Deutsche Bank Ag · XETR:DBK
Deutsche Bank — Q3 2010 Earnings Presentation
57 slides from Deutsche Bank's earnings presentation, Oct 27, 2010
Slide 1: 3Q2010 Results
Deutsche Bank 3Q2010 Results Stefan Krause Chief Financial Officer Analyst Call, 27 October 2010 Deutsche Bank 3Q2010 results financial transparency. Investor Relations Stefan Krause, CFO
Slide 2: Agenda
Agenda 1 Group results 2 Segment results 3 Key current issues Deutsche Bank 3Q2010 results financial transparency. 2 Investor Relations Stefan Krause, CFO
Slide 3: Highlights
Highlights 3Q2010 ex 3Q2010 Postbank effect(3) 3Q2009 Income before income taxes (in EUR bn) (1.0) 1.3 1.3 Profita- Net income (in EUR bn) (1.2) 1.1 1.4 bility Pre-tax RoE (target definition)(1) 13% 13% 14% Diluted EPS (in EUR) (1.75) 1.70 1.92 30 Sep 2010 ex 30 Sep 2010 Postbank effect(3) 30 Jun 20
Slide 4: Net revenues
Net revenues In EUR bn Postbank effect Charges related to Ocala Funding LLC(1) Specific property impairment Mark-downs 0.4 0.2 0.5 0.7 2.3 0.4 0.3 0.5 0.4 1.0 0.3 0.1 2.3 0.2 (2) 9.0 0.1 22.4 21.1 7.2 7.9 7.2 7.2 (3) 5.5 5.0 (4) 1Q 2Q 3Q 4Q 1Q 2Q 3Q Jan-Sep Jan-Sep 2009 2010 2009 2010 Note: Figures
Slide 5: Provision for credit losses
Provision for credit losses In EUR m Related to IAS 39 reclassified assets 2,070 1,000 526 544 560 868 362 262 243 1,129 492 584 308 329 249 233 159 193 1Q 2Q 3Q 4Q 1Q 2Q 3Q Jan-Sep Jan-Sep 2009 2010 2009 2010 Thereof: CIB 357 0 779 0 323 0 357 0 90 0 77 0 179 0 1,459 0 346 0 169 221 214 201 174 175
Slide 6: Noninterest expenses
Noninterest expenses In EUR bn In EUR m Compensation and benefits Compensation and benefits General and administrative expenses PWM: Sal. Oppenheim / BHF 88 GTB: ABN AMRO 24 Other non-comp expenses(1) General and admin. expenses PWM: Sal. Oppenheim / BHF 155 17.0 GTB: ABN AMRO 81 15.9 5.6 5.
Slide 7: Income before income taxes
Income before income taxes In EUR bn 5.6 (2) 4.4 2.3 2.8 1.8 1.5 1.3 (2) 1.3 1.3 3.3 0.8 (1.0) 1Q 2Q 3Q 4Q 1Q 2Q 3Q Jan-Sep Jan-Sep 2009 2010 2009 2010 Pre-tax return on equity(1), in % (2) (2) 22 15 15 9 30 15 (10) / 13 17 11 / 19 Note: Figures may not add up due to rounding differences (1) Annuali
Slide 8: Net income
Net income In EUR bn (1) 3.6 4.1 1.8 1.4 1.3 (1) 2.3 1.2 1.1 1.2 1.1 1.7 (1.2) 1Q 2Q 3Q 4Q 1Q 2Q 3Q Jan-Sep Jan-Sep 2009 2010 2009 2010 Effective tax rate, in % (1) (1) 35 18 (6) (73) 36 23 (16) / 13 18 47 / 28 Note: Figures may not add up due to rounding differences (1) Excluding Postbank effect of
Slide 9: Capital ratios and risk-weighted assets
Capital ratios and risk-weighted assets 12.6 11.7 11.3 11.5 11.5 11.0 11.2 10.2 Target: ≥10% 8.7 7.8 8.1 7.6 7.5 7.5 7.6 7.1 316 295 288 292 303 277 273 1Q 2Q 3Q 4Q 1Q 2Q 3Q 2009 2010 Tier 1 ratio, in % Core Tier 1 ratio, in % RWA, in EUR bn Note: Tier 1 ratio = Tier 1 capital / RWA; core Tier 1 rat
Slide 10: Tier 1 capital and RWA development
Tier 1 capital and RWA development In EUR bn Tier 1 capital RWA 1.1 303.5 34.3 0.4 (10.6) (2.3) 277.1 31.8 (11.6) (1.5) (3.6) (0.6) (0.2) 30 Jun 3Q10 Postbank Capital FX Other(2) 30 Sep 30 Jun FX Credit Market Opera- 30 Sep 2010 Net effect deduction effects 2010 2010 effects risk(3) risk tional risk
Slide 11: Funding and liquidity
Funding and liquidity In EUR bn Funding sources overview Liquidity position 30 Jun 2010 (Total: EUR 911 bn) 230 — Overall balance sheet impacted by 30 Sep 2010 (Total: EUR 919 bn) 207 strong FX movements 178 171 — Reduction in stable funding 167 163 sources consistent with lower term funding require
