Deutsche Bank Ag · XETR:DBK
Deutsche Bank — Sal. Oppenheim European Financials Conference 2008
34 slides from Deutsche Bank's conference presentation, Nov 18, 2008
Slide 1: Deutsche Bank
Deutsche Bank Stefan Krause Chief Financial Officer Sal. Oppenheim European Financials Conference Zurich, 18 November 2008
Slide 2: Agenda
Agenda 1 Third quarter 2008 results 2 Key current issues 3 Risk and capital management 4 Business strategy Investor Relations 11/08 · 2
Slide 3: 3Q2008 Highlights
3Q2008 Highlights Income before income taxes of EUR 93 m – After mark-downs of EUR 1.2 bn Group – Includes only EUR 146 m gain on FV on own debt; election on all own debt performance would have increased pre-tax profit by more than EUR 2 bn Net income of EUR 414 m, including tax benefit of EUR 3
Slide 4: 3Q2008 results in summary
3Q2008 results in summary In EUR bn 3Q2008 3Q2008 vs. vs. 3Q2008 3Q2007 2Q2008 3Q2007 2Q2008 Net revenues 4.4 5.1 5.4 (14)% (19)% Provision for credit losses (0.2) (0.1) (0.1) 125 % 75 % Noninterest expenses (4.0) (3.5) (4.6) 14 % (13)% Income before income taxes 0.1 1.4 0.6 Net income 0.4 1.6 0.6 D
Slide 5: We continue to manage down key exposures
We continue to manage down key exposures Carrying value(1), in EUR bn Leveraged Finance Commercial Real Estate(2) Loans held New deals 2008 Assets at Fair Value Loans held 39.9 Assets at Fair Value(3) (4) 18.8 34.9 30.2 15.4 14.4 24.5 22.5 10.8 9.7 8.4 11.9 3Q 4Q 1Q 2Q 3Q 3Q 4Q 1Q 2Q 3Q 2007 2008 20
Slide 6: Sales & Trading: Impact of extreme market stress
Sales & Trading: Impact of extreme market stress S&T (debt and other products) S&T (equity) Net revenues, in EUR m Mark-downs Net revenues, in EUR m Net revenues 3,354 1,714 2,889 1,403 1,068 745 830 1,589 885 2,053 428 1,244 705 1,317 924 576 602 (142) 1Q 2Q 3Q 4Q 1Q 2Q 3Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 2007
Slide 7: 'Stable' businesses: Impact of specific items
‘Stable’ businesses: Impact of specific items … GTB AWM Income before income taxes PBC 2003 – 2007 Quarterly trend In EUR bn In EUR m 2x 3.0 835 832 854 2.6 742 695 643 1.9 449 1.6 1.4 Specific items: Seed capital investment losses 49 Money market fund injections 54 Auction Rate Securities provision
Slide 8: … and their contribution to RoE in challenging markets
… and their contribution to RoE in challenging markets Pre-Tax return on equity* (in %) 102 86 33 35 31 30 25 18 10 2007 9M2008 2007 9M2008 2007 9M2008 2007 9M2008 GTB AWM PBC „Stable‟ businesses aggregated * Annualized Investor Relations 11/08 · 8
Slide 9: Agenda
Agenda 1 Third quarter 2008 results 2 Key current issues 3 Risk and capital management 4 Business strategy Investor Relations 11/08 · 9
Slide 10: Impact of IAS 39 reclassification
Impact of IAS 39 reclassification IAS 39 Impact on results In October 2008 the European Union endorsed 3Q2008, in EUR m amendments to IAS 39 and IFRS 7, „Reclassification of Financial Assets‟, which permit the reclassification IAS 39 effect of trading assets and assets available for sale in cases
Slide 11: Total assets increase primarily due to FX impact and derivatives
Total assets increase primarily due to FX impact and derivatives In EUR bn IAS 39 reclass 38 104 (103) 25 2,061 28 12 1,991 (39) 29 (12) (154) Financial assets at FV: (12) Other assets: 82 30 Jun FX Derivatives Managed FX September Other / 30 Sep 2008 reductions / Other / settlement IAS 39 2008 IAS
Slide 12: Assets reconciliation
Assets reconciliation As of 30 Sep 2008, in EUR bn 2,061 Positive market values from 727 derivatives Financial assets 1,361 at FV through P&L 163 Trading securities 347 347 Reverse repos / securities borrowed 208 Other 100 157 100 Loans 253 Cash and deposits from banks 253 52 Securities borrowed / c
Slide 13: On a risk weighted basis, Deutsche Bank below peer average
On a risk weighted basis, Deutsche Bank below peer average As of 30 Sep 2008, in EUR bn Total assets RWA 2,186 894 2,061 776 1,725 1,603 1,460 621 1,361 1,295 445 Peer average 885 Ø: 424 735 671 319 613 258 228 201 201 196 (1) (1) RBS BAR JPM Citi UBS(1) CS GS (3) MS(3) MER(2) JPM Citi(2) RBS(1) BAR
Slide 14: Deutsche Bank: Limited application of fair value option
Deutsche Bank: Limited application of fair value option Disclosed P&L benefit / (loss) from fair value option on own debt, FY2007-3Q2008, in EUR bn (1),(2) 5.5 4.7 2.4 (3) 2.2 2.1 2.0 (3) 0.4 0.3 (1) Also reflects fair value gain on Mandatory Convertible Notes of EUR 2.4 bn in 1Q2008 (2) 3Q2008 fair
Slide 15: Progress towards our leverage ratio target
Progress towards our leverage ratio target Balance sheet leverage ratio per target definition 38 34 ~30 30 June 2008 30 September 2008 Target Investor Relations 11/08 · 15
Slide 16: Agenda
Agenda 1 Third quarter results 2008 2 Key current issues 3 Risk and capital management 4 Business strategy Investor Relations 11/08 · 16
