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Transcript of CCehief FinaacaO cencial Officer - Deutsche Bank ... Deutsche Bank Deutsche Bank Stefan Krause...

  • Deutsche Bank

    Deutsche Bank

    Stefan Krause Chief Financial OfficerC e a c a O ce

    24 June 2010 Stefan Krause

    Deutsche Bank Investor Relations

    Investor RoadshowInvestor Roadshow Singapore, 24Singapore, 24 JuneJune 20102010

  • Agenda

    1 A strong start to 2010: 1Q Highlights

    2 Implementing Phase 4 of our management agenda

    3 Key current issues

    24 June 2010 Stefan Krause

    Deutsche Bank Investor Relations

    1

  • First Quarter 2010: Highlights

    Income before income taxes (in EUR bn) 2 81 8

    1Q2009 1Q2010

    Profitability

    Income before income taxes (in EUR bn)

    Net income (in EUR bn)

    Pre-tax RoE (target definition)(1)

    2.8

    1.8

    30%

    1.8

    1.2

    25%

    11 2%12 6%Ti 1 it l ti

    31 Dec 2009

    31 Mar 2010

    Capital 11.2%

    32.8

    12.6%

    34.4

    Tier 1 capital ratio

    Tier 1 capital (in EUR bn)

    Core Tier 1 capital ratio 8.7% 7.5% p ( )

    Balance sheet 978891Total assets (U.S. GAAP pro-forma, in EUR bn)

    Total assets (IFRS, in EUR bn) 1,6701,501

    2323Leverage ratio (target definition)(2) sheet ( p )

    (1) Based on average active equity

    24 June 2010 Stefan Krause

    Deutsche Bank Investor Relations

    2

    (1) Based on average active equity (2) Total assets based on U.S. GAAP pro-forma divided by total equity per target definition

  • First quarter revenues and profits close to pre-crisis levels I EUR bIn EUR bn Net revenues Income before income taxes

    9.6 9.0 3.2

    6.2 6.6

    8.0 7.2

    1 6 1.8

    2.6

    1.8

    2.8

    5.0 4.6

    0.2

    1.6

    (0.3)

    ‘03 ‘04 ‘05 ‘06 ‘07 ‘08 ‘09

    1Q

    ‘03 ‘04 ‘05 ‘06 ‘07 ‘08 ‘09

    1Q

    ‘10 ‘10

    24 June 2010 Stefan Krause

    Deutsche Bank Investor Relations

    3

    Note: 2003-2005 based on U.S. GAAP reported figures, 2006 onwards based on IFRS reported figures

  • Global Markets 1Q2010 vs. 1Q2007: A tale of two cities

    Similar top line revenue performance . . . . . . using significantly lower resources

    (26%) (47%)

    1Q2010 vs. 1Q2007 1Q2010 vs. Peak

    U.S. GAAP pro-forma assets

    S&T revenues, in EUR m p g g y

    (2)

    5,068 4 746

    n.a.

    3%

    (47%)

    (38%)

    assets

    Level 3 Assets

    RWA5,068 4,746 3%

    (22%)

    (35%)

    (38%)

    RWA

    VaR

    1Q2007 1Q2010

    (93%)

    (50%)

    (95%)

    (69%)

    Prop Trading Notional Capital Stress Loss(1) (3)

    (3%)

    (69%)

    (25%) Headcount(1) 1Q2007 based on structure as of 2008(2) Peak refers to highest level during the period 3Q2007 to 4Q2009 (3) Maximum potential loss across all risk types Note: S&T revenues differ from Global Markets revenues due to some revenue

    24 June 2010 Stefan Krause

    Deutsche Bank Investor Relations

    4

    Note: S&T revenues differ from Global Markets revenues due to some revenue reallocation between GM and GB

  • Reduced provisioning for credit losses I EURIn EUR m

    Related to IAS 39 reclassified assets

    1,000 (50)%

    262

    526 544 560

    159

    262

    308 492

    329 249

    1Q1Q 2Q 3Q 4Q

    Thereof: CIB

    1Q

    2010

    1Q 2Q 3Q 4Q

    2009

    Thereof: PCAM

    357 779 323 357 90

    169 221 214 201 173

    24 June 2010 Stefan Krause

    Deutsche Bank Investor Relations

    5

    Note: Divisional figures do not add up due to omission of Corporate Investments; figures may not add up due to rounding differences

  • Tier 1 capital remains well above target

    11 0 11.7

    12.6 11.211.2

    Tier 1 ratio: (117) bps(1)

    10.2 11.0 11.2

    8.7

    Target: ≥10%

    7.1 7.8 8.1 7.57.5

    RWA: EUR 17 bn 316 295 288 273 292

    RWA: EUR 17 bn

    1Q 2Q 3Q 4Q 1Q

    2009 2010

    Note: Core Tier 1 ratio = Tier 1 capital less hybrid Tier 1 capital divided by RWAs

    Core Tier 1 ratio, in %Tier 1 ratio, in % RWA, in EUR bn Sal. Oppenheim Group impact

