Deutsche Bank Ag · XETR:DBK
Deutsche Bank — Debt Investor Presentation (November 2019)
33 slides from Deutsche Bank's debt investor presentation, Nov 4, 2019
Slide 1: Q3 2019 Fixed Income Investor Conference Call
Deutsche Bank Q3 2019 Fixed Income Investor Conference Call James von Moltke, Chief Financial Officer Dixit Joshi, Group Treasurer 4 November 2019
Slide 2: Agenda
Agenda 1 Q3 2019 results and execution progress 2 Capital, Liquidity and Funding 3 Appendix Deutsche Bank Q3 2019 Fixed Income Investor Call 2 Investor Relations 4 November 2019
Slide 3: Tangible progress on our strategic transformation
Tangible progress on our strategic transformation Disciplined execution – delivering on key milestones and targets Core business revenues resilient with loan and AuM growth demonstrating franchise stability 7th consecutive quarter of annual adjusted cost(1) reductions – on track for full year target
Slide 4: Q3 2019 Group financial highlights
Q3 2019 Group financial highlights € m, unless stated otherwise Change in % Q3 2019 vs. Q3 2018 Revenues 5,262. (15) Revenues of which: specific items(1) (182)( Revenues ex specific items 5,444( (12) Noninterest expenses 5,774( 4. Costs of which: Adjusted costs ex transformation(2) 5,240( (4) Cost/i
Slide 5: Core Bank revenues essentially flat
Core Bank revenues(1) essentially flat € bn (15)% (1)% 6.2 0.0 (0.5) 5.7 5.6 (0.1) (0.1) 5.3 (0.1) (0.2) Group Specific CRU C&O Core Bank Core Bank C&O CRU Specific Group Q3 2018 items(2) Q3 2018(1) Q3 2019(1) items(2) Q3 2019 reported reported Note: Throughout this presentation totals may not sum d
Slide 6: Stabilizing revenues
Stabilizing revenues € bn, Core Bank revenues(1) excluding specific items(2) 5.7 5.6 — Revenues strong in Origination & Advisory and in Market sensitive Investment Financing Bank — Re-shaping of Rates and Emerging Markets businesses 1.8 1.7 IB (2.9)% well underway with improving momentum — Revenues
Slide 7: On track to reach adjusted cost targets
On track to reach adjusted cost targets € bn, adjusted costs(1) 7th consecutive quarter of annual adjusted cost(2) reductions Progress to 2019 adjusted cost target Transformation charges(3) (1.3) (0.2) 22.8 5.7 21.5 5.4 0.4 Q4 5.4 (0.4) 0.2 5.0 17.0 0.7 Bank 0.6 levies (0.2) Q3 5.5 5.2 5.7 5.6 5.5 5
Slide 8: Progress deleveraging the Capital Release Unit
Progress deleveraging the Capital Release Unit € bn Risk weighted assets Leverage exposure – CRD4, fully loaded Prime Finance (retained as part of BNP Paribas transfer) 281 250 72 65 (73) (9) 56 177 52 ~(40) ~40 (4) ~20 34 137 119 9 2018 Q2 2019 Q3 2019 2019 2022 2018 Q2 2019 Q3 2019 2019 2022 targe
Slide 9: Key balance sheet and risk metrics remain strong
Key balance sheet and risk metrics remain strong 9M 2019 Comment Prudent management Common Equity Tier 1 capital ratio 13.4% of capital resources Reflects strong underwriting Provision for credit losses as a % of loans 15bps standards and low risk portfolios High quality and growing loan Loans as a
Slide 10: Agenda
Agenda 1 Q3 2019 results and execution progress 2 Capital, Liquidity and Funding 3 Appendix Deutsche Bank Q3 2019 Fixed Income Investor Call 10 Investor Relations 4 November 2019
Slide 11: Conservatively managed balance sheet
Conservatively managed balance sheet € bn, as of 30 September 2019, after netting(1) Assets Liabilities & equity 1,019 1,019 Trading and Liquidity 166 related liabilities(2) reserves(1) 243 — Net balance sheet down over € 20bn 50 Other liabilities(4) (ex. FX translation) quarter on quarter Trading a
Slide 12: Loan growth to support revenue generation with conservative underwriting standards
Loan growth to support revenue generation with conservative underwriting standards € bn, excl. FX effects, Q3 2019 year-on-year Key growth drivers — Short-term Trade Finance – typically collateralized to investment Corporate 4% grade multinationals and German mid caps 5 Bank — Commercial Banking in
Slide 13: Strong CET1 capital ratio maintained
Strong CET1 capital ratio maintained 26 13.4% 13.4% 0 (28) — Consistent with our strategy, CET1 capital ratio stable as de-risking offset the negative impact of our Q2 2019 FX Effect RWA Capital Q3 2019 transformation on earnings change change — Reduction in risk weighted assets reflects € 6bn CET1
Slide 14: Delivering on announced leverage exposure reductions
Delivering on announced leverage exposure reductions € bn except movements in basis points, period end 12 3.9% (4) 3.9% (8) — Leverage ratio stable as leverage exposure Q2 2019 FX Effect Leverage Capital Q3 2019 reduction offset transformation related Exposure change change charges and FX translatio
Slide 15: Maintaining a solid liquidity profile
Maintaining a solid liquidity profile Liquidity Coverage Ratio(1) Surplus above 100% € 76bn € 66bn € 68bn € 66bn € 59bn requirement 148% 147% 140% 141% 139% — Lower Liquidity Coverage Ratio due to redeployment of excess liquidity ~130% — Absolute liquidity surplus remains healthy at € 59bn — Liquidi
