Deutsche Bank AG · XETR:DBK
Deutsche Bank — Q3 2009 Earnings Presentation
50 slides from Deutsche Bank's earnings presentation, Oct 29, 2009
Slide 1: 3Q2009 Results
3Q2009 Results Stefan Krause Chief Financial Officer 29 October 2009
Slide 2: Agenda
Agenda 1 Group p results 2 Segment results 3 Key current issues Investor Relations 10/09 · page 2
Slide 3: 3Q2009 Highlights
3Q2009 Highlights Revenues of EUR 7 7.22 bn Provision for credit losses of EUR 544 m Group Income before income taxes of EUR 1.3 bn, net income of EUR 1.4 bn performance Diluted EPS of EUR 2.10 Pre-tax return on average active equity of 15% (per target definition: 14%) Tier 1 ratio of 11
Slide 4: Results in summary
Results in summary In EUR bn Jan-Sep Jan-Sep 3Q2009 2Q2009 3Q2008 2009 2008 Net revenues 7.2 7.9 4.4 22.4 14.5 Provision for credit losses (0.5) (1.0) (0.2) (2.1) (0.5) Noninterest expenses (5 4) (5.4) (5 6) (5.6) (4 1) (4.1) (15 9) (15.9) (13 5) (13.5) Income before income taxes 1.3 1.3 0.1 4.4 0.5
Slide 5: Net revenues
Significant property impairment Net revenues Mark-downs In EUR bn 0.7 0.5 0.5 10 1.0 00 0.0 66 6.6 3.2 2.3 12 1.2 22.4 7.2 7.9 7.2 (2) 14.5 4.6 5.4 4.4 (0.8)(1) 1Q 2Q 3Q 4Q 1Q 2Q 3Q Jan Sep Jan-Sep Jan-Sep Jan Sep 2008 2009 2008 2009 (1) Includes mark-downs of EUR 0.9 bn (2) Includes net effect of c
Slide 6: Provision for credit losses
Provision for credit losses Related to IAS 39 reclassified assets In EUR m 2 070 2,070 1,000 591 526 544 236 485 1,129 114 135 406 492 308 329 413 164 1Q 2Q 3Q 4Q 1Q 2Q 3Q Jan-Sep Jan-Sep 2008 2009 2008 2009 Thereof: Th f CIB (11) (9) 66 361 357 779 323 46 1,459 125 145 169 229 169 221 214 440 605 T
Slide 7: Noninterest expenses
Noninterest expenses 2Q 3Q In EUR bn Severance EUR 321 m Severance EUR 62 m Huntsman EUR 316 m Repurchase of Maher investm. p products EUR 200 m impairment EUR 151 m 15 9 15.9 5.6 13.5 5.4 4.8 4.6 4.8 4.9 41 4.1 90 9.0 3.1 2.8 7.5 2.9 2.1 2.7 1.9 3.0 2.3 2.2 2.2 6.0 6.4 2.0 1.8 2.2 2.0 (0.1) 0.1 0.4
Slide 8: Income before income taxes
Income before income taxes In EUR bn 4.4 18 1.8 1.3 1.3 0.6 01 0.1 05 0.5 (0.3) (6.2) 1Q 2Q 3Q 4Q 1Q 2Q 3Q Jan-Sep Jan-Sep 2008 2009 2008 2009 Investor Relations 10/09 · page 8
Slide 9: Net income
Net income In EUR bn 3.6 1.4 1.2 1.1 0.6 0.9 0.4 (0.1) (4.8) 1Q 2Q 3Q 4Q 1Q 2Q 3Q Jan-SepJan-Sep 2008 2009 2008 2009 Effective tax rate, in % 45 (0) nm n.m. 23 35 18 (6) (91) 18 Investor Relations 10/09 · page 9
Slide 10: Capital ratios and risk-weighted assets
Capital ratios and risk-weighted assets 11.7 11.7 11.0 10.3 10.2 Target: 10.1 ~10% 9.2 9.3 8.1 78 7.8 7.5 6.9 7.0 7.1 6.8 319 308 316 303 305 295 288 1Q 2Q 3Q 4Q 1Q 2Q 3Q 2008 2009 Tier 1 ratio, in % Core Tier 1 ratio, in % RWA, in EUR bn Note: Core Tier 1 ratio = Tier 1 capital less hybrid Tier 1 c
Slide 11: Tier 1 capital development
Tier 1 capital development In EUR bn 1.4 1.3 (0.6) (0.4) 33.7 (0 2) (0.2) (0.3) 32.5 30 Jun Issuance of 3Q2009 FX effects Equity-based Actuarial loss Other(1) 30 Sep 2009 Tier 1 Hybrid net income compensation on pension 2009 securities plans (1) Includes EUR (0.2) bn which qualifies as Basel II 'ite
