Deutsche Bank Ag · XETR:DBK

Deutsche Bank — Goldman Sachs European Financials Conference 2007

24 slides from Deutsche Bank's conference presentation, Jun 14, 2007

  1. Slide 1: Managing Risk in a Bull Market

    Managing Risk in a Bull Market Dr. Hugo Banziger Chief Risk Officer Goldman Sachs European Financials Conference Lisbon, 14 June 2007

  2. Slide 2: Agenda

    Agenda 1 Outstanding performance 2 Outlook for major risk buckets 3 Update on Basel II 4 Summary Investor Relations 06/07 · 2

  3. Slide 3: First quarter 2007 results

    First quarter 2007 results Strong profit growth and outperformance against key targets Income before income taxes Net income In EUR bn In EUR bn 6.1 8.3 6.1 3.5 4.0 2.5 3.2 2.1 2.8 22% 1.4 29% 2.6 1.6 2003 2004 2005 2006 1Q07 2003 2004 2005 2006 1Q07 Pre-tax RoE (target definition)(1) Diluted EPS (t

  4. Slide 4: Delivery to shareholders

    Delivery to shareholders Dividend per share Cash returned to shareholders In EUR In EUR bn 4.00 12.9 32% CAGR Dividends 5.7 2.50 1.70 1.50 1.30 7.2 Share retirements 2002 2003 2004 2005 2006 2002 - 2006 Investor Relations 06/07 · 4

  5. Slide 5: De-risked the bank… Significant reduction in credit losses

    De-risked the bank… Significant reduction in credit losses Loan book development Provision for credit losses In EUR bn, at period end In EUR m 2,108 183 189 172 (1) 148 153 10.8 (2) 139 994 1,063 6.6 9.7 4.8 3.9 3.2 3.1 307 350 298 98 4.3 2.6 2.5 2.7 2.4 2002 2003 2004 2005 2006 1Q07 2001 2002 2003

  6. Slide 6: …and focussed on strict balance sheet discipline

    …and focussed on strict balance sheet discipline Economic profit development 2002 – 1Q2007 Financial Institutions Corporates economic profit economic profit economic loss 2002 2004 2006 1Q07 2002 2004 2006 1Q07 Total Financial Institutions Thereof Non Bank Financial Institutions Total Corporates The

  7. Slide 7: Disciplined approach in market risk management…

    Disciplined approach in market risk management… Efficiency further improved and loss-making days down „ VaR & EC levels only moderately up despite Sales & Trading revenues / Ø VaR(1) significant volume increase 102 1Q2006 1Q2007 100 „ Risk efficiency measured in sales & trading revenues/Ø VaR furthe

  8. Slide 8: …and strict management of operational risks

    …and strict management of operational risks Overall level of losses contained in growth phase „ Strong growth in net income & transaction Net income, transaction volumes* and losses volumes since 2004….. Transaction volumes* OR losses (rhs) „ …however, Operational Risk losses have Qtr net income (lh

  9. Slide 9: Pandemic & cyber risk management

    Pandemic & cyber risk management Preparedness & prevention through strategy & governance … „Preparation for pandemic event Pandemic risk strategy „ Four-phased corporate action plan aligned Phases 1 to 3 Phases 4 to 6 with international SOS and WHO ■ Plan business strategy ■ Invoke crisis management

  10. Slide 10: Integrated risk profile and capital management

    Integrated risk profile and capital management Newly formed CaR committee ensures proper capital control Integrated planning Comprehensive stress testing Examples of risks for DB FX Rates Interest Rates Default Rates Business targets Risk appetite 1.4 1.3 7.00% 6.00% 5.00 4.50 4.00 5.00% 3.50 1.2 3.

