Deutsche Bank Ag · XETR:DBK
Deutsche Bank — Merrill Lynch Banking & Insurance CEO Conference 2008
33 slides from Deutsche Bank's conference presentation, Oct 8, 2008
Slide 1: Deutsche Bank – Dr. Josef Ackermann, Merrill Lynch Banking & Insurance CEO Conference
D t h B Deutsche Bank k Dr. Josef Ackermann Chief Executive Officer Merrill Lynch Banking & Insurance CEO Conference London, 8 October 2008
Slide 2: Agenda
Agenda 1 Performing strongly through the credit crisis 2 Sustaining capital and funding strength 3 Investment banking: Leveraging a strong platform 4 Further expanding ‘stable’ businesses 5 Summary Investor Relations 10/08 · 2
Slide 3: Market turmoil continues
Market turmoil continues Phase 1: Phase 2: Phase 3: Phase 4: Phase 5: Phase 6: Phase 7: Phase 8: Credit crisis Knock-on Spill-over to Interim recovery More write-downs, Monoliners, de- Tentative recovery Banking industry starts in the sub- sub effects on interbank as Fed starts coordinated central l
Slide 4: The outlook remains difficult – with banking book assets under pressure
The outlook remains difficult – with banking book assets under pressure Rising delinquencies in the U.S.(1) Loan loss provisions of leading banks(3) In EUR bn 6% Consumer loans Credit card loans Real estate loans 5% 4% 3% ~2.5x 25 2% 1% 0% 19.4 20.7 2001 2002 2003 2004 200 2005 2006 200 2007 2008 18
Slide 5: However mark-downs are trending lower
However mark-downs are trending lower However, Selected peers: Reported mark-downs(1) Aggregated mark-downs(1) In EUR bn In % of In EUR bn shareholders’ equity pre-crisis(2) MER (3) 31.1 110 53.7 UBS(3) 29 1 29.1 92 LEH(4) 10.1 73 40.2 (4) MS 10.7 35 C (3) 28.6 33 SOC (3) 9.0 30 CS (3) 5.6 21 22.5 1
Slide 6: Deutsche Bank remains a relative winner through the crisis
Deutsche Bank remains a relative winner through the crisis Aggregate IBIT, 3Q2007-3Q2008, reported, in EUR bn JPM (2) 10.5 GS (1) 10.5 (2) 3.3 MS (1) 1.4 CS (2) 0.1 LEH ((1)) (4 2) (4.2) UBS (2) (18.5) C (2) (18.7) MER (2) (19.8) (1) Diverging fiscal year (2) 3Q2008 results not yet published Note: F
Slide 7: Credit crisis results in a 'flight to quality'
Credit crisis results in a ‘flight flight to quality quality’ … “‘Flight to quality’ in prime brokerage as hedge funds shift assets to the most financially stable banks.” (Hedge fund managers and market observers, June 2008) “As As well as from the surge in overall bond market volatility the rates b
Slide 8: … and the 'flight to quality' has benefited Deutsche Bank
… and the ‘flight flight to quality quality’ has benefited Deutsche Bank Selected examples PCAM – Strong net new money inflows GM – Market leadership in FX 3Q2007 – 2Q2008 (in EUR bn) Number of monthly transactions 16 52 16 #1 in global FX market 20 Market share of 21.7% AM PWM PBC Total Jan 2006 Ja
Slide 9: Agenda
Agenda 1 Performing strongly through the credit crisis 2 Sustaining capital and funding strength 3 Investment banking: Leveraging a strong platform 4 Further expanding ‘stable’ businesses 5 Summary Investor Relations 10/08 · 9
Slide 10: Key exposures have been managed down
Key exposures have been managed down Carrying value(1), in EUR bn Leveraged Finance Commercial Real Estate(3) Unfunded Non U.S. Funded U.S. (39)% (43)% 39.9 18.8 (2) 34.9 30.2 15.4 14.4 24.5 10.8 15 2 15.2 63 6.3 9.4 4.5 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 2007 2008 2007 2008 (1) Exposure represents carrying va
Slide 11: Loan loss provisions remain at relatively low levels
