Deutsche Bank Ag · XETR:DBK
Deutsche Bank — Q1 2023 Earnings Presentation
48 slides from Deutsche Bank's earnings presentation, Apr 27, 2023
Slide 1: Q1 2023 results
Deutsche Bank Investor Relations Q1 2023 results #PositiveImpact April 27, 2023 Deutsche Bank Investor Relations
Slide 2: Strong performance in volatile markets
Strong performance in volatile markets Q1 2023 Profitability Resilience Improvement in pre-provision profit to € 2.2bn in the quarter 8% Strong balance sheet, positioned to navigate uncertainty; credit loss 13.6% RoTE1 CET1 provisions contained, proving robust Ongoing disciplined expense manag
Slide 3: Continued progress across all divisions
Continued progress across all divisions Q1 2023 Corporate Bank Investment Bank New MNC mandates for working capital and global value chain 33% Strong underlying FIC revenue driven by robust client activity + 40 bps Operating leverage1 O&A QoQ share growth reviews Continued development of core
Slide 4: Balanced portfolio of businesses driving performance
Balanced portfolio of businesses driving performance Pre-provision profit1, in € bn, unless stated otherwise Divisional composition2 Q1 2023 LTM Q1 2023 7.1 Resilient pre-provision profit in Q1 2023 with more balanced 6% divisional composition, well-positioned to navigate in volatile times 22% 36% 2
Slide 5: Reinforcing cost agenda across front office and infrastructure
Reinforcing cost agenda across front office and infrastructure Realigned and centralized cost responsibility within the Management Board Productivity increases through dynamic capacity planning and removal of duplications Immediate ~5% reduction in senior management of non-client facing functions St
Slide 6: Well diversified loan and deposit base, supported by strong capital and liquidity
Well diversified loan and deposit base, supported by strong capital and liquidity Well-diversified loan book Stable deposit base Strong capital and liquidity By business By region 73% CET1 Ratio: 13.6% Other Investment Other Bank Asia of € 592bn deposit base is within (~250bps MDA buffer) 0% 2% 21%
Slide 7: Global Hausbank positioned to support our clients through every cycle
Global Hausbank positioned to support our clients through every cycle Strategy aligned to trends Clear focus on clients Equipped to navigate changed interest rate Growth trajectory confirms set-up with four client centric environment businesses Macro shifts Deploy risk management expertise to su
Slide 8: Accelerated execution of strategic agenda driving returns
Accelerated execution of strategic agenda driving returns Efficiency measures Capital efficiency Revenue growth In € bn Enhanced regional and industry 2.5 RWA reduction in lower- coverage yielding portfolios and Corporate Strategic realignment and future ~€ 15-20bn other optimizations over Bank
Slide 9: Summary
Summary Q1 performance demonstrates the resilience and strength of our franchise, profitability and balance sheet Platform positioned for growth, reflecting benefits of a diversified business model, with a strong step-off to accelerate our Global Hausbank ambition Initiated measures to drive increme
Slide 10: Group financials
Group financials Deutsche Bank Q1 2023 results 9 Investor Relations April 27, 2023
Slide 11: Key performance indicators
Key performance indicators In % Revenue CAGR1 Q1 2023 LTM vs FY 2021 CIR development 85 Continued revenue momentum, with 75 71 Group revenue CAGR in line with 2025 targets 25.6 10.9 6.7 Further improvement in cost/income (2.1) (5.7) ratio (CIR); with pro-rata annualized- CB IB PB AM Group FY 2021 FY
Slide 12: Q1 2023 highlights
