Deutsche Bank Ag · XETR:DBK
Deutsche Bank — Q2 2009 Earnings Presentation
49 slides from Deutsche Bank's earnings presentation, Jul 28, 2009
Slide 1: 2Q2009 Results
2Q2009 Results Stefan Krause Chief Financial Officer 28 July 2009
Slide 2: Agenda
Agenda 1 Group p results 2 Segment results 3 Key current issues Investor Relations 07/09 · 2
Slide 3: 2Q2009 highlights
2Q2009 highlights Revenues of EUR 7.9 bn Provision for credit losses of EUR 1 1.0 0 bn Group Income before income taxes of EUR 1.3 bn, net income of EUR 1.1 bn performance Diluted EPS of EUR 1.64 Pre tax return on equity((1)) of 16% Pre-tax Tier 1 ratio of 11.0%, above target RWAs of E
Slide 4: Results in summary
Results in summary In EUR bn 2Q2009 2Q2008 1Q2009 1H2009 1H2008 Net revenues 7.9 5.4 7.2 15.2 10.1 Provision for credit losses (1.0) (0.1) (0.5) (1.5) (0.2) Noninterest expenses (5 6) (5.6) (4 6) (4.6) (4 9) (4.9) (10 5) (10.5) (9 4) (9.4) Income before income taxes 1.3 0.6 1.8 3.1 0.4 N t iincome N
Slide 5: Net revenues
Net revenues Significant property impairment Mark-downs In EUR bn 0.5 0.5 1.0 10 1.0 00 0.0 5.5 3.2 2.3 12 1.2 15 2 15.2 7.2 7.9 4.6 5.4 4.4 10.1 (0.8) * 1Q 2Q 3Q 4Q 1Q 2Q 1H 1H 2008 2009 2008 2009 * Includes mark-downs of EUR 0.9 bn Note: Figures may not add up due to rounding differences; historic
Slide 6: Provision for credit losses
Provision for credit losses Related to IAS 39 reclassified assets In EUR m 1 526 1,526 1,000 591 526 236 799 114 135 492 249 406 308 164 1Q 2Q 3Q 4Q 1Q 2Q 1H 1H 2008 2009 2008 2009 Thereof: CIB (11) (9) 66 361 357 779 (20) 1,136 125 145 169 229 169 221 270 391 Thereof: PCAM Note: Divisional figures
Slide 7: Composition of loan book and provisions by category
Composition of loan book and provisions by category In EUR bn, as of 30 Jun 2009 xx 2Q2009 provision for loan losses, in EUR m 1,000* , 147 156 677 Low loan to 268 value Substantially hedged Highly diversified Substantially Short term / Fully collateralised collateralised (64) on demand Liquid by Go
Slide 8: Noninterest expenses
Noninterest expenses In EUR bn 10 5 10.5 9.4 5.6 4.8 4.6 4.8 4.9 Severance 41 4.1 EUR 321 m 6.1 3.1 5.6 2.9 2.1 3.0 Huntsman 2.7 1.9 EUR 316 m Real estate 23 2.3 2.2 exit costs 42 4.2 2.0 1.8 2.2 2.0 EUR 43 m 3.8 (0.1) 0.1 0.4 (0.1) 0.3 Maher 0.2 impairment EUR 151 m 1Q 2Q 3Q 4Q 1Q 2Q 1H 1H 2008 200
Slide 9: 2Q2009 specific P&L items
2Q2009 specific P&L items In EUR m Noninterest expenses R Revenues LLP LLPs Comp & Gen. & Other non- T t l Total Total benefits Admin comp Equity comp hedges 392 - 392 Specific Postbank gain 234 - 234 Industrial Holdings 132 - 132 Specific p positive p effects 758 - - - - - 758 Provisions related to
Slide 10: Income before income taxes
Income before income taxes In EUR bn 3.1 18 1.8 1.3 0.6 0.4 01 0.1 (0.3) (6.2) 1Q 2Q 3Q 4Q 1Q 2Q 1H 1H 2008 2009 2008 2009 Investor Relations 07/09 · 10
Slide 11: Net income
Net income In EUR bn 2.3 1.2 1.1 0.6 0.5 0.4 (0.1) (4.8) 1Q 2Q 3Q 4Q 1Q 2Q 1H 1H 2008 2009 2008 2009 ETR, in % 45 ((0)) n.m. 23 35 18 ((30)) 28 Investor Relations 07/09 · 11
Slide 12: Capital ratios and risk-weighted assets
Capital ratios and risk-weighted assets 11.0 10.3 10.1 10.2 Target: 9.2 9.3 ~10% 78 7.8 7.5 6.9 7.0 7.1 6.8 319 308 316 303 305 295 1Q 2Q 3Q 4Q 1Q 2Q 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 Capital divided by RWA
Slide 13: Development of total assets
Development of total assets In EUR bn 31 Mar 2009 30 Jun 2009 Leverage ratio(2) 2,103 1,733 28 25 24 982 928 (1,122) (805) IFRS N tti (1) U.S. Netting U S GAAP IFRS tti (1) U.S. Netting N U S GAAP 31 Dec D 31 M Mar 30 JJun ‘pro-forma’ ‘pro-forma’ 2008 2009 2009 (1) For 30 Jun 09 incl incl. derivativ
