Deutsche Bank Ag · XETR:DBK
Deutsche Bank — Deutsche Bank German & Austrian Corporate Conference 2008
27 slides from Deutsche Bank's conference presentation, Jun 4, 2008
Slide 1: Deutsche Bank German & Austrian Corporate Conference
Deutsche Bank Anshu Jain Head of Global Markets Member of the Group Executive Committee Deutsche Bank German & Austrian Corporate Conference Frankfurt, 4 June 2008 8cld0248_Screenshow.ppt
Slide 2: Agenda
Agenda 1 Deutsche Bank Group overview 2 The crisis and Global Markets performance Investor Relations 06/08 · 2 8cld0248_Screenshow.ppt
Slide 3: Deutsche Bank with relatively robust profitability through the downturn
Deutsche Bank with relatively robust profitability through the downturn Aggregate IBIT, 3Q2007/4Q2007/1Q2008, reported, in EUR bn 8.7 8.1 2.6 2.2 (0.8) (0.8) (14.6) (15.6) (15.9) Note: For peers IBIT reflects IBIT attributable to the shareholders of the parent; translation into EUR based on average
Slide 4: 1Q2008: Pre-tax profit by segment
1Q2008: Pre-tax profit by segment Income before income taxes, in EUR m CB&S GTB CI 2,181 17% 123% 679 214 250 305 (1,604) 1Q2007 1Q2008 1Q2007 1Q2008 1Q2007 1Q2008 AWM PBC C&A 0% 4% 293 304 188 188 (17) (72) 1Q2007 1Q2008 1Q2007 1Q2008 1Q2007 1Q2008 Investor Relations 06/08 · 4 8cld0248_Screenshow.p
Slide 5: We have outperformed against key targets
We have outperformed against key targets Reported Target definition Pre-tax RoE Diluted EPS In % In EUR 33 29 54% p.a. 13.05 26 11.48 24 10.79 25% 16 6.95 10 4.53 2.31 2003 2004 2005 2006 2007 2003 2004 2005 2006 2007 Note: 2003-2005 based on U.S. GAAP, 2006 onwards based on IFRS Investor Relations
Slide 6: Asset growth driven by 'fair value financial assets' – particularly derivatives
Asset growth driven by ‘fair value financial assets’ – particularly derivatives In EUR bn Financial Assets at FV through P&L Loans Cash and deposits from banks Trading liabilities of EUR 838 bn Securities borrowed / Majority subject of master Positive central bank funds sold 2,305 market values
Slide 7: Market conditions drive rising derivatives balances, credit risk remains low
Market conditions drive rising derivatives balances, credit risk remains low Growth in derivatives Underlying credit risk In EUR bn March 2008, in EUR bn 4 242 (706) 849 849 603 (23) (41) (6) 73 December 2007 Impact of market Impact of growth March 2008 Derivatives Counterparty Exchange Collateral S
Slide 8: Unsecured funding base has grown; markets appreciate Deutsche Bank's credit
Unsecured funding base has grown; markets appreciate Deutsche Bank’s credit Unsecured funding by source 5-year senior CDS, in bps In EUR bn 3% 1 July 2007 2 June 2008 511 526 242 EUR 104 153 190 (49) bn 157 122 100 + EUR 422 77 84 76 358 61 64 bn 35 35 35 37 14 18 19 10 12 30 Jun 2007 31 Mar 2008 DB
Slide 9: Agenda
Agenda 1 Deutsche Bank Group overview 2 The crisis and Global Markets performance Investor Relations 06/08 · 9 8cld0248_Screenshow.ppt
Slide 10: The banking crisis represents an unprecedented example of value destruction
The banking crisis represents an unprecedented example of value destruction … Losses as % of capital base or equity* “The current financial crisis is likely to be judged in retrospect as the most wrenching since the end of the Second World War” Alan Greenspan, 17 March 2008 21% + Example: Swap rates
Slide 11: Preceded by an equally extraordinary period of market exuberance
… and was preceded by an equally extraordinary period of market exuberance Rising equity Sustained low Tightening credit markets … interest rates … spreads … MSCI World US 10yr yield iBx $ Corporates Record high Record low 2003 2005 2007 2003 2005 2007 2003 2005 2007 Rising commodity Falling prices
Slide 12: A steep decline in US house prices and a drop in subprime valuations were the trigger
A steep decline in US house prices and a drop in subprime valuations were the trigger for the crisis Underwriting standards decreased as Subprime mortgage profits declined home prices appreciated despite increasing volumes Originator underwriting Home price “Bear Stearns, already forced to shut two
Slide 13: Market conditions have continued to be very turbulent since then
Market conditions have continued to be very turbulent since then Phase 1: Crisis Phase 2: Affects Phase 3: Spill Phase 4: Restoration Phase 5: Market gaps Phase 6: Contagion Phase 7: Some looks to be leveraged loans, Credit over into money of calm after rate down as writedowns continues spread into
Slide 14: Global Markets emerged as a leader in 2007 despite difficult conditions
Global Markets emerged as a leader in 2007 despite these difficult conditions Sales & Trading revenues, FY2007, in EUR bn 20.2 Equity Debt 13.0 9.0 8.4 7.6 6.4 2.2 (2.7) (4.6) (4.6) GS* LEH* CS JPM MS* BSC* Citi MER UBS * Diverging fiscal year Note: Citi includes cross-divisional revenue share; GS e
