Deutsche Bank AG · XETR:DBK
Deutsche Bank — FY2005 Earnings Presentation
54 slides from Deutsche Bank's earnings presentation, Feb 2, 2006
Slide 1: 4Q2005 Results
4Q2005 Results Dr. Clemens Börsig Chief Financial Officer Analyst Meeting, Frankfurt, 2 February 2006
Slide 2: Agenda
financial transparency. Agenda 1 Summary 2 Group results 3 Segment results 4 Risk and capital management Investor Relations 02/06 · 2
Slide 3: 2005 in summary
financial transparency. 2005 in summary 4Q2005 FY2005 Revenues EUR Revenues EUR up 23% 6.5 bn up 17% 25.6 bn Income before EUR Income before EUR income taxes up 327% 1.3 bn income taxes up 58% 6.4 bn EUR EUR Net income Net income up 280% 0.7 bn up 53% 3.8 bn Strong YoY improvements across the board
Slide 4: Delivery to shareholders
financial transparency. Delivery to shareholders Earnings per share (diluted) Pre-tax return on equity* In EUR In % 6x 12x 7.45 26 4.53 16 13 2.31 4 0.63 2002 2003 2004 2005 2002 2003 2004 2005 * RoE based on average active equity; 2002 – 2004 underlying; 2005 as per target definition (excludes rest
Slide 5: Agenda: Group results
financial transparency. Agenda 1 Summary 2 Group results 3 Segment results 4 Risk and capital management Investor Relations 02/06 · 5
Slide 6: An outstanding pre-tax profit …
financial transparency. An outstanding pre-tax profit … Income before income taxes, in EUR bn 4Q2005 includes provision for real estate fund investor compensation of 6.4 EUR (203) m 1.8 1.9 1.6 4.0 1.4 1.2 1.3 58% 1.0 0.3 327% 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q Full year Full year 2004 2005 2005 2004 2005 Rest
Slide 7: … and net income
financial transparency. … and net income Net income, in EUR bn 3.8 1.1 2.5 0.9 0.9 1.0 53% 0.7 0.7 0.7 0.2 280% 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q Full year Full year 2004 2005 2005 2004 2005 Effective tax rate excl. tax reversal 35.7% 32.0% Effective tax rate excl. tax reversal and excl. capital gains* 36.9%
Slide 8: Revenues: Growth and consistency
financial transparency. Revenues: Growth and consistency Net revenues, in EUR bn Underlying revenue growth vs. same quarter 2004 +9% +9% +25% +19% 17% 25.6 21.9 6.6 6.6 6.5 6.2 5.9 5.4 5.1 5.3 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q Full year Full year 2004 2005 2005 2004 2005 Note: Figures may not add up due to ro
Slide 9: Operating cost base remains under control
financial transparency. Operating cost base remains under control Operating cost base, in EUR bn Compensation and benefits Non-comp 6% 4% 17.9 3% 16.9 4.4 4.4 4.5 4.5 4.6 4.1 4.3 4.0 11.0 10.2 2.6 2.7 2.6 2.8 2.5 2.3 3.0 2.6 4Q vs. 3Q2005 1.8 2.0 non-comp variance 6.7 6.9 1.6 1.6 1.6 1.5 1.6 1.7 of
Slide 10: Principle drivers of 4Q2005 non-comp variance
financial transparency. Principle drivers of 4Q2005 non-comp variance Non-comp operating cost base, change 4Q vs. 3Q2005, in EUR m Increased business activity ~140 Expenses related to specific transactions ~45 Volume driven processing expenses ~25 Charitable / citizenship activities ~10 Ot
Slide 11: Business Realignment Program – status of related expenses
financial transparency. Business Realignment Program – status of related restructuring / other expenses In EUR bn 0.3 0.8 1.3 0.4 1.1 BRP 0.6 Additional BRP-related measures 0.2 in 2005 4Q2004* 1Q-3Q2005 4Q2005 Restructuring 4Q2004* - FY2005 4Q2005 * 4Q2004 including other efficiency measures of EUR
Slide 12: Business Realignment Program – status of personnel measures