Slide 16: 2019 issuance plan
2019 issuance plan € bn TLTRO II Covered Bonds Senior Structured / Preferred Senior Non-Preferred Tier 2 Issuance plan Contractual maturity profile(1) 40 23 23 22 24 20 2 4 3 4 2 8 10-12 12 4 13 30 4 1 10 2-3 2 3 4 16 18 1 2-3 4 9 8 8 6 6 4 1 2018 2019 2019 YTD(2) 2018 2019 2020 2021 2022 2023 Plan
Slide 17: Outlook
Outlook Continue to manage balance sheet conservatively Ongoing deleveraging in the Capital Release Unit Maintain strong liquidity while further optimizing composition of liquidity reserves Significantly reduced funding footprint Sizeable MREL/TLAC buffers (€ 17bn / € 40bn) Mitigating measures to of
Slide 18: Agenda
Agenda 1 Q3 2019 results and execution progress 2 Capital, Liquidity and Funding 3 Appendix Deutsche Bank Q3 2019 Fixed Income Investor Call 18 Investor Relations 4 November 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 Sep 2019 Deutsche Bank available TLAC/MREL TLAC/MREL surplus 118 Plain-vanilla senior 1(2) preferred debt(1) — TLAC surplus of € 40bn and MREL surplus of
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-Nov-19 Quarterly Postbank F
Slide 21: Capital Markets and Equity to MREL reconciliation
Capital Markets and Equity(1) to MREL reconciliation € bn, as of 30 Sep 2019 Covered 185 bonds 21 (21) Structured notes 23 23 Plain-vanilla 1 (12) senior preferred 4 (16) (0) 118 Plain-vanilla 1 senior preferred Plain-vanilla 65 senior Plain-vanilla non-preferred 57 senior non- preferred debt AT1 /
Slide 22: Current Ratings
Current Ratings Moody‘s Investors S&P Global Fitch Ratings DBRS Services Ratings Counterparty obligations (e.g. Deposits / Structured Notes / A3 BBB+(1) BBB+ A (high) Derivatives / Swaps / Trade Finance obligations/ LOC‘s) Senior Preferred(2) A3 BBB+ BBB+ A (low) Long- term unse- cured Non-preferred
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: Q3 2019 specific revenue items and adjusted costs
Q3 2019 specific revenue items and adjusted costs €m Q3 2019 Q3 2018 Q2 2019 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 1,318 1,647 2,054 543 (76) 5,485 (223) 5,262 1,242 1,740 2,112 567 54 5,715 459 6,175 1,278 1,814 2,109 59
Slide 25: 9M 2019 specific revenue items and adjusted costs
9M 2019 specific revenue items and adjusted costs €m 9M 2019 9M 2018 Core Core CB IB PB AM C&O CRU Group CB IB PB AM C&O CRU Group Bank Bank Revenues 3,920 5,443 6,311 1,662 95 17,431 385 17,816 3,857 6,087 6,617 1,673 (111) 18,122 1,619 19,741 (1) DVA - IB Other / CRU - (126) - - - (126) (19) (146)
Slide 26: Q3 2019 impact of transformation effects
Q3 2019 impact of transformation effects € m, unless stated otherwise Excluding Transformation Reported transformation Comment effects effects Revenues 5,262 - 5,262 Impairment of software and accelerated depreciation of real estate assets, legal fees related to Adjusted costs(1) (5,426) (186) (5,24
Slide 27: 9M 2019 impact of transformation effects
9M 2019 impact of transformation effects € m, unless stated otherwise Excluding Transformation Reported transformation Comment effects effects Revenues 17,816 - 17,816 Impairment of software and accelerated depreciation of real estate assets, legal fees related to Adjusted costs(1) (17,051) (537) (1
Slide 28: Loan book composition
Loan book composition IFRS loans at amortized cost, 30 September 2019 Private Bank Investment Bank Corporate Bank Capital Release Unit Other(1) — Well diversified Loan Portfolio Capital Release Unit — Around half of the loan portfolio is in Private Other Bank, mainly consisting of German retail IB O
Slide 29: Provision for credit losses and stage 3 loans
Provision for credit losses and stage 3 loans Provision for credit losses, € m Stage 3 at amortised cost, € 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) IB (ex-POCI) Group Stage 3 2.4% 2.3%
Slide 30: Net interest income sensitivity
Net interest income sensitivity € bn, hypothetical +100 bps parallel shift impact First year Second year 1.5 1.8 0.9 1.0 0.8 0.6 Retail Non-retail Group Retail Non-retail Group Maturity Maturity > 3M 0.3 0.1 0.3 > 3M 0.5 0.1 0.6 EUR EUR ≤ 3M 0.3 0.7 1.1 ≤ 3M 0.3 0.7 1.0 > 3M 0.0 0.0 0.0 > 3M 0.0 0.1
Slide 31: Level 3 assets
Level 3 assets € bn, as of 30 September 2019 Assets (total: approx. € 25bn) ― Level 3 assets arise from the bank’s activities in various markets, some of which are less liquid Equity securities Mortgage backed securities 1 0 ― Level 3 classification is not an indicator of risk or asset Other 2 quali
Slide 32: Litigation update
Litigation update € bn, period end Litigation provisions(1) 1.2 1.1 1.2 1.1 ― Provisions decreased by € 0.1bn predominantly due to settlement payments ― Provisions include approximately € 0.2bn related to settlements already achieved or agreed in principle Q4 2018 Q1 2019 Q2 2019 Q3 2019 but not yet
Slide 33: 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
Deutsche Bank — Debt Investor Presentation (November 2019) on 6ix