Slide 14: 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 significantly 511 exceed short-term wholesale funding of 479 EUR 68 bn 30% 14% 68 Comprehensive monthly liquidity stress testing, 153 incl. contingent liquid
Slide 15: Funding in 2009
Funding in 2009 DB YTD issuance (non-government guaranteed) vs. government guaranteed issuance of banks* 2009 trends / key features Average issuance lower cost, longer 200 Issuance maturity than guarantee schemes Spain markets Average issuance far lower cost than Netherlands peer non non-guarant
Slide 16: Agenda
Agenda 1 Group p results 2 Segment results 3 Key current issues Investor Relations 07/09 · 16
Slide 17: Sales & Trading revenues
Sales & Trading revenues Mark-downs Revenues In EUR bn 1.1 1.0 0.1 3.5 1.4 2.1 7.5 4.0 3.5 21 2.1 0.7 0 7 35 3.5 1.4 0.8 (4 8) * (4.8) 1Q 2Q 3Q 4Q 1Q 2Q 1H 1H 2008 2009 2008 2009 * Includes mark-downs of EUR 1.7 bn Investor Relations 07/09 · 17
Slide 18: Global Markets: Continued cost, risk and balance sheet reduction
Global Markets: Continued cost cost, risk and balance sheet reduction Constant input VaR Example: USD basis risk (38)% (45)% (8)% (42)% Oct 2008 (Peak) 1Q2009 Avg 2Q2009 Avg 3Q2008 (Peak) 1Q2009 2Q2009 Global Markets U.S. GAAP ‘pro-forma’ balance sheet Non-comp direct costs (43)% (23)% (1)% ((7)% )
Slide 19: Sales & Trading debt and other products
Sales & Trading debt and other products Net revenues Trends vs. 1Q2009 / key features In EUR bn Mark-downs Mark downs FX / Money Markets Lower client activity amid return to less Net revenues volatile markets 1.0 Voted #1 in Euromoney FX poll for fifth g yyear straight 0.1 Rates 3.8 One of the
Slide 20: Sales & Trading equity
Sales & Trading equity Net revenues Trends vs. 1Q2009 / key features In EUR m Equity Derivatives Legacy positions largely de-risked Strong European trading driven by client flows and structured trades 830 903 745 Cash Equities 275 Rising markets and normalizing volatility Continued market gr
Slide 21: Origination & Advisory
Origination & Advisory Net revenues Trends vs. 1Q2009 / key features In EUR m Advisory Ad i Advisory Low market volumes Origination Increased market share of fees Maintained market position globally ((M&A volume)) 1,090 1 090 152 Equity 727 Origination Record level of follow-on issuance 72
Slide 22: Global Transaction Banking
Global Transaction Banking Income before income taxes Trends vs. 1Q2009 / key features In EUR m Revenues Positive impact from risk-based funding Low interest rates impacted 291 earnings across all products and 283 281 regions 250 221 Strong new business generation 181 Expenses Increased regu
Slide 23: Brokerage and portfolio- / fund management revenues
Brokerage and portfolio- / fund management revenues Equity indices Brokerage and portfolio- Volatility / fund management I d Indexed d 1 Jan J 2008 = 100 R Revenues, iin EUR m PBC AWM 110 1,165 1 195 1,195 S&P 500 1,076 90 345 355 912 327 842 857 213 70 DAX 245 248 (37)% (40)% 820 840 50 749 699 597
Slide 24: Asset and Wealth Management
Asset and Wealth Management Income before income taxes Trends vs. 1Q2009 / key features In EUR m Asset Management Additional impairments on RREEF 242 assets 188 Increase in portfolio / fund management fees, mainly DWS RREEF impairments (110) Europe performance fees Severance* (54) Continued co
Slide 25: Private & Business Clients
Private & Business Clients Income before income taxes Trends vs. 1Q2009 / key features In EUR m XX Severance* Revenues Strong increase in deposit revenues 5 4 6 106 15 150 Client activity in investment products remains weak 328 304 Provision for Benefit from revised parameters and 262 credit l
