Deutsche Bank Ag · XETR:DBK
Deutsche Bank — Q2 2018 Earnings Presentation
35 slides from Deutsche Bank's earnings presentation, Jul 25, 2018
Slide 1: Deutsche Bank – Q2 2018 results
Deutsche Bank Deutsche Bank – Q2 2018 results 25 July 2018
Slide 2: Execution on strategic plan to materially improve returns to shareholders over time
Execution on strategic plan to materially improve returns to shareholders over time Conservative balance sheet management provides a solid basis to continue reshaping the franchise and focus on growth Private & Commercial Bank: legal entity merger and integration of Sal. Oppenheim completed Corporat
Slide 3: Q2 2018 results demonstrate the resilience of our franchise
Q2 2018 results demonstrate the resilience of our franchise € bn, unless stated otherwise X% FX adjusted(1) Revenues Noninterest expenses Profit before tax(2) 2% (0)% 3% 6.6 6.6 1% 5.7 Non- 5.8 0.1 operating 0.2 costs(3) (9)% 1% 5.6 5.6 (13)% (1)% 0.8 0.7 Adjusted costs(4) Q2 2017 Q2 2018 Q2 2017 Q2
Slide 4: A conservatively managed balance sheet
A conservatively managed balance sheet As of 30 June 2018 CET1 excess above SREP Common Equity Tier 1 capital ratio 13.7%(1) requirement: € 11bn(2) Excess above MREL and TLAC Total loss-absorbing capacity € 119bn requirement: € 18bn / € 40bn(3) Provision for credit losses as a % of loans 9 bps(4) St
Slide 5: Clearly defined near-term targets
Clearly defined near-term targets Post-tax return on tangible >4% in 2019 equity € 23bn in 2018 Adjusted costs € 22bn in 2019 Employees <93,000 in 2018 (Full-time equivalent, end of period) <90,000 in 2019 Common Equity Tier 1 capital >13% ratio Deutsche Bank Q2 2018 results 5 Investor Relations 25
Slide 6: Progress towards near-term targets
Progress towards near-term targets Post-tax return on tangible equity Adjusted costs (€ bn) Employees (in 000’s)(1) 23.9 23 >4.0% 22 97.5 Q4 6.4 95.4 <93.0 1.8% Q3 5.5 <90.0 Q2 5.6 5.6 Q1 6.3 6.3 (1.4)% 2017 H1 2018 Target 2017 2018 Target Target 31 Dec 30 Jun Target Target 2019 2018 2019 2017 2018
Slide 7: Q2 2018 Group financial highlights
Q2 2018 Group financial highlights € m, unless stated otherwise Higher / (lower) in % Q2 2018 vs. Q2 2017 vs. Q1 2018 Revenues 6,590 (0) (6) Revenues of which: Specific items(1) 194 n.m. (36) Noninterest expenses 5,784 1) (10) Costs of which: Adjusted costs 5,577 (1) (12) Cost/income ratio (in %) 88
Slide 8: Adjusted costs
Adjusted costs(1) € m, FX adjusted(2) 1% 160 5,537 5,577 — Delivering in line with targets (13) (18) (89) — Compensation and benefits: YoY increase reflects higher deferrals from normalisation of compensation framework in 2017 and more even distribution of current year variable compensation accruals
Slide 9: Employees
Employees Full-time equivalents 97,130 Front office — On track to meet <93,000 target by Allocated infrastructure year-end 2018 (942) — Reduction in the quarter primarily driven by front office staff in Corporate & Investment Bank with a focus in Corporate Finance and (240) Equity Sales & Trading (1
Slide 10: Capital ratios
Capital ratios € bn except movements (in basis points), CRD4, fully loaded CET1 ratio — CET1 capital ratio remains above 13% 37 13.7% — Reduced risk-weighted assets (RWA) in CIB as we refocus 13.4% 9 9 resources: (2) (15) — Reduction across trading businesses (~€ 5bn) reflecting generally lower Mark
Slide 11: Non-strategic legacy assets in CIB
Non-strategic legacy assets in CIB € bn Risk weighted assets excluding operational risk Background (35)% ― Non-strategic portfolio created to facilitate the run- down of residual CIB assets in the former non-core 13 operations unit and other items not consistent with the CIB strategy 8 Recent perfor
Slide 12: Level 3 assets