financial transparency. Business Realignment Program – status of personnel measures Departures / notifications* (FTE) Completed to date 500 6,400 1,200 1,300 5,900 5,200 4,600 Total End During Total End Planned 2006 Total Smartsourcing Net reduction 3Q2005 4Q2005 4Q2005 BRP BRP Announced 3 Feb 2005
Slide 13: Additional BRP-related measures 2005
financial transparency. Additional BRP-related measures 2005 In EUR m Asset Management additional restructuring – Sale of AM institutional business UK incl. Philadelphia ~100 – Reconfiguration of Hedge Fund distribution model – Scudder repositioning Expenses related to early retirement program I
Slide 14: Improvement in CIR with tight control of comp ratio
financial transparency. Improvement in CIR with tight control of comp ratio In % Underlying cost / income ratio(1) 87 74 77 81 70 73 73 76 80 73 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q Full year 2004 2005 04 05 Underlying compensation ratio(2) Underlying non-compensation ratio(3) 48 47 47 51 46 45 45 43 48 45 33 36
Slide 15: Agenda: Segment results
financial transparency. Agenda 1 Summary 2 Group results 3 Segment results 4 Risk and capital management Investor Relations 02/06 · 15
Slide 16: CIB: A record result
financial transparency. CIB: A record result Results at a glance (underlying) Condensed P&L (underlying) Pre-tax profit, in EUR m In EUR m Key ratios, in % 4th quarter Full year 2004 2005 2004 2005 1,599 1,310 Revenues 3,224 3,748 13,383 15,918 1,142 985 Provisions* 57 2 (24) (10) 763 856 555 567 OC
Slide 17: Sales & Trading Debt: Sustained year-on-year growth
financial transparency. Sales & Trading Debt: Sustained year-on-year growth S&T (debt and other) – net revenues Highlights in 4Q / FY In EUR m Credit Products Continued strong growth 2,380 Positive market conditions in 4Q2005 1,894 1,850 Commodities Strong global momentum in 1,640 1,640 struct
Slide 18: Sales & Trading Equity: Strong growth QoQ and YoY
financial transparency. Sales & Trading Equity: Strong growth QoQ and YoY S&T (equity) – net revenues Highlights in 4Q / FY In EUR m Equity Substantial growth in volumes Derivatives Sustained high demand in key client sectors (e.g. retail, hedge funds) Strong cross-sell via Debt sales force 1,
Slide 19: Origination: 5th consecutive quarter of revenue growth
financial transparency. Origination: 5th consecutive quarter of revenue growth Origination – net revenues Highlights in 4Q / FY In EUR m Equity Growth in primary equity / equity linked Capital 23% Markets Strong increase in volume 442 (25% vs. 9% in the market)(1) 423 396 403 Regained #1 positio
Slide 20: Advisory: Best quarterly revenues since 2000
financial transparency. Advisory: Best quarterly revenues since 2000 Advisory – net revenues Highlights in 4Q / FY In EUR m Global Sustained levels of corporate activity Improved ranking - 22% Completed: #8 (2004: #10)(1) 197 Increased market share - Announced: 13.6% (2004: 12.7%)(2) 161 Ben
Slide 21: GTB: Profitability almost doubled in 2005
financial transparency. GTB: Profitability almost doubled in 2005 Results at a glance (underlying) Condensed P&L (underlying) Pre-tax profit, in EUR m In EUR m Key ratios, in % 4th quarter Full year 153 140 132 2004 2005 2004 2005 119 102 Revenues 447 513 1,863 1,971 89 Provisions* (23) 19 (11) 18 4
Slide 22: PCAM: Excellent result, driven by top-line growth
financial transparency. PCAM: Excellent result, driven by top-line growth Results at a glance (underlying) Condensed P&L (underlying) Pre-tax profit, in EUR m In EUR m Key ratios, in % 513 4th quarter Full year 461 409 407 2004 2005 2004 2005 380 363 370 344 Revenues 2,033 2,284 7,965 8,463 Provisio
Slide 23: AWM: Profit more than doubled for 2nd consecutive quarter