Q1 2023 highlights In € bn, unless stated otherwise Financial results Divisional revenues Key highlights Δ vs. Δ vs. Δ vs. Q1 2023 Q1 2022 Q4 2022 +5% +5% Q1 2022 Statement of income Revenues 7.7 5% 22% 7.3 7.7 Revenue growth demonstrates Revenues ex-specific items1 7.6 4% 26% benefits of a divers
Slide 13: Net interest margin (NIM)
Net interest margin (NIM) Divisional NIM development Group NIM development Key highlights Net interest margin1 Average interest earnings assets2, in € bn Corporate Bank 4.13% Corporate Bank and Private Bank 1.51% NIM show continued favorable 3.36% 1.47% 1.39% 1.41% development due to rising rates
Slide 14: Adjusted costs – Q1 2023 (YoY)
Adjusted costs – Q1 2023 (YoY) In € m, unless stated otherwise Key highlights Q1 2022 ex- bank levies 4,655 Adjusted costs excluding bank levies flat compared to FX impact prior quarter, in line with run-rate guidance of € 1.60- Compensation 6 26 1.65bn per month and benefits1 Cumulative investm
Slide 15: Provision for credit losses
Provision for credit losses In € m, unless stated otherwise Key highlights Stage 1+2 Stage 3 In bps of average loans annualized1 24 19 28 28 30 Q1 provisions slightly higher compared 351 372 to the previous quarter 350 Stage 3 provisions slightly increased, 13 driven by idiosyncratic events in 2
Slide 16: Commercial Real Estate (CRE)
Commercial Real Estate (CRE) Focus portfolio comprised of IB and CB non-recourse CRE lending CRE portfolio: € 33bn IB CRE: € 28bn Risk management and mitigations By region 28 APAC Retail 13% 2 Geographically diverse, well located Hotel 3 Of total loans institutional quality assets € 33bn 50% US Ot
Slide 17: Funding and liquidity
Funding and liquidity In € bn, unless stated otherwise Diversified deposit base Strong liquidity By business By product Surplus above Investment Bank Term Deposits & Treasury Other requirements 64 63 ~50 Institutional Term Deposits 3% 11% Private Bank 13% Private Bank 142% 143% Client Services 3% Ge
Slide 18: Capital metrics
Capital metrics Movements in basis points (bps), period end, unless stated otherwise CET1 ratio Leverage ratio MREL/TLAC, in € bn 30 13.6% 7 4.6% Surplus above requirements 1 4.6% 1 13.4% 127 (6) (2) Senior 8 preferred1 19 Senior 35 non- 50 preferred Q4 2022 FX effect RWA Capital Q1 2023 Q4 2022 FX
Slide 19: Segment results
Segment results Deutsche Bank Q1 2023 results 18 Investor Relations April 27, 2023
Slide 20: Corporate Bank
Corporate Bank In € m, unless stated otherwise Financial results Revenue performance Key highlights Δ vs. Δ vs. Δ vs. Q1 Q1 2023 Q1 2022 Q4 2022 2022 Highest quarterly revenues since the Corporate Treasury Services Statement of income 1,188 32% 32% formation of the Corporate Bank with Revenues 1,9
Slide 21: Investment Bank
Investment Bank In € m, unless stated otherwise Financial results Revenue performance Key highlights Δ vs. Δ vs. Δ vs. Q1 Revenues lower compared to an Q1 2023 Q1 2022 Q4 2022 2022 exceptionally strong prior year quarter FIC Sales & Trading Statement of income 2,360 (17)% (17)% FIC revenues lowe
Slide 22: Private Bank
Private Bank In € m, unless stated otherwise Financial results Revenue and AuM performance Key highlights Δ vs. Δ vs. Revenues Δ vs. Q1 Q1 2023 Q1 2022 Q4 2022 2022 Germany Statement of income 1,550 PB 14% 14% Revenues at record levels driven by net Revenues 2,438 10% (3)% 1 interest income in bot
Slide 23: Asset Management
Asset Management In € m, unless stated otherwise Financial results Revenue and AuM performance Key highlights Revenues Δ vs. Q1 Δ vs. Δ vs. Q1 2023 Q1 2022 Q4 2022 2022 trans. Mgmt. Other fees fees Statement of income 571 (8)% Net flows excluding Cash of € 8.8bn driven Revenues 589 (14)% (3)% by P
Slide 24: Corporate & Other