Slide 12: Agenda
Agenda 1 Group results 2 Segment results 3 Key current issues Deutsche Bank 3Q2010 results financial transparency. 12 Investor Relations Stefan Krause, CFO
Slide 13: Segment overview
Segment overview Income before income taxes, in EUR m 3Q2010 3Q2009 3Q2010 acquisition impact / Postbank effect 1,101 CB&S 981 214 13(1) GTB 201 78 52(2) AWM 134 245 PBC 149 (2,337) 2,338(3) CI 117 (349) C&A (267) (1) ABN AMRO Netherlands impact (2) PWM: Sal. Oppenheim / BHF impact (3) Postbank effe
Slide 14: CB&S: P&L at a glance
CB&S: P&L at a glance In EUR m 3Q2010 vs. 3Q2010 vs. 3Q2010 3Q2009 2Q2010 3Q2009 2Q2010 Net revenues 4,169 4,440 3,633 (6)% 15% Provision for credit losses (135) (318) (46) (58)% 195% Noninterest expenses (2,934) (3,126) (2,801) (6)% 5% Income before income taxes 1,101 981 779 12% 41% CIR 70% 70% 77
Slide 15: Sales & Trading revenues
Sales & Trading revenues In EUR bn Charges related to Ocala Funding LLC Mark-downs 0.4 Net revenues 0.8 0.4 0.4 1.0 0.3 0.1 0.4 0.3 0.1 10.3 10.4 0.1 0.0 4.7 4.1 0.2 3.3 3.0 (1) 2.9 2.8 1.9 1Q 2Q 3Q 4Q 1Q 2Q 3Q Jan-Sep Jan-Sep 2009 2010 2009 2010 Note: Prior periods have been adjusted due to a trans
Slide 16: Sales & Trading debt and other products
Sales & Trading debt and other products Net revenues Key features In EUR bn Overall — Seasonal slowdown exacerbated by aftermath of sovereign risk Charges related to Ocala Funding LLC concerns Mark-downs — Reduction of volumes in July / August partially offset by rebound in September, but continued
Slide 17: Sales & Trading equity
Sales & Trading equity Net revenues Key features In EUR m Overall — Significantly reduced client flows due to lower investor risk appetite and lack of primary activity — Maintained market share across all products and regions Cash Equities 927 944 — Strong performance despite significantly lower mar
Slide 18: Origination & Advisory
Origination & Advisory Net revenues Key features In EUR m General — #5 position globally YTD up from #8 y-o-y Advisory — #1 position in EMEA, and #5 in the Americas vs. #7 a year Origination ago — DB gained most market share and rank of any top 10 bank 725 since end 2008 Advisory 72 635 — #4 globall
Slide 19: Global Transaction Banking: P&L at a glance
Global Transaction Banking: P&L at a glance In EUR m 3Q2010 vs. 3Q2010 vs. 3Q2010 3Q2009 2Q2010 3Q2009 2Q2010 Net revenues 852 659 1,070 29% (20)% Provision for credit losses (44) (6) (32) n.m. 40% Noninterest expenses (594) (453) (560) 31% 6% Income before income taxes 214 201 478(2) 6% (55)% ABN A
Slide 20: Global Transaction Banking
Global Transaction Banking Income before income taxes Key features In EUR m Overall — Continued shift to fee income y-o-y counterbalancing Negative goodwill(1) impact of the low interest rate environment 478 — Improved overall performance y-o-y but seasonal decline q-o-q Trade Finance — Another stro
Slide 21: Asset and Wealth Management: P&L at a glance
Asset and Wealth Management: P&L at a glance In EUR m 3Q2010 vs. 3Q2010 vs. 3Q2010 3Q2009 2Q2010 3Q2009 2Q2010 Net revenues 1,014 771 969 32% 5% Provision for credit losses (19) (5) (4) n.m. n.m. Noninterest expenses (921) (632) (921) 46% (0)% Income before income taxes 78 134 45 (41)% 76% PWM: Sal.
