Deutsche Bank Ag · XETR:DBK
Deutsche Bank — Debt Investor Presentation (July 2018)
30 slides from Deutsche Bank's debt investor presentation, Jul 27, 2018
Slide 1: Q2 2018 Fixed Income Investor Conference Call
Deutsche Bank Q2 2018 Fixed Income Investor Conference Call James von Moltke, Chief Financial Officer Dixit Joshi, Group Treasurer 27 July 2018
Slide 2: Agenda
Agenda 1 Q2 2018 results 2 Capital, funding and liquidity 3 Appendix Deutsche Bank Q2 2018 Fixed Income Investor Call 1 Investor Relations 27 July 2018
Slide 3: Execution on strategic plan to materially improve earnings and capital generation over time
Execution on strategic plan to materially improve earnings and capital generation over time Conservative balance sheet management provides a solid basis to continue reshaping the franchise and focus on growth Corporate & Investment Bank: optimization of capital & resource allocation – including leve
Slide 4: Q2 Group financial highlights
Q2 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 1) p
Slide 5: H1 2018 results demonstrate the resilience of our franchise
H1 2018 results demonstrate the resilience of our franchise € bn, unless stated otherwise Year-over-year change, FX adjusted(1) Revenues Noninterest expenses Profit before tax(2) 0.1 (0.4) 0.5 14.0 13.6 0.2 12.0 12.2 Non- 0.1 0.3 operating costs(3) (0.4) 0.3 12.0 11.9 (0.6) (0.1) 1.7 Adjusted costs(
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) 97.5 23.9 23 >4.0% 22 Q4 6.4 95.4 Q3 5.5 <93.0 1.8% Q2 5.6 5.6 <90.0 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: 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 8: Agenda: Capital, funding and liquidity
Agenda 1 Q2 2018 results 2 Capital, funding and liquidity 3 Appendix Deutsche Bank Q2 2018 Fixed Income Investor Call 7 Investor Relations 27 July 2018
Slide 9: Leverage ratio
Leverage ratio € bn except movements (in basis points), CRD4, fully loaded 32 4.0% 3.7% 2 2 (4) (5) 31 Mar 2018 Distributions(1) DWS Other FX Effect Leverage 30 Jun 2018 Exposure change Tier 1 52.0 (0.5) 0.3 0.3 0.4 52.5 Leverage 1,409 29 (114) 1,324 exposure — Good progress towards 4.5% leverage ra
Slide 10: Common Equity Tier 1 Capital ratio
Common Equity Tier 1 Capital ratio € bn except movements (in basis points), CRD4, fully loaded 37 13.7% 13.4% 9 (2) 9 (15) 31 Mar 2018 Distributions(1) DWS Other FX Effect RWA change 30 Jun 2018 CET1 47.3 (0.5) 0.3 0.3 0.4 47.9 RWA 354 4 (10) 348 — CET1 capital ratio remains above 13% — Reduced risk
Slide 11: Minimum Requirement for Own Funds and Eligible Liabilities (MREL), Total Loss Absorbing Capacity (TLAC)
Minimum Requirement for Own Funds and Eligible Liabilities (MREL), Total Loss Absorbing Capacity (TLAC) DB has a total loss absorbing capacity which is € 18bn above MREL and € 40bn above 2019 Transitional TLAC requirements (1) € 119bn € 101bn Plain-vanilla senior debt(2) € 79bn € 57bn € 1bn TLAC adj
Slide 12: 2018 funding plan and contractual maturities
2018 funding plan and contractual maturities € bn 2018 funding plan Maturity profile Covered Bonds Senior Structured / Preferred Senior Non-Preferred AT1 / Tier2 Expected contractual maturities(1) 25 24 23 2-3 22 21 € 11bn 19 2 12-13 funding plan 4 in H2 2018 3 4 17 10-12 2 14 4 5 1 11 4 5 1 7 16 15
Slide 13: Order of bail-in sequence
New German insolvency hierarchy and implications From 21 July 2018, DB can now issue plain vanilla debt in senior preferred format in addition to previous non-preferred debt format German creditor hierarchy Different senior rating categories X Notching difference Deposits ≤€100k / short-term liabili
Slide 14: External funding profile
External funding profile € bn, as of 30 June 2018 Secured funding and Equity(1) , shorts(4), 7%, € 64bn 15%, € 139bn — Funding profile well diversified: 77% of total funding from 77% from most stable sources (versus 73% in prior quarter) Unsecured wholesale, most stable 3%, € 33bn Capital funding —
