Deutsche Bank Ag · XETR:DBK
Deutsche Bank — Q2 2022 Earnings Presentation
52 slides from Deutsche Bank's earnings presentation, Jul 27, 2022
Slide 1: Q2 2022 results
Deutsche Bank Q2 2022 results July 27, 2022
Slide 2: Solid results despite challenging environment
Solid results despite challenging environment H1 2022 Performance Profitability Resilience Group revenues of € 14.0bn, Significant improvement in Strong risk management reflecting average growth of profitability: € 2.4bn post-tax through unprecedented 9% across four core businesses profit, +31% YoY
Slide 3: All core businesses demonstrating clear momentum
All core businesses demonstrating clear momentum H1 20221 Continued improvement in Corporate Bank operating leverage from higher rates, business volumes and +18% 10% 66% growth in fees, as well as a lower Revenue RoTE CIR cost base growth Continued FIC franchise Investment Bank development, with inc
Slide 4: Stable revenue contributors
Growth now visible across divisions Core Bank revenues1, in € bn, unless stated otherwise Group 23.2 24.9 25.9 13.5 14.0 Average Average +12% 9% 4% +7% +9% 25.9 14.0 24.9 13.4 23.8 Divisional growth rates 10.1 11% 6.0 +9% Investment 9.7 Divisional CAGRs 8.2 5.5 Bank Stable revenue contributors Corpo
Slide 5: Significant improvement in pre-provision profit
Significant improvement in pre-provision profit Core Bank1, in € bn, unless stated otherwise RoTE (10.3)% 4.1% 9.3% 10.1% 4.3 Corporate Bank Investment Bank 1.0 Private Bank 3.6 Asset Management 0.4 C&O 2.9 0.5 2.7 2.5 2.2 1.0 0.1 1.1 0.6 0.5 0.0 0.2 0.2 0.3 0.5 0.5 (0.3) (0.3) (1.0) H1 20192 H1 202
Slide 6: Ongoing progress, despite pressures
Ongoing progress, despite pressures In % RoTE and CIR development Ratio impacts in H1 2022 RoTE RoTE CIR 8.0 6.5 Additional bank levies (0.5) 1.3 Valuation & timing differences (V&T) (0.6) 1.0 (0.5) H1 2020 H1 2021 H1 2022 CIR 87.1 Regulatory enforcement / litigation (0.2) 0.4 78.5 73.3 Russia-relat
Slide 7: Robust balance sheet
Robust balance sheet Q2 2022 Q1 2022 Comments Common Equity Tier 1 Strong capital position 13.0% 12.8% capital ratio More than € 9bn above regulatory requirements Q2 2022 ratio including Leverage ratio 4.3% 4.6% central bank balances More than € 16bn above regulatory requirements € 51bn above regula
Slide 8: Resilient loan book with strong risk management
Resilient loan book with strong risk management Credit loss provision history Loan book composition by division3 x In bps of average loans Provision for credit losses Other Investment x 1% Bank 33 13 13 17 41 12 22 20% Private 53% 1.8 1.4 Bank 26% 0.5 0.5 0.7 0.5 0.5 Corporate Bank 2016 2017 2018 20
Slide 9: Sustainable Finance strategy well on track
Sustainable Finance strategy well on track In € bn, cumulative since 2020 Sustainable Finance1 volumes versus target Reported volumes by business and product type +9% +8% +5% >200 106 191 177 28 157 52 10 78 32 46 42 32 YE 2020 YE 2021 Q1 2022 H1 2022 YE 2022 Investment Bank Corporate Bank Private B
Slide 10: Significantly improved performance in challenging market
Significantly improved performance in challenging market Underlying business performance driving significant improvements in profitability Strong revenue generation resulting in enhanced returns and resilience Ongoing progress despite pressures from unprecedented market environment Resilient loan bo
Slide 11: Q2 2022 Group financial highlights
Q2 2022 Group financial highlights In € m, unless stated otherwise Change in % Change in % Q2 2022 vs. Q2 2021 vs. Q1 2022 Revenues 6,650 7 (9) Revenues Revenues ex specific items1 6,639 7 (9) Noninterest expenses 4,870 (3) (9) Costs Adjusted costs 4,767 1 (11) Profit (loss) before tax 1,547 33 (7)
Slide 12: Q2 2022 Core Bank financial highlights
Q2 2022 Core Bank financial highlights In € bn, unless stated otherwise Change vs. Change vs. Q2 2022 Q2 2021 Q1 2022 Revenues 6.6 6% (9)% Revenues ex specific items1 6.6 6% (10)% Noninterest expenses 4.7 (1)% (7)% Adjusted costs 4.6 3% (9)% Profit (loss) before tax 1.7 21% (13)% Profit (loss) 1.3 3
Slide 13: Net interest margin
Net interest margin Evolution of Group NIM and average interest earning assets Comments Average interest earning assets, in € bn1 — NIM increase driven predominantly Net interest margin, in %2 by USD interest rate rises in H1 2022 as well as lower average cash balances in the second quarter 1.37% 1.
