Deutsche Bank AG · XETR:DBK
Deutsche Bank — Q3 2007 Earnings Presentation
46 slides from Deutsche Bank's earnings presentation, Oct 31, 2007
Slide 1: 3Q2007 Results
2007 financials, including reference to comparable 2006 data, have been prepared under IFRS 3Q2007 Results Anthony di Iorio Chief Financial Officer Analyst Call, 31 October 2007
Slide 2: Agenda
financial transparency. Agenda 1 Summary 2 Group results 3 Segment results 4 Risk and capital management Investor Relations 10/07 · 2
Slide 3: Robust earnings in a challenging environment
financial transparency. Robust earnings in a challenging environment 3Q2007 January - September 2007 EUR EUR Revenues Revenues (20)% 5.1 bn 10% 23.5 bn Income before EUR Income before EUR income taxes (19)% 1.4 bn income taxes 14% 7.3 bn EUR EUR Net income Net income 31% 1.6 bn 30% 5.5 bn Loss in
Slide 4: Performance against key metrics
financial transparency. Performance against key metrics 2006 2007 Pre-tax RoE EPS (diluted) In % In EUR 38% 11.13 45 42 36 8.05 33 34 33 28 36% 19 4.28 3.60 3.31 3.11 2.44 2.43 1Q 2Q 3Q Jan-Sep 1Q 2Q 3Q Jan-Sep Note: Return on equity annualized Investor Relations 10/07 · 4
Slide 5: Performance against key metrics, per target definition
financial transparency. Performance against key metrics, per target definition Pre-tax RoE (target definition)(1) Diluted EPS (target definition)(2) In % In EUR 3Q2006: 25 3Q2006: 2.11 21% 3Q2007: 12 3Q2007: 1.76 10.24 (3)ppt 9.06 33 31 29 7.50 6.95 25 16 4.53 13 2.31 2003 2004 2005 2006 Jan-Sep 200
Slide 6: Agenda
financial transparency. Agenda 1 Summary 2 Group results 3 Segment results 4 Risk and capital management Investor Relations 10/07 · 6
Slide 7: Income before income taxes of EUR 1.4 bn
financial transparency. Income before income taxes of EUR 1.4 bn In EUR bn 14% (19)% 7.3 6.4 3.2 2.6 2.7 2.0 1.9 1.8 1.4 1Q 2Q 3Q 4Q 1Q 2Q 3Q Jan-Sep Jan-Sep 2006 2007 2006 2007 Investor Relations 10/07 · 7
Slide 8: Net income includes positive tax impact in the quarter
financial transparency. Net income includes positive tax impact in the quarter In EUR bn 31% 30% 5.5 2.1 1.8 1.8 4.3 1.6 1.6 1.4 1.2 1Q 2Q 3Q 4Q 1Q 2Q 3Q Jan-Sep Jan-Sep 2006 2007 2006 2007 Investor Relations 10/07 · 8
Slide 9: Net revenues lower, driven by charges in CB&S
financial transparency. Net revenues lower, driven by charges in CB&S In EUR bn 10% (20)% 23.5 21.3 9.6 8.8 8.0 6.9 7.2 6.4 5.1 1Q 2Q 3Q 4Q 1Q 2Q 3Q Jan-Sep Jan-Sep 2006 2007 2006 2007 Investor Relations 10/07 · 9
Slide 10: Third-quarter net revenues by segment
financial transparency. Third-quarter net revenues by segment In EUR m 654 5,095 1,265 (52) 1,441 3,228 1,126 661 GTB AWM PBC Total ‘stable’ CB&S CI C&A Group businesses Note: Figures may not add up due to rounding differences Investor Relations 10/07 · 10
Slide 11: Year-on-year change in net revenues by segments
financial transparency. Year-on-year change in net revenues by segments 3Q2007 vs. 3Q2006, in EUR m 6,369 (20)% Incl. charges of EUR (2.2) bn 573 5,095 189 221 (153) 119 (2,223) Group CB&S GTB AWM PBC CI C&A Group 3Q2006 3Q2007 Note: Figures may not add up due to rounding differences Investor Relati
Slide 12: Noninterest expenses lower year-on-year, driven by compensation
financial transparency. Noninterest expenses lower year-on-year, driven by compensation … In EUR bn 8% (22)% 15.9 14.7 6.3 6.0 5.4 5.1 4.8 9.9 4.5 9.4 4.3 3.9 3.5 3.6 3.0 3.1 2.7 1.7 5.3 6.0 1.8 1.8 1.8 2.0 2.0 2.1 1.8 1Q 2Q 3Q 4Q 1Q 2Q 3Q Jan-Sep Jan-Sep 2006 2007 2006 2007 Compensation and benefit
Slide 13: … with an impact on cost ratios