Slide 17: Rise in provisions partly driven by IAS 39 asset reclassification
Rise in provisions partly driven by IAS 39 asset reclassification Provision for credit losses, in EUR m Single counterparty relationship 329 485 236 283 72 IAS 39 135 98 105 114 81 1Q 2Q 3Q 4Q 1Q 2Q 3Q Jan-Sep Jan-Sep 2007 2008 2007 2008 Thereof: CIB (20) 0 (42) 0 (19) 0 190 0 (11) 0 (9) 0 66 0 (82)
Slide 18: Tier I ratio improved to 10.3%, above new target
Tier I ratio improved to 10.3%, above new target Change to 10.3 Basel II 10.3 9.2 9.3 Target ~10% 9% 8.7 8.8 8.6 8.4 Target range 8% 329 319 308 311 303 305 285 31 Mar 30 Jun 30 Sep 31 Dec 31 Mar 30 Jun 30 Sep 2007 2008 Tier I ratio, in % RWA, in EUR bn Investor Relations 11/08 · 18
Slide 19: Reduced reliance in short-term funding
Reduced reliance in short-term funding Unsecured funding by source, in EUR bn 511 521 14% 75 153 30% 447 + EUR 88 bn 358 30 June 2007 30 September 2008 Capital markets Short-term wholesale funding Retail deposits Fiduciary, clearing & other deposits Note: Figures may not add up due to rounding diffe
Slide 20: A funding cost advantage for Deutsche Bank
A funding cost advantage for Deutsche Bank 5-year senior CDS, in bps 1 July 2007 10 November 2008 411 316 213 197 121 133 133 135 109 112 19 18 35 35 35 14 11 13 10 12 JPM Bar BoA UBS CS C MER GS MS Source: Bloomberg Investor Relations 11/08 · 20
Slide 21: Agenda
Agenda 1 Third quarter results 2008 2 Key current issues 3 Risk and capital management 4 Business strategy Investor Relations 11/08 · 21
Slide 22: 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 reinforcing in North America, A leader in Europe businesses Asia and key emerging markets Investor Relations 11/08 · 22
Slide 23: We remain a relative winner through the crisis
We remain a relative winner through the crisis Aggregate IBIT, 3Q2007-3Q2008, reported, adjusted for FV gains on own debt, in EUR bn (1) 10.1 7.4 3.1 (1) (0.8) (3.8) (2),(3) (24.3) (25.1) Fair value gains (30.1) on own debt (1) Diverging fiscal (2) 3Q2008 based on preliminary announcement of 16 Oct
Slide 24: 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% (17)% 134 136 110 112 2006 2007 2008E 2009E S&T equity S&T debt * Reflects Top 15 firms; excludes mark-downs and fair value gains / losses on own debt Source: Company reporti
Slide 25: We continue to invest in 'stable' businesses: example PBC
We continue to invest in ‘stable’ businesses: example PBC PBC growth program Advisory Banking Consumer Banking Significant investment in our Building a European core competencies PBC Consumer platform − Expanding number of − Setting up a 'state of the qualified Advisory banking art' online banking s
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 Income before income taxes 1.0 1.1 Customer loans 90 89
Slide 27: Meeting challenges, seizing opportunities
Meeting 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 Expand Advis
Slide 28: Additional information
financial Additional information A Passion to Perform. Deutsche Bank
Slide 29: Invested assets report
Invested assets(1) report In EUR bn Net new money 30 Sep 31 Dec 31 Mar 30 Jun 30 Sep 2007 2007 2008 2008 2008 Jan-Sep 3Q2008 2008 Asset and Wealth Management 759 749 698 700 700 (5) 10 Asset Management 561 555 516 515 510 (11) (8) Institutional 156 158 151 155 156 (4) 2 Retail 239 234 214 211 193 (8
Slide 30: Listed holdings
Listed holdings In EUR m Stake Market value (in %) 30 Sep 30 Sep 31 Dec 31 Mar 30 Jun 30 Sep 2008 2007 2007 2008 2008 2008 Daimler AG 2.7% 3,170 2,967 1,567 1,027 943 Allianz SE - 1,277 1,154 867 584 - Linde AG 3.3% 929 789 571 570 418 Other n.m. 362 171 141 122 135 Total market value 5,738 5,081 3,
Slide 31: Financial assets at FV: Development by category
Financial assets at FV: Development by category Positive market values Total assets, in EUR bn from derivatives Trading securities Reverse repos / securities borrowed 2,061 Other 1,991 1,395 1,383 640 727 Financial Assets 1,383 1,395 at FV through P&L 415 347 227 208 253 Loans 216 Cash and deposits
Slide 32: Balance sheet leverage ratio (target definition)
Balance sheet leverage ratio (target definition) In EUR bn 30 Jun 2008 30 Sep 2008 Total assets (IFRS) 1,991 2,061 Adjust derivatives according to U.S. GAAP netting rules (498) (564) Adjust pending settlements according to U.S. GAAP netting rules (92) (74) Adjust repo according to U.S. GAAP netting
Slide 33: Our target definition
Our target definition Pre-tax return on equity (target definition) IBIT attributable to DB shareholders (target definition) Reported income before income tax expense IBIT attributable to DB shareholders Less minority interest (target definition) IBIT attributable to DB shareholders Average active eq
Slide 34: 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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