Slide 14: Adjusted costs – Q2 2022 (YoY)
Adjusted costs – Q2 2022 (YoY) In € m, unless stated otherwise Q2 2022 year-on-year comments Q2 2021 ex transformation 4,651 charges & bank levies FX impact Compensation 80 — Adjusted costs excluding transformation and benefits1 155 charges and bank levies increased 2% year on year, and declined 2%
Slide 15: Adjusted costs – H1 2022 (YoY)
Adjusted costs – H1 2022 (YoY) In € m, unless stated otherwise H1 2022 year-on-year comments H1 2021 ex transformation 9,403 charges & bank levies FX impact — Adjusted costs excluding transformation Compensation and benefits1 129 213 charges and bank levies decreased 1% year on year, and 3% excludin
Slide 16: Provision for credit losses
Provision for credit losses In € m Comments Stage 1 + 2 Stage 3 — Quarter-on-quarter reduction driven by 761 lower level of new provisions on Russian portfolio and the benefits of a portfolio sale in Private Bank 252 — Second order effects from Ukraine war, 506 supply chain challenges and rising inf
Slide 17: Capital ratios
Capital ratios Movements in basis points (bps), period end CET1 ratio Comments 13 13.0% 12.8% 4 — CET1 ratio up 14bps compared to Q1 2022: (3) — (3)bps from FX translation effects — 13bps from capital changes reflecting strong Q2 2022 earnings net of deductions for dividends and AT1 coupons, and OCI
Slide 18: Segment results
Segment results Deutsche Bank Q2 2022 results Investor Relations July 27, 2022
Slide 19: Corporate Bank
Corporate Bank In € m, unless stated otherwise Change in Change in % vs. % vs. Q2 2022 Q2 2021 Q1 2022 Q2 2022 year-on-year comments Revenues 1,551 26 6 Revenues Revenues ex specific items1 1,551 26 6 — Revenues 26% higher reflecting improvements in the interest rate Noninterest expenses 960 (4) (6)
Slide 20: Q2 2022 Corporate Bank revenue performance
Q2 2022 Corporate Bank revenue performance In € m, unless stated otherwise X% X% Excluding specific items1 Change vs. Q2 2021 Q2 2022 year-on-year drivers Corporate Treasury Services: Corporate Treasury Services 962 30% 30% — Revenues 30% higher driven by strong operating performance, improving inte
Slide 21: Investment Bank
Investment Bank In € m, unless stated otherwise Change in Change in % vs. % vs. Q2 2022 Q2 2021 Q1 2022 Q2 2022 year-on-year comments Revenues 2,646 11 (20) — Higher revenues driven by strong Revenues performance in FIC, partially Revenues ex specific items1 2,634 10 (21) offset by a significant dec
Slide 22: Q2 2022 Investment Bank revenue performance
Q2 2022 Investment Bank revenue performance In € m, unless stated otherwise X% X% Excluding specific items1 Change vs. Q2 2021 Q2 2022 year-on-year comments Fixed Income, Currency Sales & Trading: — Macro trading revenues significantly Fixed Income, Currency higher, driven by increased market Sales
Slide 23: Private Bank
Private Bank In € m, unless stated otherwise Change in Change in % vs. % vs. Q2 2022 Q2 2021 Q1 2022 Q2 2022 year-on-year comments Revenues 2,160 7 (3) — Revenues up 4% ex specific items Revenues and the net impact of BGH6 ruling, Revenues ex specific items1 2,158 9 (2) reflecting volume growth, FX