Level 3 assets € bn, as of 30 June 2018 Assets (total: € 22bn) — Level 3 assets arise as a consequence of the bank being Mortgage backed securities Equity securities active in various markets, some of which are less liquid 1 1 — Assets are mainly booked in core businesses – only Other 2 € 1.4bn are
Slide 13: Segment results
Segment results Deutsche Bank Q2 2018 results 13 Investor Relations 25 July 2018
Slide 14: Corporate & Investment Bank (CIB)
Corporate & Investment Bank (CIB) € m, unless stated otherwise Higher / (lower) in % vs. vs. Q2 2018 Q2 2017 Q1 2018 YoY comments Revenues 3,579 (1) (7) Revenues ex specific items declined Revenues of which: Specific items(1) 113 n.m. (22) on lower Sales & Trading revenues Noninterest expenses up pr
Slide 15: CIB business unit revenue performance
CIB business unit revenue performance € m, revenues X% FX adjusted Change YoY Q2 2018 YoY reported revenue drivers Global Transaction Banking 1,008 4% 8% Global Transaction Banking: — Higher, driven by a gain on sale on an Origination & Advisory 577 2% 6% asset disposal Origination & Advisory: — Gro
Slide 16: Private & Commercial Bank (PCB)
Private & Commercial Bank (PCB) € m, unless stated otherwise Higher / (lower) in % vs. vs. Q2 2018 Q2 2017 Q1 2018 YoY comments Revenues 2,542 (1) (4) Revenues essentially flat Revenues of which: Specific items(1) 81 n.m. (48) excluding specific items and of which: Exited businesses(2) 62 (8) n.m. E
Slide 17: PCB business unit revenue performance
PCB business unit revenue performance € m, revenues X% FX adjusted Change YoY Q2 2018 YoY reported revenue drivers Private and Commercial Business (Germany): Private and Commercial Business 1,635 4% 4% — Growth in mortgage and commercial (Germany) loans offset by continued deposit margin compression
Slide 18: Asset Management (AM)
Asset Management (AM) € m, unless stated otherwise Higher / (lower) in % vs. vs. Q2 2018 Q2 2017 Q1 2018 YoY comments Q2 2017 benefited from Revenues 561 (17) 3) performance fees paid every other Revenues of which: Specific items - - - year; lower management fees driven by net outflows Lower compens
Slide 19: Corporate & Other (C&O)
Corporate & Other (C&O) € m, unless stated otherwise Profit before tax Higher / (lower) vs. Q2 vs. Q1 Q2 2018 2017 2018 (119) Profit before tax (119) 246 48 (167) (286) (364) Funding & liquidity 14 (6) 63 67% Valuation & Timing differences(1) (113) (111) (149) Shareholder expenses (118) (18) (21) (8
Slide 20: Progress towards near-term targets
Progress towards near-term targets Post-tax return on tangible equity Adjusted costs (€ bn) Employees (in 000’s)(1) 23.9 23 >4.0% 22 97.5 Q4 6.4 95.4 <93.0 1.8% Q3 5.5 <90.0 Q2 5.6 5.6 Q1 6.3 6.3 (1.4)% 2017 H1 2018 Target 2017 2018 Target Target 31 Dec 30 Jun Target Target 2019 2018 2019 2017 2018
Slide 21: Appendix
Appendix Deutsche Bank Q2 2018 results 21 Investor Relations 25 July 2018
Slide 22: Specific items
Specific items €m Q2 2018 Q2 2017 Q1 2018 CIB PCB AM C&O Group Group Group Revenues 3,579 2,542 561 (91) 6,590 6,616 6,976 DVA and own credit spreads(1) 56 - - - 56 (179) 61 Gain on sale in GTB 57 - - - 57 - - Change in valuation of an - - - - - - 84 investment (CIB) Revenues Sal. Oppenheim workout
Slide 23: Adjusted costs trends
Adjusted costs(1) trends € m, unless stated otherwise Q2 2017 YoY Q1 2018 QoQ Q2 2018 Q2 2017 Q1 2018 ex FX(2) ex FX(2) ex FX(2) ex FX(2) Compensation and benefits(3) 2,994 2,890 2,833 6% 2,960 2,991 0% IT costs 904 933 917 (1)% 1,022 1,031 (12)% Professional service fees 391 425 415 (6)% 392 398 (2
Slide 24: Q2 2018 indicative regional currency mix
