Deutsche Bank Ag · XETR:DBK
Deutsche Bank — Debt Investor Presentation (July 2019)
30 slides from Deutsche Bank's debt investor presentation, Jul 26, 2019
Slide 1: Q2 2019 Fixed Income Investor Conference Call
Deutsche Bank Q2 2019 Fixed Income Investor Conference Call James von Moltke, Chief Financial Officer Dixit Joshi, Group Treasurer 26 July 2019
Slide 2: Agenda
Agenda 1 Q2 2019 results and execution progress 2 Capital, Liquidity and Funding 3 Appendix Deutsche Bank Q2 2019 Fixed Income Investor Call 1 Investor Relations 26 July 2019
Slide 3: Driving execution of our transformation agenda
Driving execution of our transformation agenda Execution of strategic alignment well underway Continued resilience of revenues in more controllable businesses Adjusted cost trajectory supports our material cost reduction target Balance sheet and CET1 ratio remain robust Deutsche Bank Q2 2019 Fixed I
Slide 4: Q2 2019 Group financial highlights
Q2 2019 Group financial highlights € m, unless stated otherwise Higher / Higher / (lower) in % (lower) in % Q2 2019 vs. Q2 2018 vs. Q1 2019 Revenues Revenues 6,203. (6) (2) of which: Specific items(1) 109( (44) n.m. Noninterest expenses 6,987( 21. 18. Costs of which: Adjusted costs(2) 5,696( 2. (4)
Slide 5: Q2 2019 impact of transformation charges
Q2 2019 impact of transformation charges € m, unless stated otherwise Transformation Reported Excluding items Comment charges Revenues 6,203 - 6,203 Impairment of software and Adjusted costs (5,696) (351) (5,345) provisions for existing service contracts Nonoperating costs(1) (1,292) (1,035) (256) I
Slide 6: Resilient revenues in more controllable areas
Resilient revenues in more controllable areas € bn, revenues(1) excluding specific items(2) (5)% 13.1 1.1 12.4 Equities — Impact of challenging market conditions, perimeter adjustments in 2018 and uncertainty around our 0.8 Equities S&T Market sensitive recent strategic transformation in H1 2019 3.2
Slide 7: On track with adjusted cost reductions
On track with adjusted cost reductions € bn, adjusted costs Cost trajectory on track … … to deliver 2019 cost target 6.4 (0.2)(1) Transformation (1.3) Bank 0.7 5.9 levies 5.7 charges related 22.8 5.6 5.5 to adjusted cost 5.4 0.6 0.4 21.5(2) (0.6) H2 10.9 10.2 Adjusted costs 5.7 0.7 Bank ex 5.6 5.5 5
Slide 8: Focused on execution to fundamentally change the bank
Focused on execution to fundamentally change the bank Created Capital Release Unit with a dedicated management team Exited Cash Equities positions and begun process to shut down systems. Negotiations for the sale of Global Prime Finance & Electronic Equities ongoing More than 900 employees have eith
Slide 9: Progress towards near-term objectives
Progress towards near-term objectives 2019 2020 Adjusted cost € 21.5bn(1) € 19.5bn Near-term objectives CET1 Ratio ~13% At least 12.5% Leverage Ratio (fully loaded) 4% 4.5% Credit and Market Risk-weighted CRU Derisking ~€ 20bn ~€ 10bn assets(2) Leverage exposure (fully loaded) € 119bn € 17bn Note: D
Slide 10: Agenda
Agenda 1 Q2 2019 results and execution progress 2 Capital, Liquidity and Funding 3 Appendix Deutsche Bank Q2 2019 Fixed Income Investor Call 9 Investor Relations 26 July 2019
Slide 11: CET1 capital ratio to remain above peers and regulatory requirements
CET1 capital ratio to remain above peers and regulatory requirements € bn except movements in basis points, unless stated otherwise — CET1 ratio declined by ~30 bps in the quarter, driven by two ECB 13.7% decisions related to regular reviews (~20 bps) as well as the payment of common share dividend
Slide 12: Addressing concerns around leverage
Addressing concerns around leverage fully loaded, € bn except movements in basis points, unless stated otherwise — Leverage ratio improved by 3 bps in the quarter predominantly 9 1 driven by lower leverage exposure on an FX neutral basis: 3.9% 3.9% — € (26)bn decrease in cash and deposits with banks
Slide 13: Maintaining a solid liquidity profile
Maintaining a solid liquidity profile Liquidity Coverage Ratio(1) (LCR) Surplus above 100% € 76bn € 66bn € 68bn € 66bn — LCR increased by 6% as a result of growth in requirement operational deposits and liability reductions 148% 147% in the quarter 140% 141% — Liquidity reserves decreased by € 14bn
Slide 14: A smaller, simpler, less market-sensitive balance sheet
A smaller, simpler, less market-sensitive balance sheet Funded balance sheet(1) in € bn, unless otherwise stated 1,022 1,022 — Funded balance sheet reduction of ~20% planned principally from Liquidity lower trading assets 24% 22% Reserves ~820 ~820 — Up to € 60bn reduction in 12% Trading and long-te
Slide 15: 2019 issuance plan and contractual maturities
2019 issuance plan and contractual maturities € bn Issuance plan Maturity profile TLTRO II Covered Bonds Senior Structured / Preferred Senior Non-Preferred AT1 / Tier 2 Contractual maturities(1) 40 32 2 23 24 24 23 22 15-20 4 2 30 up to 5 4 2 4 13 10-12 1 10 9 4 2-3 ~15 18 4 2 1 16 2-3 2 8 4 6 6 8 1