financial transparency. … with an impact on cost ratios In % Cost / income ratio(1) 67 69 71 71 66 68 69 69 68 1Q 2Q 3Q 4Q 1Q 2Q 3Q Jan-Sep 2006 2007 2006 2007 Compensation ratio(2) Non-compensation ratio(3) 45 44 43 43 45 44 44 42 36 33 22 26 28 29 24 25 25 21 1Q 2Q 3Q 4Q 1Q 2Q 3Q Jan-Sep 1Q 2Q 3Q
Slide 14: Agenda
financial transparency. Agenda 1 Summary 2 Group results 3 Segment results 4 Risk and capital management Investor Relations 10/07 · 14
Slide 15: Segments at a glance
financial transparency. Segments at a glance Income before income taxes, in EUR m CB&S GTB CI 1,027 55% 263 629 170 (179) 45 3Q2006 3Q2007 3Q2006 3Q2007 3Q2006 3Q2007 AWM PBC C&A 15% 304 168 45% 265 264 182 93 3Q2006 3Q2007 3Q2006 3Q2007 3Q2006 3Q2007 Investor Relations 10/07 · 15
Slide 16: Growth momentum of 'stable' businesses sustained
financial transparency. GTB Growth momentum of ‘stable’ businesses sustained AWM Income before income taxes PBC 2003 – 2006 Year-to-date In EUR bn In EUR m EUR 2.0 bn +17% EUR 2.4 bn 2x 2.6 835 832 1.9 717 694 695 1.6 616 1.4 2003* 2004 2005 2006 1Q06 2Q06 3Q06 1Q07 2Q07 3Q07 * GTB adjusted for gain
Slide 17: CB&S: Impact of 3rd quarter charges
financial transparency. CB&S: Impact of 3rd quarter charges Results at a glance Condensed P&L Income before income taxes, in EUR m In EUR m Jan- Δ vs. Key ratios, in % 3Q Δ vs. Sep Jan-Sep 2007 3Q2006 2007 2006 1,977 2,181 Revenues 1,265 (64)% 12,691 (0)% 1,752 1,345 1,027 1,030 Provisions* 17 (8)%
Slide 18: S&T debt: Revenues impacted by charges
financial transparency. S&T debt: Revenues impacted by charges S&T (debt and other products) Trends vs. 3Q2006 / key features Net revenues, in EUR m Credit Severe market illiquidity drives write- downs in CDO and other structured credit portfolios (71)% Relative value trading under stress in Aug
Slide 19: S&T equity: Impact of market conditions on proprietary trading
financial transparency. S&T equity: Impact of market conditions on proprietary trading S&T (equity) Trends vs. 3Q2006 / key features Net revenues, in EUR m Equity Absorbed cost of hedging against Derivatives severe market correction (38)% Strong performance in retail structured products led by c
Slide 20: Leveraged finance: Development of commitments through 3Q2007
financial transparency. Leveraged finance: Development of commitments through 3Q2007 In EUR bn Composition of current commitments 31 Aug 07 30 Sep 07 Loans to sponsors 29.4 26.7 Other loan commitments 4.9 4.8 Bond commitments to Funded 14.0 Trading 40.1 9.7 10.0 sponsors and others Total commitments
Slide 21: Origination & Advisory: Impacted by leveraged finance write-downs
financial transparency. Origination & Advisory: Impacted by leveraged finance write-downs Origination & Advisory Trends vs. 3Q2006 / key features Net revenues, in EUR m Advisory High Yield / Charges of EUR 603 m (net of fees) Origination Lev. loans All commitments marked-to-market (77)% Some l
Slide 22: GTB: Strong year-on-year growth momentum
financial transparency. GTB: Strong year-on-year growth momentum Results at a glance Condensed P&L Income before income taxes, in EUR m In EUR m Jan- Δ vs. Key ratios, in % 3Q Δ vs. Sep Jan-Sep 2007 3Q2006 55% 2007 2006 263 Revenues 661 22% 1,928 17% 247 199 214 Provisions* 2 n.m. 1 n.m. 182 170 153
Slide 23: AWM: Substantial profit growth and money inflows
financial transparency. AWM: Substantial profit growth and money inflows Results at a glance Condensed P&L Income before income taxes, in EUR m In EUR m Jan- Δ vs. Key ratios, in % 3Q Δ vs. Sep Jan-Sep 2007 3Q2006 45% 2007 2006 292 Revenues 1,126 24% 3,273 8% 242 265 233 237 Provisions* (1) n.m. (1)
