Deutsche Bank AG · XETR:DBK
Deutsche Bank — Strategy 2020 Press Conference, Frankfurt
43 slides from Deutsche Bank's conference presentation, Apr 27, 2015
Slide 1: Strategy 2020: Delivering Value
Deutsche Bank Strategy 2020: Delivering Value Press Conference Frankfurt, 27 April 2015 Jürgen Fitschen and Anshu Jain Co-Chief Executive Officers
Slide 2: Strategy 2020: Focusing Deutsche Bank to deliver value
Strategy 2020: Focusing Deutsche Bank to deliver value A leading global bank based in Germany What’s constant What changes Client-centricity: placing our clients Refocusing on clients who offer at the centre of what we do mutually beneficial partnerships Moving toward a more focused Keeping a global
Slide 3: Deutsche Bank's unique positioning is a long-term competitive advantage
Deutsche Bank’s unique positioning is a long-term competitive advantage Market position of Deutsche Bank Positioning of Deutsche Bank Germany Europe Global Capital markets expertise and global cash / trade platform CB&S No. 1 Top 1-3 Top 5 Leading domestic retail franchise International reach with p
Slide 4: Agenda
Agenda 1 Taking stock 2 Strategy 2020 3 Delivering value Deutsche Bank Jürgen Fitschen and Anshu Jain 27 April 2015 3
Slide 5: Taking stock: Strategy 2015+ achievements
Taking stock: Strategy 2015+ achievements Balance and Core business balance and performance: All core performance businesses exceeding EUR 1 billion IBIT for the first time(1) Capital Stronger capital position, with strong deleveraging, de- position risking and near-doubling of CET 1 ratio More resi
Slide 6: In 2012, we identified five key levers
In 2012, we identified five key levers Strong capital base and capital Capital management toolkit Businesses built on the best people and Competencies world-class products Focused portfolio of clients and regions Clients based on our ability to generate value Culture that sustainably rewards Culture
Slide 7: Capital: Significantly improved capital strength
Capital: Significantly improved capital strength CRD4, fully loaded, in % CET1 ratio Leverage ratio RWA, in EUR bn Leverage exposure, in EUR trn >530 431 ~1.8 1.5 11.1 3.4 ~1.9x ~1.7x <2.0 <6.0 Jun 2012(1) Mar 2015 Jun 2012(1) Mar 2015 (1) Estimates based on June 2012 Basel 3 / CRD4 rule interpretat
Slide 8: Competencies: Four EUR 1 billion+ businesses
Competencies: Four EUR 1 billion+ businesses Reported IBIT, full year(1), in EUR bn Profit growth outside investment banking… …delivers a better balanced bank 6.8 1.0 Strategic priority: four strong pillars 5.2 IBIT in all four core businesses exceeds 0.2 1.2 52% 0.7 EUR 1bn for the first time 4
Slide 9: Culture: Embedding deep-rooted cultural change
Culture: Embedding deep-rooted cultural change What’s different How we engaged our staff Responsibility ~700 people added to strengthen controls for controls in businesses Culture and conduct workshops with >6,000 bankers in CB&S Risk ~180 transactions escalated through governance Reputational Risk
Slide 10: Costs: Invested significantly in efficiency, controls and systems
Costs: Invested significantly in efficiency, controls and systems Operational Excellence program delivered Investments in our platform Cost savings, in EUR bn Achieved 2012-2014/ CtA and CtB(3), in EUR bn delta to FY15 target(1) FY14 target(1) ~5.8 1.7 4.5 2.3 1.9 2.8 1.1 1.6 3.3 2.2 Businesses(2) I
Slide 11: However, we have also faced significant setbacks
However, we have also faced significant setbacks Environment Execution Regulatory bar raised: Cost of regulatory compliance ‒ FBO / CCAR(1) rules in the US and new controls materially higher than originally ‒ TLAC(2) foreseen ‒ Leverage ratios in Europe / US Costs of Regulation regulatory ‒ Bank
Slide 12: The efficiency drive has been largely offset by material cost increases
The efficiency drive has been largely offset by material cost increases Adjusted Cost Base development(1) In EUR bn ■ Business growth ~0.5 ■ Mandatory 25.1 wage increases ~0.3 ■ Remaining ~0.2 (0.3) 23.8 (3.3) ~1.0 ~1.6 ~(0.3) ~EUR 0.7bn run-rate impact of portfolio actions in 2015 2012 OpEx OpEx sa
Slide 13: Agenda
Agenda 1 Taking stock 2 Strategy 2020 3 Delivering value Deutsche Bank Jürgen Fitschen and Anshu Jain 27 April 2015 12
Slide 14: A rigorous strategy review process focused on delivering value
A rigorous strategy review process focused on delivering value Macro assumptions Dec 2014 Environment Regulatory assumptions analysis Competitive landscape Client / product trends Jan 2015 Competitive Sustainable competitive advantages position Evolving challenges Client segments Feb 2
Slide 15: We analyzed our operating environment…
We analyzed our operating environment… Positive outlook Negative outlook Key themes Outlook 2015 to 2020 US and Asia: recovery / sustainable growth Macro Europe: historically low interest rates persist Rising geopolitical tensions create uncertainties Improving global outlook anchored to US
Slide 16: …especially trends that affect our clients' needs
…especially trends that affect our clients’ needs Our clients are getting… …leading to… Population aged 60+, 2010 vs. 2050 Wealthier and Increasing demand for sophisticated wealth more senior transfer and protection +1.1bn # of UHNWI in top 25 cities, 2013 Increasing concentration of wealth in emerg
Slide 17: Our strategic levers remain critical, and we add a sixth