Loan loss provisions remain at relatively low levels Provision for credit losses, in EUR m Single counterparty relationship 329 135 105 114 98 81 1Q 2Q 3Q 4Q 1Q 2Q 2007 2008 Investor Relations 10/08 · 11
Slide 12: Capital and balance sheet leverage targets
Capital and balance sheet leverage targets BIS Tier I ratio (Basel II) Balance sheet leverage ratio(1) Pro-forma U.S. GAAP(2) 40 ~10 % 9.3 % ~30 30 Jun 2008 Target 30 Jun 2008 Target (1) Total assets after pro-forma U.S. GAAP netting divided by total equity (2) Assets per IFRS adjusted for pro-forma
Slide 13: Strong funding base
Strong funding base Unsecured funding, in EUR bn, as of 30 June 2008 511 516 Includes 84 EUR 44 bn 153 of term money Short-term wholesale 432 funding 358 +74 Fiduciary, clearing & other deposits Capital markets Retail deposit 30 Jun 2007 30 Jun 2008 Investor Relations 10/08 · 13
Slide 14: Deutsche Bank's relative strength: The market's verdict
Deutsche Bank’s Bank s relative strength: The market’s market s verdict 5-year senior CDS, in bps 1,035 1 July y 2007 3 October 2008 406 417 317 261 234 159 160 145 109 35 35 35 18 19 13 14 11 10 12 CS JPM BofA BAR UBS C MER GS MS Source: Bloomberg Note: Scales have been adjusted to improve visualiz
Slide 15: Agenda
Agenda 1 Performing strongly through the credit crisis 2 Sustaining capital and funding strength 3 Investment banking: Leveraging a strong platform 4 Further expanding ‘stable’ businesses 5 Summary Investor Relations 10/08 · 15
Slide 16: Investment banking remains a highly important business
Investment banking remains a highly important business Sales & Trading revenue pool*, in EUR bn DB current market share: ~10% 10% (17)% 134 136 110 112 2006 2007 2008E 2009E S&T equity q y S&T debt * Reflects Top 15 firms; excludes mark-downs and fair value gains / losses on own debt Source: Company
Slide 17: Dislocations in the competitive landscape: Fewer leading players
Dislocations in the competitive landscape: Fewer leading players March 2008 Current Bear Stearns JPMorgan g Chase JPMorgan g Chase Merrill Lynch Bank of America Bank of America Lehman Brothers Chapter 11 Goldman Sachs Goldman Sachs Morgan Stanley Morgan Stanley Wachovia Citi Citi* Deutsche Bank Deut
Slide 18: Our investment banking franchise has demonstrated robust underlying performance
Our investment banking franchise has demonstrated robust underlying performance Leading investment bank … … with strong operating earnings CB&S revenues(1) 3Q2007 – 2Q2008 (in EUR bn) CB&S revenues before mark-downs and losses (in EUR bn) (2),(4) Reported revenues GS Mark-downs and 61 6.1 losses(5)
Slide 19: Repositioning the platform toward growth prospects
Repositioning the platform toward growth prospects Business Line Overall revenue trend Global Finance & FX Core Rates Exploit leading g Distressed Debt positions in ‘growth’ products Equity Derivatives Emerging Markets Credit Trading (excl. Prop) Cash Equities Continue investment in Prime Brokerage
Slide 20: Agenda
Agenda 1 Performing strongly through the credit crisis 2 Sustaining capital and funding strength 3 Investment banking: Leveraging a strong platform 4 Further expanding ‘stable’ businesses 5 Summary Investor Relations 10/08 · 20
Slide 21: 'Stable' businesses have proved their resilience…
‘Stable’ Stable businesses have proved their resilience resilience… GTB AWM Income before income taxes PBC 2003 – 2007 Quarterly development In EUR bn In EUR m +15% >2x 3.0 854 835 832 2.6 742 Ø751 695 643 1.9 1.6 1.4 2003 2004 2005 2006 2007 1Q 2Q 3Q 4Q 1Q 2Q 2007 2008 Note: 2003-2005 based on U.S.