Slide 24: PBC: Best-ever quarterly pre-tax profits
financial transparency. PBC: Best-ever quarterly pre-tax profits Results at a glance Condensed P&L Income before income taxes, in EUR m In EUR m Jan- Δ vs. Key ratios, in % 3Q Δ vs. Sep Jan-Sep 2007 3Q2006 15% 2007 2006 Revenues 1,441 15% 4,309 13% 301 293 297 304 252 264 Provisions* (124) 18% (364)
Slide 25: Agenda
financial transparency. Agenda 1 Summary 2 Group results 3 Segment results 4 Risk and capital management Investor Relations 10/07 · 25
Slide 26: Problem loans: Progress on impaired loans
financial transparency. Problem loans: Progress on impaired loans Problem loans, in EUR bn Problem loans not considered impaired under IFRS IFRS impaired loans(1) 3.5 3.4 3.4 IFRS impaired loans coverage ratio(2) 3.2 3.1 2.9 2.8 2.9 2.8 2.7 2.7 2.6 2.5 2.4 61% 61% 63% 66% 64% 59% 60% 31 Mar 30 Jun 3
Slide 27: Provisions: Strategy remains on track
financial transparency. Provisions: Strategy remains on track Provision for credit losses, in EUR m 283 168 131 98 105 82 76 81 9 1Q 2Q 3Q 4Q 1Q 2Q 3Q Jan-Sep Jan-Sep Thereof: CIB 2006 2007 2006 2007 (72) (19) (27) 24 (20) (42) (19) (118) (82) 85 94 104 107 117 124 124 284 365 Thereof: PCAM Note: Di
Slide 28: Tight capital management
financial transparency. Tight capital management 8.8 8.7 8.9 8.7 8.8 8.8 9% 8.5 8.4 Target range 8% 308 311 285 271 275 256 263 Tier I ratio, in % RWA, 31 Mar 30 Jun 30 Sep 31 Dec 31 Mar 30 Jun 30 Sep in EUR bn 2006 2007 Note: March, June and September 2006 based on U.S. GAAP Investor Relations 10/0
Slide 29: We re-affirm our commitment to our stated strategy …
financial transparency. We re-affirm our commitment to our stated strategy … 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
Slide 30: … and to our published targets
financial transparency. … and to our published targets Group targets ‘over-the-cycle’ Vision 2008 Income before income taxes*, in EUR bn Corporate Banking & Securities 5.3 Sustainable profitability of 25% pre-tax RoE Global Transaction Banking 1.0 Maintaining Maintaining Asset and Wealth Management
Slide 31: Robust earnings in a challenging environment
financial transparency. Robust earnings in a challenging environment 3Q2007 January - September 2007 EUR EUR Revenues Revenues (20)% 5.1 bn 10% 23.5 bn Income before EUR Income before EUR income taxes (19)% 1.4 bn income taxes 14% 7.3 bn EUR EUR Net income Net income 31% 1.6 bn 30% 5.5 bn Loss in
Slide 32: Additional information
financial transparency. Additional information A Passion to Perform. Deutsche Bank
Slide 33: Number of shares for EPS calculation
financial transparency. Number of shares for EPS calculation In million Average At end of period 3Q 2Q 3Q 30 Sep 30 Jun 30 Sep 2006 2007 2007 2006 2007 2007 Common shares issued 520 527 528 521 528 528 Total shares in treasury (26) (26) (31) (24) (28) (29) Common shares outstanding 495 501 497 497 5
Slide 34: Group headcount
financial transparency. Group headcount Full-time equivalents, at period end 30 Sep 2007 vs. 31 Mar 30 Jun 30 Sep 31 Dec 31 Mar 30 Jun 30 Sep 30 Jun 2007 2006 2006 2006 2006 2007 2007 2007 Net of Total change de-/consoli- dation CIB 12,889 13,230 13,860 14,364 16,295 16,610 17,181 571 571 PCAM 27,15
Slide 35: Invested assets report
financial transparency. Invested assets(1) report In EUR bn 30 Sep 31 Dec 31 Mar 30 Jun 30 Sep Net new money 2006 2006 2007 2007 2007 3Q2007 Asset and Wealth Management 713 732 747 765 759 13 Asset Management 540 543 553 564 561 12 Institutional 150 152 153 159 159 4 Retail 234 236 242 246 240 1 Alt
Slide 36: Regional invested assets – AM and PWM
