Deutsche Bank Ag · XETR:DBK
Deutsche Bank — Q2 2021 Earnings Presentation
52 slides from Deutsche Bank's earnings presentation, Jul 28, 2021
Slide 1: Deutsche Bank Q2 2021 results
Deutsche Bank Q2 2021 results 28 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 Demonstrated execution of business strategies and transformation agenda Robust bala
Slide 3: Evidenced improved performance in H1 2021
Evidenced improved performance in H1 2021 H1 2021 H1 2020 Revenues € 13.5bn € 12.6bn Adjusted costs ex transformation charges(1) € 9.8bn € 10.2bn Provision for credit losses € 0.1bn € 1.3bn Cost/income ratio 78% 87% Return on tangible equity(2) 6% (0)% Core Bank return on tangible equity 9% 4% Note:
Slide 4: 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 5: 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 6: Progress on strategic priorities
Progress on strategic priorities H1 2021(1) Corporate Bank Investment Bank Strong performance in FIC despite market Regained #1 market position in corporate banking in Germany(2) normalization Continued progress on transformation € 87bn deposits under charging agreements with Q2 revenues of €
Slide 7: 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 8: 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 9: 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 10: Robust balance sheet
Robust balance sheet Q2 2021 Q1 2021 Comments Common Equity Tier 1 Reflects expected 13.2% 13.7% capital ratio regulatory inflation Further strengthened Leverage ratio 4.8% 4.6% capitalization € 67bn above regulatory Liquidity coverage ratio 143% 146% requirements Provision for credit losses Improve
Slide 11: Good momentum in achieving sustainability goals
Good momentum in achieving sustainability goals In € bn, cumulative Sustainable Finance(1) volumes reported and targets Cumulative volumes by business and product type >200 56 Financing 13 Issuance(2) AuM >150 99 >100 71 42 19 15 6 46 9 13 2020 Q1 2021 Q2 2021 2021 2022 2023 Investment Corporate Pri
Slide 12: Continued delivery of transformation agenda
Continued delivery of transformation agenda H1 results support our path to delivering 8% RoTE and 70% CIR targets in 2022 Improving client engagement and franchise resilience support the revenue trajectory Disciplined execution on controllable cost items Continued adherence to strict and con
Slide 13: 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 14: Q2 2021 Core Bank financial highlights
Q2 2021 Core Bank financial highlights In € bn, unless stated otherwise Change vs. Change vs. Q2 2021 Q2 2020 Q1 2021 Revenues 6.3 (1)% (12)% Revenues ex specific items(1) 6.2 (1)% (13)% Noninterest expenses 4.7 (3)% (7)% Adjusted costs ex transformation charges(2) 4.4 (2)% (10)% Profit (loss) befor
Slide 15: Adjusted costs
Adjusted costs In € m, unless stated otherwise Prime Finance(1) Cost/income Q2 2021 year on year comments ratio (adj.) Q2 2020 ex. — Reductions across all major cost transformation 4,831 92 4,923 78% categories charges — Lower compensation and benefits Compensation reflect workforce reductions. (67)
Slide 16: 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 17: Capital ratios
Capital ratios Movements in basis points, period end CET1 ratio Comments — Q2 2021 CET1 ratio down by 55bps compared to Q1 2021 mainly due to expected regulatory impacts: 13.7% 0 9 13.2% — (64)bps from RWA changes, including ~(70)bps RWA (64) inflation due to TRIM decisions on leveraged lending and
Slide 18: Segment results
Segment results Deutsche Bank Q2 2021 results Investor Relations 28 July 2021
Slide 19: Corporate Bank
Corporate Bank In € m, unless stated otherwise Change in Change in % vs. % vs. Q2 2021 Q2 2020 Q1 2021 Q2 2021 year on year comments Revenues 1,230 (8) (6) — Reported revenues down 8% Revenues Revenues ex specific items(1) 1,230 (8) (6) — Revenues essentially flat adjusted for effects of episodic No
Slide 20: Q2 2021 Corporate Bank revenue performance
Q2 2021 Corporate Bank revenue performance In € m, unless stated otherwise X% X% Excluding specific items(1) Change vs. Q2 2020 Q2 2021 year on year drivers — Corporate Treasury Services decreased by 9% excluding currency Corporate Treasury Services 728 (10)% (10)% effects, mainly driven by lower ep
Slide 21: Investment Bank
Investment Bank In € m, unless stated otherwise Change in Change in % vs. % vs. Q2 2021 Q2 2020 Q1 2021 Q2 2021 year on year comments Revenues 2,394 (11) (23) Revenues — Lower revenues reflecting Revenues ex specific items(1) 2,403 (10) (23) normalized conditions in our macro businesses partially of
Slide 22: Q2 2021 Investment Bank revenue performance
Q2 2021 Investment Bank revenue performance In € m, unless stated otherwise X% X% Excluding specific items(1) Change vs. Q2 2020 Q2 2021 year on year drivers Fixed Income, Currency Sales & Trading: — Significantly higher Credit revenues Fixed Income, Currency reflecting strong performance both in ou
Slide 23: Private Bank
