Q2014 results financial transparency. 9 Investor Relations 29 October 2014
Slide 10: Net revenues
Net revenues In EUR bn 9.4 8.2 8.4 7.7 7.9 7.9 6.6 1Q 2Q 3Q 4Q 1Q 2Q 3Q 2013 2014 (1) Contribution to Group revenues ex Consolidation & Adjustments by business segment : CB&S 47% 43% 37% 36% 47% 44% 40% PBC 25% 29% 29% 35% 28% 30% 30% GTB 11% 12% 13% 14% 12% 13% 13% AWM 13% 12% 16% 17% 12% 14% 16% N
Slide 11: Provision for credit losses
Provision for credit losses In EUR m Cost of Risk(1) Core Bank Non-Core Operations Unit (1) Cost of Risk Deutsche Bank Group(1) (1) Cost of Risk Core Bank(1) 800 0.80% 725 700 0.70% 600 512 0.60% 473 319 500 0.50% 400 354 174 239 0.40% 246 250 269 300 87 19 42 200 0.30% 407 67 267 299 273 100 0.20%
Slide 12: Cost: Reported and adjusted
Cost: Reported and adjusted Non-interest expenses, in EUR bn 28.4 7.2 7.6 7.3 6.6 6.9 6.7 20.5 6.5 16.1 Non-compensation 3.1 3.7 4.3 4.9 3.1 3.7 4.1 11.0 Compensation and 3.5 12.3 3.2 2.9 2.7 3.3 3.0 3.2 9.5 benefits 0 0 1Q 2Q 3Q 4Q 1Q 2Q 3Q FY 9M 2013 2014 2013 2014 Adj. cost base 6,034 5,910 5,600
Slide 13: Cost: Update on Operating Cost and OpEx Development
Cost: Update on Operating Cost and OpEx Development 3Q2014 vs. 3Q2013 OpEx program to date In EUR bn Key drivers: In EUR bn — Establishing new control function capabilities — Integrating platforms and enhancing end-to-end (E2E) 9M2014 Invested/ processes 2012/2013 achieved — Strengthening our regula
Slide 14: Profitability
Profitability Income before income taxes Net income In EUR bn In EUR bn 2.4 1.7 1.7 0.9 1.1 0.8 0.3 0.0 0.3 0.1 0.2 (0.1) (1.4) (1.8) 1Q 2Q 3Q 4Q 1Q 2Q 3Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 2013 2014 2013 2014 (1) Post-tax return on equity Effective tax rate 12% 2% 0% (10)% 8% 2% (1)% 31% 58% (183)% 23% 34% 74% 1
Slide 15: 3Q2014 Core Bank adjusted IBIT
3Q2014 Core Bank adjusted IBIT In EUR bn 3Q2014 Group reported IBIT to EUR Core Bank adjusted IBIT: 1.7 bn 0.1 2.0 0.3 1.9 0.3 1.0 1.3 0.3 (1) 3Q2014 NCOU Core Bank Litigation Investing in our CVA / DVA / 3Q2014 3Q2013 Group reported reported IBIT platform(2) FVA(3) Core Bank Core Bank IBIT adjusted
Slide 16: Agenda
Agenda 1 Key current themes 2 Group results 3 Segment results Deutsche Bank 3Q2014 results financial transparency. 16 Investor Relations 29 October 2014
Slide 17: Corporate Banking & Securities
Corporate Banking & Securities Income before income taxes Key features In EUR m In EUR m 3Q14 vs. 3Q14 vs. 3Q14 3Q13 2Q14 3Q13 2Q14 Revenues(1) 3,147 2,900 3,532 9% (11)% 1,908 Prov. for credit (33) (43) (44) (22)% (24)% losses 1,492 Noninterest exp. (2,737) (2,487) (2,603) 10% 5% IBIT 374 361 885 4
Slide 18: Sales & Trading revenues
Sales & Trading revenues Revenues Key features Debt S&T, in EUR m Debt Sales & Trading 2,717 2,433 — FX revenues significantly higher y-o-y driven by an uptick in volatility versus difficult trading conditions in 3Q2013 1,823 1,826 1,2481,017 1,435 — Global Liquidity Management revenues in-line y-o-
Slide 19: Origination & Advisory
Origination & Advisory Revenues Key features In EUR m Overall Advisory Origination — Revenues up 5% y-o-y as higher ECM revenues were partially offset by slightly lower DCM revenues, Advisory revenues flat y- 811 o-y 737 674 701 130 691 — #5 in global Corporate Finance year-to-date with record marke
Slide 20: Private & Business Clients
