Deutsche Bank Ag · XETR:DBK
Deutsche Bank — Q4 2023 Earnings Presentation
53 slides from Deutsche Bank's earnings presentation, Feb 1, 2024
Slide 1: Q4 / FY 2023 results
Deutsche Bank Investor Relations Q4 / FY 2023 results #PositiveImpact February 1, 2024 Deutsche Bank Investor Relations
Slide 2: Results reflect the strength of Global Hausbank strategy
Results reflect the strength of Global Hausbank strategy FY 2023 Achieved revenue CAGR of 6.6% since 2021 supports new target of 5.5-6.5%1, with € 28.9bn ambition to reach total Group revenues of ~€ 32bn in 2025 Revenues Invested to protect and grow franchise and progressed on cost efficiency me
Slide 3: Sharpened business model with growing revenues
Sharpened business model with growing revenues In € bn, unless stated otherwise Improving revenue mix Investing to grow our client franchise Net revenues Group 24.0 +6% 25.4 +7% 27.2 +6% 28.9 Product innovation in Corporate Bank coupled with relationship manager hiring in strategic growth areas is 2
Slide 4: Strong revenue trajectory supported by resilient and diversified franchise positioning
Strong revenue trajectory supported by resilient and diversified franchise positioning Revenue trajectory Revenue growth drivers in 2024-2025 3.5-4.5% 5.5-6.5% Growth in Corporate Bank commission and fees via enhanced coverage of existing and new clients, coupled with development of new platforms an
Slide 5: Accelerating growth in noninterest income driven by targeted investments
Accelerating growth in noninterest income driven by targeted investments Corporate Bank Investment Bank Investing into fee-generating payment platforms and enhanced Significant growth in Origination & Advisory driven by strategic industry coverage teams investments and selective hiring for targe
Slide 6: Peak investment year to future proof franchise
Peak investment year to future proof franchise FY 2023, in € bn, unless stated otherwise 0.7 Workforce optimization: restructuring and severance associated with targeted Operational reduction of headcount across divisions and infrastructure 0.2 efficiency Real estate one-offs: impairment of real
Slide 7: Reinforced cost execution supports operating leverage
Reinforced cost execution supports operating leverage In € bn, unless stated otherwise Noninterest expenses Cost management agenda in 2024-2025 75.1 Cost/income ratio, in % <62.5 Significant reduction in nonoperating expenses following a series of one-off items, management including € 0.2bn of goodw
Slide 8: Robust risk, liquidity and capital management
Robust risk, liquidity and capital management YE 2023, unless stated otherwise Diversified loan book, underpinned by disciplined risk management, € 479bn 31bps allows for contained provision for credit losses through the credit cycle Loans Provision for credit losses vs. € 489bn in Q4 2022 FY 2023 C
Slide 9: Growth in net income and disciplined capital management lead to significantly increased distributions
Growth in net income and disciplined capital management lead to significantly increased distributions Net income attributable to DB shareholders Strong organic capital generation, with € 9.2bn of net income in FY 2022-2023, supporting shareholder distributions X Strict capital discipline with 50% of
Slide 10: Global Hausbank strategy set to deliver growth and shareholder returns
Global Hausbank strategy set to deliver growth and shareholder returns Sharpened operating model with four well-balanced and Helping our clients Accelerating our mutually-reinforcing businesses creating capital-efficient, navigate a volatile clients’ sustainability predictable revenue mix world tran
Slide 11: Group financials
Group financials Deutsche Bank Q4 / FY 2023 results 10 Investor Relations February 1, 2024
Slide 12: Key performance indicators
Key performance indicators In % Revenue CAGR2 FY 2023 vs FY 2021 CIR development 85 Sustained revenue growth momentum with 75 75 Group CAGR in line with updated target of 5.5-6.5%1 22.4 7.8 6.6 (2.5) Cost/income ratio (CIR) and return on tangible (6.2) equity3 (RoTE) for FY 2023 are impacted by CB I
Slide 13: Q4 2023 highlights
