Deutsche Bank Ag · XETR:DBK
Deutsche Bank — Debt Investor Presentation (April 2019)
32 slides from Deutsche Bank's debt investor presentation, Apr 29, 2019
Slide 1: Q1 2019 Fixed Income Investor Conference Call
Deutsche Bank Q1 2019 Fixed Income Investor Conference Call James von Moltke, Chief Financial Officer Dixit Joshi, Group Treasurer 29 April 2019
Slide 2: Agenda
Agenda 1 Q1 2019 results 2 Issuance, liquidity and capital 3 Appendix Deutsche Bank Q1 2019 Fixed Income Investor Call 1 Investor Relations 29 April 2019
Slide 3: Executing on our targets with a conservative balance sheet
Executing on our targets with a conservative balance sheet Concluded that executing on own strategy provides superior returns with less execution risk Resilient performance despite challenging markets with continued discipline in cost reduction CET1 and liquidity ratios provide flexibility to exploi
Slide 4: Q1 2019 Group financial highlights
Q1 2019 Group financial highlights € m, unless stated otherwise Higher / Higher / (lower) in % (lower) in % Q1 2019 vs. Q1 2018 vs. Q4 2018 Revenues Revenues 6,351. (9) 14( of which: Specific items(1) 31( (90) (84) Noninterest expenses 5,919( (8) 5( Costs of which: Adjusted costs 5,930( (7) 9( Cost/
Slide 5: Resilient revenues in less market sensitive areas
Resilient revenues in less market sensitive areas € bn, revenues(1) excluding specific items(2) (5)% 6.7 0.6 6.3 Equities — Impact of 2018 perimeter adjustments 0.5 Equities Market sensitive S&T — Continued challenging market conditions — Impacted by market environment and perimeter 1.8 1.5 FIC (16)
Slide 6: Well on track to achieve our accelerated cost reductions
Well on track to achieve our accelerated cost reductions € bn, adjusted costs 5th consecutive quarterly reduction (ex bank levy) On track to deliver 2019 cost target (0.4) (1.1) 6.3 23.9 (1.0) 5.9 22.8 0.7 21.8 5.6 5.5 5.4 Bank 0.6 levy Q2-Q4 17.6 16.5 15.9 Adjusted costs 5.7 5.6 5.5 5.4 5.3 ex bank
Slide 7: Focused on delivering improved returns to shareholders
Focused on delivering improved returns to shareholders Post-tax return on tangible equity, in % / ~ / : progress towards full year objective — Adjusted cost reductions (€ 1bn) Balance sheet and liquidity optimization (>€ 300m) >4% — Growth in stable businesses — Tax rate normalization (to
Slide 8: Agenda
Agenda 1 Q1 2019 results 2 Issuance, liquidity and capital 3 Appendix Deutsche Bank Q1 2019 Fixed Income Investor Call 7 Investor Relations 29 April 2019
Slide 9: Well positioned for focused growth
Well positioned for focused growth As of 31 Mar 2019 Comment Prudent management Common Equity Tier 1 capital ratio 13.7% of capital resources Excess above MREL Loss-absorbing capacity € 123bn requirement: € 19bn(1) High quality loan portfolio Loans as a % of deposits(2) 77% against stable deposits E
Slide 10: 2019 issuance plan and contractual maturities
2019 issuance plan and contractual maturities € bn Issuance plan Maturity profile Covered Bonds Senior Structured / Preferred Senior Non-Preferred Tier 2 Contractual maturities(1) 20-25 24 24 23 22 4 5-6 2 15-20 Collateral 17 2 currently 4 3-5 used for TLTRO 4 13 6-8 3-4 1 4 10 8 4 18 2 1 16 1 4 9-1
Slide 11: Development of liquidity metrics
Development of liquidity metrics Liquidity Coverage Ratio(1) (LCR) 148% 147% 147% — Liquidity optimization measures led to year- over-year reductions in € 68bn above — LCR of (7)ppts 141% 140% 100% — Liquidity reserves of (7)%, from which require- ment cash (18)% — In the quarter — Liquidity Reserve