Corporate & Other In € m, unless stated otherwise Financial results Profit (loss) before tax Key highlights Δ vs. Δ vs. Abs. Δ vs. Q1 2023 Q1 2022 Q4 2022 Q1 2022 Statement of income Funding & liquidity (106) 21 Loss before tax of € (226)m includes positive impact from valuation and timing differe
Slide 25: Outlook
Outlook Group revenues expected to be around the mid-point of a range between € 28-29bn in 2023 Monthly run-rate for adjusted costs ex-bank levies in line with guidance of € 1.60-1.65bn Additional cost measures expected to result in restructuring and severance charges of around € 500m in 2023 Provis
Slide 26: Appendix
Appendix Deutsche Bank Q1 2023 results 25 Investor Relations April 27, 2023
Slide 27: 2025 financial targets and capital objectives
2025 financial targets and capital objectives Financial targets Capital objectives 3.5- >10% <62.5% ~13% 50% 4.5% Cost/income Total payout Post-tax RoTE Revenue CAGR in 2025 2021-2025 ratio CET1 ratio ratio in 2025 from 2025 Confirm 2025 target Increased revenue Reiterate CIR target, Aim to operate
Slide 28: Definition of certain financial measures
Definition of certain financial measures Revenues Revenues excluding specific items are calculated by adjusting net revenues under IFRS for specific revenue items which generally fall outside the usual nature or scope of the business and are likely to distort an accurate assessment of the divisional
Slide 29: Sustainability
Sustainability Q1 2023 highlights Recent achievements Sustainable Finance1 volumes Increased Sustainable Finance volumes by € 22bn QoQ to € 238bn1 (cumulative since 2020) Signed agreement between DB Private Bank and WWF Germany for advisory service to advance sustainable Sustainable finance offe
Slide 30: Specific revenue items and adjusted costs
Specific revenue items and adjusted costs In € m Q1 2023 Q1 2022 Q4 2022 CB IB PB AM C&O Group CB IB PB AM C&O Group CB IB PB AM C&O Group Revenues 1,973 2,691 2,438 589 (10) 7,680 1,462 3,323 2,220 682 (359) 7,328 1,760 1,675 2,506 609 (236) 6,315 revenue items DVA - IB Other / Legacy portfolios1 -
Slide 31: Pre-provision profit, CAGR and operating leverage
Pre-provision profit, CAGR and operating leverage In € m, unless stated otherwise CAGR2 FY 2021 - Q1 2023 vs Q1 FY 2021 LTM Q1 2023 Q1 2022 Q1 2023 Q2 2022 Q3 2022 Q4 2022 Q1 2023 LTM Q1 2023 2022 Net revenues Corporate Bank 5,153 1,551 1,564 1,760 1,973 6,848 25.6% 1,462 1,973 35% Investment Bank 9
Slide 32: Indicative divisional currency mix
Indicative divisional currency mix Q1 2023 Net revenues Noninterest expenses 8% 6% 4% 10% 13% 19% 20% 16% 18% 16% 0% 5% 16% 6% 1% 28% 10% 20% 0% 15% 24% 19% 32% 38% 1% 6% 17% 15% 0% 86% 83% 70% 64% 59% 58% 49% 46% 50% 51% 0% CB IB PB AM Group CB IB PB AM Group EUR GBP USD Other1 Note: Classification
Slide 33: Net interest income sensitivity
Net interest income sensitivity Hypothetical +/-25bps shift in yield curve, in € m Net interest income (NII) sensitivity1 Key highlights +25bps shift in yield curve -25bps shift in yield curve ~160 ~80 ~80 Current observations on client ~(80) ~(90) pricing show a slower pass through ~(170) of inte
Slide 34: Evolution of market-implied interest rates
Evolution of market-implied interest rates In % ECB deposit facility rate Federal Reserve interest on reserve balances 5.5 5.5 5.0 5.0 4.5 4.5 4.0 4.0 3.5 3.5 3.0 3.0 2.5 2.5 2.0 2.0 04/23 07/23 10/23 01/24 04/24 07/24 10/24 01/25 04/25 07/25 04/23 07/23 10/23 01/24 04/24 07/24 10/24 01/25 04/25 07/
Slide 35: 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 Corporate Bank Investment Bank PB (ex-POCI) CB (ex-POCI) IB (ex-POCI) POCI 350 351 372 2.6% 2.5% 2.5% 2.5% 2.7% Group stage 3 41 loans at 292 78 13.0 132 64 amortized 12.