Slide 12: Development of total assets
Development of total assets In EUR bn 30 Jun 2009 30 Sep 2009 Leverage ratio(2) 1,733 1,660 25 25 24 928 915 (805) (745) IFRS N tti (1) U.S. Netting U S GAAP IFRS tti (1) U.S. Netting N U S GAAP 31 Mar M 30 JJun 30 S Sep ‘pro-forma’ ‘pro-forma’ 2009 2009 2009 (1) For 30 Sep 09 incl. incl derivatives
Slide 13: Liquidity and unsecured funding
Liquidity and unsecured funding In EUR bn Unsecured U secu ed funding u d g Liquidity qu d ty position pos t o Cash and liquidity reserves exceed short-term 511 wholesale funding of EUR 76 bn 481 DB proactively reduced wholesale borrowing 153 30% 16% 76 sharply early in the crisis and well ahead
Slide 14: Agenda
Agenda 1 Group p results 2 Segment results 3 Key current issues Investor Relations 10/09 · page 14
Slide 15: CB&S: P&L at a glance
CB&S: P&L at a glance In EUR m 3Q2009 2Q2009 3Q2008 Net revenues 4,440 4,646 1,051 Provision for credit losses (318) (771) (66) Noninterest expenses (3,119) (3,060) (1,794) Income before income taxes 988 828 (789) CIR 70% 66% 171% (1) Pre-tax RoE 24% 17% (17)% (1) Annualised, based on average active
Slide 16: Sales & Trading revenues
Mark-downs Sales & Trading revenues Net revenues In EUR bn Specific item 0.4 0.8 1.0 0.1 0.4 (2) 4.2 1.4 10.6 2.1 4.0 (3) 3.5 3.1 21 2.1 0.7 0 7 43 4.3 1.4 0.8 8) (1) (4.8) (4 1Q 2Q 3Q 4Q 1Q 2Q 3Q Jan-Sep Jan-Sep 2008 2009 2008 2009 (1) Includes mark-downs mark downs of EUR 1 1.7 7 bn (2) Includes c
Slide 17: Sales & Trading debt and other products
Sales & Trading debt and other products Net revenues Key features In EUR bn S Specific ifi ititem Mark-downs M kd Overall O ll Net revenues Record third quarter Continued normalisation of volatility, volumes and margins Normal seasonality 1.0 Sustained reduction in balance sheet / RWA Shar
Slide 18: Sales & Trading equity
Sales & Trading equity Net revenues Key features In EUR m Overall O ll Best quarterly revenues since 2007 Cash Equities 830 903 918 Market share gains in U U.S. S (Bloomberg (Bloomberg, Autex) 745 Improved alignment of primary issuance and secondary trading 275 Equity q y Derivatives Recalib
Slide 19: Global Markets: Improved asset efficiency and lower risk appetite
Global Markets: Improved asset efficiency and lower risk appetite Indexed, 2005 / Oct 2008 = 100% Revenues to assets ratio(1) Assets Value-at-Risk Value at Risk 297 GM VaR GM constant input VaR 167 148 100 97 100 92 100 83 84 73 60 68 55 57 46 45 2005 2006 2007 2008 30 Sep 2005 2006 2007 2008 30 Sep
Slide 20: Origination & Advisory
Origination & Advisory Net revenues Key features In EUR m Advisory Ad i Advisory Ad i Origination Continued low market volumes Improved share and rank globally Ranked #5 globally by volumes (Thomson Reuters) 1,090 1 090 152 Equity Origination 727 637 Strong market activity continues 72 95
Slide 21: Global Transaction Banking: P&L at a glance
Global Transaction Banking: P&L at a glance In EUR m 3Q2009 2Q2009 3Q2008 Net revenues 658 653 692 Provision for credit losses (6) (8) (0) Noninterest expenses (459) (464) (410) Income before income taxes 194 181 281 CIR 70% 71% 59% (1) Pre-tax RoE 69% 62% 104% (1) Annualised, based on average activ