financial transparency. Regional invested assets(1) – AM and PWM In EUR bn 30 Sep 31 Dec 31 Mar 30 Jun 30 Sep 30 Sep vs. 2006 2006 2007 2007 2007 30 Jun 2007 Asset Management 540 543 553 564 561 (0)% Germany 237 238 249 265 265 (0)% UK 8 10 12 13 17 32 % Rest of Europe 49 48 45 40 36 (9)% Americas 2
Slide 37: Regional net new money – AM and PWM
financial transparency. Regional net new money – AM and PWM In EUR bn 3Q2006 4Q2006 FY2006 1Q2007 2Q2007 3Q2007 Asset Management 6 (0) 6 4 6 12 Germany 1 (3) 5 8 11 (0) UK 0 1 1 1 1 4 Rest of Europe 0 (2) (4) (3) (6) 1 Americas 3 3 0 (3) 1 4 Asia / Pacific 0 1 4 1 (1) 3 Thereof: business sold / held
Slide 38: Corporate Investments
financial transparency. Corporate Investments Results at a glance Condensed P&L (reported) Income before income taxes, in EUR m In EUR m Jan- Δ vs. 3Q Δ vs. Sep Jan-Sep 629 2007 3Q2006 2007 2006 Revenues 654 n.m. 1,351 232% 305 Provisions* 1 n.m. 0 n.m. 233 127 Noninterest exp. (26) (30)% (191) 55%
Slide 39: Alternative assets exposure
financial transparency. Alternative assets exposure Book values, in EUR bn 3.7 CI - Private Equity funds 0.0 0.3 CI - Private Equity directs 0.3 CI - Real Estate 2.6 2.7 2.6 2.5 2.5 0.2 2.4 0.1 0.2 0.1 0.3 0.4 0.3 0.3 0.3 0.4 0.3 1.9 PCAM 0.6 0.4 0.4 0.3 0.4 0.4 0.4 1.0 1.0 1.0 0.9 0.9 1.0 0.9 1.1 C
Slide 40: Listed holdings – unrealised net gains of EUR 3.3 bn
financial transparency. Listed holdings – unrealised net gains of EUR 3.3 bn In EUR m Stake Market value (in %) 30 Sep 31 Mar 30 Jun 30 Sep 31 Dec 31 Mar 30 Jun 30 Sep 2007 2006 2006 2006 2006 2007 2007 2007 Daimler AG 4.3% 2,124 1,728 1,770 2,103 2,766 3,058 3,170 Allianz SE 1.7% 1,330 1,191 1,316
Slide 41: Loan book
financial transparency. Loan book In EUR bn 3% 189 189 195 195 178 183 CI/Other 172 100 94 98 97 CIB 85 91 91 94 96 98 PCAM 85 86 88 90 31 Mar 30 Jun 30 Sep 31 Dec 31 Mar 30 Jun 30 Sep 2006 2007 Note: Figures may not add up due to rounding differences Investor Relations 10/07 · 41
Slide 42: Risk
financial transparency. Risk VaR of CIB trading units (99%, 1 day), in EUR m EUR 2.7 bn Sales & Trading revenues EUR 1.0 bn 120 110 100 90 80 70 60 50 ∅ 68.2 ∅ 67.6 ∅ 69.3 ∅ 72.9 ∅ 77.5 ∅ 83.6 ∅ 90.5 1Q2006 2Q2006 3Q2006 4Q2006 1Q2007 2Q2007 3Q2007 Investor Relations 10/07 · 42
Slide 43: Update on share buybacks
financial transparency. Update on share buybacks Total repurchases 2.8 m 3.3 m 5.8 m 1.4 m In % of shares issued* 0.5 % 0.6 % 1.1 % 0.3% Capital consumption EUR 0.3 bn EUR 0.3 bn EUR 0.6 bn EUR 0.1 bn Share Share price, in EUR Number of shares, in ‘000 buybacks 120 2,500 110 Weekly 2,000 repurchase
Slide 44: Our target definition
financial transparency. Our target definition Pre-tax return on equity (target definition) IBIT attributable to DB shareholders (target definition) IBIT attributable to DB shareholders (target definition) Reported income before income tax expense Less minority interest Average active equity IBIT att
Slide 45: Items excluded in target definition
financial transparency. Items excluded in target definition In EUR m 2006 2007 Pre-tax Post-tax Pre-tax Post-tax First quarter 131 131 First quarter 252 197 Gains from sale of the holding Gains from the sale of FIAT 128 126 in Eurohypo 131 131 shares Equity pick-up from Interhotel 178 125 Second qua
Slide 46: Cautionary statements
financial transparency. Cautionary statements Unless otherwise indicated, the financial information provided herein has been prepared under the International Financial Reporting Standards (IFRS). It may be subject to adjustments based on the preparation of the full set of financial statements for 20