Q4 2023 highlights In € bn, unless stated otherwise Financial results Divisional revenues Key highlights Δ vs. Δ vs. Δ vs. Q4 2023 +5% Q4 2022 Q3 2023 +5% Q4 2022 Revenues higher year on year, Statement of income driven by continued momentum in Revenues 6.7 5% (7)% 6.7 Corporate Bank and Private B
Slide 14: Net interest income (NII)
Net interest income (NII) In € bn, unless stated otherwise Group NII development1 Key highlights Group NII 11.2 13.7 13.6 12.9 13.2 2024 reduction of ~€ 0.6bn expected Thereof: across banking book segments and accounting asymmetry2 2.2 2.7 0.4 0.33 0.33 funding driven Reduction driven by expecte
Slide 15: Adjusted costs – Q4 2023
Adjusted costs – Q4 2023 In € m, unless stated otherwise Key highlights Q4 2023 5,305 Q4 adjusted costs do not include the expected restitution payment from a national resolution fund Bank levies (49) Exceptional items of ~€ 210m Real estate one-off charges materially Q4 2023 reflecting the ag
Slide 16: Provision for credit losses
Provision for credit losses In € m, unless stated otherwise Annual development Quarterly development Key highlights IB PB In bps of average loans annualized1 Stage 1+2 In bps of average loans annualized1 CB Other Stage 3 FY provisions elevated reflecting macroeconomic environment 12 25 31 28 30 33
Slide 17: Capital metrics
Capital metrics Movements in basis points (bps), unless stated otherwise, period end CET1 ratio Leverage ratio MREL/TLAC, in € bn 13.9% 2 2 4.7% 3 Surplus above requirements 13.7% 4.5% (9) 123 (24) (7) Senior 9 preferred1 17 Senior 30 non- 47 preferred Q3 2023 FX effect RWA Capital Q4 2023 Q3 2023 F
Slide 18: Capital management
Capital management Inflection point in capital management Progress on capital efficiency CET 1 development Capital usage € 25-30bn 1 RWA reductions targeted Sustainable net income allows for 50% growing shareholder distributions ~€ 3bn RWA relief achieved in Q4 2023 ~25% Capital deployment into bu
Slide 19: Committed to increasing shareholder distributions
Committed to increasing shareholder distributions Total payout1 Payout trajectory details Share buybacks Executed in FY, in € m Strong organic capital generation, with € 11.2bn of net income in FY 2021-2023, supporting shareholder potential +50% p.a. distributions as well as business growth Upside 4
Slide 20: Segment results
Segment results Deutsche Bank Q4 / FY 2023 results 19 Investor Relations February 1, 2024
Slide 21: Corporate Bank
Corporate Bank In € m, unless stated otherwise Financial results Revenue performance Key highlights Δ vs. Δ vs. Δ vs. Q4 Q4 2023 Q4 2022 Q3 2023 2022 Revenues higher year on year, mainly driven Corporate by continued favorable interest rate Treasury Services Statement of income 1,052 2% 2% environ
Slide 22: Investment Bank
Investment Bank In € m, unless stated otherwise Financial results Revenue performance Key highlights Δ vs. Δ vs. Δ vs. Q4 Q4 2023 Q4 2022 Q3 2023 2022 Higher revenues year on year driven by FIC Sales & Trading Statement of income improvement in O&A, with FIC essentially flat 1,536 1% 1% to a very
Slide 23: Private Bank
Private Bank In € m, unless stated otherwise Financial results Revenue and AuM performance Key highlights Δ vs. Δ vs. Revenues Δ vs. Q4 Q4 2023 Q4 2022 Q3 2023 2022 Revenues excluding specific items up 9% Germany year on year, or 10% for the full year, driven Statement of income 1,488 PB 10% 10% b
Slide 24: Asset Management
Asset Management In € m, unless stated otherwise Financial results Revenue and AuM performance Key highlights Δ vs. Δ vs. Revenues Δ vs. Q4 Q4 2023 Q4 2022 Q3 2023 2022 trans. Mgmt. Other fees fees Statement of income 575 (3)% Revenues 580 (5)% (2)% Perf. & Revenues ex-specific items1 580 (5)% (2)%
Slide 25: Corporate & Other
Corporate & Other In € m, unless stated otherwise Financial results Profit (loss) before tax Key highlights Δ vs. Δ vs. Abs. Δ vs. Q4 2023 Q4 2022 Q3 2023 Q4 2022 Statement of income Funding & liquidity (111) (55) Loss before tax of € 14m includes positive Revenues (65) (73)% n.m. impact from valu
Slide 26: Outlook
Outlook Revenue CAGR target revised to 5.5-6.5%, supported by franchise improvements, more favorable environment and fee generation across divisions Adjusted cost run-rate expected to reduce to € 5bn due to non-repeat of one-off items and additional management actions Significant progress on remedia
Slide 27: Appendix
