Deutsche Bank Ag · XETR:DBK
Deutsche Bank — Debt Investor Presentation (July 2021)
39 slides from Deutsche Bank's debt investor presentation, Jul 30, 2021
Slide 1: Q2 2021 Fixed Income Investor Conference Call
Deutsche Bank Q2 2021 Fixed Income Investor Conference Call 30 July 2021
Slide 2: Strategy execution drives efficiency and revenue generation
Strategy execution drives efficiency and revenue generation Increased profitability driven by continued franchise improvement in a more normalized environment Ongoing focus on cost management despite unforeseen items Robust balance sheet combined with disciplined risk management Positive outlook rev
Slide 3: Q2 2021 Group financial highlights
Q2 2021 Group financial highlights In € m, unless stated otherwise Change in % Change in % Q2 2021 vs. Q2 2020 vs. Q1 2021 Revenues 6,238 (1) (14) Revenues Revenues ex specific items(1) 6,214 (1) (14) Noninterest expenses 4,998 (7) (10) Costs Adjusted costs ex transformation charges(2) 4,628 (6) (13
Slide 4: Franchise strength drives revenue generation
Franchise strength drives revenue generation Core Bank revenues(1) excluding specific items(2), in € bn Group 6.3 6.2 12.4 12.5 13.5 (1)% 13% 6.3 13.4 6.2 12.7 Corporate 11.8 2.5 1.3 Bank 1.2 2.7 2.6 Investment 5.5 2.7 2.4 5.0 Bank 3.8 Private 2.0 4.1 1.9 4.1 4.1 Bank Asset Management 0.5 0.6 1.1 1.
Slide 5: Ongoing commitment to cost discipline
Ongoing commitment to cost discipline Adjusted costs excluding transformation charges(1), in € bn Bank levies Prime Finance(2) 0.7 0.6 0.5 0.6 0.1 5.7 5.6 5.5 5.4 5.3 5.3 5.2 5.0 4.9 4.7 4.7 4.6 4.6 4.5 0.1 0.1 0.1 0.1 0.1 0.1 0.1 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2018 2019 2020 2021 (1) Adj
Slide 6: Demonstrating tangible impact of strategic transformation
Demonstrating tangible impact of strategic transformation Last 12 months (LTM) adjusted profit (loss) before tax(1), in € bn 92% 5.9 Core Bank 5.3 4.2 3.7 2.7 3.0 3.1 2.4 Capital (1.7) (1.4) Release (2.1) (2.4) (2.4) (2.0) (2.6) (2.7) Unit Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2019 2020 2021 (1) 2019 figures base
Slide 7: Underlying shareholder returns support 2022 targets
Underlying shareholder returns support 2022 targets H1 2021 profit (loss) before tax, in € bn, unless stated otherwise Group Core Bank Post-tax 6.5% 7.6% 9.2% 9.3% 10.5% RoTE 3.8 3.7 3.4 3.1 2.8 Unforeseen factors: Adjustments: BGH ruling Transformation Unplanned SRF charge charges increase(3)
Slide 8: Disciplined risk management
Disciplined risk management In € bn, unless stated otherwise Credit risk Market risk 32 13 13 17 41 7 4.3 4.0 1.8 3.8 3.6 1.4 2.2 2.3 0.7 0.1 0.5 0.5 2016 2017 2018 2019 2020 H1 2021 2016 2017 2018 2019 2020 H1 2021 Provisions for credit losses In bps of average loans(1) Market risk trading economic
Slide 9: Conservatively managed balance sheet
Conservatively managed balance sheet Net balance sheet(1), in € bn, as of 30 June 2021 Comments Assets Liabilities & equity 992 992 Trading and — Resilient balance sheet to navigate 145 related liabilities(3) current environment Liquidity reserves(2) 254 47 Other liabilities(5) — Liquidity reserves
Slide 10: Loan demand picking up in Q2
Loan demand picking up in Q2 In € bn Loan developments Comments Change vs. FX adjusted Q1 2021 change — Continued growth in Private Bank from mortgage and collateralized lending Private Bank 247 4 5 — Corporate Bank benefitting from growth in TLTRO eligible lending, offset by repayments of credit fa
Slide 11: Further growth in deposit charging revenues
Further growth in deposit charging revenues In € bn, unless otherwise stated Quarterly charging Q2 2021 deposits by revenues, in € m Charging agreements(1) total client holdings(2) Comments — On track to reach updated 2022 revenue target already this year — Corporate Bank revenues further 93 110 149
Slide 12: Sound liquidity and funding profile
Sound liquidity and funding profile Liquidity coverage ratio(1) Comments High-quality liquid assets, in € bn Surplus above requirements — Liquidity coverage and net stable funding 144% 151% 145% 146% 143% ratios remained stable in the second € 64bn € 76bn € 66bn € 70bn € 67bn ~130% quarter — Higher
