Deutsche Bank AG · XETR:DBK
Deutsche Bank — Q2 2012 Earnings Presentation
47 slides from Deutsche Bank's earnings presentation, Jul 31, 2012
Slide 1: Deutsche Bank Stefan Krause Analyst Call, 31 July 2012
Deutsche Bank Deutsche Bank Stefan Krause Chief Financial Officer Analyst Call, 31 July 2012 Deutsche Bank Stefan Krause financial transparency. Investor Relations 31 July 2012
Slide 2: Agenda
Agenda 1 Group results 2 Segment results 3 Key current issues Deutsche Bank Stefan Krause financial transparency. 2 Investor Relations 31 July 2012
Slide 3: Key take-aways
Key take-aways — CB&S revenue performance was in line with the opportunities presented in a very challenging market environment; lower performance based comp offset by negative currency translation effects and increased litigation costs — GTB delivered revenue growth across all products and regions;
Slide 4: Overview
Overview 2Q2012 2Q2011 Income before income taxes (in EUR bn) 1.0 1.8 Net income (in EUR bn) 0.7 1.2 Profitability Pre-tax RoE (target definition)(1) 7% 14% Diluted EPS (in EUR) 0.68 1.24 30 Jun 2012 31 Mar 2012 Core Tier 1 capital ratio 10.2% 10.0% Capital Tier 1 capital ratio 13.6% 13.4% Core Tier
Slide 5: Income before income taxes
Income before income taxes In EUR m 1,778 (612) 69 960 3 (192) (26) (60) 2Q2011 CB&S AWM PBC GTB CI C&A 2Q2012 Deutsche Bank Stefan Krause financial transparency. 5 Investor Relations 31 July 2012
Slide 6: Net revenues
Net revenues In EUR bn 19.0 10.5 17.2 9.2 8.5 8.0 7.3 6.9 1Q 2Q 3Q 4Q 1Q 2Q 1H 1H 2011 2012 2011 2012 Deutsche Bank Stefan Krause financial transparency. 6 Investor Relations 31 July 2012
Slide 7: Provision for credit losses
Provision for credit losses In EUR m 837 Effect from Postbank releases shown as net interest income at DB Group / PBC level 733 200 Related to IAS 39 reclassified assets 54 100 154 540 464 463 91 419 373 82 111 64 18 (1) 314 100 638 (1) 679 79 23 117 36 537 525 22 449 (1) 54 (1) (1) 382 352 (1) 385
Slide 8: Non-interest expenses
Non-interest expenses In EUR bn 13.4 13.6 Compensation & benefits General and administrative expenses Other non-interest expenses(1) 7.0 7.6 7.1 6.7 7.0 6.3 6.6 5.9 4.3 2.8 3.7 3.4 3.4 2.7 5.6 6.4 3.3 3.7 3.2 3.3 2.7 2.9 0.1 0.1 (0.1) 0.2 0.2 (0.0) 0.1 0.2 1Q 2Q 3Q 4Q 1Q 2Q 1H 1H 2011 2012 2011 2012
Slide 9: Profitability
Profitability Income before income taxes Net income In EUR bn In EUR bn 3.0 2.1 1.8 1.9 1.2 1.4 0.9 1.0 0.8 0.7 0.2 (0.4) 1Q 2Q 3Q 4Q 1Q 2Q 1Q 2Q 3Q 4Q 1Q 2Q 2011 2012 2011 2012 Pre-tax return on equity(1), in % Effective tax rate, in % 24 14 7 (3) 14 7 29 31 18 153 25 31 FY2011: 10 FY2011: 20 (1) A
Slide 10: Capital ratios and risk-weighted assets
Capital ratios and risk-weighted assets Basel 2 Basel 2.5 14.0 13.8 13.4 13.6 13.4 12.9 12.3 Tier 1 ratio, in % 9.6 10.2 10.1 10.0 10.2 9.5 8.7 Core Tier 1 ratio, in % 381 368 373 346 338 328 320 RWA, in EUR bn 4Q 1Q 2Q 3Q 4Q 1Q 2Q 2010 2011 2012 Note: Tier 1 ratio = Tier 1 capital / RWA; Core Tier