Appendix Deutsche Bank Q4 / FY 2023 results 26 Investor Relations February 1, 2024
Slide 28: 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 29: Sustainability
Sustainability Q4 2023 highlights Recent achievements Sustainable Finance1 volumes Increased Sustainable Finance volumes by € 14bn to € 279bn1 (cumulative since 2020) Completed a deal-contingent interest rate hedge and a tailored financing for Hai Long, Taiwan’s largest offshore wind project to
Slide 30: FY 2023 highlights
FY 2023 highlights In € bn, unless stated otherwise Financial results Divisional revenues Δ vs. Δ vs. FY 2023 FY 2022 +6% +6% FY 2022 FY 2022 Statement of income Revenues 28.9 27.2 6% 28.9 27.2 Revenues ex-specific items1 28.9 26.7 8% Provision for credit losses 1.5 1.2 23% Noninterest expenses 21.7
Slide 31: Adjusted costs – FY 2023 and Q4 2023
Adjusted costs – FY 2023 and Q4 2023 In € m, unless stated otherwise FY 2023 Q4 2023 FY/Q4 2022 19,154 4,871 ex-Bank levies Compensation and benefits1 FX impact (173) 182 FX impact (50) 137 Information technology (38) 76 (9) 20 (240) +5% +5% (65) +8% +8% Professional services (12) 41 (3) (8) Other (
Slide 32: Specific revenue items and adjusted costs – Q4 2023
Specific revenue items and adjusted costs – Q4 2023 In € m Q4 2023 Q4 2022 Q3 2023 CB IB PB AM C&O Group CB IB PB AM C&O Group CB IB PB AM C&O Group Revenues 1,911 1,837 2,395 580 (65) 6,658 1,760 1,675 2,506 609 (236) 6,315 1,889 2,271 2,343 594 35 7,132 1 DVA - IB Other / Legacy portfolios - (28)
Slide 33: Specific revenue items and adjusted costs – FY 2023
Specific revenue items and adjusted costs – FY 2023 In € m FY 2023 FY 2022 CB IB PB AM C&O Group CB IB PB AM C&O Group Revenues 7,716 9,160 9,575 2,383 45 28,879 6,337 10,016 9,153 2,608 (904) 27,210 revenue items DVA - IB Other / Legacy portfolios1 - (47) - - 5 (42) - 49 - - (6) 43 Specific Sal. Op
Slide 34: Pre-provision profit, CAGR and operating leverage
Pre-provision profit, CAGR and operating leverage In € m, unless stated otherwise CAGR2 FY 2021 - FY 2023 vs FY 2021 FY 2023 FY 2022 FY 2023 Q1 2023 Q2 2023 Q3 2023 Q4 2023 FY 2023 FY 2022 Net revenues Corporate Bank 5,153 1,973 1,943 1,889 1,911 7,716 22.4% 6,337 7,716 22% Investment Bank 9,631 2,6
Slide 35: Indicative divisional currency mix
Indicative divisional currency mix Q4 2023 Net revenues Noninterest expenses 7% 5% 3% 15% 10% 15% 19% 21% 0% 5% 16% 19% 18% 6% 1% 26% 14% 17% 15% 23% 21% 28% 0% 13% 35% 5% 17% 2% 2% 88% 83% 67% 64% 52% 57% 56% 58% 51% 42% 6% CB IB PB AM Group CB IB PB AM Group EUR GBP USD Other1 Notes: Classificatio
Slide 36: Net interest margin (NIM) / Net interest income (NII)
Net interest margin (NIM) / Net interest income (NII) In € bn, unless stated otherwise NIM / NII development of key banking book segments Group NIM / NII development Corporate Bank 3.4% 4.1% 4.2% 3.9% 4.1% 1.5% 1.5% 1.4% 1.4% 1.3% 1.1 1.3 1.3 1.2 1.3 Group Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 3.7
Slide 37: Net interest income (NII) drivers for banking book
Net interest income (NII) drivers for banking book In € bn, unless stated otherwise NII drivers for banking book segments including other funding impacts1 Key highlights 13.2 13.0 1.7 0.6 Expected reduction in deposit margin as (2.5) 1.02 both deposit betas and policy rates 0.73 converge to steady
Slide 38: Interest rate hedges
Interest rate hedges In € bn, unless stated otherwise Gross hedge income1 Key highlights EUR avg yield Roll-over locked-in (EUR, USD hedges) EUR 10y swap Future roll-over (EUR, USD hedges) 3.0% 2.6% 2.6% 1.9% 1.2% 1.4% 0.7% 0.9% 0.5% Interest rate hedging offsets NII decline from non-interest-bear
Slide 39: Net interest income (NII) sensitivity
Net interest income (NII) sensitivity Hypothetical +/-25bps shift in yield curve, in € m Net interest income (NII) sensitivity1 +25bps shift in yield curve -25bps shift in yield curve ~125 ~55 ~50 ~(55) ~(50) ~(125) 2024 2025 2026 Breakdown of sensitivity by currency for +25bps shift in yield curve
Slide 40: 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 488 1505 Group stage 3 2.5% 2.7% 2.7% 2.6% 2.8% 401 loans at 351 372 431 amortized 13.0 13.2 12
Slide 41: Loan and deposit development
