Deutsche Bank Ag · XETR:DBK
Deutsche Bank — Debt Investor Presentation (February 2021)
44 slides from Deutsche Bank's debt investor presentation, Feb 5, 2021
Slide 1: Q4/FY 2020 Fixed Income Investor Conference Call
Deutsche Bank Q4/FY 2020 Fixed Income Investor Conference Call 5 February 2021
Slide 2: Agenda
Agenda 1 Q4/FY 2020 results and strategic progress 2 Balance sheet, Liquidity, Capital and Issuance 3 Appendix Deutsche Bank Q4/FY 2020 Fixed Income Investor Call 2 Investor Relations 5 February 2021
Slide 3: Profitable and resilient through transformation
Profitable and resilient through transformation Return to post-tax profit despite challenges faced in 2020 Core Bank profit growth more than offset transformation effects and elevated provisions for credit losses Execution discipline demonstrated through 6 quarters of successful transformation Prove
Slide 4: Q4 and FY 2020 Group financial highlights
Q4 and FY 2020 Group financial highlights In € m, unless stated otherwise Change in % Change in % Q4 2020 vs. Q4 2019 FY 2020 vs. FY 2019 Revenues 5,453 2 24,028 4 Revenues Revenues ex. specific items(1) 5,520 4 23,998 4 Noninterest expenses 5,027 (21) 21,216 (15) Costs Adjusted costs ex. transforma
Slide 5: Growing revenues under refocused strategy
Growing revenues under refocused strategy Core Bank revenues(1) excluding specific items(2), in € bn Group 23.2 24.0 24.2 ~24.4 ~0.4% CAGR 6% 22.8 5.2 Corporate 5.2 Bank Investment 9.3 7.0 Bank Private 8.1 8.1 Bank Asset Management 2.3 2.2 2019 2020 2022 Group revenue plan as of 9 December 2020 (1)
Slide 6: Cost discipline continues for the 12th consecutive quarter
Cost discipline continues for the 12th consecutive quarter Adjusted cost ex. transformation charges, in € bn Adjusted cost ex transformation charges(1) Bank levies Prime Finance(2) Prime Finance(2) 0.1 0.7 (9)% 0.6 0.5 0.4 0.1 21.5 5.7 5.6 5.5 5.4 5.3 5.3 5.2 5.0 4.9 4.7 4.7 4.6 19.5 0.1 0.1 0.1 0.1
Slide 7: Provision for credit losses
Provision for credit losses In € bn Corporate Bank Capital Release Unit 1.8 Investment Bank Other 0.4 — FY provisions at 41bps, impacted by Private Bank COVID-19, in line with our April 0.7 guidance of 35-45 bps of loans 0.7 0.5 — Q4 provisions slightly below the 0.3 previous quarter and remain elev
Slide 8: Strategic transformation drives growth and higher profitability
Strategic transformation drives growth and higher profitability In € bn, unless stated otherwise Operating leverage(1) Adjusted profit (loss) before tax (PBT)(2) Group Group Core Bank reported (2.6) 1.0 PBT 12% 11% 4.2 Core Bank 52% 2.7 3% Capital (2.0) Release (2.4) Unit (1)% 2019 2020 2019 2020 (1
Slide 9: Maintained strong balance sheet
Maintained strong balance sheet 2019 2020 Common Equity Tier 1 ~315bps above regulatory 13.6% 13.6% capital ratio requirements(1) Improved quality and cost of Liquidity reserves € 222bn € 243bn funding base € 66bn above regulatory Liquidity Coverage Ratio 141% 145% requirements Provision for credit
Slide 10: Agenda
Agenda 1 Q4/FY 2020 results and strategic progress 2 Balance sheet, Liquidity, Capital and Issuance 3 Appendix Deutsche Bank Q4/FY 2020 Fixed Income Investor Call 10 Investor Relations 5 February 2021
Slide 11: Key milestones in 2020 leave us well positioned for 2021
Key milestones in 2020 leave us well positioned for 2021 ~€ 85bn deposits under charging agreements generating more than € 200m incremental revenues Distance to regulatory capital requirements increases to € 10bn on a pro-forma basis Spread compression across debt stack, outperforming peers Favourab
Slide 12: Conservatively managed balance sheet