Slide 22: Asset Management
Asset Management Income before income taxes Key features In EUR m — Continued strong earnings trend Reversal of impairment DWS Scudder — Higher performance fees vs. 2Q2010 in DWS Europe driven by money market and 349 equities businesses 96 84 — Net new money inflows of EUR 2 bn 56 mainly in Cash and
Slide 23: Private Wealth Management
Private Wealth Management Income before income taxes Key features In EUR m xx IBIT ex Sal. Oppenheim / BHF — PWM revenues, excluding Sal. Oppen- heim / BHF, increased y-o-y, though 27 77 47 3Q2010 revenues were down due to seasonal effects 38 — Asia growth strong with revenues up y-o-y 26 — Cost rem
Slide 24: Private & Business Clients: P&L at a glance
Private & Business Clients: P&L at a glance In EUR m 3Q2010 vs. 3Q2010 vs. 3Q2010 3Q2009 2Q2010 3Q2009 2Q2010 Net revenues 1,455 1,389 1,444 5% 1% Provision for credit losses (165) (209) (171) (21)% (3)% Noninterest expenses (1,045) (1,031) (1,040) 1% 1% Income before income taxes 245 149 233 64% 5%
Slide 25: Private & Business Clients
Private & Business Clients Income before income taxes Key features In EUR m Overall — Best quarter since Lehman bankruptcy, driven by revenue Severance(1) growth, continuously reduced provision for credit losses and stable costs Revenues 11 — Deposits: Another record quarterly result, volumes 7 stab
Slide 26: Agenda
Agenda 1 Group results 2 Segment results 3 Key current issues Deutsche Bank 3Q2010 results financial transparency. 26 Investor Relations Stefan Krause, CFO
Slide 27: Timeline Public Tender Offer (PTO)
Timeline Public Tender Offer (PTO) Expected schedule Public tender offer (PTO) Review of PTO by BaFin Offer period Add. offer period (4 weeks) (2 weeks) Analyst meeting / Announce- press Publication and start ment conference of offer document 12 Sep 13 Sep 20 Sep 21 Sep 22 Sep 29 Sep 1 Oct 5 Oct 6 O
Slide 28: Basel 2.5 / Basel 3 simulation
Basel 2.5 / Basel 3 simulation(1) Impact simulation Targeted management action In EUR bn ‗RWA — Further reduction of legacy positions RWA equivalent‘ (securitizations, correlation trading) Basel 2.5(2) — Reduce trading book exposures to certain 85 85 (trading book rules) Emerging Markets sovereigns
Slide 29: Basel 2.5 / Basel 3 simulation
Basel 2.5 / Basel 3 simulation(1) In EUR bn xx Core Tier 1 ratio Without Phase-in 34 Pro forma RWA Pro forma Core Tier 1 capital and ratios 7.6% 8.5% 7.0% 8.1% 5 45 6 188 529 11 8 (8) Capital formation allows strong 21 — Capitalization 64 — Dividend 277 — Growth 3Q2010 Postbank Basel 2.5 / 1 Jan 3Q2
Slide 30: Update complexity reduction initiatives
Update complexity reduction initiatives In EUR bn, 2011 exit rate, as of 30 Sep 2010 Lever Impact Generic description Examples of initiatives — Implement efficiency model for — Legal Entity Optimization Operating infrastructure functions — Optimize GBS / GT Operating Model(1) Model & — Optimize glob