Slide 22: Global Transaction Banking
Global Transaction Banking Income before income taxes Key features In EUR m R Revenues Continued impact of weak corporate environment Negative effect from constant low interest rates across all products and regions 291 Trade Finance: Continued strong top-line 283 281 performance despite low tr
Slide 23: Asset and Wealth Management: P&L at a glance
Asset and Wealth Management: P&L at a glance In EUR m 3Q2009 2Q2009 3Q2008 Net revenues 772 618 713 Provision for credit losses (5) (4) (1) Noninterest expenses (633) (700) (810) Income before income taxes 134 (85) (95) CIR 82% 113% 114% (1) Pre-tax RoE 11% (7)% (8)% (1) Annualised, based on average
Slide 24: Asset and Wealth Management
Asset and Wealth Management Income before income taxes Key features In EUR m A Asset M Management Lower specific charges 242 188 Retail revenues and performance fees boosted by tightening spreads 134 Positive impact of repositioning / rightsizing Net new money of EUR 5 bn (850) (95) (85) Pri
Slide 25: Private & Business Clients: P&L at a glance
Private & Business Clients: P&L at a glance In EUR m 3Q2009 2Q2009 3Q2008 Net revenues 1,389 1,414 1,435 Provision for credit losses (209) (217) (168) Noninterest expenses (1,031) (1,141) (1,004) I Income before b f income i taxes t 149 55 262 CIR 74% 81% 70% (1) Pre-tax RoE 17% 6% 29% (1) Annualise
Slide 26: Private & Business Clients
Private & Business Clients Income before income taxes Key features In EUR m Severance(1) S Revenues: Investment products: Impact of continued caution on the part of retail investors 4 Deposits: Impact of low interest rate environment 5 Credit products: Growth in a strategic priority area 6 Pro
Slide 27: PCAM net new money flows by quarter
PCAM net new money flows by quarter In EUR bn 11 11 10 1 PBC 5 AM 5 PWM (2) (2) (6) (17) 1Q 2Q 3Q 4Q 1Q 2Q 3Q 2008 2009 Investor Relations 10/09 · page 27
Slide 28: Agenda
Agenda 1 Group p results 2 Segment results 3 Key current issues Investor Relations 10/09 · page 28
Slide 29: Capital demand and supply: Overview
Capital demand and supply: Overview – Capital demand + Capital supply Regulatory impact on RWAs Retained earnings − ~EUR 50 bn market risk (Basel II) Asset reduction initiative − New Basel II rules will become effective b 1 JJan 2011 by − Continue to reduce legacy and Level 3 assets Organic
Slide 30: Composition of loan book and provisions by category
Composition of loan book and provisions by category xx 3Q2009 provision for credit losses, in EUR m In EUR bn, as of 30 Sep 2009 IAS 39 reclassified assets 544 123 134 287 Low loan to 263 value 35 Substantially hedged Highly diversified Substantially Short term / Fully collateralised collateralised
Slide 31: Pro-forma impact of IAS 39 reclassifications
‘Pro-forma’ Pro-forma impact of IAS 39 reclassifications In EUR m FY2008 - Total T t l Total T t l 2Q2009 3Q2009 1Q2009 FY08-2Q09 FY08-3Q09 Incremental reported income(1) (162) (666) (827) (193) (1,020) Fair value P&L impact of reclassified 4,653 380 5,032 (581) 4,452 assets Net pro-forma impact on