Private Bank In € m, unless stated otherwise Change in Change in % vs. % vs. Q2 2021 Q2 2020 Q1 2021 Q2 2021 year on year comments Revenues 2,018 3 (7) — Pre-tax result impacted by Revenues Revenues ex specific items(1) 1,984 3 (8) € (222)m(8) foregone revenues and litigation charges from BGH ruling
Slide 24: Q2 2021 Private Bank revenue performance
Q2 2021 Private Bank revenue performance In € m, unless stated otherwise X% Excluding specific items(1) Change vs. Q2 2020 Q2 2021 year on year comments Private Bank Germany: — Revenues down 1% due to impact from BGH ruling and up 7%(2) if adjusted Private Bank — Improved markets and continued stron
Slide 25: Asset Management
Asset Management In € m, unless stated otherwise Change in Change in % vs. % vs. Q2 2021 Q2 2020 Q1 2021 Q2 2021 year on year comments Revenues 626 14 (2) Revenues — Record net flows of € 20bn Revenues ex specific items(1) 626 14 (2) across all product pillars and regions in the quarter Noninterest
Slide 26: Corporate & Other
Corporate & Other In € m Profit (loss) before tax Change Change vs. Q2 vs. Q1 Q2 2021 2020 2021 Profit (loss) before tax (39) 126 139 Funding & liquidity (60) 5 (23) (39) Valuation & timing differences(1) 83 124 87 Shareholder expenses (113) (5) (0) Noncontrolling interest(2) 47 5 (3) (165) Other 4
Slide 27: Capital Release Unit
Capital Release Unit In € m, unless stated otherwise Absolute Absolute change vs. change vs. Q2 2021 Q2 2020 Q1 2021 Q2 2021 year on year comments Revenues (24) 43 (105) — Significant improvement in loss before tax Revenues driven by lower expenses and lower de- Revenues ex specific items(1) (23) 21
Slide 28: Outlook
Outlook Improved profitability supports the path to 8% RoTE target Sustainable revenue generation continues even in normalized environment Improved credit environment leads to reduced CLP guidance of ~20bps for 2021 Cost discipline drives CIR towards 70% target despite uncontrollable items Continuin
Slide 29: Appendix
Appendix Deutsche Bank Q2 2021 results Investor Relations 28 July 2021
Slide 30: Sustainability at Deutsche Bank
Sustainability at Deutsche Bank Q2 2021 highlights Our key focus areas Recent achievements – Sustainability Deep Dive hosted on 20 May 2021 with around 3,000 participants – Detailed divisional Sustainable Finance objectives and targets published at the Sustainability Deep Dive Sustainable Finance –
Slide 31: 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 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: 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 40: Deposit charging
Deposit charging In € bn, unless stated otherwise 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 benefitting from lowering
Slide 41: Indicative divisional currency mix
Indicative divisional currency mix Q2 2021 Net revenues Total noninterest expenses 7% 7% 5% 11% 14% 14% 19% 17% 18% 18% 4% 4% 1% 0% 21% 25% 15% 12% 20% 18% 0% 14% 1% 31% 40% 18% 5% 19% 85% 89% 68% 65% 38% 58% 59% 51% 53% 44% 13% 0% CB IB PB AM Group CB IB PB AM Group EUR GBP USD Other(1) Note: Class
Slide 42: 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 43: 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 44: 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 45: Q2 2021 loan and deposit development
Q2 2021 loan and deposit development In € bn, period end 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 rep
Slide 46: Loan book
Loan book In € bn, period end 459 442 440 445 433 432 Corporate Treasury 109 95 Services 99 94 94 96 Business Banking 21 21 21 21 21 21 Investment Bank 87 71 75 80 73 69 International 76 77 80 82 76 75 Private Bank Private Bank 152 155 158 161 162 165 Germany Capital Release Unit Other (1) 3 3 10 10
Slide 47: Loan book composition
Loan book composition Q2 2021, IFRS loans: € 445bn Comments Capital Release Unit Other (1) — Well diversified loan portfolio IB Other(2) Leveraged Debt Capital Markets 1% — 55% of loan portfolio in Private Bank, 6% Asset Backed Securities 1% 1% mainly consisting of German Mortgages 5% German Mortgag
Slide 48: 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 49: Leverage exposure and risk weighted assets
Leverage exposure and risk weighted assets CRD4, fully loaded, in € bn, period end Leverage exposure Risk weighted assets 345 345 67 Operational Risk RWA 67 1,105 1,100 Market Risk RWA Trading assets 107 109 31 22 Credit valuation 6 adjustments Derivatives(1) 148 146 26 Lending(2) 436 432 124 250 Le
Slide 50: Trading book Value at Risk (VaR)
Trading book Value at Risk (VaR) DB Group, 99%, 1 day, in € m, unless stated otherwise Historical Simulation VaR Quarterly average 82 73 46 43 41 140 120 100 80 60 40 20 0 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Note: Deutsche Bank received regulatory approval for the Value at Risk model f
Slide 51: Assets under Management (AuM) – Private Bank
Assets under Management (AuM) – Private Bank In € bn, unless stated otherwise IPB - Investment Products PB GY - Investment Products IPB - Deposits PB GY - Deposits AuM(1,2) – by business unit and product group +14% +3% 519 535 471 477 493 442 109 110 106 107 108 106 57 58 57 57 56 58 354 128 367 114
Slide 52: 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