Slide 12: Capital ratios
Capital ratios CRD4, fully loaded, € bn except movements (in basis points) CET1 ratio — CET1 capital change including € (0.1)bn from IFRS 16 adoption 21 13.7% — Lower risk-weighted assets (RWA) driven by: 13.6% (3) 0 — Market Risk RWA movement of € (7)bn reversing temporary increases recorded in Q4
Slide 13: Minimum Requirement for Own Funds and Eligible Liabilities (MREL)
Minimum Requirement for Own Funds and Eligible Liabilities (MREL) € bn, unless stated otherwise, as of 31 March 2019 Deutsche Bank available MREL categories 123 — Loss absorbing capacity of € 123bn, € 19bn above Plain-vanilla 1(2) MREL requirement(6) senior preferred debt(1) — Compliant since incept
Slide 14: Additional Tier 1 (AT1) payment capacity
Additional Tier 1 (AT1) payment capacity € m, before harmonization under CRR2 2018 2017 Comments Available Distributable Changes in CRR II related to AT1 payment capacity will be reflected in 414 397 Items (ADI) 2019 ADI disclosure Tier 1 interest expense Adds back prior year interest expenses for l
Slide 15: Introduction of Senior Preferred CDS
Introduction of Senior Preferred CDS — Since the change in the German bail-in law in 2017, Credit Default Swap (CDS) contracts for Deutsche Bank have been linked to senior non-preferred instruments (part of loss absorbing capacity) and therefore overstated counterparty risk — Compared to senior pref
Slide 16: Agenda
Agenda 1 Q1 2019 results 2 Issuance, liquidity and capital 3 Appendix Deutsche Bank Q1 2019 Fixed Income Investor Call 15 Investor Relations 29 April 2019
Slide 17: Conservatively managed balance sheet
Conservatively managed balance sheet After netting, € bn, as of 31 March 2019 Assets Liabilities & equity 1,063 1,063 Trading and Liquidity reserves(1) 203 related liabilities(2) (24%) 260 (19%) Other liabilities(4) 52 (5%) Trading and related assets(2) 331 (31%) Deposits 576 (54%) 77% loan-to- depo
Slide 18: Regulatory capital requirements
Regulatory capital requirements SREP(1) vs CET1 Ratio Total capital requirements CET1 AT1 Tier 2 Contribution from legacy G-SIB buffer Pillar 2 Requirement X.X Tier 1 instruments Countercyclical Buffer Pillar 1 Requirement Capital Conservation Buffer 17.72% 15.31% 1.79% 13.73% 2.00% 2.20% 0.88% 11.8
Slide 19: AT1 and Trust Preferred Securities outstanding
AT1 and Trust Preferred Securities outstanding(1) Original Regulatory Capital Current Nominal Next call Subsequent Issuer ISIN issuance treatment(1) recognition(1) Coupon outstanding date call period date DB Contingent Capital Trust II AT1 / Tier 2 100% / 100% US25153X2080 6.550% $ 800mn 23-May-07 2
Slide 20: Minimum Requirement for Own Funds and Eligible Liabilities (MREL)
Minimum Requirement for Own Funds and Eligible Liabilities (MREL)(1) SRB methodology (% RWA) Requirements Pillar 1 minimum requirement — MREL requirement calculated by the Single Resolution Pillar 2 requirement Board (SRB) as a % of risk-weighted assets (RWA), Combined buffer requirement(2) Market C
Slide 21: Capital Markets and Equity to MREL reconciliation
Capital Markets and Equity(1) to MREL reconciliation € bn, as of 31 March 2019 Covered 200 bonds 22 (22) Structured notes 24 24 Plain-vanilla 1 (16) senior preferred +2 (18) +1 123 Plain-vanilla 1 Plain-vanilla 74 senior senior preferred non-preferred 60 Plain-vanilla senior non- AT1 / Tier 2 15 MRE
