Deutsche Bank Ag · XETR:DBK
Deutsche Bank — Q2 2011 Earnings Presentation
43 slides from Deutsche Bank's earnings presentation, Jul 26, 2011
Slide 1: 2Q2011 Results
Deutsche Bank 2Q2011 Results Stefan Krause Chief Financial Officer Analyst a yst Ca Call,, 26 6 July Ju y 2011 0 Deutsche Bank 2Q2011 results financial transparency. Investor Relations Stefan Krause, CFO
Slide 2: Key take-aways
Key take-aways — CIB performance reflects challenging market conditions: macro concerns depressed flow trading client volumes, particularly in June. Integra remains well on track to deliver EUR 500 m IBIT — PCAM growth trajectory remains intact: all businesses are significantly outperforming yoy — E
Slide 3: Agenda
Agenda 1 Group results 2 Segment results 3 Key current topics Deutsche Bank 2Q2011 results financial transparency. 3 Investor Relations Stefan Krause, CFO
Slide 4: Highlights
Highlights 2Q2011 2Q2010 Income before income taxes (in EUR bn) 18 1.8 15 1.5 Profita- Net income (in EUR bn) 1.2 1.2 bility Pre-tax RoE (target definition)(1) 14% 13% Diluted EPS (in EUR) 1.24 1.60 30 Jun 2011 31 Mar 2011 Core Tier 1 capital ratio 10.2% 9.6% Capital Tier 1 capital ratio 14.0% 13.4%
Slide 5: Profitability
Profitability Income before income taxes Net income In EUR bn In EUR bn 2.8 3.0 1.8 1.8 2.1 1.5 13 1.3 (1) 12 1.2 1(1) 1.1 1 12 1.2 0.7 0.6 (1.0) (1.2) 1Q 2Q 3Q 4Q 1Q 2Q 1Q 2Q 3Q 4Q 1Q 2Q 2010 2011 2010 2011 Pre-tax return on equity(2), in % Effective tax rate, in % 30 15 ( )/ (1) (10)/13 6 24 14 36
Slide 6: Noninterest expenses
Noninterest expenses I EUR b In bn Acquisitions:(2) Compensation and benefits In EUR m 1Q2011 2Q2011 General and administrative expenses Compensation & benefits 509 453 Other noninterest expenses(1) General and admin. 1,064 993 555 540 expenses 13.4 11.3 6.3 7.1 5.9 5.4 5.7 6.3 7.6 6.6 36 3.6 30 3.0
Slide 7: Capital ratios and risk-weighted assets
Capital ratios and risk-weighted assets 14.0 13.4 Tier 1 ratio, in % 12.3 11.2 11.3 11.5 9.6 10.2 8.7 Core Tier 1 ratio, in % 7.5 7.5 7.6 346 328 320 292 303 277 RWA, in EUR bn 1Q 2Q 3Q 4Q 1Q 2Q 2010 2011 Note: Tier 1 ratio = Tier 1 capital / RWA; Core Tier 1 ratio = (Tier 1 capital - hybrid Tier 1
Slide 8: 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 1.2 0.0 327.9 32.5 31.6 (0.2) (0.1) (1.9) ((2.7)) 319.7 (3.1) (0.6) 31 Mar Net income Dividend FX Effect Others (1) 30 Jun 2011 31 Mar FX effect Credit risk Market risk Operational 30 Jun 2011 2011 accrual 2011 risk
Slide 9: Funding activities update
Funding activities update Funding cost development Observations I bps In b European Sovereign E S i CDS — Ongoing market volatility resulted in lower iTraxx Senior Financials 320 DB 5yr Senior CDS total financial issuance (unsecured plus DB issuance spread (4wk mov avg.) covered) in 2Q2011 (-50% qoq
Slide 10: Agenda
Agenda 1 Group results 2 Segment results 3 Key current topics Deutsche Bank 2Q2011 results financial transparency. 10 Investor Relations Stefan Krause, CFO
Slide 11: Segment overview
Segment overview I Income before b f income i taxes, t in i EUR m 2Q2011 2Q2010 982 CB&S 781 293 GTB 476 (1) 227 AWM 65 458(2) PBC 233 (139) CI (85) (43) C&A 53 (1) Positively impacted by EUR 208 m representing provisional goodwill commercial banking activities acquired from ABN AMRO in the Netherla
Slide 12: Corporate Banking & Securities