Slide 11: Core Tier 1 capital and RWA development
Core Tier 1 capital and RWA development Core Tier 1 capital RWA In EUR bn In EUR bn 0.6 0.2 0.4 37.8 0.1 37.0 5.2 0.1 372.6 (0.2) (0.3) 368.4 (0.8) (0.3) 31 Mar Net Dividend CDI (2) Postbank(3) Other FX effect 30 Jun 31 Mar 2012 FX effect Credit Market Operational 30 Jun 2012 2012 income (1) accrual
Slide 12: Agenda
Agenda 1 Group results 2 Segment results 3 Key current issues Deutsche Bank Stefan Krause financial transparency. 12 Investor Relations 31 July 2012
Slide 13: Segment overview
Segment overview Income before income taxes, in EUR m 2Q2012 2Q2011 357 CB&S 969 309 GTB 306 35 AWM 227 398 PBC 458 (70) CI (139) (69) C&A (43) Deutsche Bank Stefan Krause financial transparency. 13 Investor Relations 31 July 2012
Slide 14: Corporate Banking & Securities
Corporate Banking & Securities Income before income taxes Key features In EUR m In EUR m 2Q12 vs. 2Q12 vs. 2Q12 2Q11 1Q12 2Q11 1Q12 2,287 Revenues 3,526 3,977 5,220 (11)% (32)% Prov. for credit (112) (96) (85) 16 % 32 % losses 1,717 Noninterest exp. (3,054) (2,907) (3,412) 5% (10)% IBIT 357 969 1,71
Slide 15: Sales & Trading debt and other products
Sales & Trading debt and other products Revenues Key features In EUR m Overall 2Q12 vs. 2Q12 vs. 2Q12 2Q11 1Q12 2Q11 across — Solid y-o-y performance despite lower client activity 1Q12 3,691 most products driven by ongoing macro economic concerns Revenues 3,390 — #1 Prov. US Fixed Income for third y
Slide 16: Sales & Trading equity
Sales & Trading equity Revenues Key features In EUR m 2Q12 vs. 2Q12 vs. Overall 2Q12 2Q11 1Q12 2Q11 1Q12 — Revenues Revenues flat y-o-y despite difficult market conditions, 943 underpinned by good performance in Cash Equities and Prov. for credit Prime Brokerage losses — Equities business remains mo
Slide 17: Origination & Advisory
Origination & Advisory Revenues Key features In EUR m 2Q12 vs. 2Q12 vs. Overall 2Q12 2Q11 1Q12 2Q11 1Q12 Origination Advisory — Industry-wide activity down across all markets Revenues — Ranked No. 5 globally - gained market share globally ytd 717 Prov. for credit 714 Advisory losses — Lower y-o-y re
Slide 18: Global Transaction Banking
Global Transaction Banking Income before income taxes Key features In EUR m In EUR m 2Q12 vs. 2Q12 vs. 2Q12 2Q11 1Q12 2Q11 1Q12 Revenues 972 886 967 10 % 1% 340 Prov. for credit (47) (31) (33) 54 % 42 % 306 309 losses 274 283 Noninterest exp. (616) (549) (593) 12 % 4% 259 IBIT 309 306 340 1% (9)% CI
Slide 19: Asset and Wealth Management
Asset and Wealth Management Income before income taxes Key features In EUR m In EUR m 2Q12 vs. 2Q12 vs. 2Q12 2Q11 1Q12 2Q11 1Q12 227 Revenues 891 976 883 (9)% 1% Prov. for credit 190 186 losses (14) (13) (0) 3% n.m. 165 Noninterest exp. (843) (737) (739) 14 % 14 % IBIT 35 227 142 (85)% (76)% 142 (1)