Slide 24: Q2 2022 Private Bank revenue performance
Q2 2022 Private Bank revenue performance In € m, unless stated otherwise X% X% Excluding specific items1 Change vs. Q2 2021 Q2 2022 year-on-year comments Private Bank Germany: — Revenues in Private Bank Germany up 3% adjusted for significantly reduced forgone revenues related to the BGH3 ruling Priv
Slide 25: Asset Management
Asset Management In € m, unless stated otherwise Change in Change in % vs. % vs. Q2 2022 Q2 2021 Q1 2022 Q2 2022 year-on-year comments Revenues 656 5 (4) Revenues — Revenues up 5% from higher Revenues ex specific items1 656 5 (4) management and performance fees and favorable impact of fair Nonintere
Slide 26: Corporate & Other
Corporate & Other In € m Profit (loss) before tax Change Change vs. vs. Q2 2022 Q2 2021 Q1 2022 (39) Profit (loss) before tax (498) (459) (70) Funding & liquidity (126) (66) 1 Valuation & timing differences1 (185) (268) (1) Shareholder expenses (120) (7) 1 (429) Noncontrolling interest2 49 2 (7) (49
Slide 27: Capital Release Unit
Capital Release Unit In € m, unless stated otherwise Absolute Absolute change vs. change vs. Q2 2022 Q2 2021 Q1 2022 Q2 2022 year-on-year comments Revenues 7 31 13 — Revenues improved due to lower de- Revenues risking, risk management and funding Revenues ex specific items1 10 32 14 impacts that mor
Slide 28: Outlook
Outlook Managing through continued uncertain macro-economic and financial market environment Focus will remain on managing a resilient balance sheet; retaining CLP outlook of 25 bps Strong Core Bank operating performance and ongoing transformation execution supports strategy Continue to focus on del
Slide 29: Appendix
Appendix Deutsche Bank Q2 2022 results Investor Relations July 27, 2022
Slide 30: Sustainability at Deutsche Bank
Sustainability at Deutsche Bank Q2 2022 highlights Our key focus areas Recent achievements – Increase of cumulative volumes in sustainable financing and investment to € 191bn1, with growth in all businesses Sustainable – Deal highlights: 1st green bond issuance by Austrian government due in May 2049
Slide 31: Definition of certain financial measures
Definition of certain financial measures Revenues excluding specific items are calculated by adjusting net revenues under IFRS for specific revenue items which Revenues generally fall outside the usual nature or scope of the business and are likely to distort an accurate assessment of the excluding
Slide 32: Specific revenue items and adjusted costs – Q2 2022
Specific revenue items and adjusted costs – Q2 2022 In € m Q2 2022 Q2 2021 Q1 2022 Core Core Core CB IB PB AM C&O CRU Group CB IB PB AM C&O CRU Group CB IB PB AM C&O CRU Group Bank Bank Bank Revenues 1,551 2,646 2,160 656 (370) 6,643 7 6,650 1,230 2,394 2,018 626 (6) 6,262 (24) 6,238 1,461 3,323 2,2
Slide 33: Specific revenue items and adjusted costs – H1 2022
Specific revenue items and adjusted costs – H1 2022 In € m H1 2022 H1 2021 Core Core CB IB PB AM C&O CRU Group CB IB PB AM C&O CRU Group Bank Bank Revenues 3,012 5,969 4,381 1,338 (723) 13,976 1 13,977 2,543 5,491 4,196 1,263 (80) 13,413 57 13,471 revenue items DVA - IB Other / CRU - 4 - - - 4 (5) (