Conservatively managed balance sheet Net balance sheet(1), in € bn, as of 31 December 2020 Assets Liabilities & Equity 963 963 — Resilient balance sheet to navigate 139 Trading and current environment Liquidity related liabilities(2) reserves 243 — Liquidity Reserves account for 25% of 39 Other Liab
Slide 13: Sound liquidity profile
Sound liquidity profile Liquidity Reserves, in € bn Cash and cash equivalents(1) Highly liquid and other securities(2) 253 243 222 232 — Progress in managing down excess 205 >200 liquidity in the quarter, primarily 66% 64% driven by pro-active management of 61% 55% 67% liabilities: — Targeted reduct
Slide 14: Improving quality and cost of funding base
Improving quality and cost of funding base In € bn, unless stated otherwise Long-term debt — Growth in year-to-date liquidity driven by increase in stable and low cost 149 TLTRO funding 136 16 38 — Benefiting from favourable TLTRO-III 22 TLTRO funding rates 120 112 (9) Debt issuances — Funding rate
Slide 15: CET1 ratio
CET1 ratio In € bn, except movements (in basis points), period end, fully-loaded(1) — CET1 capital ratio increased by 31bps in the quarter 13.3% 60 13.6% — 33bps net improvement from 0 (28) regulatory changes, notably from CRR2 changes regarding the treatment of software assets (43bps) — 20bps impro
Slide 16: Distance to regulatory capital requirements
Distance to regulatory capital requirements(1) In %, as of 31 December 2020, phase-in view 308bps pro-forma incl. Jan 21 — Buffer to total capital requirement 17.8 T2 issuance increased by 17bps to 276bps over the quarter T2 2.1 276bps — 31bps increase relates to higher 15.0 AT1 2.1 CET1 ratio with
Slide 17: Leverage ratio
Leverage ratio In € bn, except movements (in basis points), period end, fully-loaded(1) 18 4.7% 4.4% 3 3 — Leverage ratio increased by 24bps in Q3 2020 FX Effect Leverage Capital Q4 2020 the quarter Exposure change — 18bps from positive CET1 change capital effects Tier 1 48.8 (0.3) - 1.9 50.4 — 3bps
Slide 18: Conservatively managing down excess regulatory buffers
Conservatively managing down excess regulatory buffers Loss absorbing capacity, in € bn, as of 31 December 2020 21 5 109 — Q4 2020 available loss absorbing Senior 105 capacity significantly above all regu- preferred 4 100 4 latory requirements — MREL is the most binding bail-in 87 Senior constraint
Slide 19: 2021 Issuance plan
2021 Issuance plan In € bn, unless stated otherwise Issuance plan Contractual maturity profile(1) Covered Bonds Senior Structured / Preferred Senior Non-Preferred AT1 / Tier 2 22 18.5 4 0.5 15-20 3.7 3-4 2 15 10-15 1 12 2 4-5 1 10 4 9 4 11.6 16 4 1 3 4-7 6-8 4 2 6 7 5 3 2.7 2-3 4 3 2020 Plan 2020 Ac
Slide 20: Summary
Summary Resilient and low-risk balance sheet with high portion of funding from stable funding sources Committed to maintaining CET1 ratio above 12.5% Progress to sustainable profitability increasingly recognized by credit markets Provision for credit losses to remain above pre-COVID levels, but belo
Slide 21: Agenda
Agenda 1 Q4/FY 2020 results and strategic progress 2 Balance sheet, Liquidity, Capital and Issuance 3 Appendix Deutsche Bank Q4/FY 2020 Fixed Income Investor Call 21 Investor Relations 5 February 2021
Slide 22: Simplified legal entity structure
Simplified legal entity structure Entities without Issuing Deutsche Bank AG entities direct issuance Germany activities Americas EMEA APAC DWS DB AG DB AG DB AG DB AG DB AG New London Singapore Hong Kong Sydney York Branch Branch Branch Branch Branch USA Great Britain Singapore Hong Kong Australia D
Slide 23: Current Ratings
Current Ratings Moody‘s Investors S&P Global Fitch Ratings DBRS Services Ratings Counterparty obligations (e.g. Deposits / Structured Notes / A3 BBB+(1) BBB+ A (high) Derivatives / Swaps / Trade Finance obligations/ LOC‘s) Senior Preferred(2) A3 BBB+ BBB+ A (low) Long- term unse- cured Non-preferred