Slide 32: Problem loans
Problem loans xx IAS 39 impact - IFRS impaired loans In EUR bn 8.2 8.7 5.7 4.6 6.8 3.9 4.5 6.7 3.2 3.3 3.7 3.2 27 2.7 25 2.5 06 0.6 08 0.8 11 1.1 26 2.6 26 2.6 62% 65% 53% 53% 50% 46% 47% 31 Mar 30 Jun 30 Sep 31 Dec 31 Mar 30 Jun 30 Sep 2008 2009 Problem loans not considered impaired under IFRS IFRS
Slide 33: PBC loan book: Delinquency ratio
PBC loan book: Delinquency ratio Small corporates Mortgage 90≤x≤269 days past due(1) Consumer Mortgage loan book represents ~70% of PBC loan book 3.39% 3.31% 2 92% 2.92% 2.76% 2.62% 2.49% 2.34% 2.37% 2.15% 2.18% 1.90% 1 97% 1.97% 1.78% 1.83% 1.61% 1.67% 1.78% 1.44% 1.71% 1.63% 1.63% 1.66% 1.72% 1 55
Slide 34: Risk-based analysis of monoline exposure
Risk-based analysis of monoline exposure Fair value assets, in EUR bn X% CVA in % of FV prior to CVA g y Risk category Non-investment g grade monolines AA monolines FV assets FV assets Provision- FV assets Provision- FV assets prior to prior to ing ratio after CVA ing ratio after CVA CVA CVA U.S. RM
Slide 35: Summary
Summary 30 Sep 30 Sep 2008 2009 Income before income taxes (YTD, in EUR bn) 0.5 4.4 Profitability N t income Net i (YTD in (YTD, i EUR b bn)) 09 0.9 36 3.6 Pre-tax RoE (YTD, target definition)(1) (3)% 18% Tier 1 capital ratio 10.3% 11.7% Capital strength Core Tier 1 capital ratio 7.5% 8.1% Tier 1 ca
Slide 36: Additional information
financial transparency. Additional information Analyst OF- 7 | | A Passion to Perform. Deutsche Bank
Slide 37: Value of Level 3 assets
Value of Level 3 assets((1)) Asset sset c classes asses 3Q2009 3Q 009 development de e op e t In EUR bn Key changes: (25)% – Reduction in derivatives market values 80 2 – Sales and unwinds 7 64 10 60 52 4 2 9 8 45 33 28 Financial assets AfS / Other 15 13 16 Financial assets(2) Other trading assets
Slide 38: Number of shares for EPS calculation
Number of shares for EPS calculation In million Average At end of period 3Q 2Q 3Q 30 Sep 30 Jun 30 Sep 2008 2009 2009 2008 2009 2009 Common shares issued 535 621 621 571 621 621 Total shares in treasury (25) (3) (4) (25) (3) (1) Common shares outstanding 509 618 617 546 618 620 Forward purchases(1)
Slide 39: Group headcount
Group headcount Full-time equivalents, at period end 30 Sep 2009 vs. 31 Mar 30 Jun 30 Sep 31 Dec 31 Mar 30 Jun 30 Sep 30 Jun 2009 Net of 2008 2008 2008 2008 2009 2009 2009 Total de-/consoli- change dation CIB 15,428 15,395 15,329 14,823 14,279 14,023 14,208 185 188 PCAM 32 020 32,020 32 460 32,460 3
Slide 40: Invested assets report
Invested assets((1)) report In EUR bn Net new 31 Mar 30 Jun 30 Sep 31 Dec 31 Mar 30 Jun 30 Sep money 2008 2008 2008 2008 2009 2009 2009 3Q2009 Asset and Wealth Management 698 700 700 628 627 632 657 10 Asset Management 516 515 510 463 462 460 476 5 Institutional 157 161 162 164 169 160 165 5 R t il
Slide 41: Regional invested assets – AM and PWM
Regional invested assets((1)) – AM and PWM In EUR bn 30 S Sep 09 31 Mar 30 Jun 30 Sep 31 Dec 31 Mar 30 Jun 30 Sep vs. 2008 2008 2008 2008 2009 2009 2009 30 Sep 08 Asset Management 516 515 510 463 462 460 476 (7)% Germany 252 248 232 200 194 200 211 (9)% UK 16 16 19 18 17 18 17 (10)% Rest of Europe 3
