Deutsche Bank Ag · XETR:DBK
Deutsche Bank — Q2 2023 Earnings Presentation
43 slides from Deutsche Bank's earnings presentation, Jul 26, 2023
Slide 1: Q2 2023 results
Deutsche Bank Investor Relations Q2 2023 results #PositiveImpact July 26, 2023 Deutsche Bank Investor Relations
Slide 2: Continued positive momentum in H1 2023
Continued positive momentum in H1 2023 € 15.1bn Continued revenue momentum driven by resilient and well-balanced franchise, with growth in Revenues Corporate Bank and Private Bank, and strong net inflows 8% Revenue growth YoY Proven earnings power, with profit before tax of € 3.3bn after absorbi
Slide 3: Well-positioned franchise across divisions
Well-positioned franchise across divisions H1 2023 Corporate Bank Investment Bank Strong revenue momentum and continued high operating leverage 24% Leading global FIC franchise, with longstanding stable + 9% Operating leverage1 FIC Financing revenue Financing business growth Q2 2023 YoY Securi
Slide 4: Complementary business portfolio driving growth
Complementary business portfolio driving growth Net revenues, in € bn, unless stated otherwise Half-year Last twelve months1 Revenue trajectory underpinning confidence in full-year 15.1 Group 24.9 25.9 28.3 guidance of mid-point of a range between € 28-29bn in 2023, with potential for upside 28.4 14
Slide 5: Growing underlying earnings power
Growing underlying earnings power In € bn, unless stated otherwise Pre-provision profit1 Profitability ratios RoTE, in % +8% 9.3 8.0 Strong revenue performance resulted in a pre-provision 4.0 6.8 profit increase in H1 2023 3.7 Higher nonoperating costs in H1 2023 with € 0.5bn of 15.1 +8% litigation
Slide 6: Accelerated execution of strategic agenda
Accelerated execution of strategic agenda Efficiency measures Capital efficiency Revenue growth € 2.5bn € 15-20bn 3.5-4.5% Operational efficiencies targeted Additional RWA reductions targeted Revenue CAGR 2021-2025 targeted € 0.6bn of operational efficiencies already Revenues increased despite year-
Slide 7: Group financials
Group financials Deutsche Bank Q2 2023 results 6 Investor Relations July 26, 2023
Slide 8: Key performance indicators
Key performance indicators In % Revenue CAGR1 H1 2023 LTM vs FY 2021 CIR development 85 73 Continued business momentum driven by 75 reported interest environment, offset by normalizing markets 25.5 10.9 67 7.5 adjusted Cost/income ratio (CIR) and return on (3.7) (5.7) tangible equity (RoTE) impacted
Slide 9: Q2 2023 highlights
Q2 2023 highlights In € bn, unless stated otherwise Financial results Divisional revenues Key highlights Δ vs. Δ vs. Δ vs. Q2 2023 Q2 2022 Q1 2023 +11% +11% Q2 2022 Statement of income Revenues 7.4 11% (4)% 7.4 Revenues ex-specific items1 7.5 13% (2)% 6.6 Provision for credit losses 0.4 72% 8% Str
Slide 10: 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% 4.20% 1.47% 1.51% 1.51% 3.36% 1.39% 1.41% Strong Corporate Bank and 2.64% Private Bank NIM, as rate pass- 2.49% through con
Slide 11: Adjusted costs – Q2 2023 (YoY)
Adjusted costs – Q2 2023 (YoY) In € m, unless stated otherwise Key highlights Q2 2022 ex- 4,762 bank levies Cost trajectory continues to reflect inflationary pressures, FX impact ongoing controls investments and business growth, offset Compensation by efficiency initiatives and benefits1 (49) 19
Slide 12: 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 Q2 provision moderately higher than 24 19 28 28 30 33 prior quarter as a result of increases in stage 1+2 provisions based on 351 372 401 portfolio and rating movements,
Slide 13: Capital metrics
Capital metrics Movements in basis points (bps), unless stated otherwise, period end CET1 ratio Leverage ratio MREL/TLAC, in € bn 16 13.8% 5 4.7% Surplus above requirements 4.6% 1 13.6% (1) 121 0 (1) Senior 7 preferred1 12 Senior 31 non- 45 preferred Q1 2023 FX effect RWA Capital Q2 2023 Q1 2023 FX
Slide 14: Segment results
Segment results Deutsche Bank Q2 2023 results 13 Investor Relations July 26, 2023
Slide 15: Corporate Bank
Corporate Bank In € m, unless stated otherwise Financial results Revenue performance Key highlights Δ vs. Δ vs. Δ vs. Q2 Q2 2023 Revenues higher year on year driven by Q2 2022 Q1 2023 2022 Corporate increased interest rates with growth across Treasury Services Statement of income 1,076 14% 14% all
Slide 16: Investment Bank
Investment Bank In € m, unless stated otherwise Financial results Revenue performance Key highlights Δ vs. Δ vs. Δ vs. Q2 Strong FIC performance, despite lower Q2 2023 Q2 2022 Q1 2023 2022 volatility environment, against an exceptional FIC Sales & Trading Statement of income prior year quarter 2,1
Slide 17: Private Bank
Private Bank In € m, unless stated otherwise Financial results Revenue and AuM performance Key highlights Δ vs. Δ vs. Revenues Δ vs. Q2 Q2 2023 Q2 2022 Q1 2023 2022 Double-digit revenue growth year on year Germany Statement of income driven by higher net interest income in both 1,535 PB 16% 16% bu
Slide 18: Asset Management
Asset Management In € m, unless stated otherwise Financial results Revenue and AuM performance Key highlights Revenues Δ vs. Q2 Δ vs. Δ vs. Q2 2023 Q2 2022 Q1 2023 2022 trans. Mgmt. Other fees fees Statement of income 580 (6)% Revenues 620 (6)% 5% Net flows excluding Cash of € 10.4bn driven Perf.
