Deutsche Bank Ag · XETR:DBK
Deutsche Bank — Q3 2018 Earnings Presentation
33 slides from Deutsche Bank's earnings presentation, Oct 24, 2018
Slide 1: Deutsche Bank – Q3 2018 results
Deutsche Bank Deutsche Bank – Q3 2018 results 24 October 2018
Slide 2: Cost and capital fully on track – revenue growth is now key
Cost and capital fully on track – revenue growth is now key Disciplined execution against our 2018 adjusted cost and headcount targets On track to meet our 2019 commitments Franchise focus – regaining market share in core businesses is our priority Prudent redeployment of liquidity and capital to pr
Slide 3: Progress on cost and resources
Progress on cost and resources Adjusted costs (€ bn) Employees (in 000’s)(1) 23.9 23 (2.8) 22 97.5 6.4 94.7 <93.0 Q4 <90.0 Q3 5.5 5.5 Q2 5.6 5.6 Q1 6.3 6.3 2017 9M 2018 Target 2018 Target 2019 31 Dec 2017 30 Sep 2018 Target 2018 Target 2019 Note: Throughout this presentation totals may not sum due t
Slide 4: Continued conservative balance sheet management
Continued conservative balance sheet management As of 30 Higher / (lower) September 2018 vs. 30 June 2018 Common Equity Tier 1 capital CET1 capital ratio 14% 23 bps ratio (fully loaded) above >13% target Excess above MREL Loss-absorbing capacity € 118bn € (1)bn requirement: € 19bn(1) Provision for c
Slide 5: Development of Return on Tangible Equity and Revenues
Development of Return on Tangible Equity and Revenues Post-tax return on tangible equity Revenues (€ bn) 6.8 (5)% >4.0% 0.2 6.5 6.2 6.2 0.0 1.7% (1.4)% Q3 2017 Specific Q3 2017 Q3 2018 Specific Q3 2018 2017 9M 2018 Target net items(1) revenues revenues items(1) net 2019 revenues excl. excl. revenues
Slide 6: Q3 2018 Group financial highlights
Q3 2018 Group financial highlights € m, unless stated otherwise Higher / (lower) in % Q3 2018 vs. Q3 2017 vs. Q2 2018 Revenues 6,175 (9) (6) Revenues of which: Specific items(1) (16) n.m. n.m. Noninterest expenses 5,578 (1) (4) Costs of which: Adjusted costs 5,462 (1) (2) Cost/income ratio (in %) 90
Slide 7: Adjusted costs
Adjusted costs(1) € m, FX adjusted(2) (1)% 46 5,526 (6) 5,462 — Delivering in line with targets (50) (53) — Compensation and benefits: higher charges for deferred compensation — IT costs broadly flat as cost for ongoing investments including higher amortization are absorbed Q3 2017 Compensation IT c
Slide 8: Employees
Employees Full-time equivalents(1) 95,429 (104) Front office Allocated Infrastructure — Remain on track to meet <93,000 target by year-end 2018 (349) — Reduction of ~1,450 FTE excluding ~750 graduate hirings during the quarter (453) — Reduction in the quarter driven by (149) infrastructure staff, fo
Slide 9: Capital ratios
Capital ratios CRD4, fully loaded, € bn except movements (in basis points) CET1 ratio 25 14.0% 13.7% (1) (1) — Reduced risk-weighted assets (RWA) driven by lower: — Credit risk RWA in CIB, driven by de-risking in non-strategic assets and distribution of risk related to transactions originated in Cor
Slide 10: Segment results
Segment results Deutsche Bank Q3 2018 results 10 Investor Relations 24 October 2018
Slide 11: Corporate & Investment Bank (CIB)
Corporate & Investment Bank (CIB) € m, unless stated otherwise Higher / (lower) in % vs. vs. Q3 2018 Q3 2017 Q2 2018 YoY comments Revenues 3,025 (13) (15) Mainly reflecting lower Sales & Revenues of which: Specific items(1) (58) (30) n.m. Trading and GTB revenues Non-interest expenses 2,868 (3) (7)