Slide 31: Targeted net savings of EUR 1 bn reached in FY2012
Targeted net savings of EUR 1 bn reached in FY2012 In EUR bn Targeted impact of Complexity Reduction Program over time Required cost-to-achieve 1.0 In-year cost savings Net savings 0.5 1.0 0.8 0.2(3) n.m. 0.5(2) 0.8 0.3 0.3 0.3 0.3 0.0 2010(1) 2011 2012 Note: Figures may not add up due to rounding d
Slide 32: Targeted split of cost-to-achieve and savings
Targeted split of cost-to-achieve and savings Complexity reduction program, in EUR bn Cost-to-achieve by division Savings by division CI(1) PWM AM 1.0 PBC GTB CB&S 0.1 PWM 0.8 0.1 AM 0.1 0.1 0.2 PBC 0.2 0.2 GTB 0.1 0.3 0.3 0.3 0.4 CB&S 0.3 0.0 2010 2011 2012 2010 2011 2012 Note: Figures may not add
Slide 33: Performance vs. targets
Performance vs. targets Income before income taxes, in EUR bn Phase 4 9M2010 potential reported 2011 Acquisition impact Corporate Banking & 4.5 6.3 Securities Global Transaction 9M2010 excluding ABN AMRO Netherlands 0.8 1.3 Banking acquisition: EUR 0.6 bn Asset and Wealth 9M2010 excluding Sal. Oppen
Slide 34: Additional information
Deutsche Bank Additional information
Slide 35: Specific items
Specific items In EUR m Noninterest expenses Business Revenues Total Comp & benefits Gen. & Admin Other non-comp Postbank related charge CI (2,338) - - - (2,338) FV gains / (losses) on own debt CB&S / C&A (113) (1) - - - (113) Ocala Funding LLC CB&S ~(90) - - - ~ (90) Total specific charges ~ (2,541
Slide 36: Postbank related charge
Postbank related charge Stake (incl. MEB(1)), in EUR m, as of 30 September 2010 Stake revaluation effect ― According to the former IFRS 3 rules + Book value initial stake 958 the effect would have been part of + Book value MEB 2,825 acquisition cost thereby impacting + Book value shares acquired in
Slide 37: Basel 3: Phase-in of Core Tier 1 capital requirements
Basel 3: Phase-in of Core Tier 1 capital requirements 12% Market demand on top of Regulatory Requirement/ Potential Systemic Banks Surcharge ? 10% Countercyclical Buffer 0.0 – 8% 0.0 – 2.5% Minimum 7% 0.0 – 2.5% Capital Conservation Buffer 2.5% 6% 1.88% 2.50% 0.63% 1.25% 4% Min Core Tier 1 Capital 2
Slide 38: Loan book
Loan book In EUR bn xx IAS 39 impact on CIB loan book 8% 292 283 276 268 270 CI 263 261 10 10 14 13 13 13 11 35 32 38 37 35 34 34 154 (2) 147 (2) CIB 154 144 137 133 136 (1) (1) 108 110 113 115 123 128 (1) 127 PCAM 31 Mar 30 Jun 30 Sep 31 Dec 31 Mar 30 Jun 30 Sep 2009 2010 Germany excl. Financial In
Slide 39: Composition of loan book and provisions by category
Composition of loan book and provisions by category In EUR bn, as of 30 Sep 2010 xx 3Q2010 provision for credit losses(1), in EUR m IAS 39 reclassified assets 362 126 119 117 – Low loan 283 to value 32 – Substan- – Highly tially diversified hedged – Short term – Mostly – Substantially – Credit colla
Slide 40: Pro-forma impact of IAS 39 reclassifications