Slide 19: Corporate & Other
Corporate & Other In € m, unless stated otherwise Financial results Profit (loss) before tax Key highlights Δ vs. Δ vs. Abs. Δ vs. Q2 2023 Q2 2022 Q1 2023 Q2 2022 Statement of income Funding & liquidity (10) 116 Loss before tax of € 115m includes positive impact from valuation and timing differenc
Slide 20: Outlook
Outlook H1 revenue momentum underpins confidence in full-year guidance of mid-point of a range between € 28-29bn in 2023, with potential for upside FY 2023 noninterest expenses slightly higher, attributable to higher nonoperating costs, with adjusted costs remaining essentially flat Provision for cr
Slide 21: Appendix
Appendix Deutsche Bank Q2 2023 results 20 Investor Relations July 26, 2023
Slide 22: 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 Well positioned to Increased revenue Reiterate CIR target, Aim to operate w
Slide 23: 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 24: Sustainability
Sustainability Q2 2023 highlights Recent achievements Sustainable Finance1 volumes Increased Sustainable Finance volumes by € 17bn to € 254bn1 (cumulative since 2020) Received awards in May 2023 as “Best bank for ESG 2023” for its ESG-related trade and supply chain finance Sustainable programs a
Slide 25: Specific revenue items and adjusted costs – Q2 2023
Specific revenue items and adjusted costs – Q2 2023 In € m Q2 2023 Q2 2022 Q1 2023 CB IB PB AM C&O Group CB IB PB AM C&O Group CB IB PB AM C&O Group Revenues 1,943 2,361 2,400 620 85 7,409 1,551 2,646 2,160 656 (363) 6,650 1,973 2,691 2,438 589 (10) 7,680 1 DVA - IB Other / Legacy portfolios - (71)
Slide 26: Specific revenue items and adjusted costs – H1 2023
Specific revenue items and adjusted costs – H1 2023 In € m H1 2023 H1 2022 CB IB PB AM C&O Group CB IB PB AM C&O Group Revenues 3,916 5,052 4,838 1,209 75 15,089 3,013 5,969 4,380 1,338 (722) 13,977 revenue items DVA - IB Other / Legacy portfolios1 - (24) - - 2 (22) - 4 - - (5) (1) Specific Sal. Opp
Slide 27: Pre-provision profit, CAGR and operating leverage
Pre-provision profit, CAGR and operating leverage In € m, unless stated otherwise CAGR2 FY 2021 - H1 2023 vs H1 FY 2021 LTM Q2 2023 H1 2022 H1 2023 Q3 2022 Q4 2022 Q1 2023 Q2 2023 LTM Q2 2023 2022 Net revenues Corporate Bank 5,153 1,564 1,760 1,973 1,943 7,240 25.5% 3,013 3,916 30% Investment Bank 9
Slide 28: Adjusted post-tax RoTE, CIR and operating leverage
Adjusted post-tax RoTE, CIR and operating leverage In € m, unless stated otherwise Q2 2022 Q2 2023 H1 2022 H1 2023 Profit (loss) before tax 1,547 1,405 3,205 3,258 (-) Restructuring & severance 14 (260) 47 (283) (-) Litigation (116) (395) (142) (461) Adjustments Nonoperating costs adjustment 102 655
Slide 29: Last 12 months (LTM) revenues reconciliation
Last 12 months (LTM) revenues reconciliation In € m, unless stated otherwise Q2 2021 Q2 2022 Q2 2023 Q2 2023 Q3 20201 Q4 20201 Q1 20211 Q2 20211 Q3 20211 Q4 20211 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 LTM2 LTM3 LTM4 LTM %-share5 Revenues Corporate Bank 1,255 1,226 1,314 1,230 1,255 1,352 1
Slide 30: Indicative divisional currency mix
Indicative divisional currency mix Q2 2023 Net revenues Noninterest expenses 8% 6% 8% 5% 17% 15% 16% 13% 16% 19% 0% 5% 1% 7% 23% 29% 14% 19% 19% 0% 29% 35% 30% 13% 9% 15% 1% 16% 0% 87% 85% 69% 30% 59% 56% 56% 51% 51% 50% 22% CB IB PB AM Group CB IB PB AM Group EUR GBP USD Other1 Notes: classificatio