Slide 12: CIB business unit revenue performance
CIB business unit revenue performance € m, revenues X% Excluding specific items(1) Change YoY Q3 2018 YoY reported revenue drivers Global Transaction Banking: Global Transaction Banking 912 (5)% (5)% — Driven by changes to the business perimeter Origination & Advisory: Origination & Advisory 468 (1)
Slide 13: Private & Commercial Bank (PCB)
Private & Commercial Bank (PCB) € m, unless stated otherwise Higher / (lower) in % vs. vs. Q3 2018 Q3 2017 Q2 2018 YoY comments Revenues 2,518 (3) (1) Essentially flat excluding specific of which: Specific items(1) 42 (74) (48) items; growth in loan revenues Revenues more than offset ongoing deposit
Slide 14: PCB business unit revenue performance
PCB business unit revenue performance €m X% Excluding specific items(1) Change YoY Q3 2018 YoY reported revenue drivers Private and Commercial Business (Germany): — Revenues essentially flat, excluding a Private and Commercial Business 1,686 (4)% 2% € 108m gain from the sale in Q3 2017 of (Germany)
Slide 15: Asset Management (AM)
Asset Management (AM) € m, unless stated otherwise Higher / (lower) in % vs. vs. Q3 2018 Q3 2017 Q2 2018 YoY comments Flat excluding a prior year Revenues 567) (10) 1) insurance recovery and Revenues businesses exited in 2017; growth of which: Specific items(1) -) n.m. n.m. in Passive offset by lowe
Slide 16: Corporate & Other (C&O)
Corporate & Other (C&O) € m, unless stated otherwise Profit before tax Higher/(lower) vs. Q3 vs. Q2 Q3 2018 2017 2018 (23) (13) (119) Profit before tax (13) 10) 105) (43)% (299) Funding & liquidity 6) 27) (8) Valuation & Timing differences(1) 94) (92) 207) Shareholder expenses (101) (29) 17) (902) (
Slide 17: Appendix
Appendix Deutsche Bank Q3 2018 results 17 Investor Relations 24 October 2018
Slide 18: Specific items – Q3 2018
Specific items – Q3 2018 €m Q3 2018 Q3 2017 Q2 2018 CIB PCB AM C&O Group Group Group Revenues 3,025 2,518 567 65 6,175 6,776 6,590 DVA (CIB) (58) - - - (58) (7) 56 Gain on sale in GTB (CIB) - - - - - - 57 Valuation of legacy RMBS - - - - - (76) - portfolio (CIB) Sal. Oppenheim workout (PCB) - 42 - -
Slide 19: Specific items – 9M 2018
Specific items – 9M 2018 €m 9M 2018 9M 2017 CIB PCB AM C&O Group Group Revenues 10,449 7,700 1,672 (80) 19,741 20,738 DVA (CIB) 59 - - - 59 (329) Change in valuation of an investment (CIB) 84 - - - 84 - Gain on sale in GTB (CIB) 57 - - - 57 - Valuation of legacy RMBS portfolio (CIB) - - - - - (76) A
Slide 20: Adjusted costs trends – Q3 2018
Adjusted costs(1) trends – Q3 2018 € m, unless stated otherwise Q3 2017 YoY Q2 2018 QoQ Q3 2018 Q3 2017 Q2 2018 ex FX(2) ex FX(2) ex FX(2) ex FX(2) Compensation and benefits(3) 2,833 2,788 2,788 2% 2,994 2,990 (5)% IT costs 939 942 945 (1)% 904 901 4% Professional service fees 358 406 408 (12)% 391
Slide 21: Adjusted costs trends – 9M 2018
Adjusted costs(1) trends – 9M 2018 € m, unless stated otherwise YoY YoY ex FX(2) 9M 2017 9M 2018 9M 2017 abs in % abs in % ex FX(2) Compensation and benefits(3) 8,787 8,783 5 0% 8,600 187 2% IT costs 2,865 2,811 54 2% 2,766 99 4% Professional service fees 1,141 1,248 (106) (9)% 1,216 (75) (6)% Occup
Slide 22: Indicative regional currency mix Q3 2018
Indicative regional currency mix Q3 2018 Net revenues Total noninterest expenses 9% 5% 6% 10% Other (1) 15% Other (2) 17% 15% 24% 3% 3% 19% 1% 0% 28% 18% USD 13% 31% 30% USD 9% 19% GBP 41% 1% 87% 86% 0% GBP 32% 62% EUR 54% 57% 48% 35% EUR 21% CIB PCB AM Group CIB PCB AM Group Note: Classification is