Private & Business Clients Income before income taxes Key features In EUR m In EUR m 3Q14 vs. 3Q14 vs. 3Q14 3Q13 2Q14 3Q13 2Q14 Revenues 2,392 2,324 2,367 3% 1% 520 483 507 Prov. for credit (150) (171) (145) (13)% 3% losses 403 356 Noninterest exp. (1,886) (1,805) (1,819) 4% 4% 347 IBIT 356 347 403
Slide 21: Private & Business Clients: Profit by business unit
Private & Business Clients: Profit by business unit Income before income taxes, in EUR m (1) Cost-to-Achieve Private & Commercial Banking Postbank Advisory Banking International 48 32 11 63 19 9 59 1 5 6 51 17 18 11 41 70 25 53 155 204 204 86 188 204 70 177 145 135 161 155 146 164 181 118 126 117 12
Slide 22: Global Transaction Banking
Global Transaction Banking Income before income taxes Key features In EUR m In EUR m 3Q14 vs. 3Q14 vs. Impairment of goodwill and other intangible assets 3Q14 3Q13 2Q14 3Q13 2Q14 Revenues 1,039 1,023 1,035 2% 0% 380 367 Prov. for credit 338 (43) (58) (47) (25)% (8)% 318 324 losses Noninterest exp. (
Slide 23: Deutsche Asset and Wealth Management
Deutsche Asset and Wealth Management Income before income taxes Key features In EUR m In EUR m 3Q14 vs. 3Q14 vs. Impairment of goodwill and other intangible assets 3Q14 3Q13 2Q14 3Q13 2Q14 Revenues 1,267 1,265 1,134 0% 12% 283 288 Prov. for credit (3) (1) (1) 6 (12)% n.m. losses 219 214 204 Noninter
Slide 24: Non-Core Operations Unit
Non-Core Operations Unit Income before income taxes Key features In EUR m In EUR m 3Q14 vs. 3Q14 vs. 3Q14 3Q13 2Q14 3Q13 2Q14 Revenues 20 402 (44) (95)% n.m. Prov. for credit (258) losses (42) (239) (19) (82)% 120% (532) (580) Noninterest exp. (1,026) (1,361) (517) (25)% 98% (672) IBIT (1,049) (1,19
Slide 25: NCOU: De-risking since June 2012
NCOU: De-risking since June 2012 De-risking milestones Size of Non-Core Operations Unit — Since June 2012: Capital generation of EUR 5.2 bn, IFRS assets, in EUR bn 119 bps CET1 ratio benefit(1); substantial reduction of ~(68)% assets achieved ~140 64 48 45 3Q2014 Update — RWA release from capital ac
Slide 26: Consolidation & Adjustments
Consolidation & Adjustments Income before income taxes Key features In EUR m In EUR m 3Q14 vs. 3Q14 vs. 3Q14 3Q13 2Q14 3Q13 2Q14 IBIT (43) (153) (223) (72)% (81)% (43) (153) thereof (255)(205) (223) (1) (336) V&T differences 4 (59) (13) n.m. n.m. FVA 36 0 (26) n.a. n.m. Spreads for capital (82) (85)
Slide 27: Appendix
Deutsche Bank Appendix
Slide 28: Appendix: Table of Contents
Appendix: Table of Contents IBIT detail 29 AQR / Stress Test 34 NCOU Details 36 Total assets (adjusted) 38 CRD4 – Balance sheet and risk weighted assets 39 Loan book 40 Impaired loans 42 Value-at-Risk 43 Funding 44 Number of shares 46 Invested assets 47 Group headcount 50 Deutsche Bank 3Q2014 result
Slide 29: 3Q2014: IBIT detail
3Q2014: IBIT detail 3Q2014 In EUR m IBIT reported CtA Litigation CVA / DVA / FVA Other(1) IBIT adjusted CB&S 374 (69) (304) (173) (18) 938 PBC 356 (98) (0) 0 (3) 458 GTB 338 (23) 3 0 (4) 362 AWM 288 (65) (1) 0 (3) 359 C&A (43) 9 (1) 36 (12) (75) Core Bank 1,315 (247) (303) (137) (40) 2,042 NCOU (1,0
Slide 30: 3Q2013: IBIT detail
3Q2013: IBIT detail 3Q2013 In EUR m IBIT reported CtA Litigation CVA / DVA / FVA Other(1) IBIT adjusted CB&S 361 (75) (341) (75) (8) 860 PBC 347 (83) (0) 0 3 428 GTB 380 (18) (0) 0 2 396 AWM 283 (60) 29 0 2 312 C&A (153) 2 (4) 0 (12) (139) Core Bank 1,217 (234) (316) (75) (14) 1,856 NCOU (1,199) (8)
Slide 31: 9M2014: IBIT detail
