Deutsche Bank Ag · XETR:DBK
Deutsche Bank — Deutsche Bank German and Austrian Conference 2010
40 slides from Deutsche Bank's conference presentation, May 20, 2010
Slide 1: Deutsche Bank German and Austrian Conference
Deutsche Bank Deutsche Bank Stefan Krause Chief C e Financial a ca O Officer ce Deutsche Bank Deutsche Bank German and Austrian Conference 20 May 2010, Investor conference Investor Relations Stefan Krause Frankfurt, 20 May 2010
Slide 2: Agenda
Agenda 1 A strong start to 2010: 1Q Highlights 2 Implementing Phase 4 of our management agenda 3 Key current issues Deutsche Bank 20 May 2010, Investor conference 2 Investor Relations Stefan Krause
Slide 3: First quarter 2010: Highlights
First quarter 2010: Highlights 1Q2009 1Q2010 Income before income taxes (in EUR bn) 18 1.8 28 2.8 Profitability Net income (in EUR bn) 1.2 1.8 Pre-tax RoE (target definition)(1) 25% 30% 31 Dec 31 Mar 2009 2010 Ti 1 capital Tier it l ratio ti 12 6% 12.6% 11 2% 11.2% Capital Core Tier 1 capital ratio
Slide 4: The first quarter in historical context
The first quarter in historical context IIn EUR bbn Net revenues Income before income taxes 9.6 9.0 3.2 8.0 2.8 2.6 7.2 6.6 6.2 1.8 1.8 16 1.6 5.0 4.6 0.2 (0.3) ‘03 ‘04 ‘05 ‘06 ‘07 ‘08 ‘09 ‘10 ‘03 ‘04 ‘05 ‘06 ‘07 ‘08 ‘09 ‘10 1Q 1Q Note: 2003-2005 based on U.S. GAAP reported figures, 2006 onwards bas
Slide 5: Strong sales and trading revenues; reduced legacy effects
Strong sales and trading revenues; reduced legacy effects I EUR b In bn Specific item Mark-downs Net revenues 03 0.3 1.0 0.1 0.4 (1) 4.7 4.0 0.2 3.5 3.1 (2) 1.9 1Q 2Q 3Q 4Q 1Q 2009 2010 (1) Charges related to Ocala Funding LLC of approx. EUR 350 m (2) Includes net effect of losses related to write-d
Slide 6: Global Markets 1Q2010 vs. 1Q2007: A tale of two cities
Global Markets 1Q2010 vs. 1Q2007: A tale of two cities Similar top line revenue performance . . . p . . . using g significantly g y lower resources S&T revenues, in EUR m 1Q2010 vs. 1Q2007 (2) (26%) U.S. GAAP pro-forma 1Q2010 vs. Peak (47%) assets n.a. (38%) Level 3 assets 5,068 4 746 4,746 3% RWA (
Slide 7: Reduced provisioning for credit losses
Reduced provisioning for credit losses I EUR m In Related to IAS 39 reclassified assets (50)% 1,000 526 544 560 262 492 308 329 249 159 1Q 2Q 3Q 4Q 1Q 2009 2010 Thereof: CIB 357 779 323 357 90 169 221 214 201 173 Thereof: PCAM Note: Divisional figures do not add up due to omission of Corporate Inves
Slide 8: Tier 1 capital remains well above target
Tier 1 capital remains well above target Tier 1 ratio: (117) bps(1) 12.6 11.7 11.2 11 0 11.0 11.2 10.2 Target: ≥10% 8.7 7.8 8.1 7.5 7.1 7.5 RWA: EUR 17 bn 316 295 288 292 273 1Q 2Q 3Q 4Q 1Q 2009 2010 Tier 1 ratio, in % Core Tier 1 ratio, in % RWA, in EUR bn Sal. Oppenheim Group impact Note: Core Tie
Slide 9: PCAM: Strengthened franchise with invested assets over EUR 1 trn
PCAM: Strengthened franchise with invested assets over EUR 1 trn t In EUR bn 78 1,005 19 (2) 9 21 880 EUR 125 bn 31 Dec 2009 NNM FX Market Sal. Other 31 Mar 2010 appreciation Oppenheim acquisition Deutsche Bank 20 May 2010, Investor conference 9 Investor Relations Stefan Krause
Slide 10: Sal. Oppenheim: Dedicated strategy for each business activity