Slide 31: 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 ~200 Current observations on client ~90 ~125 pricing show a slower pass-through ~(90) ~(135) of interest
Slide 32: 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 401 Group stage 3 2.5% 2.5% 2.5% 2.7% 2.7% 350 351 372 loans at 41 141 amortized 13.2 78 12.2 1
Slide 33: Loan and deposit development
Loan and deposit development In € bn, unless stated otherwise, loan-to-deposit ratio 81% Loan development Key highlights QoQ YoY 493 503 489 488 482 (1)% (2)% Lending reduction of € 5bn (1%) in the quarter adjusted for FX Investment Bank 99 105 103 103 103 Loans in the Corporate Bank reduced by
Slide 34: Loan book composition
Loan book composition Q2 2023, IFRS loans: € 482bn Key highlights Other 1 Other IB2 0% Well-diversified loan portfolio Leveraged Debt Capital Markets 10% 1% YTD FX impact on loan book is € (3.1)bn Asset Backed Securities German Mortgages 6% 54% of loan portfolio in Private Bank, mainly consist
Slide 35: Level 3 assets and liabilities
Level 3 assets and liabilities As of June 30, 2023, in € bn Assets: € 26bn Liabilities: € 10bn Key highlights Equity securities Mortgage backed securities Other Other 1 0 2 Derivative Derivative liabilities Debt securities Level 3 is an indicator of valuation uncertainty and Debt 9 assets 3 securi
Slide 36: Leverage exposure and risk-weighted assets
Leverage exposure and risk-weighted assets CRD4, in € bn, period end Leverage exposure Risk-weighted assets 359 359 58 Operational risk RWA 58 1,238 1,236 Market risk RWA Trading assets 110 108 31 22 Credit valuation 7 Derivatives1 126 128 25 adjustments Lending 493 250 487 144 Lending commitments2
Slide 37: Litigation update
Litigation update In € bn, period end Litigation provisions Key highlights 1.2 1.3 1.2 1.2 1.5 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Litigation provisions increased by € 0.3bn quarter on quarter; during the second quarter of 2023, the Group resolved a number of longstanding matters; the cost of
Slide 38: 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 47 52 47 51 44 80 60 40 20 0 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Stressed VaR, DB Group Regulatory scope, 99%, 10 days Quarterly average 256 1
Slide 39: Assets under management – Private Bank
Assets under management – Private Bank In € bn, unless stated otherwise AuM1,2 – by business unit and product group +3% +2% Including € (15)bn disposal effect4 529 529 518 531 541 112 111 110 109 110 72 76 73 72 74 Inv. Prod. 122 345 121 127 135 350 139 358 342 336 223 221 209 215 220 Q2 2022 Q3 202
Slide 40: Assets under management – Asset Management
Assets under management – Asset Management In € bn, unless stated otherwise AuM development Quarterly mgmt. 28.4 Year on year 27.4 27.7 Quarter on quarter 27.4 fee margin, in bps 859 859 1 0 11 (16) 20 21 (2) 9 833 841 Q2 2022 Net flows FX Market Other Q2 2023 Q1 2023 Net flows FX Market Other Q2 20
Slide 41: Footnotes 1/2
Footnotes 1/2 Slide 1 – Continued positive momentum in H1 2023 Slide 11 – 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 gro
Slide 42: Footnotes 2/2
Footnotes 2/2 Slide 18 – Corporate & Other Slide 31 – Provision for credit losses and stage 3 loans 1. Valuation & timing reflects the mismatch in revenue from instruments accounted for on an accrual basis 1. Quarterly provision for credit losses annualized as basis points of average loans gross of
Slide 43: 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