Slide 22: Current Ratings
Current Ratings part of loss-absorbing capacity senior to loss-absorbing capacity Counterparty obligations (e.g. Deposits / Structured A3 BBB+(1) A- A (high) Notes / Derivatives / Swaps) Senior Preferred(2) A3 BBB+ A- A (low) Long- term unse- cured Non-preferred Baa3 BBB- BBB+ BBB (high) Tier 2 Ba2
Slide 23: Rating landscape – senior unsecured and short-term ratings
Rating landscape – senior unsecured and short-term 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
Slide 24: Loan book composition
Loan book composition IFRS 9 loans at amortized cost, 31 March 2019 Corporate & Investment Bank Private & Commercial Bank Global Transaction Bank — Well diversified Loan Portfolio 16% — 2/3rd of the loan portfolio is in PCB, mainly German including German retail mortgages and mortgages Wealth Manage
Slide 25: Level 3 assets
Level 3 assets € bn, as of 31 March 2019 Assets (total: € 25bn) — Level 3 assets arise from the bank’s activities in various markets, some of which are less liquid — Level 3 assets are mainly booked in core businesses Mortgage backed securities Equity securities — Level 3 classification is not an in
Slide 26: Non-strategic legacy assets in CIB
Non-strategic legacy assets in CIB € bn Risk weighted assets excluding operational risk (30)% Background ― Non-strategic portfolio created to facilitate the run- 10 down of residual ex-CIB assets from NCOU and other inventory not consistent with the CIB 7 strategy Recent Performance ― Risk weighted
Slide 27: Specific revenue items and adjusted costs
Specific revenue items and adjusted costs €m Q1 2019 Q1 2018 Q4 2018 CIB PCB AM C&O Group CIB PCB AM C&O Group CIB PCB AM C&O Group Revenues 3,328 2,513 525 (15) 6,351 3,845 2,640 545 (54) 6,976 2,597 2,458 514 6 5,575 DVA (49) - - - (49) 61 - - - 61 67 - - - 67 - CIB Other Change in valuation of an
Slide 28: Adjusted costs trends – Q1 2019
Adjusted costs trends – Q1 2019 € m, unless stated otherwise Q1 Q4 Q1 Q1 YoY Q4 QoQ YoY 2018 ex QoQ 2018 ex 2019 2018 ex FX 2018 ex FX FX(1) FX(1) Compensation and benefits 2,842 2,960 (4)% 3,020 (6)% 2,824 1% 2,836 0% IT costs 954 1,022 (7)% 1,044 (9)% 957 (0)% 962 (1)% Professional service fees 31
Slide 29: Net interest income sensitivity
Net interest income sensitivity € bn, hypothetical +100bps parallel shift impact First year Second year 1.8 1.6 0.9 0.9 0.8 0.8 PCB CIB Group PCB CIB Group > 3M 0.3 0.1 0.4 > 3M 0.5 0.1 0.7 EUR EUR ≤ 3M 0.5 0.6 1.0 ≤ 3M 0.3 0.6 0.9 > 3M 0.0 0.0 0.1 > 3M 0.0 0.1 0.1 USD USD ≤ 3M 0.0 0.1 0.1 ≤ 3M 0.0
Slide 30: Provision for credit losses and stage 3 loans under IFRS 9
Provision for credit losses and stage 3 loans under IFRS 9 Provision for credit losses, € m Stage 3 at amortised cost under IFRS 9, € bn Corporate & Investment Banking (CIB) CIB (ex-POCI) Purchased or Originated Credit Impaired (POCI) Private & Commerical Bank (PCB) PCB (ex-POCI) Group 252 Stage 3 a
Slide 31: Litigation update
Litigation update € bn, unless stated otherwise Litigation provisions(1) ― Further progress has been made in resolving legacy 7.6 matters throughout the quarter ― Decrease in provisions predominately due to payments for past settlements, releases for lower- than-expected settlements or agreements-in
Slide 32: 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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