Sal. Oppenheim: Dedicated strategy for each business activity ti it Cluster 1 Cluster 2 Cluster 3 Cluster 4 WM GER + AM Select WM / AM Other business GER/LUX international activities Wealth Management Switzerland IB Wealth Management Germany Austria Other (BAS, SGG, Asset Management Asset Management
Slide 11: Sal. Oppenheim: Asset base
Sal. Oppenheim: Asset base Invested assets development Sal. Oppenheim Group(1) Observations In EUR bn 8 127 — Invested assets have 15 grown with only (2) 103 (2) 105 1 4 45 marginal net outflows (1) (4) BHF 34 (3) 38 — Invested assets of IB, SOPEP, 14 core proposition(5) OVAM & other 2 WM foreigng 9
Slide 12: PWM and Sal. Oppenheim: Benefits, synergies and outlook
PWM and Sal. Oppenheim: Benefits, synergies and outlook — Undisputed leadership in Private Wealth Management in Germany — Complementary C l t client li t profile, fil particularly ti l l iin th the UHNWI client li t segmentt Strategic — Second wealth management proposition with strong brand compleme
Slide 13: Agenda
Agenda 1 A strong start to 2010: 1Q Highlights 2 Implementing Phase 4 of our management agenda 3 Key current issues Deutsche Bank 20 May 2010, Investor conference 13 Investor Relations Stefan Krause
Slide 14: Well placed to deliver on Phase 4
Well placed to deliver on Phase 4 Management Agenda Phase 4 2009 – 2011 Increase CIB profitability with renewed Focus on core PCAM businesses risk and balance sheet discipline and home market leadership Focus on Asia as a key driver Reinvigorate our of revenue growth performance culture Deutsche Ban
Slide 15: Phase 4: Financial potential
Phase 4: Financial potential Phase 4 potential 2011 Revenue growth p.a. ~ 8% Perfformance Income before income taxes, in EUR bn(1) ~ 10.0 Return on Equity(2) 25% over-the-cycle Cost / income ratio ~ 65% Consttraints Tier 1 ratio ≥10% Leverage(3) ≤25x ( ) (1) Before Corporate p Investments and Consol
Slide 16: Phase 4: assumptions for 2010 – 2011
Phase 4: assumptions for 2010 – 2011 — No further major market dislocations — Normalization of asset valuations — Global revenue fee pool: CAGR of 9% to a level slightly Environmental below 9M2007 annualized — Margins remain higher than pre-crisis — Interest rates normalization from 2nd half 2010 —
Slide 17: Phase 4: IBIT potential of business divisions
Phase 4: IBIT p potential of business divisions In EUR bn Ph Phase 4 potential t ti l 2011 Corporate Banking & Securities 6.3 Global Transaction Banking 1.3 Asset and Wealth Management 1.0 Private & Business Clients 1.5 Total business divisions 10.0 Note: Figures do not add up due to rounding differ
Slide 18: Progress towards 2011 profit target
Progress g towards 2011 profit target g Income before income taxes, in EUR bn Phase 4 1Q2010 potential reported 2011 Prospects / Key features — Capture client flow / market share with prudent risk Corporate Banking & taking 2.6 6.3 Securities — Record performance in traditionally strong first quarte
Slide 19: Complexity reduction program: Further strengthen competitive position
Complexity reduction program: Further strengthen competitive i i position ii Efficiency y gains g and complexity p y Development cost/income ratio reduction Reported, in % 134 — Efficiency gains and complexity reduction is planned to result in EUR 1 bn cost savings in infrastructure areas (based on
Slide 20: Complexity reduction program: Structured process to achieve EUR 1 bn efficiency gains