Corporate Banking & Securities Income before income taxes Key features In EUR m In EUR m 2Q11 2Q11 vs. 2Q11 1Q11 2Q10 vs. 2Q10 1Q11 2,591 Revenues 3,968 5,831 3,633 9% (32)% (1) 2 305 2,305 Provisions ((95)) ((12)) ((46)) 108% n.m. Noninterest exp. (2,886) (3,503) (2,800) 3% (18)% IBIT 982 2,305 781
Slide 13: Sales & Trading debt and other products
Sales & Trading debt and other products Net revenues Key features In EUR m Overall — Ranked No.1 in US Fixed Income for the second consecutive year (Greenwich) — Lower revenues, especially in flow products, due to 3,802 3,650 seasonality and lower client activity due to market conditions diti — Part
Slide 14: Sales & Trading equity
Sales & Trading equity Net revenues Key features In EUR m Overall — Lower revenues yoy due to lower secondary market volumes and commissions Cash Equities 944 943 — Revenues down yoy due to significantly lower market 872 volumes and commissions in Europe, partially offset by resilient performance in
Slide 15: Origination & Advisory
Origination & Advisory Net revenues Key features In EUR m Overall — Maintained top five ranking, continuing to benefit from Advisory synergies across the investment bank Origination — No.1 in EMEA, with highest ever market share – No.1 in 809 five countries 717 714 — No.1 in Global IPOs by value, fo
Slide 16: Global Transaction Banking
Global Transaction Banking Income before income taxes Key features In EUR m In EUR m 2Q11 2Q11 2Q11 1Q11 2Q10 vs. vs. Negative goodwill(1) 2Q10 1Q11 4Q2010 efficiency measures(2) Revenues 895 865 1,070 (16)% 3% Provisions(3) (32) (21) (32) 1% 52% 476 Noninterest exp. (570) (588) (562) 1% (3)% IBIT 2
Slide 17: Asset and Wealth Management
Asset and Wealth Management Income before income taxes Key features In EUR m In EUR m 2Q11 2Q11 2Q11 1Q11 2Q10 vs. vs. 227 2Q10 1Q11 Revenues 976 1,002 896 9% (3)% 190 Provisions(1) (13) (19) (3) n.m. (29)% Noninterest exp. (737) (792) (828) (11)% (7)% IBIT 227 190 65 n.m. 19% (2) ested assets Inves
Slide 18: Asset Management
Asset Management Income before income taxes Key features 2Q11 2Q11 Q In EUR m In EUR m 2Q11 1Q11 2Q10 vs. vs. 124 1Q11 2Q10 Revenues 453 441 417 9% 3% (1) 96 Provisions (0) (0) (0) 23% 14% 84 Noninterest exp. (328) (366) (361) (9)% (10)% 75 IBIT 124 75 56 121% 67% Invested assets(2) 523 529 551 (5)%
Slide 19: Private Wealth Management
Private Wealth Management Income before income taxes Key features Q 2Q11 2Q11 In EUR m In EUR m 2Q11 1Q11 2Q10 vs. vs. 2Q10 1Q11 Revenues 523 561 479 9% (7)% Provisions(1) (13) (19) (3) n.m. (29)% 116 102 Noninterest exp. (408) (426) (467) (13)% (4)% IBIT 102 116 9 n.m. (12)% Invested assets(2) 274
Slide 20: Private & Business Clients
Private & Business Clients Income before income taxes Key features 2Q11 2Q11 In EUR m In EUR m 2Q11 1Q11 2Q10 vs. vs. Net HuaXia one-off gain 2Q10 1Q11 Negative impact from Greek government 78 Revenues 2,563 3,072 1,444 77% (17)% bonds(1) (2) Cost to achieve related to Postbank Cost-to-achieve Provi
Slide 21: PBC – business division performance
PBC – business division performance I Income b f before income i ttaxes, iin EUR m 2Q2011 – Reported results 2Q2010 – Reported results Negative impact from Greek government bonds Cost-to-achieve related to Postbank acquisition 124 42 35 201(1) Advisory Banking Germany 168 105 Advisory Banking Intern
Slide 22: Corporate Investments