Loan and deposit development In € bn, unless stated otherwise; loan-to-deposit ratio 77% Loan development1,2 Key highlights QoQ YoY 489 488 482 485 479 (0)% (1)% Lending remained essentially stable during the quarter and Investment Bank compared to last year adjusted for FX: 103 103 103 103 101 (0
Slide 42: Loan book composition
Loan book composition Q4 2023, IFRS loans: € 479bn1 Key highlights Other IB3 Other2 0% Leveraged Debt Capital Markets 10% Asset Backed Securities 1% 55% of loan portfolio in Private Bank, mainly consisting German Mortgages 6% of retail mortgages in Private Bank Germany and 32% collateralized lendi
Slide 43: Commercial Real Estate (CRE) 1 / 2
Commercial Real Estate (CRE) 1 / 2 CRE non-recourse portfolio: €38bn € 31bn in scope of severe stress test2 Non-recourse € 38bn – 8% of total loans1 By region By region € 7bn deemed as lower risk, includes data centers APAC APAC EU 1% and municipal social housing 8% 23% CRE higher risk loans €
Slide 44: Commercial Real Estate (CRE) 2 / 2
Commercial Real Estate (CRE) 2 / 2 US CRE in scope of severe stress test1: € 17bn US CRE loan risk management US CRE CLPs By types Office: € 7bn Modified loans, in € bn CLPs per quarter, in € m 8 123 Other Other NY Office 19% 28% 29% Miami 43% 3% 74 Philadelphia 3% 66 5% 4.5% 5% Boston CLP impact Re
Slide 45: Level 3 assets and liabilities
Level 3 assets and liabilities As of December 31, 2023, in € bn Assets: € 26bn Liabilities: € 11bn Key highlights Other Other 4 0 Derivative Debt Securities Derivative Liabilities Level 3 is an indicator of valuation uncertainty and 8 Assets 3 Debt not of asset quality securities 4 The Group cla
Slide 46: Leverage exposure and risk-weighted assets
Leverage exposure and risk-weighted assets CRD4, in € bn, period end Leverage exposure Risk-weighted assets 350 350 57 Operational risk RWA 57 1,235 1,240 Market risk RWA Trading assets 111 122 29 22 Credit valuation 5 Derivatives1 131 131 20 adjustments Lending 473 250 466 145 Lending commitments2
Slide 47: Litigation update
Litigation update In € bn, period end Litigation provisions Key highlights 1.2 1.2 1.5 1.6 1.3 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Litigation provisions decreased by € 0.4bn quarter on quarter Contingent liabilities decreased modestly by € 0.1bn Contingent liabilities quarter on quarter; con
Slide 48: Group Trading Book Value-at-Risk (VaR) and stressed Value-at-Risk (sVaR)
Group Trading Book Value-at-Risk (VaR) and stressed Value-at-Risk (sVaR) In € m, 99% confidence level, as of December 31, 2023 Trading P&L, VaR sVaR 400 160 300 170 174 162 200 120 124 100 80 0 51 44 34 34 -100 40 -200 0 -300 -400 (40) -500 (80) Q1 2023 Q2 2023 Q3 2023 Q4 2023 -600 1
Slide 49: Assets under management – Private Bank
Assets under management – Private Bank In € bn, unless stated otherwise AuM1,2 – by business unit and product group +8% +2% 518 531 541 547 559 110 109 110 113 117 73 72 74 78 76 Inv. Prod. 336 135 350 139 358 138 356 143 366 127 209 215 220 218 223 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 IPB - Inve
Slide 50: Assets under management – Asset Management
Assets under management – Asset Management In € bn, unless stated otherwise AuM development Quarterly mgmt. 28.1 Year-on-year 26.2 27.1 Quarter-on-quarter 26.2 fee margin, in bps 896 896 1 0 860 40 11 (14) 57 (12) 821 28 Q4 2022 Net flows FX Market Other Q4 2023 Q3 2023 Net flows FX Market Other Q4
Slide 51: Footnotes 1 / 2
Footnotes 1 / 2 Slide 1 – Results reflect the strength of Global Hausbank strategy Slide 13 – Net interest income (NII) 1. Compound annual growth rates of the total of net revenues between FY 2021 and FY 2025 1. 2024 and 2025 based on market-implied forward rates as of January 26, 2024 2. Throughout
Slide 52: Footnotes 2 / 2
Footnotes 2 / 2 Slide 23 – Asset Management Slide 39 – Provision for credit losses and stage 3 loans 1. Detailed on slides 31-33 1. Quarterly provision for credit losses annualized as basis points of average loans gross of allowance at amortized cost 2. Detailed on slide 49 2. IFRS 9 Stage 3 assets
Slide 53: Cautionary statements
Cautionary statements The figures in this presentation are preliminary and unaudited. Our Annual Report 2023 and SEC Form 20-F are scheduled to be published on March 14, 2024. Forward-looking statements This presentation contains forward-looking statements. Forward-looking statements are statements