Slide 34: Last 12 months (LTM) revenue reconciliation
Last 12 months (LTM) revenue reconciliation In € m Q2 2020 Q2 2021 Q2 2022 Q3 20191 Q4 20191 Q1 20201 Q2 20201 Q3 20201 Q4 20201 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 LTM2 LTM3 LTM4 Revenues CB 1,324 1,286 1,324 1,342 1,255 1,226 1,314 1,230 1,255 1,352 1,461 1,551 5,276 5,024 5,619 IB 1,6
Slide 35: Private Bank – Impact of BGH ruling
Private Bank – Impact of BGH ruling1 In € m, unless stated otherwise Q2 2021 Q1 2022 Q2 2022 H1 2021 H1 2022 Revenues Net revenues 2,018 2,220 2,160 4,196 4,381 BGH ruling - impact of forgone revenues (net) 94 7 8 94 15 of which: Private Bank Germany - BGH ruling - impact of forgone revenues (net) 9
Slide 36: Transformation-related effects
Transformation-related effects In € bn, unless stated otherwise 2019 – 2019 – 2022 Q2 2022 expected % of total cumulative cumulative 2019 – Q2 2022 impact impact Q2 2022 Nonoperating Goodwill impairment3 - 1.0 1.0 100% costs1 Restructuring & severance4 (0.0) 1.8 2.0 93% Pre-tax items Real estate cha
Slide 37: Indicative divisional currency mix
Indicative divisional currency mix Q2 2022 Net revenues Noninterest expenses 5% 4% 10% 10% 11% 19% 20% 17% 16% 21% 5% 5% 0% 1% 25% 21% 30% 17% 21% 1% 20% 0% 30% 14% 40% 16% 7% 16% 0% 84% 84% 64% 68% 56% 50% 52% 34% 51% 48% 9% CB IB PB AM Group CB IB PB AM Group EUR GBP USD Other1 Note: Classificatio
Slide 38: 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 Investment Bank PB (ex-POCI) CRU (ex-POCI) Corporate Bank Capital Release Unit CB (ex-POCI) Purchased or Originated Credit Impaired (POCI) 292 IB (ex-POCI) 254 36 Group S
Slide 39: Russia: credit risk overview
Russia: credit risk overview Q2 2022 Loan exposure to Russia Additional contingent risk € 1.3bn 1 € 0.5 bn € 0.6bn on a net basis2 Material operations and cash flows outside € 0.9bn of Russia Booked offshore € 0.4bn Largely mitigated via − Export Credit Agency coverage Large Russian € 0.3bn
Slide 40: Balance sheet of Russia subsidiary OOO Deutsche Bank
Balance sheet of Russia subsidiary OOO “Deutsche Bank” Q2 2022 Balance Sheet Capital Liquidity € 1.6bn € 0.4bn 1 ~€ 0.7bn excess liquidity in No cross-border funding foreign currency placed required; local operations self- with Group funded Assets ~€ 0.6bn of Central Bank >30% CET1 ratio cash
Slide 41: Litigation update
Litigation update In € bn, period end Litigation provisions1 Comments 1.0 1.1 1.1 1.2 0.9 ― Provisions increased modestly by € 0.1bn quarter Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 on quarter ― Contingent liabilities increased modestly by € 0.1bn quarter on quarter; contingent liabilities include po
Slide 42: Q2 2022 loan and deposit development
Q2 2022 loan and deposit development In € bn Loan development Comments QoQ YoY — Lending growth of € 8bn compared to Q1 2022 456 476 481 493 3% 11% 445 adjusted for FX and hedge accounting effects: 7 6 4 1 6% 7 93 94 99 33% — Stable growth of € 4bn in Private Bank driven by 75 80 mortgages in Privat
Slide 43: Deposit repricing in Q2 2022