Pro-forma impact of IAS 39 reclassifications In EUR m Total Total FY2008 - 2Q2009 - 1Q2010 - FY08- 3Q2010 FY2008 - 1Q2009 4Q2009 2Q2010 FY09 3Q2010 Incremental reported income(1) (162) (1,188) (1,350) (211) (164) (1,725) Fair value P&L impact of reclassified 4,653 (231) 4,422 (278) (93) 4,051 assets
Slide 41: PBC loan book: Delinquency ratio
PBC loan book: Delinquency ratio At period end, 90≤x≤269 days past due(1)(2) Small corporates Mortgage Consumer Mortgage loans represent ~72% of PBC loan book 3.39% 3.31% 2.76% 2.71% 2.65% 2.49% 2.58% 2.52% 2.34% 2.40% 2.31% 2.15% 2.21% 1.90% 1.95% 1.99% 2.01% 1.84% 1.87% 1.78% 1.83% 1.83% 1.61% 1.6
Slide 42: Impaired loans
Impaired loans In EUR bn xx IAS 39 impact – IFRS impaired loans 7.2 7.4 7.4 7.4 6.7 6.8 4.5 1.1 2.6 2.6 2.8 2.9 2.8 2.7 50% 46% 47% 46% 47% 48% 49% 31 Mar 30 Jun 30 Sep 31 Dec 31 Mar 30 Jun 30 Sep 2009 2010 IFRS impaired loans(1) IFRS impaired loans coverage ratio(2) (1) IFRS impaired loans include
Slide 43: Monoline update
Monoline update Reduction since 1Q2009 peak Exposure adequately reserved In EUR bn(1) In EUR bn, as of 30 Sep 2010 Fair value after CVA CVA Fair value after CVA CVA 9.1 (51)% 7.6 5.9 5.6 Net exposure to non-investment grade: 5.2 5.1 6.8 4.5 EUR 1.0 bn 5.5 4.7 4.0 2.7 3.7 4.0 1.0 3.2 0.8 2.3 0.6 0.4
Slide 44: Value of Level 3 assets
Value of Level 3 assets(1) Asset classes 3Q2010 development In EUR bn — Decrease of EUR 11 bn mainly due to: — Transfer of certain derivative assets from level 3 into level 2 due to 56 58 3 improved observability of underlying 3 4 47 market data used to value these 3 6 6 assets 43 5 — Change in fair
Slide 45: Group headcount
Group headcount Full-time equivalents, at period end 30 Sep 2010 vs. 31 Mar 30 Jun 30 Sep 31 Dec 31 Mar 30 Jun 30 Sep 30 Jun 2010 2009 2009 2009 2009 2010 2010 2010 Net of Total de-/consoli- change dation CIB 14,364 14,124 14,309 14,274 14,463 15,692 16,194 502 502 PCAM 32,614 31,868 31,617 30,634 3
Slide 46: Number of shares for EPS calculation
Number of shares for EPS calculation In million Average At end of period 3Q 2Q 3Q 30 Sep 30 Jun 30 Sep 2009 2010 2010 2009 2010 2010 Common shares issued(1) 683 683 683 670 683 683 Total shares in treasury (4) (2) (3) (1) (2) (4) Common shares outstanding 679 681 679 669 681 679 Vested share awards(
Slide 47: Invested assets report
Invested assets(1) report In EUR bn Net new 31 Mar 30 Jun 30 Sep 31 Dec 31 Mar 30 Jun 30 Sep money 2009 2009 2009 2009 2010 2010 2010 3Q2010 Asset and Wealth Management 627 632 657 686 853 870 846 (0) Asset Management 462 460 476 496 537 551 532 2 Institutional 169 160 165 173 180 177 169 5 Retail 1
Slide 48: Regional invested assets – AM and PWM
Regional invested assets(1) – AM and PWM In EUR bn 30 Sep 10 31 Mar 30 Jun 30 Sep 31 Dec 31 Mar 30 Jun 30 Sep vs. 2009 2009 2009 2009 2010 2010 2010 30 Sep 09 Asset Management 462 460 476 496 537 551 532 12 % Germany 194 200 211 214 239 239 239 13 % UK 17 18 17 21 21 22 22 24 % Rest of Europe 33 30