Slide 20: Asset Management
Asset Management Income before income taxes Key features In EUR m In EUR m 2Q12 vs. 2Q12 vs. 131 2Q12 2Q11 1Q12 2Q11 1Q12 124 117 Revenues 396 453 380 (13)% 4% Prov. for credit (0) (0) 0 n.m. n.m. losses Noninterest exp. (366) (328) (325) 12 % 13 % IBIT 30 124 54 (76)% (45)% 75 (1) Invested assets 5
Slide 21: Private Wealth Management
Private Wealth Management Income before income taxes Key features In EUR m In EUR m 2Q12 vs. 2Q12 vs. 2Q12 2Q11 1Q12 2Q11 1Q12 Revenues 495 523 503 (5)% (2)% 116 Prov. for credit (14) (13) (0) 4% n.m. 102 losses Noninterest exp. (477) (408) (414) 17 % 15 % 88 IBIT 5 102 88 (95)% (95)% (1) Invested a
Slide 22: Private & Business Clients
Private & Business Clients Income before income taxes Key features In EUR m In EUR m 2Q12 vs. 2Q12 vs. 2Q12 2Q11 1Q12 2Q11 1Q12 Cost-to-achieve related Negative impact from Greek Revenues 2,425 2,563 2,501 (5)% (3)% to Postbank acquisition(1) government bonds(1) Prov. for credit Net HuaXia one-off g
Slide 23: Agenda
Agenda 1 Group results 2 Segment results 3 Key current issues Deutsche Bank Stefan Krause financial transparency. 23 Investor Relations 31 July 2012
Slide 24: 2Q2012 Basel 3 simulation
2Q2012 Basel 3 simulation(1) In EUR bn xx Core Tier 1 ratio (%) Pro forma RWA Pro forma Core Tier 1 capital and ratios 10.2% 10.2% 8.9% 7.2% 119 (29) 3 (0) 42 (9) 475 (10) 465 2 39 38 373 12 385 33 Jun 12 Normali- Dec 12 Basel 3 Add. 1 Jan 2013 Application 1 Jan Jun 12 Net income Dec 12 Basel 3 Cost
Slide 25: Cost base development
Cost base development Compensation and benefits Non-interest expenses, in EUR bn General and admin expenses Other non-interest expenses 2Q2012 vs. 2Q2011 1H2012 vs. 1H2011 0.1 0.1 13.4 0.3 0.6 13.6 0.4 0.2 13.0 0.1 6.6 (0.2) 0.1 6.3 0.1 (0.9) 6.3 (0.1) (0.2) 7.0 (0.1) 7.6 6.7 3.4 3.4 3.2 6.2 6.4 3.1
Slide 26: Compensation development
Compensation development Compensation ratio Performance related compensation Compensation expenses / net revenues Bonus & retention 2Q12 vs. 2Q11 (9)% 2.9 ppt 42.3% 39.4% Cash (27)% Amortization 12% of deferrals 2Q2011 2Q2012 2Q11 2Q12 Memo: Group 8.5 8.0 (6)% revenues(1) (1) In EUR bn Deutsche Bank
Slide 27: Summary
Summary The macro economic uncertainties are expected to continue to weigh on investor sentiment and client activity Maintained a superior liquidity and funding profile; asset quality remains strong Commitment to strict capital and risk discipline; on track to achieve Basel 3 projected capitalizatio
Slide 28: Additional information
Deutsche Bank Additional information
Slide 29: Funding profile
Funding profile As at 31 Dec 2007 As at 30 Jun 2012 Total: EUR 1,206 bn 30% (EUR 361 bn) of Total: EUR 1,175 bn(2) 57% (EUR 672 bn) of Financing overall funding from Financing overall funding from Vehicles Vehicles 5% most stable funding most stable funding 2% sources(1) sources Capital Capital Mark