Deposit repricing in Q2 2022 In € bn, unless otherwise stated Quarterly charging revenues, in € m Comments QoQ 139 153 +10% 126 22 — Further increase in quarterly revenues by 10% 108 20 +15% 94 17 driven by Corporate Bank and Private Bank 12 8 — Q2 2022 annualized run-rate of € 612m, up € 120 131 +9
Slide 44: Net interest income sensitivity
Net interest income sensitivity Hypothetical +/-25bps shift in yield curve, in € m Net interest income (NII) sensitivity1 Comments +25bps shift in yield curve -25bps shift in yield curve ~330 ~180 ~210 ~90 ~(50) — Revenue change grows larger over time ~(210) ~(190) due to cumulative effect of hedge
Slide 45: Evolution of market implied interest rates
Evolution of market implied interest rates In % ECB deposit facility rate Federal Reserve interest on reserve balances 4.0 4.0 3.0 3.0 2.0 2.0 1.0 1.0 0.0 0.0 -1.0 -1.0 01/22 07/22 01/23 07/23 01/24 07/24 01/25 01/22 07/22 01/23 07/23 01/24 07/24 01/25 EUR 10-year swap rate USD 10-year swap rate 3.5
Slide 46: Loan book composition
Loan book composition Q2 2022, IFRS loans: € 493bn Comments Other1 — Well diversified loan portfolio Other IB2 Leveraged Debt Capital Markets 1% — YTD increase from FX impact on loan book is 8% 1% € 11bn Asset Backed Securities German Mortgages 7% — 53% of loan portfolio in Private Bank, mainly 31%
Slide 47: Leverage exposure and risk weighted assets
Leverage exposure and risk weighted assets CRD4, in € bn, period end Leverage exposure Risk weighted assets 370 370 59 Operational risk RWA 59 1,247 1,277 103 Market risk RWA Trading assets 111 36 28 Credit valuation 5 Derivatives1 143 148 23 adjustments Lending 488 503 145 250 Lending Credit risk R
Slide 48: Level 3 assets
Level 3 assets In € bn, as of June 30, 2022 Assets (total: € 29bn) Comments Equity securities Mortgage backed securities Other 1 3 0 — Level 3 is an indicator of valuation Derivative uncertainty and not of asset quality Debt 12 securities 5 Assets — The movements in level 3 assets reflect that the p
Slide 49: Value-at-risk / stressed Value-at-risk
Value-at-risk / stressed Value-at-risk (VaR / sVaR) In € m, unless stated otherwise Historical simulation VaR, DB Group Trading book, 99%, 1 day Quarterly average 41 33 34 30 47 80 60 40 20 0 Q2 2021 Q3 2021 Q4 2021 Q1 2021 Q2 2022 Historical simulation sVaR, DB Group Regulatory scope, 99%
Slide 50: Assets under management (AuM) – Private Bank
Assets under management (AuM) – Private Bank In € bn, unless stated otherwise IPB - Investment Products PB GY - Investment Products IPB - Deposits PB GY - Deposits AuM(1,2) – by business unit and product group (2)% (4)% 537 542 554 548 521 528 110 110 111 112 112 109 64 65 66 68 63 71 Inv. Prod. 363
Slide 51: Assets under management (AuM) – Asset Management
Assets under management (AuM) – Asset Management In € bn, unless stated otherwise AuM development Quarterly mgmt 28.1 Year on Year 28.4 fee margin, in bps 27.7 Quarter on Quarter 28.4 902 (25) 21 46 859 (74) (65) 1 833 833 1 0 Q2 2021 Net Flows FX Market Other Q2 2022 Q1 2021 Net Flows FX Market Oth
Slide 52: Cautionary statements
Cautionary statements Forward-looking 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