Q2 2018 indicative regional currency mix Revenues Noninterest expenses 10% 6% 9% 4% 14% Other (2) 15% 14% Other (1) 21% 4% 3% 19% 0% 1% 26% 22% 31% 16% USD 33% USD 38% 23% 1% 22% 0% 87% 86% GBP GBP 39% 60% 54% EUR 46% 41% 42% EUR 13% CIB PCB AM Group CIB PCB AM Group Note: Classification is based pr
Slide 25: Litigation update
Litigation update € bn, unless stated otherwise Litigation provisions(1) Contingent liabilities(1) 2.5 2.2 1.9 1.4 31 Mar 2018 30 Jun 2018 31 Mar 2018 30 Jun 2018 ― Decrease predominately due to settlement payments for ― Includes possible obligations where an estimate can be made major cases, releas
Slide 26: Loan book
Loan book € bn Under IAS 39 Under IFRS 9 414 406 403 400 395 392 Corporate & 147 137 134 138 Investment Banking 127 128 Wealth Management 40 39 37 37 37 39 PCB (International) 30 30 30 30 31 31 PCB (Germany) 187 187 189 190 190 191 PCB (Exited)(1) 9 10 9 10 7 7 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 201
Slide 27: Loan book composition
Loan book composition IFRS loans at amortized cost, 30 June 2018 Corporate & Investment Bank Private & Commercial Bank Leveraged Finance(5) CIB non-strategic ABS CIB Other(4) 5% 1% 1% 6% — Well diversified Loan Portfolio German mortgages — Over 2/3rds of the loan portfolio in the Global 34% Private
Slide 28: Provision for credit losses and stage 3 loans under IFRS 9
Provision for credit losses and stage 3 loans under IFRS 9 €m Provision for credit losses Stage 3 at amortised cost under IFRS9, at period end Corporate & Investment Bank (CIB) Purchased or Originated Credit Impaired assets (POCI) Private & Commercial Bank (PCB) CIB (ex-POCI) PCB (ex-POCI) Group Sta
Slide 29: Net interest income sensitivity
Net interest income sensitivity € bn, hypothetical +100bps parallel shift impact First year Second year 1.8 1.5 0.9 0.9 0.7 0.8 PCB CIB Group PCB CIB Group > 3M 0.3 0.1 0.4 > 3M 0.5 0.1 0.6 EUR EUR ≤ 3M 0.4 0.7 1.1 ≤ 3M 0.4 0.7 1.1 > 3M 0.0 0.0 0.0 > 3M 0.0 0.0 0.0 USD USD ≤ 3M 0.0 0.0 0.0 ≤ 3M 0.0
Slide 30: Leverage exposure and Risk-weighted assets
Leverage exposure and Risk-weighted assets € bn, CRD4, fully loaded Leverage exposure Risk-weighted assets (RWA) 348 348 Operational Risk 64 93 RWA 93 64 1,409 1,324 Market Risk Trading assets 172 161 34 RWA 26 CVA 9 Derivatives(1) 194 187 29 Lending 250 389 392 113 Lending Credit Risk commitments(2
Slide 31: Value at Risk (VaR)
Value at Risk (VaR) € m, unless stated otherwise, DB Group, 99%, 1 day Average VaR Stressed VaR(1) € 2.2bn Sales & Trading revenues € 1.9bn 180 160 140 120 100 80 60 40 20 ∅ 32 ∅ 30 ∅ 25 ∅ 28 ∅ 26 ∅ 83 ∅ 81 ∅ 67 ∅ 87 ∅ 81 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 (1) Stressed Value at Risk is calculat
Slide 32: Reconciliation of AM reported segment to DWS standalone
Reconciliation of AM reported segment to DWS standalone € m, unless stated otherwise Sold & discontinued Other perimeter Q2 2018 AM reported DWS reported business(1) adjustments(2) Revenues 561 (2) 17 576 Noninterest expenses (441) 12 (4) (434) Noncontrolling interest (26) 26 - Profit before tax 93
Slide 33: Assets under Management / Client Assets – PCB
Assets under Management / Client Assets – PCB € bn Q1 2 0 1 7 Q2 2 0 1 7 Q3 2 0 1 7 Q4 2 0 1 7 Q1 2 0 1 8 Q2 2 0 1 8 Asset s un der Man agemen t 508 504 505 506 497 503 (1) Assets under Administration 198 201 206 217 217 220 Clien t Asset s 706 705 711 722 715 723 P rivat e an d Commercial Busin ess
Slide 34: Employees
Employees Full-time equivalents 30 Jun 2018 vs. 31 Mar 2018 Of which 30 Jun 2018 Change 31 Mar 2018 31 Dec 2017 30 Sep 2017 30 Jun 2017 disposals CIB 17,179 (942) (91) 18,122 18,276 17,750 17,300 PCB 43,497 (177) - 43,674 43,837 44,050 44,504 AM 4,017 (31) - 4,048 4,012 4,042 3,991 Infrastructure 30
Slide 35: 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