Slide 23: Litigation update
Litigation update € bn, unless stated otherwise Litigation provisions(1) Contingent liabilities(1) 2.2 2.3 1.4 1.3 30 Jun 2018 30 Sep 2018 30 Jun 2018 30 Sep 2018 ― Decrease predominately due to payments for past ― Includes possible obligations where an estimate can be settlements, releases for lowe
Slide 24: Loan book
Loan book € bn Under IAS 39 Under IFRS 9 414 403 400 406 398 392 395 Corporate & 147 137 134 138 132 Investment Banking 127 128 Wealth Management 40 39 37 37 37 39 39 PCB (International) 30 30 30 30 31 31 31 PCB (Germany) 187 187 189 190 190 191 193 PCB (Exited)(1) 9 10 9 10 7 7 2 Q1 2017 Q2 2017 Q3
Slide 25: Loan book composition
Loan book composition IFRS loans at amortized cost, 30 September 2018 Corporate & Investment Bank Private & Commercial Bank Leveraged Finance(5) CIB non-strategic ABS CIB Other(4) 5% 1% — Well diversified Loan Portfolio 1% — Over 2/3rds of the loan portfolio in the 6% German Private & Commercial Ban
Slide 26: 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 € mn Stage 3 at amortised cost under IFRS9 € bn Corporate & Investment Bank (CIB) Purchased or Originated Credit Impaired assets (POCI) Private & Commercial Bank (PCB) CIB (ex-POCI) PCB (ex-POCI) Group Stage 3 at
Slide 27: Net interest income sensitivity
Net interest income sensitivity € bn, hypothetical +100bps parallel shift impact First year Second year 2.0 1.7 0.9 1.0 1.0 0.8 PCB CIB Group PCB CIB Group > 3M 0.3 0.1 0.3 > 3M 0.6 0.1 0.7 EUR EUR ≤ 3M 0.5 0.7 1.1 ≤ 3M 0.4 0.7 1.0 > 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 28: Leverage exposure and Risk-weighted assets
Leverage exposure and Risk-weighted assets CRD4, fully loaded, € bn Leverage exposure Risk-weighted assets 342 342 64 91 Operational Risk RWA 91 64 1,324 1,305 Trading assets 161 155 34 Market Risk RWA 30 CVA 9 Derivatives(1) 187 185 27 Lending 250 392 395 102 Lending commitments(2) 97 98 Credit Ris
Slide 29: Value at Risk (VaR)
Value at Risk (VaR) € m, unless stated otherwise, DB Group, 99%, 1 day Average VaR Stressed VaR(1) € 2.1bn Sales & Trading revenues € 1.8bn 140 120 100 80 60 40 20 0 30 25 28 26 25 81 67 87 81 74 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 (1) Stressed Value-at-Risk is calculated on
Slide 30: Reconciliation of AM reported segment to DWS standalone
Reconciliation of AM reported segment to DWS standalone € m, unless stated otherwise Perimeter adjustments AM reported Sold & discontinued Other perimeter DWS reported Q3 2018 business(1) adjustments(2) Q3 2018 Revenues 567 (5) 13 574 Noninterest expenses (393) (23) 13 (403) Noncontrolling interests
Slide 31: Assets under Management / Client Assets – PCB
Assets under Management / Client Assets – PCB € bn Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Assets under Management 508 504 505 506 497 503 499 Assets under Administration (1) 198 201 206 217 217 220 220 Client Assets 706 705 711 722 715 723 719 Private and Commercial Business (German
Slide 32: Employees
Employees Full-time equivalents QoQ Of which 30 Sep 2018 30 Jun 2018 Abs 31 Mar 2018 31 Dec 2017 30 Sep 2017 disposals CIB 16,461 16,565 (104) (37) 17,508 17,687 17,392 PCB 43,471 43,619 (149) (3) 43,790 43,951 44,159 AM 4,025 4,020 5 (25) 4,049 4,013 4,043 Infrastructure 30,760 31,223 (463) (40) 31
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