Slide 30: Funding activities update
Funding activities update Funding cost development Observations In bps — Modest funding plan of EUR 15 bn 360 European Peer CDS(1) — Issuance at EUR 13 bn per mid-July US Peer CDS(2) 320 at average spread of L+73 bps (~86 DB 5yr Senior CDS bps inside CDS) 280 DB issuance spread (4wk mov avg.) DB iss
Slide 31: Corporate Investments
Corporate Investments Income before income taxes Key features In EUR m In EUR m 2Q12 vs. 2Q12 vs. 2Q12 2Q11 1Q12 2Q11 1Q12 Revenues 262 194 4 35 % n.m. Prov. for credit (2) (4) (2) (43)% 34 % losses Noninterest exp. (330) (329) (312) 0% 6% IBIT (70) (139) (303) (50)% (77)% (85) (70) (165) (139) (303
Slide 32: Consolidation & Adjustments
Consolidation & Adjustments Income before income taxes Key features In EUR m In EUR m 2Q12 vs. 2Q12 vs. 202 2Q12 2Q11 1Q12 2Q11 1Q12 117 IBIT (69) (43) (431) 61 % (84)% thereof FX hedging of net (92) (41) (82) 124 % 12 % (43) (69) investments (1) (61) n.m. V&T differences (15) (319) (81)% Bank levie
Slide 33: PBC – business division performance
PBC – business division performance In EUR m, post-minorities Impact from Cost-to- Reported Greek achieve PPA1) Hua Xia Adjusted IBIT IBIT government related to bonds Postbank 1Q2011 231 (38) 269 2Q2011 124 (42) (35) 201 Advisory Banking 3Q2011 132 (11) (35) 178 Germany 4Q2011 85 (9) (73) 167 FY2011
Slide 34: Exposure on selected countries
Exposure on selected countries Net sovereign exposure In EUR m 31 Mar 2012 30 Jun 2012 (1)% 350 338 Ireland 3,944 3,905 2,516 189 143 1,953 Portugal 1,358 873 Italy 94 35 Greece Spain Total Note: Numbers may not add up due to rounding differences Deutsche Bank Stefan Krause financial transparency. 3
Slide 35: Impaired loans
Impaired loans In EUR bn IFRS impaired loans(1) Relating to IAS 39 loans Effect from Postbank (2) 9.4 9.8 9.2 8.5 7.6 2.0 2.2 6.7 2.0 1.8 1.3 1.5 1.4 1.8 0.8 0.8 1.1 1.1 4.9 5.5 5.6 5.9 5.8 5.8 31 Mar 30 Jun 30 Sep 31 Dec 31 Mar 30 Jun 2011 2012 50% 46% 45% 44% 44% 45% Cov. Ratio DB(3) (1) IFRS impa
Slide 36: Loan book
Loan book In EUR bn IAS 39 impact on CIB loan book 25 23 23 23 23 23 398 398 416 417 412 415 11 11 10 7 7 3 CI 151 146 151 135 135 150 CIB 24 25 27 29 28 30 AWM 228 227 229 230 230 230 PBC 31 Mar 30 Jun 30 Sep 31 Dec 31 Mar 30 Jun 2011 2012 Germany excl. Financial Institutions and Public Sector: 175
Slide 37: Composition of loan book and provisions by category
Composition of loan book and provisions by category In EUR bn, as of 30 June 2012 ... DB 2Q2012 provision for credit losses(1) ex. PB, in EUR m ... Postbank (PB) 2Q2012 provision for credit losses(1)(2), in EUR m 311 IAS 39 reclassified assets Postbank 419 144 108 68 99 415 Low loan 23 to value
Slide 38: Total assets (adjusted)
Total assets (adjusted) In EUR bn 1,296 1,256 Derivatives post- Positive market values Derivatives post- 72 netting 78 netting from derivatives 221 Trading securities 234 248 Trading assets Financial assets 259 Trading assets at FV through P&L 27 Other trading assets 25 Reverse repos / 155 securitie