Slide 26: Agenda
Agenda 1 Group p results 2 Segment results 3 Key current issues Investor Relations 07/09 · 26
Slide 27: Problem loans
Problem loans xx IAS 39 impact - IFRS impaired loans In EUR bn 8.2 5.7 4.6 6.7 3.9 4.5 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 62% 65% 53% 53% 50% 46% 31 Mar 30 Jun 30 Sep 31 Dec 31 Mar 30 Jun 2008 2009 Problem loans not considered impaired under IFRS IFRS impaired loans coverage r
Slide 28: Risk-based analysis of monoline exposure
Risk-based analysis of monoline exposure Fair value assets, as of 30 June 2009, in EUR bn Risk category g y 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 U S RMBS U.S. CVA CVA Su
Slide 29: Value of Level 3 assets
Value of Level 3 assets((1)) Asset sset c classes asses 2Q2009 Q 009 development de e op e t In EUR bn Key changes: 88 (20)% – Reduction in derivatives market values 2 80 6 – Sales and unwinds 14 72 64 – Net transfer from Level 3 to Level 2 10 5 2 9 49 45 33 17 15 13 31 Dec D 2008 31 Mar M 2009 30
Slide 30: Pro-forma impact of IAS 39 reclassifications
‘Pro-forma’ Pro-forma impact of IAS 39 reclassifications In EUR m FY2008 - 1Q2009 2Q2009 Total Incremental reported income* (162) (666) (827) Fair value P&L impact of assets 4,653 380 5,032 previously classified as trading Net pro-forma impact on reported 4,491 (286) 4,205 i income before b f income
Slide 31: Impact of Postbank transaction on our results
Impact of Postbank transaction on our results Income before income taxes impact, in EUR m 2Q2009 1H2009 Related to the 50 m DB-shares given as Impact Upside purchase consideration to Deutsche Post from participation Deutsche Post completed the sale 234 476 revised on DB shares beginning of July
Slide 32: Risk-based funding impact
Risk-based funding impact Risk-based funding framework Revenue impact 2Q2009 in EUR m 2Q2009, P&L neutral on Group level Refinement of internal funding rates to more adequately reflect risks of certain assets and CB&S (66) th value the l off stable t bl short-term h tt liabilities li biliti Re
Slide 33: Deutsche Bank: Summary status, 30 June 2009
Deutsche Bank: Summary status status, 30 June 2009 Key financial data, 1H / 30 June 2008/2009 30 June 30 June 2008 2009 Revenues (in EUR bn) 10.1 15.2 Provision for credit losses (in EUR bn) 0.2 1.5 Income before income taxes (in EUR bn) 04 0.4 31 3.1 Profitability Net income (in EUR bn) 0.5 2.3 Pre
Slide 34: Additional information
financial transparency. Additional information Analyst Call A Passion to Perform. Deutsche Bank
Slide 35: Number of shares for EPS calculation
Number of shares for EPS calculation In million Average At end of period 2Q 1Q 2Q 30 Jun 31 Mar 30 Jun 2008 2009 2009 2008 2009 2009 Common shares issued 531 585 621 531 621 621 Total shares in treasury (28) (6) (3) (25) (3) (3) Common shares outstanding 503 579 618 505 618 618 (1) Forward purchases
Slide 36: Group headcount
Group headcount Full-time equivalents, at period end 30 Jun 2009 vs. 31 Mar 30 Jun 30 Sep 31 Dec 31 Mar 30 Jun 31 Mar 2009 Net of 2008 2008 2008 2008 2009 2009 Total de-/consoli- change dation CIB 15,425 15,392 15,328 14,821 14,277 14,021 (255) (247) PCAM 31 885 31,885 32 301 32,301 32 723 32,723 32
Slide 37: Invested assets report
Invested assets((1)) report In EUR bn Net new 31 Mar 30 Jun 30 Sep 31 Dec 31 Mar 30 Jun money 2008 2008 2008 2008 2009 2009 2Q2009 Asset and Wealth Management 698 700 700 628 627 632 (2) Asset Management 516 515 510 463 462 460 (3) Institutional 157 161 162 164 169 160 (2) Retail 208 205 187 147 142
Slide 38: Regional invested assets – AM and PWM