Slide 49: Regional net new money – AM and PWM
Regional net new money – AM and PWM In EUR bn 1Q2009 2Q2009 3Q2009 4Q2009 FY2009 1Q2010 2Q2010 3Q2010 Asset Management (3) (3) 5 9 9 4 (12) 2 Germany (3) (2) 2 1 (2) 4 0 (1) UK (0) 1 0 4 5 (0) 1 1 Rest of Europe (0) (0) (1) (0) (1) 1 (1) (0) Americas 1 (2) 4 5 7 0 (11) 3 Asia / Pacific (0) 0 (0) 0 (
Slide 50: Corporate Investments
Corporate Investments Income before income taxes Key features In EUR m — Net revenues of negative EUR 2.2 bn include EUR 2.3 bn charge relating to the stake in Deutsche Postbank AG and the 377 related mandatory exchangeable bond 117 65 47 (64) (103) (2,337) 1Q 2Q 3Q 4Q 1Q 2Q 3Q 2009 2010 Deutsche Ba
Slide 51: Asset Management: P&L at a glance
Asset Management: P&L at a glance In EUR m 3Q2010 vs. 3Q2010 vs. 3Q2010 3Q2009 2Q2010 3Q2009 2Q2010 Net revenues 438 424 417 3% 5% Provision for credit losses 0 (0) (0) n.m. n.m. Noninterest expenses (354) (329) (361) 8% (2)% Income before income taxes 84 96 56 (12)% 50% CIR 81% 78% 87% Deutsche Ban
Slide 52: Private Wealth Management: P&L at a glance
Private Wealth Management: P&L at a glance In EUR m 3Q2010 3Q2010 vs. vs. 3Q2010 3Q2009 2Q2010 3Q2009 2Q2010 Net revenues 576 347 553 66% 4% Provision for credit losses (19) (5) (4) 285% n.m. Noninterest expenses (566) (303) (560) 87% 1% Income before income taxes (6) 38 (12) n.m. (50)% Sal. Oppenhe
Slide 53: VaR of CIB trading units
VaR of CIB trading units 99%, 1 day, in EUR m VaR of CIB trading units Constant VaR of CIB trading units(1) EUR 3.0 bn Sales & Trading revenues EUR 2.9 bn 180 160 140 120 100 80 60 40 20 114 108 116 102 87 35 36 47 49 46 3Q2009 4Q2009 1Q2010 2Q2010 3Q2010 (1) Constant VaR is an approximation of how
Slide 54: Total assets (adjusted)
Total assets (adjusted) In EUR bn 1,043 1,044 Positive market values from derivatives 78 Derivatives post-netting 71 Derivatives post-netting Trading securities 242 244 Financial assets Trading 273 275 Trading assets at FV through P&L assets Other trading assets 31 30 Reverse repos / securities borr
Slide 55: Balance sheet leverage ratio (target definition)
Balance sheet leverage ratio (target definition) In EUR bn 2009 2010 31 Mar 30 Jun 30 Sep 31 Dec 31 Mar 30 Jun 30 Sep Total assets (IFRS) 2,103 1,733 1,660 1,501 1,670 1,926 1,958 Adjustment for additional derivatives netting (1,019) (681) (617) (533) (559) (735) (760) Adjustment for additional pend
Slide 56: Reconciliation of the Postbank effect
Reconciliation of the Postbank effect 3Q2010 Excl. As reported Postbank effect Postbank effect Net revenues (in EUR m) 4,985 (2,338) 7,324 Income before income taxes (in EUR m) (1,048) (2,338) 1,290 Net income (in EUR m) (1,218) (2,338) 1,119 Tier-1 capital (in EUR bn) 31.8 (1.8) 33.6 RWA (in EUR bn
Slide 57: 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