Complexity reduction program: Structured process to achieve hi EUR 1 bn b efficiency ffi i gains i byb endd off 2011 Identify Develop Validate Prepare Validate ideas initiatives initiatives Decision execution Execute impact Regular progress and impact tracking by Group Executive Committee Objectives
Slide 21: Cost and infrastructure efficiency: Examples of initiatives
Cost and infrastructure efficiency: Examples of initiatives I EUR m In Illustrative End 2011 potential Function / area Key levers run-rate run rate cost saving Technology / IT Functional alignment of IT operating model: — Elimination of duplication — Functional integration and standardisation of pro
Slide 22: Agenda
Agenda 1 A strong start to 2010: 1Q Highlights 2 Implementing Phase 4 of our management agenda 3 Key current issues Deutsche Bank 20 May 2010, Investor conference 22 Investor Relations Stefan Krause
Slide 23: The changing regulatory environment
The changing regulatory environment Consultation phase Proposal / discussion phase — Basel Committee consultative document — National capital requirements — Capital / capital eligibility — Structure and capitalization of legal — Leverage entities — Liquidity — Asset allocation — Counterparty credit
Slide 24: Tier 1 capital and RWA development
Tier 1 capital and RWA development I EUR bn In b Tier 1 capital RWA 14.4 0.7 1.8 292.5 (6.7) (1.3) 6.5 34.4 1.5 3.3 32 8 32.8 273 5 273.5 (2.1) (0.1) (0.5) 31 Dec 1Q10 FX Sal. Capital Equity Other(2) 31 Mar 31 Dec Market Opera- FX Sal. Other 31 Mar 2009 net effects Oppen- de- com- 2010 2009 risk((3)
Slide 25: Sovereign risk – Hot spots in Southern Europe
Sovereign risk – Hot spots in Southern Europe C Concerns about b t sovereign i risk i k – potential t ti l tertiary t ti effect ff t through th h contagion t i CDS spreads by country (in bps) DB exposures(1) by country, 31 Mar 2010 Italy Spain Portugal Greece Ireland Total exposure (gross) Exposure
Slide 26: Sovereign risk: Greece
Sovereign risk: Greece St Stress contagion t i scenario i iimpactt analysis l i Impact Market scenarios Potential impact on DB Risk — Hair cut on Greek sovereign debt — Limited losses from sovereign debt exposure — Shipping : Greek ship owners wealth largely — Greek FI/Sovereign exposure driven by
Slide 27: Modest reliance on shorter term wholesale funding
Modest reliance on shorter term wholesale funding I EUR bn In b Funding sources overview Liquidity position 31 Dec 2009 (Total: EUR 777 bn) — Secured funding increase mainly 31 Mar 2010 (Total: EUR 856 bn) 211 against highly liquid trading assets 173 165 164 — Incremental discretionary 153 158 whole
Slide 28: Key takeaways
Key takeaways — Significant capital buffer; above targets Well-capitalized — Future retained earnings potential — Fresh capital p for buying y g new earnings g streams ((only) y) Strong liquidity / — Substantial liquidity reserve f di funding — Diverse unsecured funding base — Profit growth of core
Slide 29: Additional information
Deutsche Bank Additional information
Slide 30: 2011 potential: CB&S / Global Markets
2011 potential: CB&S / Global Markets I Income before b f income i taxes, t in i EUR bn b Risk Revenue development Cost development development — Margin / volume — De-risking losses normalisation ~2.4 ~(1.6) ~(0.9) — Legacy businesses — Lower market volatility — Mark-downs — Strategic hiring — Predo
Slide 31: 2011 potential: CB&S / Corporate Finance