Regional invested assets((1)) – AM and PWM In EUR bn 30 Jun 09 31 M Mar 30 J Jun 30 S Sep 31 D Dec 31 M Mar 30 J Jun vs. 2008 2008 2008 2008 2009 2009 30 Jun 08 Asset Management g 516 515 510 463 462 460 ( )% (11)% Germany 252 248 232 200 194 200 (19)% UK 16 16 19 18 17 18 11 % Rest of Europe 36 34
Slide 39: Regional net new money – AM and PWM
Regional net new money – AM and PWM In EUR bn 1Q2008 2Q2008 3Q2008 4Q2008 FY2008 1Q2009 2Q2009 Asset Management 2 1 (11) (15) (22) (3) (3) G Germany 2 (3) (7) (22) (29) (3) (2) UK 1 1 3 (1) 4 (0) 1 Rest of Europe (0) (1) 0 (1) (2) (0) (1) Americas 0 4 (6) 9 7 1 (2) A i / Pacific Asia P ifi (1) (0) (
Slide 40: Corporate Investments
Corporate Investments Income before income taxes Key features I EUR m In Specific positive impacts: – Specific gains of EUR 234 m from derivatives related to the acquisition of 679 Postbank shares – Gains of EUR 132 m arising from the sale of industrial holdings 377 Specific charges: 275 – Goodw
Slide 41: Listed holdings
Listed holdings In EUR m Stake Market value (i %) (in 30 Jun 31 Mar 30 Jun 30 Sep 31 Dec 31 Mar 30 Jun 2009 2008 2008 2008 2008 2009 2009 Daimler AG 0.9% 1,567 1,027 943 692 509 248 Allianz SE - 867 584 - - - - Linde AG - 571 570 418 250 16 - Other - 141 122 135 129 117 121 Total market value 3,147
Slide 42: IFRS balance sheet: Development by category
IFRS balance sheet: Development by category Positive market values In EUR bn from derivatives Trading securities Other trading assets 1 516 1,516 2,103 Reverse repos / securities borrowed 1,141 1,733 Loans des. at FV Other financial assets des. at FV through P&L 1,516 1,141 770 Financial assets 1,14
Slide 43: U.S. GAAP 'pro-forma' assets
U S GAAP ‘pro-forma’ U.S. pro-forma assets In EUR bn 1 030 1,030 Positive market 982 values from 128 928 derivatives 121 95 Financial assets Trading securities 205 at FV through P&L 191 199 Other trading assets 42 28 Reverse repos / 117 29 securities borrowed 123 105 Loans des. at FV 19 18 9 Other d
Slide 44: Funding situation – Assets and liabilities
Funding situation – Assets and liabilities Balance sheet by product, as of 30 Jun 2009, in EUR bn 1,733 1,733 Unfunded IFRS Derivatives & Derivatives & Settlement Balances(1) 863 822 Settlement Balances(1) balance sheet it items Reverse Repo & 115 Repo & Other Secured Other Secured 167 54 Trading Li
Slide 45: Loan book
Loan book xx IAS 39 impact on CIB loan book In EUR bn 23% 271 276 268 255 12 14 CI 13 209 217 25 34 38 37 145 151 154 144 112 CIB 107 102 105 109 108 108 110 PCAM 31 Mar 30 Jun 30 Sep 31 Dec 31 Mar 30 Jun 2008 2009 Germany excl. financial institutions: 86 87 88 93 96 96 Note: Total incl. CI / Other;
Slide 46: Funding position in 2009
Funding position in 2009 Modest capital market funding remains CDS spreads support funding cost advantage N New iissuance, iin EUR bn b R Remaining i i 5 5-year senior i CDS CDS, 24 JJuly l 2009, 2009 in i bps b 331 54 45 167 153 21 112 117 97 101 15 16 73 74 52 2005 2006 2007 2008 Plan BNP CS JPM B
Slide 47: 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* EUR 1.4 bn Sales & Trading revenues EUR 3.5 bn 180 160 140 120 100 80 60 40 20 ∅ 112 ∅ 124 ∅ 134 ∅ 141 ∅ 145 ∅ 57 ∅ 61 ∅ 58 ∅ 45 ∅ 44 2Q2008 3Q2008 4Q2008 1Q2009 2Q2009 * Constant VaR is an appr
Slide 48: Balance sheet leverage ratio (target definition)
Balance sheet leverage ratio (target definition) In EUR bn 30 Jun 31 Mar 2009 2009 Total assets (IFRS) 1,733 2,103 Adjust derivatives according to U U.S. S GAAP netting rules (681) (1 020) (1,020) Adjust pending settlements according to U.S. GAAP netting rules (113) (97) Adjust repos according to U.
Slide 49: 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