Slide 24: AT1 and Trust Preferred Securities outstanding
AT1 and Trust Preferred Securities outstanding(1) Regulatory Original Current Nominal Next call Subsequent Issuer Type capital ISIN issuance coupon outstanding date call period treatment(1) date Postbank Funding Trust I Legacy AT1 / -(2) DE000A0DEN75 0.000% € 300m 02-Dec-04 02-Jun-21 Semi-annually P
Slide 25: Deposit charging
Deposit charging Quarterly revenue impact, € m 69 57 45 32 16 — Performing well against updated revenue target <10 — More than 90% of charging agreements currently in Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 the Corporate Bank, increasingly protecting the franchise against potential further i
Slide 26: COVID-19 impact on financials
COVID-19 impact on financials(1) COVID-19 impact Q1 2020 Q2 2020 Q3 2020 Q4 2020 FY 2020 Full year drivers — COVID-19 related defaults lower quarter on quarter but remained elevated Provision for € (260)m € (410)m € (76)m € 20m € (726)m — Improved macro-economic outlook drove credit losses partial r
Slide 27: Supporting clients through COVID-19
Supporting clients through COVID-19 Loan # Customers Amount — More than 90% to Private Bank clients — Represents 2% of Group loan portfolio Legislative & voluntary industry-driven moratoria(1,2) >100k € 9bn — >90% customer moratoria expired with ~€ 1.5bn of active loan amounts outstanding(3) Volunta
Slide 28: Provision for credit losses and stage 3 loans
Provision for credit losses and stage 3 loans Provision for credit losses, € m Stage 3 at amortised cost, € bn Private Bank Investment Bank PB (ex-POCI) CRU (ex-POCI) Corporate Bank Capital Release Unit CB (ex-POCI) Purchased or Originated Credit Impaired (POCI) 1792 IB (ex-POCI) 29 Group Stage 3 2.
Slide 29: Loan exposure by rating buckets
Loan exposure by rating buckets Preliminary 156 141 115 104 Exposure at Default 69 (EAD) (€ bn)(1) 43 38 36 Risk mitigation(2) 21 32 8 11 Adjusted exposure 33 41 37 (LGD basis) 17 11 6 5 2 5 iAAA-iAA iA iBBB iBB iB iCCC Default Probability of default 227 – 0-4 4 - 11 11 - 50 50 - 227 >1,022 N/A (bps
Slide 30: Trading book Value at Risk
Trading book Value at Risk DB Group, 99%, 1 day, in € m, unless stated otherwise Historical Simulation VaR Quarterly average 35 35 82 73 46 140 120 100 80 60 40 20 0 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Note: Deutsche Bank received regulatory approval for the Value at Risk model for Ris
Slide 31: Level 3 assets
Level 3 assets As of 31 December 2020, in € bn Assets (total: € 24bn) Equity securities Mortgage backed securities Other 1 1 0 Debt Derivative securities 5 9 Assets — Level 3 is an indicator of valuation uncertainty and not of asset quality — The slight decrease in Level 3 assets reflects: — Portfol
Slide 32: Net interest income sensitivity
Net interest income sensitivity Hypothetical +100 bps parallel shift impact, in € bn First year Second year 1.4 0.9 1.0 0.6 0.5 0.3 Retail Non-retail Group Retail Non-retail Group Maturity Maturity > 3M 0.3 0.1 0.3 > 3M 0.5 0.2 0.6 EUR EUR ≤ 3M 0.4 0.2 0.6 ≤ 3M 0.4 0.2 0.6 > 3M 0.0 0.0 0.0 > 3M 0.0
Slide 33: Litigation update
Litigation update In € bn, period end Litigation provisions(1) 1.1 1.0 1.1 1.0 ― Provisions decreased by € 0.1bn in the quarter 0.8 ― Provisions include approximately € 0.1bn related to settlements already achieved or agreed in Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 principle ― Contingent liabiliti
Slide 34: Definition of adjustments