Slide 42: Regional net new money – AM and PWM
Regional net new money – AM and PWM In EUR bn 1Q2008 2Q2008 3Q2008 4Q2008 FY2008 1Q2009 2Q2009 3Q2009 Asset Management 2 1 (11) (15) (22) (3) (3) 5 Germany 2 (3) (7) (22) (29) (3) (2) 2 UK 1 1 3 (1) 4 (0) 1 0 Rest of Europe (0) (1) 0 (1) (2) (0) (1) (1) Americas 0 4 ((6)) 9 7 1 ((2)) 4 Asia / Pacifi
Slide 43: Corporate Investments
Corporate Investments Income before income taxes Key features I EUR m In Mark-to-market gains of EUR 140 m from the put / call options to increase our investment in Deutsche Postbank AG 679 Gains of EUR 110 m arising from the sale of our stake in Daimler AG 377 Partly offset by mark-to-market
Slide 44: Listed holdings
Listed holdings In EUR m Stake Market value (in %) 30 Sep 31 Mar 30 Jun 30 Sep 31 Dec 31 Mar 30 Jun 30 Sep 2009 2008 2008 2008 2008 2009 2009 2009 Daimler AG 0.0% 1,567 1,027 943 692 509 248 14 Allianz SE - 867 584 - - - - - Linde AG - 571 570 418 250 16 - - Other - 141 122 135 129 117 121 147 Total
Slide 45: U.S. GAAP 'pro-forma' assets
U S GAAP ‘pro-forma’ U.S. pro-forma assets In EUR bn Positive market 982 values from 928 915 derivatives 121 95 84 Financial assets Trading securities at FV through P&L 191 199 202 Other trading assets 28 Reverse repos / 29 24 securities borrowed 123 105 105 Loans des. at FV 18 17 Other des. at FV 9
Slide 46: Funding situation – Assets and liabilities
Funding situation – Assets and liabilities Balance sheet by product, as of 30 Sep 2009, in EUR bn 1,660 1,660 Unfunded IFRS Derivatives & Derivatives & settlement balances(1) 792 758 settlement balances(1) balance sheet it items Reverse repo & 108 Repo & other secured 159 53 Trading liabilities othe
Slide 47: Loan book
Loan book xx IAS 39 impact on CIB loan book In EUR bn 3% 271 276 268 255 14 263 12 13 13 CI 209 217 25 34 38 37 35 145 151 154 144 137 CIB 107 112 102 105 109 108 108 110 113 PCAM 31 Mar 30 Jun 30 Sep 31 Dec 31 Mar 30 Jun 30 Sep 2008 2009 Germany excl. Financial Institutions: 86 87 88 93 96 96 96 No
Slide 48: VaR of CIB trading units
VaR of CIB trading units VaR of CIB trading units 99%, 1 day, in EUR m Constant VaR of CIB trading units(1) EUR 0.8 bn Sales & Trading revenues EUR 3.1 bn 180 160 140 120 100 80 60 40 20 ∅ 124 ∅ 134 ∅ 141 ∅ 145 ∅ 114 ∅ 61 ∅ 58 ∅ 45 ∅ 44 ∅ 32 3Q2008 4Q2008 1Q2009 2Q2009 3Q2009 (1) Constant VaR is an
Slide 49: Balance sheet leverage ratio (target definition)
Balance sheet leverage ratio (target definition) In EUR bn 30 S Sep 30 J Jun 2009 2009 Total assets (IFRS) 1,660 1,733 Adjust derivatives according to U.S. GAAP netting rules (617) (681) Adjust pending settlements according to U.S. GAAP netting rules (122) (113) Adjust repos according to U.S. GAAP n
Slide 50: Cautionary statements
Cautionary statements This presentation contains forward-looking statements. Forward-looking statements are statements that are not historical facts;; they y include statements about our beliefs and expectations p and the assumptions p underlying y g them. These statements are based on plans, estima