financial transparency. AWM: Profit more than doubled for 2nd consecutive quarter Results at a glance (underlying) Condensed P&L (underlying) Pre-tax profit, in EUR m 243 In EUR m 4th quarter Full year Key ratios, in % 207 2004 2005 2004 2005 155 163 Revenues 849 1,052 3,407 3,750 136 124 Provisions
Slide 24: AM with broad global franchise, strong growth in Germany
financial transparency. AM with broad global franchise, strong growth in Germany Invested assets(1) per year end, in EUR bn 2004 2005 x% 2005 vs. 2004 228 Germany 30% 175 60 Rest of Europe 5% 57 222 Americas 14% 195 25 Asia / Pacific (2) 2% 25 (1) Adjusted for invested assets within Asset Management
Slide 25: AM restructuring well underway
financial transparency. AM restructuring well underway Institutional businesses in the U.K. and Philadelphia sold 3 Hedge Fund distribution model reconfigured 3 Japan and Asia / Pacific reoriented from Traditional Institutional to higher margin products, e.g. Retail and Alternatives 3 Trust
Slide 26: Scudder repositioning plan: Major programs and deliverables
financial transparency. Scudder repositioning plan: Major programs and deliverables Investment Improve performance across ‘core’ Morningstar flow categories Management Align asset class capabilities with distribution strategy Product Streamline funds portfolio Management Launch new / innovat
Slide 27: PWM growth across all regions …
financial transparency. PWM growth across all regions … Invested assets per year end, in EUR bn 2004 2005 x% 2005 vs. 2004 41 Germany 17% 35 Europe / 56 Latin America / 18% Middle East 47 56 USA 12% 50 15 Asia / Pacific 50% 10 Investor Relations 02/06 · 27
Slide 28: … supported by strong net inflows in all quarters
financial transparency. … supported by strong net inflows in all quarters PWM, net new money, in EUR bn 8%* 5 11 Europe/ 5 Latin America/ Middle East 1 2 2 Germany 1 USA 2 3 Asia / Pacific 1Q2005 2Q2005 3Q2005 4Q2005 FY 2005 * Net new money in % of invested assets Note: Figures may not add up due to
Slide 29: PBC: Record profit despite growth investments
financial transparency. PBC: Record profit despite growth investments Results at a glance (underlying) Condensed P&L (underlying) Pre-tax profit, in EUR m In EUR m 4th quarter Full year Key ratios, in % 2004 2005 2004 2005 255 244 264 270 243 245 246 254 Revenues 1,185 1,232 4,559 4,713 Provisions*
Slide 30: Agenda: Risk and capital management
financial transparency. Agenda 1 Summary 2 Group results 3 Segment results 4 Risk and capital management Investor Relations 02/06 · 30
Slide 31: Problem loan ratio at lowest level for five years
financial transparency. Problem loan ratio at lowest level for five years Problem loans, in EUR bn Coverage 6.6 ratio(2) 4.8 4.8 4.6 4.3 3.9 50% 49% 50% 49% 48% 49% 31 Dec 31 Dec 31 Mar 30 Jun 30 Sep 31 Dec 2003 2004 2005 2005 Problem loan ratio(1) 4.5% 3.5% 3.3% 3.2% 2.9% 2.5% (1) Problem loans div
Slide 32: Provisions stable, well below expected loss levels
financial transparency. Provisions stable, well below expected loss levels Total provision for credit losses, in EUR m 350 307 14% 141 83 81 80 91 98 58 24 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q Full year 2004 2005 2005 2004 2005 Thereof: CIB 72 7 2 (57) 4 3 5 (2) 24 10 63 66 55 79 77 73 91 99 263 340 Thereof: PCA
Slide 33: Clear capital management strategy
financial transparency. Clear capital management strategy Organic growth Financing RWA increase Growth External growth Covering Goodwill Business Maintain and Intangibles performance: Strong capital strong Tier 1 sustainable pre- formation ratio tax RoE of 25% Dividends Rewarding of shareholders Sha