  11. Slide 11: Maintaining discipline is pre-condition for successful Phase 3

    Maintaining discipline is pre-condition for successful Phase 3 Management Agenda Phase 3 2006 – 2008: Leveraging our global platform for accelerated growth Maintain our cost, risk, capital and Continue to invest in organic growth and regulatory discipline ‘bolt-on’ acquisitions Further grow our ‘sta

  12. Slide 12: Agenda

    Agenda 1 Outstanding performance 2 Outlook for major risk buckets 3 Update on Basel II 4 Summary Investor Relations 06/07 · 12

  13. Slide 13: Leveraged Finance: Fundamentals underpin market 'euphoria'...

    Leveraged Finance: Fundamentals underpin market ‘euphoria‘... Despite aggressive leverage, balance sheets remain sound „ Aggressive deal structures have generated a slew of LBO Volume LBO Transaction Volumes Number of Deals In USD cautionary press articles 175 bn 168 178 – “Junk Bonds May Repeat Cra

  14. Slide 14: …and we continue to focus on de-risking

    …and we continue to focus on de-risking Prudent risk management addresses market challenges „ High underwriting standards - most loans Hold portfolio(1) and provision development(2) above par after syndication Hold portfolio Credit provisions (in bps) „ Expanded scope of hedging program for larger “

  15. Slide 15: Preparing for next downturn: International loan book

    Preparing for next downturn International loan book Loan book(1) and provision development(2) LEMG hedges (international book)(3) In EUR bn, at period end 34 34 37 26 10 17 9 9 7 3 14 18 25 25 26 3 2002 2003 2004 2005 2006 1Q07 2002 2003 2004 2005 2006 1Q07 Cash loans Credit provisions (in bps) CDS

  16. Slide 16: Above the hurdle rate! German MidCaps loan book

    Above the hurdle rate! German MidCaps loan book Loan book(1) and provision development(2) Revenue development 72% 73% 67% 37 30 29 38 39 39 (4) 2002 2003 2004 2005 2006 1Q07 2005 2006 1Q07 Capital market sales Other GTB Cash loans Credit provisions (in bps) Corp. Finance (excl. lending) Lending (LEM

  17. Slide 17: PBC loan losses increased, but covered by high margins

    PBC loan losses increased, but covered by high margins Continued improvement through technology and innovative collection tools Loan book(1) and provision development(2) Margin development PBC 92 106 Mortgage Consumer Small 69 commercial 49 34 21 2002 2003 2004 2005 2006 Q107 Dec- Dec- Dec- Dec- Dec

  18. Slide 18: Disciplined risk management limits downturn risk

    Disciplined risk management limits downturn risk Risk bucket summary Loan book Provisioning level (bps) (EUR bn)(1) Downturn 31 Mar 2007 Current scenario Well diversified; actively International 44 <0 <20 managed Well diversified, strong pricing German 18 & balance sheet discipline <0 <50 MidCaps (G

  19. Slide 19: Agenda

    Agenda 1 Outstanding performance 2 Outlook for major risk buckets 3 Update on Basel II 4 Summary Investor Relations 06/07 · 19

  20. Slide 20: Update on Basel II

    Update on Basel II Based on 1Q2007 figures, positive impact on Tier 1 ratio expected Tier 1 ratio expected to benefit Through the cycle, Basel II capital will fluctuate „ Bulk of expected capital relief under Basel II „ Under Basel II, capital is a function of business derives from PBC division, whi

  21. Slide 21: First contingent capital issues successfully placed

    First contingent capital issues successfully placed Contributing to capital buffer to mitigate Basel II volatility „ Successful issuance of first contingent capital DB Contingent Capital Trust I note (EUR 200m) in March, followed by Structure: 5-year senior FRN with conversion right into another iss

  22. Slide 22: Agenda

    Agenda 1 Outstanding performance 2 Outlook for major risk buckets 3 Update on Basel II 4 Summary Investor Relations 06/07 · 22

  23. Slide 23: Summary

    Summary 2006/07 onwards: By maintaining discipline, Deutsche Bank will be able to: Keep credit provisions low and retail-driven Support organic growth initiatives and make them successful Deploy acquisition capital wisely and profitably Preserve strong BIS Tier 1 capital ratio 2004 - 2005 Strict bal

  24. Slide 24: Cautionary statements

    Cautionary statements Unless otherwise indicated, the information provided herein has been prepared under International Financial Reporting Standards (IFRS). It may be subject to adjustments based on the preparation of the full set of financial statements for 2007. The segment information is based o

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