Slide 13: Significant 2021 regulatory RWA inflation absorbed in Q2
Significant 2021 regulatory RWA inflation absorbed in Q2 In € bn, except CET1 ratio movements (in basis points), period end, fully-loaded CET1 ratio Comments 13.7% 0 9 13.2% — Q2 2021 CET1 ratio down by 55bps compared to Q1 (64) 2021 mainly due to expected regulatory impacts: — (64)bps from RWA chan
Slide 14: Capital ratios well above regulatory requirements
Capital ratios well above regulatory requirements(1) In %, as of 30 June 2021, phase-in view Comments 17.7 T2 2.2 270bps 15.0 — Buffer to total capital requirement decreased by 51bps to 270bps over the quarter: AT1 2.4 2.6 T2 requirement(4) — (54)bps relates to lower CET1 ratio and requirement(5) wi
Slide 15: Leverage ratio increase driven by AT1 issuance
Leverage ratio increase driven by AT1 issuance In € bn, except movements (in bps), period end, fully-loaded 14 4.8% Comments 4.6% 1 (0) Q1 2021 FX Effect Leverage Capital Q2 2021 Exposure change — Leverage ratio increased by 15bps in the quarter: change — 1bp from FX translation effects Tier 1 — (0)
Slide 16: Significant buffer over loss absorbing capacity requirements
Significant buffer over loss absorbing capacity requirements Loss absorbing capacity, in € bn, as of 30 June 2021 Comments Surplus above requirement 113 Senior 5 preferred 21 Senior 37 non- 46 43 — Q2 2021 available loss absorbing preferred capacity significantly above all regulatory requirements —
Slide 17: Balanced maturity profile provides flexibility in future
Balanced maturity profile provides flexibility in future In € bn, unless stated otherwise Covered Bonds Senior Structured/Preferred Senior Non-Preferred AT1 / T2 25 1 24 2 22 19 7 4 1 15-20 7 15 4 2 3-4 2 14 12 12 2 4-5 1 11 4 3 9 4 4 3 16 12 12 16 1 6-8 4 3 7 7 8 7 4 5 2 2-3 3 3 3 1 H1 FY Issuance
Slide 18: Contraction of spreads to peer levels
Contraction of spreads to peer levels In bps, unless stated otherwise DB senior preferred (EUR)(1) vs. peer average(3)(4) DB senior non-preferred (EUR)(2) vs. peer average(3)(4) 120 250 100 200 Core European peers(3) Core European peers(3) 80 150 60 100 40 20 50 0 0 Sep 20 Nov 20 Jan 21 Mar 21 May 2
Slide 19: Outlook
Outlook Resilient and low-risk balance sheet with high portion of funding from stable sources Sustainable revenue generation continues even in normalized environment Cost discipline drives CIR towards 70% target despite uncontrollable items Improved credit environment leads to reduced CLP guidance o
Slide 20: Appendix
Appendix Deutsche Bank Q2 2021 Fixed Income Investor Call 19 Investor Relations 30 July 2021
Slide 21: Current ratings
Current ratings As of 29 July 2021 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) Senior Preferred(2) A3 BBB+ BBB+ A (low) Long- term unse- cured N
Slide 22: AT1 and Trust Preferred Securities outstanding
AT1 and Trust Preferred Securities outstanding(1) Regulatory Original Current Nominal Next call Subsequent call Issuer Type capital ISIN issuance coupon outstanding date period treatment(1) date Postbank Funding Trust I Legacy AT1 / -(2) DE000A0DEN75 0.165% € 300m 02 Dec 04 02 Dec 21 Semi-annually P
Slide 23: Additional funding disclosure
Additional funding disclosure Capital markets issuance outstanding, in € bn, Q2 2021 By product By currency Senior Senior Capital instruments EUR USD GBP Other non-preferred structured (T1/T2) Senior Covered preferred bonds 6 18 3 16 114 bn 58 40 114 bn 65 17 5 Deutsche Bank Q2 2021 Fixed Income Inv
Slide 24: Net interest income sensitivity
Net interest income sensitivity Hypothetical +100 bps parallel shift impact, in € bn First year Second year 1.4 0.8 0.8 0.6 0.5 0.3 Retail Non-retail Group Retail Non-retail Group Maturity Maturity > 3M 0.3 0.1 0.4 > 3M 0.6 0.2 0.7 EUR EUR ≤ 3M 0.2 0.2 0.4 ≤ 3M 0.2 0.3 0.4 > 3M 0.0 0.1 0.1 > 3M 0.1
Slide 25: Simplified legal entity structure
Simplified legal entity structure Entities without Issuing Branches Subsidiaries 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