Slide 34: Strong capital formation …
financial transparency. Strong capital formation … At year end Total shareholders’ equity Net asset value per share* Tier 1 capital In EUR bn In EUR In EUR bn 17% 22% 18% 30.2 59.36 22.1 25.9 18.7 48.72 2004 2005 2004 2005 2004 2005 * Total shareholders´ equity divided by average number of shares (d
Slide 35: … allows business growth together with strong Tier 1 ratio …
financial transparency. … allows business growth together with strong Tier 1 ratio … 10.1 9.4 9.2 9.2 9.1 9.0 8.8 8.6 9% Target range 8% 253 251 240 219 223 227 218 217 Tier 1 ratio, in % RWA, 31 Mar 30 Jun 30 Sep 31 Dec 31 Mar 30 Jun 30 Sep 31 Dec in EUR bn 2004 2005 2005 Investor Relations 02/06 ·
Slide 36: … and significant rewards for shareholders
financial transparency. … and significant rewards for shareholders Dividends Share buybacks, in m shares 62 2.50(1) 58 22 45 1.70 20 1.50 12 1.30 1.30 1.30 1.12 1.15 (2) 0.92 1,386 (3) 40 38 16 801 800 756 828 879 33 600 706 9 489 7 1997 1998 1999 2000 2001 2002 2003 2004 2005 2002/ 2003/ 2004/ 2005
Slide 37: Summary – formation and deployment of capital
financial transparency. Summary – formation and deployment of capital 2005, in EUR bn Net income 3.8 Reversal of 1999/2000 credits for tax rate changes 0.5 Impact from currency translation adjustments 1.1 Impact from change in share awards 0.6 Capital formation 6.0 Capital re-investment in growth (R
Slide 38: 2005 in summary
financial transparency. 2005 in summary 4Q2005 FY2005 Revenues EUR Revenues EUR up 23% 6.5 bn up 17% 25.6 bn Income before EUR Income before EUR income taxes up 327% 1.3 bn income taxes up 58% 6.4 bn EUR EUR Net income Net income up 280% 0.7 bn up 53% 3.8 bn Strong YoY improvements across the board
Slide 39: Additional information
financial transparency. Additional information “Bank of the Year 2005” A Passion to Perform. Deutsche Bank
Slide 40: Number of shares for EPS calculation
financial transparency. Number of shares for EPS calculation In million Average At end of period FY FY 4Q FY 30 Sep FY 2004 2005 2005 2004 2005 2005 Shares issued 563 551 554 544 553 555 Total shares in treasury (17) (34) (41) (27) (36) (49) SFAS 150 effect (59) (65) (62) (56) (62) (62) Vested share
Slide 41: Group headcount
financial transparency. Group headcount Full-time equivalents, at period end FY 2005 vs. FY FY 1Q 2Q 3Q FY FY 2004 Net of de-/ 2003 2004 2005 2005 2005 2005 Total consoli- change dation CIB 14,049 14,114 13,743 13,629 13,697 13,492 (622) (637) PCAM 26,845 26,726 26,786 26,747 27,034 27,233 507 1,030
Slide 42: 4Q2005 segment results – reconciliation from reported to underlying
financial transparency. 4Q2005 segment results – reconciliation from reported to underlying results P&L CIB PCAM CI C&A Group line item In EUR m Income before income tax expense 791 421 404 (331) 1,285 Add (deduct) Net (gains) losses on securities afs / - - (372) - (372) Revenues industrial holdings
Slide 43: Underlying operating ratios
financial transparency. Underlying operating ratios In % Underlying return on equity (pre-tax)(1) 31 22 18 24 25 20 25 14 11 16 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q Full year 2004 2005 04 05 Underlying profit margin(2) Underlying equity turnover(3) 109 96 96 28 25 26 22 93 84 80 87 89 86 97 23 21 18 19 25 13 1Q
Slide 44: Loan book
financial transparency. Loan book In EUR bn Total loans PCAM growth drivers 2005 153 +10% +33% +8% 145 145 148 CI/ 139 3.7 Other 11% 0.7 +36% 63 65 68 CIB 61 66 2.6 0.7 +13% 1.7 11% PCAM 75 77 80 81 83 2.3 +6% 31 Dec 31 Mar 30 Jun 30 Sep 31 Dec Retail Wealth Retail Consumer / mgmt.(2) mortgages 2004