Definition of adjustments Revenues excluding specific items are calculated by adjusting net revenues under IFRS for specific revenue items which Revenues generally fall outside the usual nature or scope of the business and are likely to distort an accurate assessment of the excluding specific divisi
Slide 35: Core Bank financial highlights
Core Bank financial highlights Q4 2020, in € bn, unless stated otherwise Core Change vs. Change vs. Capital Release Bank Q4 2019 Q3 2020 Unit Revenues 5.5 (0)% (8)% (0.1) Revenues ex specific items 5.6 2% (7)% (0.1) Noninterest expenses 4.7 (18)% (3)% 0.4 Adjusted costs ex transformation charges(1)
Slide 36: Core Bank financial highlights
Core Bank financial highlights FY 2020, in € bn, unless stated otherwise Core Change vs. Capital Release Bank FY 2019 Unit Revenues 24.3 6% (0.2) Revenues ex specific items 24.2 6% (0.2) Noninterest expenses 19.3 (11)% 1.9 Adjusted costs ex transformation charges(1) 18.1 (5)% 1.7 Profit (loss) befor
Slide 37: Core Bank adjusted post-tax RoTE
Core Bank adjusted post-tax RoTE In € m, unless stated otherwise Q4 2019 Q4 2020 FY 2019 FY 2020 Profit (loss) (866) 489 (2,982) 2,208 Profit (loss) attributable to noncontrolling interests (35) (42) (125) (129) Profit (loss) attributable to additional equity components (69) (85) (266) (334) Profit
Slide 38: Specific revenue items and adjusted costs – Q4 2020
Specific revenue items and adjusted costs – Q4 2020 In € m Q4 2020 Q4 2019 Q3 2020 Core Core Core CB IB PB AM C&O CRU Group CB IB PB AM C&O CRU Group CB IB PB AM C&O CRU Group Bank Bank Bank Revenues 1,230 1,888 1,982 599 (181) 5,518 (65) 5,453 1,286 1,525 2,003 671 44 5,528 (180) 5,349 1,254 2,365
Slide 39: Specific revenue items and adjusted costs – FY 2020
Specific revenue items and adjusted costs – FY 2020 In € m FY 2020 FY 2019 Core Core CB IB PB AM C&O CRU Group CB IB PB AM C&O CRU Group Bank Bank Revenues 5,145 9,283 8,126 2,229 (530) 24,253 (225) 24,028 5,244 7,019 8,206 2,332 147 22,948 217 23,165 DVA - IB Other / CRU - 6 - - - 6 (8) (2) - (140)
Slide 40: Reconciliation adjusted costs excluding transformation charges
Adjusted costs excluding transformation charges In € m, unless otherwise stated Q4 2020 Q4 2019 YoY FY 2020 FY 2019 YoY Compensation and benefits 2,404 2,605 (8)% 10,260 10,981 (7)% Adjusted costs excluding transformation IT costs 895 963 (7)% 3,605 4,035 (11)% Professional service fees 269 277 (3)%
Slide 41: Adjusted profit (loss) before tax (PBT)
Adjusted profit (loss) before tax (PBT) In € m Q4 2020 Q4 2019 Transfor- Transfor- Specific Goodwill Restructuring Specific Goodwill Restructuring Reported PBT mation Adjusted PBT Reported PBT mation Adjusted PBT revenue items impairments & severance revenue items impairments & severance charges(1)
Slide 42: Operating leverage
Operating leverage(1) In € m, unless stated otherwise (2) (2) (2) (2) FY 2019 vs. FY 2020 vs. FY 2018 FY 2019 FY 2020 FY 2019 FY 2020 FY 2018 FY 2019 Revenues Group - Revenues 25,316 23,165 24,028 (8)% 4% Specific revenue items 691 (8) 30 n.m. n.m. Group - Revenues ex specific items 24,625 23,173 23
Slide 43: Transformation-related effects
Transformation-related effects In € bn 2019 – 2019 – 2022 Q4 2020 expected % of total cumulative cumulative 2019 – Q4 2020 expenses expenses Q4 2020 Deferred tax Deferred Tax Asset asset valuation 2.8 0.0 2.8 2.9 97% valuation adjustment adjustment Nonoperating Goodwill impairment - 1.0 1.0 100% cos
Slide 44: Cautionary statements
Cautionary statements The figures in this presentation are preliminary and unaudited. Our Annual Report 2020 and SEC Form 20-F are scheduled to be published on 12 March 2021. This presentation contains forward-looking statements. Forward-looking statements are statements that are not historical fact
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