Slide 26: Provision for credit losses
Provision for credit losses In € m Stage 1 + 2 Q2 2021 comments Stage 3 761 252 506 — Q2 provisions in line with previous quarter and significantly below the 273 previous year 230 251 — Lower Stage 3 provisions across all 247 businesses from few impairment events 175 510 — Stage 1+2 releases from th
Slide 27: Provision for credit losses and stage 3 loans
Provision for credit losses and stage 3 loans Provision for credit losses, in € m Stage 3 at amortized cost, in € 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) IB (ex-POCI) 761 Group Stage 3
Slide 28: Level 3 assets
Level 3 assets In € bn, as of 30 June 2021 Assets (total: € 23bn) Comments Equity securities Mortgage backed securities Other 10 2 Derivative Debt 9 Assets securities 5 — Level 3 is an indicator of valuation uncertainty and not of asset quality — The decrease in Level 3 assets reflects: — Portfolios
Slide 29: Litigation update
Litigation update In € bn, period end Litigation provisions(1) Comments 1.1 1.0 0.9 0.8 0.8 ― Provisions increased modestly by € 0.1bn Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 quarter on quarter ― Contingent liabilities remained stable quarter on quarter. Contingent liabilities include possible Conti
Slide 30: 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 31: Transformation-related effects
Transformation-related effects In € bn, unless stated otherwise 2019 – 2019 – 2022 Q2 2021 expected % of total cumulative cumulative 2019 – Q2 2021 expenses expenses Q2 2021 Deferred tax Deferred Tax Asset asset valuation 2.8 0.0 2.8 2.9 98% valuation adjustment adjustment Nonoperating Goodwill impa
Slide 32: Core Bank adjusted post-tax RoTE
Core Bank adjusted post-tax RoTE In € m, unless stated otherwise Q1 2020 Q2 2020 H1 2020 Q1 2021 Q2 2021 H1 2021 Profit (loss) 616 486 1,103 1,333 1,013 2,346 Profit (loss) attributable to noncontrolling interests (23) (32) (56) (36) (33) (69) Profit (loss) attributable to additional equity componen
Slide 33: Group adjusted post-tax RoTE ex unforeseen factors
Group adjusted post-tax RoTE ex unforeseen factors In € m, unless stated otherwise H1 2021 Profit (loss) before tax 2,754 Revenue specific items(1) (35) Transformation charges(1) 215 Impairment of goodwill / other intangibles - Restructuring & severance 181 Adjusted profit (loss) before tax 3,115 Ta
Slide 34: Private Bank – Impact of BGH ruling
Private Bank – Impact of BGH ruling(1) In € m, unless stated otherwise Q2 2020 Q1 2021 Q2 2021 Revenues Net revenues 1,960 2,178 2,018 BGH ruling - impact of forgone revenues - - 94 of which: Private Bank Germany - BGH ruling - impact of foregone revenues - - 93 Net revenues ex BGH ruling 1,960 2,17
Slide 35: Specific revenue items and adjusted costs – Q2 2021
Specific revenue items and adjusted costs – Q2 2021 In € m Q2 2021 Q2 2020 Q1 2021 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 2,394 2,018 626 (7) 6,262 (24) 6,238 1,341 2,676 1,960 549 (173) 6,353 (66) 6,287 1,313 3,097
Slide 36: Specific revenue items and adjusted costs – H1 2021
Specific revenue items and adjusted costs – H1 2021 In € m H1 2021 H1 2020 Core Core CB IB PB AM C&O CRU Group CB IB PB AM C&O CRU Group Bank Bank Revenues 2,544 5,491 4,196 1,263 (80) 13,413 57 13,471 2,666 5,030 4,127 1,068 (130) 12,761 (123) 12,637 DVA - IB Other / CRU - (24) - - - (24) 0 (24) -
Slide 37: Adjusted profit (loss) before tax (PBT)
Adjusted profit (loss) before tax (PBT) In € m Q2 2021 Q2 2020 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 38: Last 12 months (LTM) reconciliation
Last 12 months (LTM) reconciliation In € m Q2 2020 Q2 2021 Q3 2019(1) Q4 2019(1) Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 LTM(2) LTM(3) Revenues Core Bank 5,483 5,528 6,407 6,353 5,974 5,518 7,152 6,262 23,772 24,906 CRU (220) (180) (57) (66) (36) (65) 81 (24) (523) (44) Group 5,262 5,349 6,3
Slide 39: 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
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