Slide 45: Invested assets report
financial transparency. Invested assets(1) report In EUR bn, at period end 4Q2004 1Q2005 2Q2005 3Q2005 4Q2005 Net new money 4Q2005 FY2005 Asset and Wealth Management 679 719 753 713 704 (3) 5 Asset Management 536 573 598 553 536 (8) (6) Traditional Institutional 287 312 320 266 247 (5) (9) Retail 19
Slide 46: Regional invested assets – AM and PWM
financial transparency. Regional invested assets(1) – AM and PWM In EUR bn, at period end 4Q2005 vs. 4Q2004 1Q2005 2Q2005 3Q2005 4Q2005 4Q2004(3) Asset Management 536 573 598 553 536 17% Germany 175 205 215 227 228 30% UK 69 67 66 10 10 25% Rest of Europe 50 49 51 52 51 2% Americas 210 220 235 235 2
Slide 47: Regional net new money – AM and PWM
financial transparency. Regional net new money – AM and PWM In EUR bn FY2004 1Q2005 2Q2005 3Q2005 4Q2005 FY2005 Asset Management (42) 24 (12) (9) (8) (6) Germany (1) 28 2 6 (1) 35 UK (20) (6) (6) (9) 0 (21) Rest of Europe (4) 1 0 1 (2) 0 Americas (12) 2 (6) (4) (5) (13) Asia / Pacific (5) (1) (2) (4
Slide 48: CI: Results at a glance, condensed P&L (reported)
financial transparency. CI Results at a glance Condensed P&L (reported) Income before income taxes, In EUR m 4th quarter Full year Underlying pre-tax profit, in EUR m 375 404 2004 2005 2004 2005 179 202 Revenues 68 450 621 1,229 128 144 54 40 69 Provisions* (3) (0) (19) 0 Noninterest exps. (153) (47
Slide 49: Alternative assets exposure
financial transparency. Alternative assets exposure Book values, in EUR bn 4.0 3.5 1.0 3.3 0.8 0.6 2.6 2.6 2.7 2.7 2.5 0.9 0.6 0.7 0.7 0.5 0.6 0.6 0.5 CI - Private Equity funds 0.6 0.6 0.6 0.5 0.5 CI - Private Equity directs 0.8 0.8 0.8 0.4 0.4 0.4 0.4 0.4 CI - Real Estate 1.1 1.1 1.1 0.9 1.0 1.0 1.
Slide 50: Listed holdings – unrealised net gains of EUR 2.0 bn
financial transparency. Listed holdings – unrealised net gains of EUR 2.0 bn In EUR m Stake Market value 31 Dec 31 Dec 31 Dec 31 Mar 30 Jun 30 Sep 31 Dec 2005 2003 2004 2005 2005 2005 2005 DaimlerChrysler AG 4.4% 4,445 3,706 3,641 3,538 3,082 1,930 Allianz AG 2.4% 965 935 945 918 1,084 1,234 Linde A
Slide 51: Risk efficiency improved year-on-year
financial transparency. Risk efficiency improved year-on-year VaR of CIB trading units (99%, 1 day), in EUR m S&T revenues: S&T revenues: EUR 2.1 bn EUR 2.3 bn 100 90 80 70 60 50 1Q2004 2Q2004 3Q2004 4Q2004 1Q2005 2Q2005 3Q2005 4Q2005 ∅ 66.9 ∅ 81.7 ∅ 73.6 ∅ 64.7 ∅ 66.9 ∅ 65.9 ∅ 64.8 ∅ 65.9 Investor
Slide 52: Share buybacks in 2005
financial transparency. Share buybacks in 2005 Total Total repurchases 35.5 m In % of shares issued 6.4 % Capital consumption EUR 2.6 bn Share price, in EUR Number of shares, in ‘000 Share buybacks 90 2,500 85 2,000 Weekly repurchase 80 volume (shares) 1,500 Average 75 purchase price 1,000 70 EUR 72
Slide 53: Definitions used in this presentation
financial transparency. Definitions used in this presentation Underlying pre-tax profit Operating cost base Reported net revenues Reported noninterest expenses - Net gains / losses on securities available for sale / - Policyholder benefits and claims(2) industrial holdings incl. hedging - Restructur
Slide 54: Cautionary statement regarding forward-looking statements
financial transparency. Cautionary statement regarding forward-looking statements and non-U.S. GAAP financial measures This presentation contains forward-looking statements. Forward-looking statements are statements that are not historical facts; they include statements about our beliefs and expecta