Corporate Investments Income before income taxes 2Q2011 key features In EUR m — Net revenues of EUR 194 m compared to EUR 115 m in 2Q2010 — EUR 39 m impairment charge related to 65 investment in Actavis — Noninterest expenses of EUR 329 m (85) compared to EUR 208 m in 2Q2010; (165) (139) i increase
Slide 23: Agenda
Agenda 1 Group results 2 Segment results 3 Key current topics Deutsche Bank 2Q2011 results financial transparency. 23 Investor Relations Stefan Krause, CFO
Slide 24: Provision for credit losses
Provision for credit losses I EUR m In Related to IAS 39 reclassified assets Effect from Postbank releases shown as net interest income at DB Group / PBC level 464 (1) 406 362 373 82 47 79 837 262 243 129 117 22 200 103 50 506 100 359 (1) 382(3) 256(3) 303 154 193 233 234 537 638(3) 159 352 1Q 2Q 3Q
Slide 25: Impaired loans
Impaired loans I EUR bn In b … Relating to IAS 39 loans 7.6 7.4 7.4 7.4 6.7 6.3 2.9 2.8 2.7 1.2 1.1 0.8 53% 50% 47% 48% 49% 46% 31 Mar 30 Jun 30 Sep 31 Dec 31 Mar 30 Jun 2010 2011 IFRS impaired loans((1)) IFRS impaired loans coverage ratio(2) (1) IFRS impaired loans include loans which are individua
Slide 26: EBA stress test: Update for 1H2011 capital formation
EBA stress test: Update for 1H2011 capital formation Core Tier 1 capital ratio (%) 1H2011 EBA adverse scenario capital it l EBA stress t (1) 2010 2012 formation pro-forma Key features — DB with 6.5% Core Tier 1 ratio in 8 8% 8.8% 6 5% 6.5% 7 5% 7.5% 2012 adverse scenario 500 473 — DB reported Basel
Slide 27: Net sovereign exposure on select countries
Net sovereign exposure on select countries I EUR m In Overview of net sovereign exposure Key features 31 Dec 2010 — Sovereign exposure to PIIGS declined 30 Jun 2011 12,120 70% to EUR 3.7 bn as of 30 Jun 2011 vs. 31 Dec 2010 8,011 3,669 2 283 2,283 1,601 1,154 997 1,070 237 296 153 (12) Greece Irelan
Slide 28: Update on 2011 targets
Update on 2011 targets I Income before b f income i taxes, t in i EUR bn b Phase 4 1H2011 potential 2011 Key features / Prospects — Material deterioration of market assumptions versus plan. Corporate Banking & Concerns intensified over sovereign debt risk leading to 3.3 6.4 increased client uncertai
Slide 29: Summary and Outlook
Summary and Outlook — Considerable near term uncertainties in the Eurozone, in the world economy, in financial markets, and in the new regulatory environment — EUR 10 bn earnings target is still achievable but predicated on a recovery in European capital markets and progress with regards to a soluti
Slide 30: Additional information
Deutsche Bank Additional information
Slide 31: Loan book
Loan book I EUR bn In b … IAS 39 impact on CIB loan book 34 35 32 27 25 23 411 398 398 8 CI 11 11 270 292 283 147 135 CIB 135 13 12 11 126 PCAM ex 136 154 147 126 128 Postbank 121 126 125 129 125 123 Postbank 31 Mar 30 Jun 30 Sep 31 Dec 31 Mar 30 Jun 2010 2011 Germany excl excl. Financial Institutio
Slide 32: Composition of loan book and provisions by category
Composition of loan book and provisions by category I EUR bn, In b as off 30 JJune 2011 ... DB 2Q2011 provision for credit losses ex. PB(1), in EUR m ... Postbank (PB) 2Q2011 provision for credit losses(1), in EUR m 282 IAS 39 reclassified assets Postbank 464 134 182 79 69 Low loan 398 to value 23
Slide 33: IAS 39 reclassification
IAS 39 reclassification Carrying Value vs. Fair Value 2Q2011 developments In EUR bn — The Gap between carrying value and fair value Sales & Trading - Debt Loan Products has closed by EUR 0.5 bn in 2Q2011, Origination and Advisory EUR 1.0 bn since 31 Dec 2010 31 Dec 31 Dec 31 Dec 31 Mar 30 Jun — Duri