Slide 16: Pro-forma distributable items for Additional Tier 1 instruments
Pro-forma distributable items for Additional Tier 1 instruments € m, after CRR2 amendments 2018 2018 pro-forma Comments Distributable Profit 486 Other revenue reserves 6,760 — The definition of Available Distributable Items (ADI) has been amended with the implementation of CRR II Capital reserves -
Slide 17: Benefits for bondholders from our strategic transformation
Benefits for bondholders from our strategic transformation Smaller, simpler, less market-sensitive balance sheet allows management to lower CET1 ratio of at least 12.5% Target leverage ratio to increase to 4.5% from 2020 and to ~5% from 2022 Continue to maintain strong liquidity (target LCR ~ 130%)
Slide 18: Agenda
Agenda 1 Q2 2019 results and execution progress 2 Capital, Liquidity and Funding 3 Appendix Deutsche Bank Q2 2019 Fixed Income Investor Call 17 Investor Relations 26 July 2019
Slide 19: Total Loss Absorbing Capacity (TLAC) and MREL
Total Loss Absorbing Capacity (TLAC) and Minimum Requirement for Own Funds and Eligible Liabilities (MREL) € bn, unless stated otherwise, as of 30 June 2019 Deutsche Bank available TLAC/MREL TLAC/MREL surplus 121 — Deutsche Bank has significant TLAC/MREL Plain-vanilla 1(2) Plain-vanilla senior prefe
Slide 20: AT1 and Trust Preferred Securities outstanding
AT1 and Trust Preferred Securities outstanding(1) Regulatory Original Current Nominal Next call Subsequent Issuer capital ISIN issuance coupon outstanding date call period treatment(1) date DB Contingent Capital Trust II AT1 / -(2) US25153X2080 6.550% $ 800mn 23-May-07 23-Aug-19 Quarterly DB Conting
Slide 21: Capital Markets and Equity to MREL reconciliation
Capital Markets and Equity(1) to MREL reconciliation € bn, as of 30 June 2019 Covered 186 bonds 21 (21) Structured notes 23 23 Plain-vanilla 1 (10) +4 senior preferred (14) (0) 121 Plain-vanilla 1 senior preferred Plain-vanilla 66 senior Plain-vanilla non-preferred 59 senior non- preferred debt AT1
Slide 22: Current Ratings
Current Ratings part of loss-absorbing capacity senior to loss-absorbing capacity Counterparty obligations (e.g. Deposits / Structured A3 BBB+(1) BBB+ A (high) Notes / Derivatives / Swaps) Senior Preferred(2) A3 BBB+ BBB+ A (low) Long- term unse- cured Non-preferred Baa3 BBB- BBB BBB (high) Tier 2 B
Slide 23: Rating landscape – senior debt ratings
Rating landscape – senior debt ratings Moody‘s S&P Operating company / Preferred Senior(1) Holding company / Non-preferred Senior(2) Rating scale EU Peers Swiss Peers US Peers Short-term Long-term BAR BNP HSBC SOC CS UBS BoA Citi GS JPM MS P/A-1 Aa2/AA P/A-1 Aa3/AA- P/A-1 A1/A+ P/A-1 A2/A P/A-2 A3/A
Slide 24: Loan book composition
Loan book composition IFRS 9 loans at amortized cost, 30 June 2019 Corporate & Investment Bank Private & Commercial Bank Other Other Global Transaction Bank 1% — Well diversified loan portfolio 16% — ~2/3rd of the loan portfolio is in PCB, German largely consisting of mortgages and mortgages secured
Slide 25: Level 3 assets
Level 3 assets € bn, as of 30 June 2019 Assets (total: € 24bn) — Level 3 assets arise from the bank’s activities in Equity securities Mortgage backed securities various markets, some of which are less liquid Other 10 2 — Level 3 classification is not an indicator of risk or Derivative asset quality,
Slide 26: Specific revenue items and adjusted costs
Specific revenue items and adjusted costs €m Q2 2019 Q2 2018 Q1 2019 CIB PCB AM C&O Group CIB PCB AM C&O Group CIB PCB AM C&O Group Revenues 2,942 2,486 593 182 6,203 3,578 2,542 561 (91) 6,590 3,328 2,513 525 (15) 6,351 DVA - CIB Other (15) - - - (15) 56 - - - 56 (49) - - - (49) Change in valuation
Slide 27: Specific revenue items and adjusted costs – H1 2019
Specific revenue items and adjusted costs – H1 2019 €m H1 2019 H1 2018 CIB PCB AM C&O Group CIB PCB AM C&O Group Revenues 6,270 4,999 1,118 166 12,554 7,424 5,182 1,106 (144) 13,567 DVA - CIB Other (64) - - - (64) 118 - - - 118 Change in valuation of an investment - Sales & Trading (FIC) 138 - - - 1
Slide 28: Provision for credit losses and stage 3 loans under IFRS 9
Provision for credit losses and stage 3 loans under IFRS 9 Provision for credit losses, € m Stage 3 at amortised cost under IFRS 9, € bn Corporate & Investment Bank (CIB) CIB (ex-POCI) Purchased or Originated Credit Impaired (POCI) Private & Commerical Bank (PCB) PCB (ex-POCI) Group 2.5% 2.4% 2.3% 2
Slide 29: Litigation update
Litigation update € bn, unless stated otherwise Litigation provisions(1) 2.0 ― Provisions increased by € 0.1bn predominately due 1.2 1.1 1.2 to additional charges relating to the Vestia matter, which settled on 12 July 2019 ― Provisions include approximately € 0.3bn related to settlements already ac
Slide 30: Cautionary statements
Cautionary statements This presentation 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 and pro
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