Slide 39: IAS 39 reclassification
IAS 39 reclassification Carrying Value vs. Fair Value 2Q2012 developments In EUR bn — The gap between carrying value and fair value has increased by EUR 0.1 bn in 2Q2012 Sales & Trading - Debt Origination & Advisory — Decrease of fair value by EUR 0.2 bn largely 31 Dec 31 Dec 31 Dec 31 Mar 30 Jun dr
Slide 40: Group headcount
Group headcount Full-time equivalents, at period end 30 Jun 2012 31 Dec 2010 31 Dec 2011 31 Mar 2012 30 Jun 2012 vs. 31 Mar 2012 CIB 15,613 15,186 14,672 14,542 (129) PCAM (1) 50,822 49,079 49,219 48,809 (410) Corporate Investments 1,553 1,389 1,237 1,177 (60) Infrastructure / 34,074 35,342 35,554 3
Slide 41: Number of shares
Number of shares In million Average used for EPS calculation End of period numbers 31 Dec 31 Dec 30 Jun FY2010 FY2011 2Q2012 2010 2011 2012 Common shares issued(1) 741 929 929 929 929 929 Total shares in treasury (4) (17) (10) (10) (25) (12) Common shares outstanding 737 913 919 919 905 918 (2) Vest
Slide 42: Balance sheet leverage ratio (target definition)
Balance sheet leverage ratio (target definition) In EUR bn 2010 2011 2012 31 Dec 31 Mar 30 Jun 30 Sep 31 Dec 31 Mar 30 Jun Total assets (IFRS) 1,906 1,842 1,850 2,282 2,164 2,103 2,241 Adjustment for additional derivatives netting (601) (508) (503) (821) (782) (688) (782) Adjustment for additional p
Slide 43: Invested assets report
Invested assets report In EUR bn Net new money 30 Jun 2011 30 Sep 2011 31 Dec 2011 31 Mar 2012 30 Jun 2012 2Q2011 2Q2012 Asset and Wealth Management 797 780 813 820 831 (0) 1 Asset Management 523 516 544 542 547 (5) (6) Institutional 163 162 174 174 173 (3) (6) Retail 173 157 164 169 166 0 (2) RREEF
Slide 44: Regional invested assets - AM and PWM
Regional invested assets - AM and PWM In EUR bn 30 Jun 2012 30 Jun 2012 30 Jun 2011 30 Sep 2011 31 Dec 2011 31 Mar 2012 30 Jun 2012 vs. vs. 30 Jun 2011 31 Mar 2012 Asset Management 523 516 544 542 547 5% 1% Germany(1) 246 234 240 247 244 (0)% (1)% UK 22 22 26 25 24 11% (3)% Rest of Europe 30 29 30 3
Slide 45: Regional net new money - AM and PWM
Regional net new money - AM and PWM In EUR bn 2Q2011 3Q2011 4Q2011 1Q2012 2Q2012 1H2011 1H2012 Asset Management (5) (11) 8 (10) (6) (10) (15) Germany (1) 1 (3) 0 (1) (1) (0) (2) UK (0) (2) 4 0 (0) (1) (0) Rest of Europe (1) 0 (0) (0) (0) (3) (0) Americas_Region (5) (6) 5 (7) (4) (7) (11) Asia Pacifi
Slide 46: VaR of CIB trading units
VaR of CIB trading units 99%, 1 day, in EUR m VaR of CIB trading units Constant VaR of CIB trading units (1) EUR 2.9 bn Sales & Trading revenues EUR 2.7 bn 120 100 80 60 40 20 2Q2011 3Q2011 4Q2011 1Q2012 2Q2012 75 76 56 55 56 44 43 29 29 29 (1) Constant VaR is an approximation of
Slide 47: 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