2011 potential: CB&S / Corporate Finance I Income before b f income i taxes, t in i EUR bn b Cost Risk — Credit spreads Revenue development development development tightening ~0.9 ~(0.4) ~0.0 — Lower market volatility — Lower hedge losses 0.9 0.6 0.4 — Top-5 2.4 — Key investments — Strategic hires:
Slide 32: 2011 potential: Global Transaction Banking
2011 potential: Global Transaction Banking I Income before b f income i taxes, t in i EUR bn b Cost Risk Revenue development development development ~1.1 ~(0.5) ~(0.0) — Supply Chain Finance — Expansion in — Agency Securities key growth Lending regions (e.g. — Securities Clearing Asia, MENA) — Alter
Slide 33: 2011 potential: Asset Management
2011 potential: Asset Management I Income before b f income i taxes, t in i EUR m Assumes no appreciation of equity indices 2010 - 2011 Risk Revenue development Cost development development ~45 ~235 ~0 500 — Rightsizing / Smartsourcing / — RREEF-related losses Outsourcing (RREEF prop — MM fund injec
Slide 34: 2011 potential: Private Wealth Management
2011 potential: Private Wealth Management IIncome before b f income i taxes, t excluding l di effects ff t from f Sal. S l Oppenheim, O h i in EUR m Cost Risk Revenue development development development ~310 ~(0) ~0 425 — Increased volumes — Global re-pricing — New platform — Severance initiative pr
Slide 35: 2011 potential: Private & Business Clients
2011 potential: Private & Business Clients I Income before b f income i taxes, t in i EUR bn b Risk Revenue development Cost development development ~0.7 ~0.1 ~0.0 1.5 — Severance / — IT investments related to — Other efficiency program — One-off gain from LLP Optimization in: recalibration — Hua Xi
Slide 36: LLPs stabilising as market shows signs of recovery
LLPs stabilising as market shows signs of recovery Loan loss provisions development: 2003 – 1Q2010 CIB loss in EUR m (lhs) DB loss annualised (rhs) 12% Thereof IAS39 (lhs) Moodys Corp Default Rate (rhs) 10% PCAM loss in EUR m (lhs) VIX implied vol S&P 500 8% Forecast 6% 4% 2% 2003 2) 2004 2) 2005 20
Slide 37: VaR of CIB trading units; higher revenues with lower risk
VaR of CIB trading units; higher revenues with lower risk 99% 1 day, 99%, d in i EUR m VaR of CIB trading units Constant VaR of CIB trading units(1) EUR 4.0 bn Sales & Trading revenues EUR 4.7 bn 180 160 140 120 100 80 60 40 20 141 145 114 108 116 45 44 35 36 47 1Q2009 2Q2009 3Q2
Slide 38: Sales & Trading: Second-best quarter ever
Sales & Trading: Second-best quarter ever Nett R N Revenues Debt & other products Equity In EUR bn In EUR m Specific item Mark-downs Net revenues 927 944 873 636 1.0 03 0.3 0.1 0.4 (1) 3.8 3.8 215 25 2.5 2 (2) 0 2.2 2 0.2 2 1.3 1Q 2Q 3Q 4Q 1Q 1Q 2Q 3Q 4Q 1Q 2009 2010 2009 2010 Note: Prior periods ha
Slide 39: Invested assets report
Invested assets(1) report I EUR bn In b Net new 31 Mar 30 Jun 30 Sep 31 Dec 31 Mar money 2009 2009 2009 2009 2010 1Q2010 Asset and Wealth Management 627 632 657 686 808 9 Asset Management 462 460 476 496 537 4 therein: Sal. Oppenheim (2) - - - - 14 0 Institutional 169 160 165 173 180 (1) Retail 142
Slide 40: Cautionary statements
Cautionary statements This presentation contains forward forward-looking looking statements. Forward Forward-looking 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 b
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