Slide 36: Loan and deposit development
Loan and deposit development In € bn, unless stated otherwise, loan-to-deposit ratio 82% Loan development Key highlights QoQ YoY 481 493 503 489 488 (0)% 1% Investment Bank 94 99 105 103 103 (0)% 10% Year-on-year growth of 1% (€ 4bn) adjusted for FX effects, Corporate Bank 125 129 129 122 121 driv
Slide 37: Loan book composition
Loan book composition Q1 2023, IFRS loans: € 488bn Key highlights Other IB2 Other 1 Leveraged Debt Capital Markets 0% Well-diversified loan portfolio 9% Asset Backed Securities 1% YTD FX impact on loan book is € (2.4)bn German Mortgages 6% 54% of loan portfolio in Private Bank, mainly consisti
Slide 38: Derivatives bridge
Derivatives bridge Q1 2023, IFRS derivative trading assets and the impact of netting and collateral, in € bn Key highlights 246 Gross notional derivative exposure amounts are not exchanged and relate only to the reference amount of all contracts; it is no reflection of the credit or market risk ru
Slide 39: Commercial Real Estate (CRE)
Commercial Real Estate (CRE) Focus portfolio comprised of IB and CB non-recourse CRE lending Focus Portfolio: € 33bn IB CRE: € 28bn IB US office loans: € 4.5bn Weighted average LTV 62% US office portfolio in focus given significantly lower occupancy rates CRE loans € 33bn – 7% of total loans 5
Slide 40: Level 3 assets and liabilities
Level 3 assets and liabilities As of March 31, 2023, in € bn Assets: € 26bn Liabilities: € 11bn Key highlights Equity securities Mortgage backed securities Other Other 1 0 3 0 Derivative Debt Securities Level 3 is an indicator of valuation uncertainty and 9 Assets 3 Debt not of asset quality secur
Slide 41: Leverage exposure and risk-weighted assets
Leverage exposure and risk-weighted assets CRD4, in € bn, period end Leverage exposure Risk-weighted assets 360 360 59 Operational risk RWA 59 1,240 1,238 Market risk RWA Trading assets 92 110 33 24 Credit valuation 6 Derivatives1 130 126 24 adjustments Lending 494 250 493 146 Lending commitments2 C
Slide 42: Litigation update
Litigation update In € bn, period end Litigation provisions Key highlights 1.1 1.2 1.3 1.2 1.2 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Provisions remained stable quarter on quarter Contingent liabilities Contingent liabilities remained stable quarter on quarter; contingent liabilities include po
Slide 43: Value-at-Risk / stressed Value-at-Risk (VaR / sVaR)
Value-at-Risk / stressed Value-at-Risk (VaR / sVaR) In € m, unless stated otherwise VaR, DB Group Trading book, 99%, 1 day Quarterly average 30 47 52 47 51 80 60 40 20 0 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Stressed VaR, DB Group Regulatory scope, 99%, 10 days Quarterly average 223
Slide 44: Assets under management – Private Bank
Assets under management – Private Bank In € bn, unless stated otherwise AuM1,2 – by business unit and product group (2)% -2% +3% Including € (15)bn disposal effect4 549 529 529 518 531 112 112 111 110 109 69 72 76 73 72 Inv. Prod. 134 368 122 345 121 342 127 336 135 350 235 223 221 209 215 Q1 2022 Q
Slide 45: Assets under management– Asset Management
Assets under management– Asset Management In € bn, unless stated otherwise AuM development Quarterly mgmt. 27.7 Year on year 27.7 28.1 Quarter on quarter 27.7 fee margin, in bps 902 841 (13) 1 7 (56) 19 841 821 6 (7) 1 Q1 2022 Net flows FX Market Other Q1 2023 Q4 2022 Net flows FX Market Other Q1 20
Slide 46: Footnotes 1/2
Footnotes 1/2 Slide 1 – Solid performance in volatile markets Slide 14 – Provision for credit losses 1. Throughout this presentation post-tax return on average tangible shareholders’ equity (RoTE) is calculated 1. Quarterly provision for credit losses annualized as basis points of average loans gros
Slide 47: Footnotes 2/2
Footnotes 2/2 Slide 23 – Corporate & Other Slide 36 – Loan book composition 1. Valuation & timing reflects the mismatch in revenue from instruments accounted for on an accrual basis 1. Mainly includes Corporate & Other and Institutional Client Services in the Corporate Bank under IFRS that are econo
Slide 48: Cautionary statements
Cautionary statements Forward-looking 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