Slide 22: … and their contribution to RoE in challenging markets
… and their contribution to RoE in challenging markets Pre-Tax return on equity* (in %) 101 86 38 36 33 31 19 25% 18 2007 1H2008 2007 1H2008 2007 1H2008 2007 1H2008 GTB AWM PBC ‘Stable’ businesses aggregated * Annualized Investor Relations 10/08 · 22
Slide 23: GTB: We will further build on a successful platform
GTB: We will further build on a successful platform Example GTB Strong momentum … … supported through bolt bolt-on on acquisitions Income before income taxes (in EUR m) # 4 commercial bank in the 945 Netherlands 4x ~35,000 corporate and SME clients 705 Approval pp by y regulatory g y authoriti
Slide 24: PBC: The next phase of our strategy
PBC: The next phase of our strategy PBC Growth and efficiency programme Advisory Banking Consumer Banking Significant investment in our Building a European Consumer core competencies platform - Expanding p g number of q qualified - Setting g up p a 'state of the art' online Advisory banking staf
Slide 25: PBC: Key elements of future profit growth
PBC: Key elements of future profit growth Strategic thrust Targets for 2012 (excl. acquisitions) Strengthening Advisory Banking in core markets Germany Italy and Poland Germany, Pre-tax P t ~ EUR profit 2 bn Organic Establishing European growth Consumer Bank Extending franchise in Asia Net > EUR rev
Slide 26: PBC and Postbank: A powerful basis for co-operation
PBC and Postbank: A powerful basis for co-operation As of 31 December 2007 PBC Clients & distribution Clients (m) 14.5 13.8 Branches 855 1,650 Mobile sales force ~ 4,300 ~ 3,200 FTE ((000)) 21.5 23.1 Brands Financials (in EUR bn) Revenues 4.3 5.8 IBIT* 1.0 1.1 Customer loans 90 89 Customer deposits
Slide 27: Envisaged areas of co-operation between Postbank and PBC
Envisaged areas of co-operation between Postbank and PBC Rationale: Postbank is a market leader in prime segment for standard mortgages Mortgages / home DSL may become preferred provider in this segment for PBC finance Postbank (BHW) and PBC will explore cross-sell opportunities for their respec
Slide 28: Building on our turnaround in Asset and Wealth Management
Building on our turnaround in Asset and Wealth Management Net new money, in EUR bn 40 21 15 3 (41) (38) 2003* 2004 2005 2006 2007 1H2008 * PWM not restated for Rued Blass Investor Relations 10/08 · 28
Slide 29: Capturing share of new money through the crisis
Capturing share of new money through the crisis PCAM, in EUR bn 5.9% 3.4% 3.0% 2.7% 1.8% 27 33 21 23 15 14 17 13 15 15 17 11 10 9 10 9 9 6 7 4 2 3 0 (3) (2) (3) (6) (6) (8) (27) 1Q 2Q 3Q 4Q 1Q 2Q 1Q 2Q 3Q 4Q 1Q 2Q 1Q 2Q 3Q 4Q 1Q 2Q 1Q 2Q 3Q 4Q 1Q 2Q 1Q 2Q 3Q 4Q 1Q 2Q 2007 2008 2007 2008 2007 2008 20
Slide 30: Agenda
Agenda 1 Performing strongly through the credit crisis 2 Sustaining capital and funding strength 3 Investment banking: Leveraging a strong platform 4 Further expanding ‘stable’ businesses 5 Summary Investor Relations 10/08 · 30
Slide 31: The crisis has validated our business model
The crisis has validated our business model Leading global investment bank with a strong and profitable private clients franchise Powerful and growing Mutually M t ll reinforcing i f i i N in North th A America, i A leader in Europe businesses Asia and key emerging markets Investor Relations 10/08 ·
Slide 32: Meeting challenges, seizing opportunities
Meeting challenges challenges, seizing opportunities Capital, liquidity and Investment Banking 'Stable' businesses exposures Focused investments in a GTB: Continue to invest/ Continue to manage down key ‘core’ business expand exposures PBC: Launch the next phase Exploit relative strength −
Slide 33: Cautionary statements
Cautionary statements This presentation contains forward-looking statements. Forward-looking statements are statements that are not historical f t they facts; th i l d statements include t t t about b t our beliefs b li f and d expectations t ti and d the th assumptions ti underlying d l i th them.
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