Slide 15: Global Markets has highly-diversified revenues
Global Markets has highly-diversified revenues Global Markets revenues, FY 2007 By region By product Germany Prime Equity prop Brokerage MM & FX Americas Structured Equity By client Cash Europe ex Equity (1) Other Rates Germany Corporates Asia Banks & Commod- Insurers ities (2) Credit Money Managers
Slide 16: We have created a diverse portfolio of deep and consistently profitable client relationships
We have created a diverse portfolio of deep and consistently profitable client relationships … Revenues Breakdown of clients > EUR 25 m revs No. of % Total 2007 vs 2005 change in Per Client Accounts Sales # clients Banks& Account Insurers Corporates >50 m 26 20% 53% M oney 25 – 50 m 64 16% 39% M ana
Slide 17: Our underlying customer franchise has remained strong throughout the crisis
… ensuring that our underlying customer franchise has remained strong throughout the crisis Global Markets revenues Global Markets customer flow* 1Q2007 2Q2007 3Q2007 4Q2007 1Q2008 * Customer flow is defined as client business – Global Markets uses sales credits as an internal measure to track clien
Slide 18: Global Markets has always emphasised risk transformation and distribution
Crucially, Global Markets has always emphasised risk transformation and distribution … Reconciliation of Citigroup analysis to DB actual, all numbers 2H2007, in USD bn Analyst estimated Global Markets actual 16.5 10.7 6.5 2.6 (gross) 1.2 (net) (0.7) (3.3) High Grade + HG + Mezz estimated HG + Mezz r
Slide 19: Allowing us to outperform peers without retaining excessive risk
… allowing us to outperform peers without retaining excessive risk Credit – 2004 Credit – 2004–2006 total Rev EUR bn 3 8 2 1 0 7 DB Peer Other major investment banks Avg 6 Credit – 2005 5 Rev EUR bn Rev EUR bn 3 2 4 1 0 DB Peer Other major investment banks 3 Avg 2 Credit – 2006 3 Rev EUR bn 1 2 1 0
Slide 20: Is the crisis behind us? Market indicators point to different conclusions
Is the crisis behind us? Market indicators point to different conclusions 8 US house prices S&P/Case Shiller home price index – Top 20 composite 9 Investment grade spreads CDX 125 Series 9 5 year CDS 250 -44% -17% 180 200 -13% 140 150 100 100 60 July 2006 March 2008 Potential Dec Jan Feb Mar Apr May
Slide 21: The aftermath of the crisis: challenges and opportunities
The aftermath of the crisis Challenges Challenges Opportunities Opportunities Lower Lower leverage leverage (and (and more more efficient efficient Expanded Expanded opportunities opportunities for (-) balance balance sheet sheet usage) usage) (+) profitable profitable liquidity for liquidity provis
Slide 22: We are positioned well for the aftermath of the crisis
We are positioned well for the aftermath of the crisis Morgan Stanley / Oliver Wyman total market revenue forecasts 2007 / 08, in USD bn 234 Flat (0)% (6) (1) (1) Shrinkage Slightly Modest (5-10)% down shrinkage 205 (5)% (5)% (23) Continued contraction (60)% 2007 Equities FX/Rates Commodities Emergi
Slide 23: We continue to build out selectively, profitably and successfully
We continue to build out selectively, profitably and successfully Prime Brokerage – taking market share and Commodities – delivering on initiatives and enhancing reputation diversifying the portfolio 1Q2006 1Q2008 Balances Index World’s World’sBest BestPrime PrimeBroker Broker 2005 = 100 # Clients (
Slide 24: We are consolidating industry leadership by continuing to take market share
We are consolidating industry leadership by continuing to take market share An oligopoly of firms in many products will still see Example: DB extends position in FX even in an significant shifts of market share already concentrated market 2007/08 market share of Top-10 banks FX Market Share and Rank
Slide 25: In the wake of the crisis, provision of liquidity now commands a premium
In the wake of the crisis, provision of liquidity now commands a premium Interest rate swaps Tier 1 Single Name European OTC equities Bid-offer spread (indexed) Volatility points (indexed) 500 300 167 175 100 100 Before crisis Peak Current Before crisis Peak Current stabilised levels stabilised leve
Slide 26: Despite market turbulence, megatrends continue to favour our business
Despite market turbulence, megatrends continue to favour our business Trend Features Global Markets Strengths Regional business diversification Growth of emerging markets Global network Globalisation Geographical boundaries disappear Global capital market access Global players act locall
Slide 27: Cautionary statements
Cautionary statements This presentation also 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 an
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