9M2014: IBIT detail 30 Sep 2014 In EUR m IBIT reported CtA Litigation CVA / DVA / FVA Other(1) IBIT adjusted CB&S 2,750 (341) (544) (280) (35) 3,950 PBC 1,279 (300) (0) 0 (9) 1,588 GTB 934 (74) (95) 0 (7) 1,109 AWM 662 (203) (24) 0 (8) 897 C&A (601) 6 (8) (84) (24) (491) Core Bank 5,024 (912) (672)
Slide 32: 9M2013: IBIT detail
9M2013: IBIT detail 30 Sep 2013 In EUR m IBIT reported CtA Litigation CVA / DVA / FVA Other(1) IBIT adjusted CB&S 3,027 (197) (850) (26) (28) 4,128 PBC 1,337 (300) (1) 0 (13) 1,651 GTB 1,021 (48) (0) 0 (3) 1,073 AWM 582 (246) 5 0 (5) 828 C&A (613) (1) (5) 0 (16) (590) Core Bank 5,354 (793) (851) (26
Slide 33: 9M2014 Core Bank adjusted IBIT
9M2014 Core Bank adjusted IBIT In EUR bn 9M2014 Group reported IBIT to EUR Core Bank adjusted IBIT: 4.2 bn 0.4 7.1 7.1 1.0 0.7 2.2 5.0 2.9 (1) 9M2014 NCOU Core Bank Litigation Investing in our CVA / DVA / 9M2014 9M2013 Group reported reported IBIT platform(2) FVA(3) Core Bank Core Bank IBIT adjusted
Slide 34: AQR/Stress Test: CET 1 ratio impact from baseline scenario
AQR/Stress Test: CET 1 ratio impact from baseline scenario As of 31 December 2016, based on transitional rules Including equity raise in June 2014 Equity raise impact 14.57% 14.56% 13.33% 12.69% 12.55% 2.01% (70)bps (7)bps (47)bps (72)bps 10.42% 2.27% 12.55% Threshold Threshold 8.0% 8.0% 10.42% Repo
Slide 35: AQR/Stress Test: CET 1 ratio impact from adverse scenario
AQR/Stress Test: CET 1 ratio impact from adverse scenario As of 31 December 2016, based on transitional rules Including equity raise in June 2014 14.57% Equity raise impact 13.33% (70)bps (47)bps (7)bps 10.39% 8.78% 1.61% 8.74% (455)bps 1.82% 6.92% 8.78% Threshold Threshold 5.5% 5.5% 6.92% Reported
Slide 36: NCOU IBIT components
NCOU IBIT components IBIT in EUR m, Assets and RWA data as of 30 Sept 2014 FY2013 1Q2014 2Q2014 3Q2014 Quarterly performance / Outlook — Mainly related to Wholesale assets. Current Financial performance stable driven by Credit / interest rates / Portfolio (986) (186) (188) (207) commodity / CRE expo
Slide 37: NCOU Portfolio Overview
NCOU Portfolio Overview Total IFRS assets(1) Total IFRS assets(1) In EUR bn, as of 30 June 2014 In EUR bn, as of 30 September 2014 SCG SCG IAS 39 IAS 39 AWM reclassified assets reclassified assets 4.4 AWM 6.5 7.9 7.5 1.0 CI 1.1 Other loans 2.6 Other loans 7.1 2.3 CI 7.3 4.8 Monolines 5.0 Monolines 2
Slide 38: Total assets (adjusted)
Total assets (adjusted) In EUR bn Positive market values 1,084 from derivatives 1,058 43 post netting 46 Financial assets Trading securities 188 211 Trading assets 175 196 Trading assets at FV through P&L Other trading assets 23 21 Reverse repos / securities borrowed 122 102 Loans des. at FV 15 15 2
Slide 39: CRD4 – Balance sheet and risk weighted assets
CRD4 – Balance sheet and risk weighted assets XX RWA density incl. operational risk RWA(1) vs. balance sheet (assets adj.) XX RWA density excl. operational risk In EUR bn, as of 30 Sep 2014 ~38% 338 338 ~32% 1,058 Avg. RWA density Market Risk RWA 72 64 Non-derivative 78 ~40% 196 64 trading assets ~4
Slide 40: Loan book
Loan book In EUR bn 400 393 393 401 387 382 386 NCOU 43 34 21 19 32 23 22 37 30 31 32 33 34 DeAWM 31 213 214 PBC 211 211 214 213 213 77 77 GTB 75 77 72 73 76 CB&S 41 40 39 40 42 48 53 31-Mar 30-Jun 30-Sep 31-Dec 31-Mar 30-Jun 30-Sep 2013 2014 Germany excl. Financial Institutions and Public Sector: 1