Slide 15: Liquidity
Liquidity Liquidity Coverage Ratio(1) (LCR) 147% 147% — Liquidity Coverage Ratio and Liquidity 144% 140% Reserves remained flat over the quarter at 128% € 77bn 147% and € 279bn above 119% 100% — The cash portion of Liquidity Reserves require- ment reduced to 73%, driven by a combination of active ma
Slide 16: Non-strategic legacy assets in CIB
Non-strategic legacy assets in CIB € bn Risk weighted assets excluding operational risk Background ― Non-strategic portfolio created to facilitate the (35)% run-down of residual CIB assets in the former non-core operations unit and other items not 13 consistent with the CIB strategy 8 Recent perform
Slide 17: 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 active in various markets, some of which are less liquid Equity securities 1 1 — Assets are mainly booked in core businesses – only Other 2 € 1.4bn are
Slide 18: Agenda: Appendix
Agenda 1 Q2 2018 results 2 Capital, funding and liquidity 3 Appendix Deutsche Bank Q2 2018 Fixed Income Investor Call 17 Investor Relations 27 July 2018
Slide 19: AT1 and Trust Preferred Securities outstanding
AT1 and Trust Preferred Securities outstanding(1) Original Regulatory Capital Current Nominal Next call Subsequent Issuer ISIN issuance treatment(1) recognition(1) Coupon outstanding date call period date DB Contingent Capital Trust II AT1 / Tier 2 100% / 100% US25153X2080 6.550% USD 800mn 23-May-07
Slide 20: Minimum Requirement for Own Funds and Eligible Liabilities (MREL)
Minimum Requirement for Own Funds and Eligible Liabilities (MREL)(1) Single Resolution Board (SRB) methodology (% RWA) Requirements Pillar 1 minimum requirement — MREL requirement calculated by the Single Resolution Pillar 2 requirement Board (SRB) from a % of risk-weighted assets (RWA), Combined bu
Slide 21: Funding sources to TLAC reconciliation
Funding sources to TLAC reconciliation € bn, as of 30 June 2018 198 Covered 21 (21) bonds Structured 26 (26) notes (16) (0) (16) +1 119 Plain-vanilla senior debt 73 Plain-vanilla 57 senior debt 15 TLAC AT1 / Tier 2 adjust- 1 ments 14 AT1 / Tier 2(5) Shareholder’s Equity 63 CET1(5) 48 Funding TLAC ex
Slide 22: Current Ratings
Current Ratings part of loss-absorbing capacity senior to loss-absorbing capacity Counterparty obligations (e.g. Deposits / Structured A3 BBB+(1) A- A(high) Notes / Derivatives / Swaps) Senior Preferred(2) A3 BBB+ A- - Long- term unse- cured Non-preferred Baa2 BBB- BBB+ A (low) Tier 2 Ba2 BB+ BBB -
Slide 23: Rating landscape – senior unsecured and short-term ratings
Rating landscape – senior unsecured and short-term ratings Moody‘s S&P Operating company / Preferred Senior(1) Holding company / Non-preferred Senior(2) Rating scale EU Peers Swiss Peers US Peers Short-term Long-term BAR BNP HSBC SOC CS UBS BoA Citi GS JPM MS P/A-1 Aa2/AA P/A-1 Aa3/AA- P/A-1 A1/A+ P
Slide 24: Balance sheet overview (after netting)
Balance sheet overview (after netting) € bn, as of 30 June 2018 Assets Liabilities & equity 1,026 1,026 5 Unsecured Wholesale (excl. deposits) 205 112 Trading liabilities, repos Cash and equivalents 219 and securities lend (1) Liquidity reserves Securities 207 74 Deposits, including 559 - Retail (in
Slide 25: 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 26: 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 27: 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 28: 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% — Well diversified Loan Portfolio 1% 6% — Over 2/3rds of the loan portfolio in the German Private & Commercial Bank and
Slide 29: 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 30: 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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