Slide 34: Funding sources and liquidity
Funding sources and liquidity I EUR b In bn Funding sources overview Liquidity position 31 Mar 2011 (Total: EUR 1,078 bn) — Contribution of stable funding sources 30 Jun 2011 (Total: EUR 1,088 bn) remained unchanged — Higher volume of discretionary wholesale used to further increase the bank’s Liqui
Slide 35: Group headcount
Group headcount F ll ti Full-time equivalents, i l t att period i d end d 30 Jun 2011 vs. 31 Dec 31 Mar 30 Jun 31 Mar 2011 2010 2011 2011 Total Net of change de-/consolidation CIB 15,741 15,438 15,359 (79) (79) PCAM 50,836 50,427 50,203 (223) (19) Corporate Investments 1,556 1,469 1,443 (26) (26) In
Slide 36: Number of shares for EPS calculation
Number of shares for EPS calculation I million In illi Average At end of period FY 1Q 2Q 31 Dec 31 Mar 30 Jun 2010 2011 2011 2010 2011 2011 Common shares issued(1) 741 929 929 929 929 929 Total shares in treasury (4) (7) (9) (10) (4) (19) Common shares outstanding 737 922 921 919 925 911 Vested shar
Slide 37: Invested assets report
Invested assets(1) report I EUR bn In b Net new money 31 Dec 2010 31 Mar 2011 30 Jun 2011 1Q2011 2Q2011 Asset and Wealth Management 825 799 797 (2) (0) Asset Management 550 529 523 (5) (5) Institutional 175 164 163 (4) (3) Retail 178 175 173 1 0 Alternatives 46 46 45 0 (0) Insurance 151 143 142 (3)
Slide 38: Regional invested assets – AM and PWM
Regional invested assets(1) – AM and PWM I EUR bn In b 30 Jun 11 vs vs. 31 Dec 2010 31 Mar 2011 30 Jun 2011 31 Mar 11 Asset Management 550 529 523 (1)% Germany 244 242 246 1% UK 25 23 22 (2)% Rest of Europe 34 30 30 0% Americas 223 209 202 (3)% Asia Pacific 25 25 23 (6)% Private Wealth Management 27
Slide 39: Regional net new money – AM and PWM
Regional net new money – AM and PWM I EUR bn In b 1Q2010 2Q2010 3Q2010 4Q2010 FY2010 1Q2011 2Q2011 Asset Management 4 (12) 2 4 (1) (5) (5) Germany 4 0 (1) 3 6 2 1 UK ((0)) 1 1 3 4 ((4)) ((0)) Rest of Europe 1 (1) (0) (1) (1) (2) (1) Americas 0 (11) 3 (1) (9) (2) (5) Asia Pacific (1) (0) (1) 2 (0) 1
Slide 40: VaR of CIB trading units
VaR of CIB trading units 99% 1 day, 99%, d in i EUR m VaR of CIB trading units Constant VaR of CIB trading units(1) EUR 2.8 bn Sales & Trading revenues EUR 2.9 bn 180 160 140 120 100 80 60 40 20 102 87 78 80 75 49 46 45 46 44 2Q2010 3Q2010 4Q2010 1Q2011 2Q2011 (1) Constant VaR is
Slide 41: Total assets (adjusted)
Total assets (adjusted) I EUR bn In b 1,202 1,209 Positive market values Derivatives p post- Derivatives post post- from derivatives 62 netting 60 netting Trading securities Financial assets 252 259 286 Trading assets 290 Trading assets at FV through g P&L Other trading assets 33 30 Reverse repos /
Slide 42: Balance sheet leverage ratio (target definition)
Balance sheet leverage ratio (target definition) I EUR bn In b 2010 2011 31 Mar 30 Jun 30 Sep 31 Dec 31 Mar 30 Jun Total assets (IFRS) 1,670 1,926 1,958 1,906 1,842 1,850 Adjustment for additional derivatives netting (559) (735) (760) (602) (508) (503) Adjustment for additional pending settlements n
Slide 43: Cautionary statements
Cautionary statements This presentation contains forward forward-looking looking statements. Forward Forward-looking 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 b