Slide 41: Composition of loan book and provisions by category
Composition of loan book and provisions by category In EUR m, as of 30 Sep 2014 Composition of loan book and provisions by category Sep 30, 2014 3Q2014 Non-Core Provision for In EUR m Core Bank Operations Unit Total credit losses Further details PBC Mortgages 149,103 6,710 155,813 low loan to value
Slide 42: Impaired loans
Impaired loans(1) Period-end, In EUR bn Core Bank Non-Core Operations Unit (3) Impaired loan ratio Deutsche Bank Group(3) (3) Impaired loan ratio Core Bank(3) 12.0 3.10% 10.1 10.1 10.3 10.0 9.7 9.5 10.0 2.60% 9.3 3.7 3.4 3.3 3.3 2.9 8.0 2.10% 3.2 3.5 6.0 1.60% 4.0 1.10% 6.4 6.2 6.7 6.9 6.8 6.7 6.1 2
Slide 43: Value-at-Risk
Value-at-Risk DB Group, 99%, 1 day, in EUR m Average VaR Stressed VaR(1) EUR 1.9 bn Sales & Trading revenues EUR 2.2 bn 180 160 140 120 100 80 60 40 20 48 53 54 56 50 95 97 108 105 108 3Q2013 4Q2013 1Q2014 2Q2014 3Q2014 (1) Stressed Value-at-Risk is calculated on the same portfolio as VaR but uses a
Slide 44: Funding activities update
Funding activities update Funding cost and volume development Observations Issuance, in EUR bn — Funding plan of EUR 30 – 35 bn DB issuance spread, 4 week moving average, in bps completed by mid September 200 — As per 30 September total issuance at 180 EUR 36.2 bn at average spread of 16 47(1) bps,
Slide 45: Funding Profile
Funding Profile Funding well diversified Highlights 3Q2014 As of 30 September 2014 — Total funding liabilities decreased by EUR 27 bn to Financing Vehicles Secured Funding 2% EUR 957 bn (vs. EUR 984 bn as of Dec 2013) and Shorts 11% 72% from most stable — 72% of total funding from most stable source
Slide 46: Number of shares
Number of shares In million Average used for EPS calculation End of period numbers 31 Dec 31 Dec 30 Sep FY2012 FY2013 3Q2014 2012 2013 2014 (1) Common shares issued 974 1,037 1,379 974 1,069 1,379 Total shares in treasury (1) (9) (2) (4) 0 0 (1) Common shares outstanding 965 1,034 1,376 974 1,069 1,
Slide 47: Client view invested assets – Deutsche AWM
Client view invested assets – Deutsche AWM In EUR bn 30 Sep 2014 31 Mar 2013 30 Jun 2013 30 Sep 2013 31 Dec 2013 31 Mar 2014 30 Jun 2014 30 Sep 2014 vs 30 Jun 2014 Retail 240 234 236 239 244 255 267 12 Institutional 446 433 416 404 403 406 432 27 Private Client 265 264 271 279 287 294 307 12 DeAWM 9
Slide 48: Regional invested assets – Deutsche AWM
Regional invested assets – Deutsche AWM In EUR bn 30 Sep 2014 31 Mar 2013 30 Jun 2013 30 Sep 2013 31 Dec 2013 31 Mar 2014 30 Jun 2014 30 Sep 2014 vs 30 Jun 2014 Americas 300 290 273 270 265 262 282 20 Asia-Pacific 67 64 65 67 70 75 85 10 EMEA (ex Germany) 237 231 235 245 250 262 273 10 Germany 346 3
Slide 49: Invested assets – PBC
Invested assets – PBC In EUR bn 30 Sep 2014 30 Sep 2013 31 Dec 2013 31 Mar 2014 30 Jun 2014 30 Sep 2014 vs. 30 Jun 2014 Private & Business Clients 285 282 284 286 289 3 Investment & Insurance Products 143 146 149 153 154 1 Deposits excl. Sight Deposits 142 136 135 133 135 2 0 Memo: Sight Deposits 82
Slide 50: Group headcount
Group headcount Full-time equivalents, at period end 30 Sep 2014 31 Dec 2012 31 Dec 2013 30 Jun 2014 30 Sep 2014 vs. 31 Dec 2013 CB&S 8,500 8,357 8,116 8,387 29 PBC 37,899 37,890 38,217 38,396 506 GTB 4,314 4,097 4,043 4,139 42 AWM 6,473 6,137 5,938 5,947 (189) NCOU 1,626 1,542 286 267 (1,275) Infra
Slide 51: 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