    24 June 2010 Stefan Krause

    Deutsche Bank Investor Relations

    6

    Note: Core Tier 1 ratio = Tier 1 capital less hybrid Tier 1 capital divided by RWAs (1) Includes Tier 1 capital deduction (including goodwill and other intangibles) of EUR 1.3 bn and EUR 17 bn RWA

  • Agenda

    1 A strong start to 2010: 1Q Highlights

    2 Implementing Phase 4 of our management agenda

    3 Key current issues

    24 June 2010 Stefan Krause

    Deutsche Bank Investor Relations

    7

  • Well placed to deliver on Phase 4

    Management Agenda Phase 4

    2009 – 2011

    Focus on core PCAM businesses and home market leadership

    Increase CIB profitability with renewed risk and balance sheet discipline and home market leadershiprisk and balance sheet discipline

    Focus on Asia as a key driver Reinvigorate ourFocus on Asia as a key driver of revenue growth

    Reinvigorate our performance culture

    24 June 2010 Stefan Krause

    Deutsche Bank Investor Relations

    8

  • Phase 4: Financial potential

    Phase 4 potential 2011Phase 4 potential 2011

    Revenue growth p.a. ~ 8%

    fo rm

    an ce Income before income taxes, in EUR bn(1) ~ 10.0

    P er

    f

    Return on Equity(2)

    Cost / income ratio

    25% over-the-cycle

    ~ 65%

    tra in

    ts Tier 1 ratio ≥10%

    C on

    st

    Leverage(3) ≤25x

    (1) Before Corporate Investments and Consolidations & Adjustments

    24 June 2010 Stefan Krause

    Deutsche Bank Investor Relations

    9

    ( ) p j (2) Pre-tax return on Average Active Equity (3) Per target definition: Assets based on U.S.GAAP ‘pro-forma’; total equity adjusted for FV gains / losses on DB issued debt

  • Phase 4: assumptions for 2010 – 2011

    — No further major market dislocations — Normalization of asset valuations — Global revenue fee pool: CAGR of 9% to a level slightly— Global revenue fee pool: CAGR of 9% to a level slightly

    below 9M2007 annualized — Margins remain higher than pre-crisis

    Environmental

    — Interest rates normalization from 2nd half 2010 — Global GDP growth ≥ 2% p.a. over the period

    — No significant further write-downs Deutsche Bank — Market share gains

    — EUR 1 bn efficiency gains out of infrastructure

    24 June 2010 Stefan Krause

    Deutsche Bank Investor Relations

    10

  • Phase 4: IBIT potential of business divisionsp In EUR bn

    Ph 4 t ti l 2011Phase 4 potential 2011

    Corporate Banking & Securities 6.3

    Global Transaction Banking 1.3

    Asset and Wealth Management 1.0

    Private & Business Clients 1.5

    Total business divisions 10.0

    24 June 2010 Stefan Krause

    Deutsche Bank Investor Relations

    11

    Note: Figures do not add up due to rounding differences

  • 2011 potential: CB&S / Global Markets I b f i t i EUR b

    Cost developmentRevenue development Risk

    development Margin / volume

    Income before income taxes, in EUR bn

    ~(1.6)~2.4 ~(0.9) — Margin / volume

    normalisation — Lower market volatility — Predominantly

    FX/Rates/ Credit

    — De-risking losses — Legacy businesses — Mark-downs — Monoline reserves

    — Strategic hiring — Platform investments

    5.6 4.1 5.7 5.6

    — U.S. cash — Liquid/flow

    — Commodities build — EM debt build — Other

    derivatives — Asia cash — Prime

    Brokerage

    (4.0)

    2009 IBIT

    2009 adjusted

    2011 potential

    Additional staff costs

    Potential write downs(1)

    — Direct market access — Clearing

    Growth areas Growth related costs

    Revenue impacts IBIT adjusted potential

    IBITEquities Debt / other products

    staff costs incl. deferrals

    write-downs(1)related costs Market nor- malisation

    Specific items / other

    trading losses

    (1) Primarily contra revenues

    24 June 2010 Stefan Krause

    Deutsche Bank Investor Relations

    (1) Primarily contra-revenues Note: Does not correspond to segmental reporting; the sum of GM and CF does not add up to the reported CB&S figure mainly due to LEMG; column size is illustrative

    12

  • 2011 potential: CB&S / Corporate Finance I b f i t i EUR b

    — Credit spreads

    Cost developmentRevenue development

    Risk development

    Income before income taxes, in EUR bn

    0.9

    Credit spreads tightening

    — Lower market volatility — Lower hedge losses

    ~(0.4)~0.9 ~0.0

    2.4

    0.6 0.4

    — Strategic hires: — Junior hiring — Senior hires in

    — Top-5 — Key investments

    (M&A, FIG, NRG) — IPO market

    R it li ti

    — CRE / Other mark-downs(1)(0.9) — IAS 39 LLPs (1.2)

    FIG, NRG, China & UK — Recapitalization — Financing

    (2.6) 2009 Specific Market 2009 Target fee Share Invest- Additional 2011

    — Lev. Fin.-related legal settlements (0.3)

    Non- Additional IBIT items normali-

    sation bef