Our strategic levers remain critical, and we add a sixth Emphasis for future Expanding our focus on CET1 with a Capital commitment on leverage, RWA harmonization and liquidity Reshaping our investment banking and retail Competencies businesses and investing in the future Focusing on those that value
Slide 18: We have taken six key decisions
We have taken six key decisions 1 Reposition CB&S 2 Reshape retail 3 Digitalize DB 4 Grow GTB and Deutsche AWM 5 Rationalize our footprint 6 Transform our operating model Deutsche Bank Jürgen Fitschen and Anshu Jain 27 April 2015 17
Slide 19: Reposition CB&S: Delivering a sustainable, resilient and well-controlled investment bank
1 Reposition CB&S: Delivering a sustainable, resilient and well-controlled investment bank Emphasis H / M / L= high / medium / low De-emphasis CRD4 leverage consumption 2012- Aspiration CRD4 2014 2020 usage Top 3 global Debt S&T business H Invest Top 5 global Corporate Finance house L To
Slide 20: Reposition CB&S: Trimming while investing
1 Reposition CB&S: Trimming while investing Optimizing our client franchise Grow Size of bubble relates to CRD4 2014 Aspiration 2020 Corporate Finance leverage exposure Cash Equities Equity Derivatives #1-2 EM Debt FX Credit Solutions Optimize Rates and GLM Rates and Prime Finance CB&S revenue rank(
Slide 21: Reposition CB&S: Shrinking and re-deploying balance sheet
1 Reposition CB&S: Shrinking and re-deploying balance sheet CRD4 leverage exposure, in EUR bn Expected impact of Targeted leverage exposure exposure reduction reduction: gross ~EUR 200bn; net ~EUR 130-150bn >900 ~EUR 0.8bn deleveraging exit costs ~EUR 0.6bn negative (80-90) run-rate revenue impa
Slide 22: Reshape retail: Substantial investments in Postbank since 2010
2 Reshape retail: Substantial investments in Postbank since 2010 Postbank in 2010 Substantial investments Postbank today(1) Disposed / wound down Balance sheet (total assets, 215 non-core assets 155 in EUR bn) EUR 42.3bn: ‒ EUR 3.7bn structured credit portfolio Non-customer assets ‒ EUR 13.1bn com
Slide 23: Reshape retail: Reconsidering Postbank's strategic fit with DB
2 Reshape retail: A number of factors has led us to reconsider Postbank’s strategic fit with DB Key factors Implications Postbank’s mortgage and home loans products drive high returns at high balance DB's proactive focus on ≥5% sheet usage medium-term leverage ratio would Leverage negatively impac
Slide 24: Reshape retail: Postbank deconsolidation process and timeline
2 Reshape retail: Postbank deconsolidation process and timeline Intention to launch squeeze-out Next steps Cease integration efforts especially in IT and middle/back-office operations To prepare the execution of our strategy, Imme- Revert to stand-alone business and we acquired additional 2.7%
Slide 25: Reshape retail: Transform our private and commercial client franchise
2 Reshape retail: Transform our private and commercial client franchise “Leading digitally-enabled advisory Our value proposition: “Best-in-class, bank for private and commercial clients seamlessly accessible, investment-centric with strong home base in Europe” financial solutions for demanding clie
Slide 26: Reshape retail: A leading advisory bank
2 Reshape retail: A leading advisory bank Substantial actions planned… …to deliver our new PBC Sharpen distribution model 2016-2020 ‒ Up to 200 branches closed by 2017 Leading digitally-enabled advisory bank for >13m ‒ Strengthen omni-channel clients with strong home base in Europe capabilities
Slide 27: Digitalize DB: Becoming a more Digital Bank
3 Digitalize DB: Becoming a more Digital Bank Banking on the verge of major digital disruption Investing in disruptive technologies in financial services – e.g. Deliver Banking via Apple Watch Customer Experience Fingerprint login Digital Media Tipping point Capture Autobahn App Market New Finan
Slide 28: Grow GTB: Continue to invest in scale
4 Grow GTB: Continue to invest in scale Trajectory to build on Why we want to grow GTB Planned investments GTB performance(1) IBIT Market leader in In EUR bn Revenues ■ EUR 50bn+ incremental leverage ‘annuity- like’ 0.9 +36% 1.2 business to corporate exposure supporting corporates and financial in
Slide 29: Grow Deutsche AWM: Building on a strong trajectory
4 Grow Deutsche AWM: Building on a strong trajectory Focused transformation... ...with strong delivery momentum Select examples Net New Assets In EUR bn AuM, in EUR trn Rationalization Divested EUR 30bn non-core AuM 0.9 1.0 1.2 De-listed and closed small funds 40 17 Integration Created global
Slide 30: Grow Deutsche AWM: Invest to capture future growth
4 Grow Deutsche AWM: Invest to capture future growth Significant global growth opportunities for the industry Planned investments to capture growth AuM, in USD trn Balance Sheet: U/HNWI growth Prudently grow lending balance sheet 5-6% p.a. 5-10% p.a. to support client needs 220 Wealth Client cover
Slide 31: Rationalize our footprint: Centers of economic power are shifting
5 Rationalize our footprint: Centers of economic power are shifting Towards emerging markets Towards mega-cities # of large caps in EM(1) GDP in largest 600 cities >3x >2x 2010 >2020 2007 >2020 AuM in EM # of UHNWI(2) in top 25 cities >2x +30% 2012 >2020 2013 >2020 (1) Companies with >USD 1bn in ann
Slide 32: Rationalize our footprint: Exit or reduce presence while investing in high growth hubs
5 Rationalize our footprint: Exit or reduce our presence while investing in high growth hubs Key drivers of our footprint optimization decisions - De-emphasize + Emphasize – examples Reducing complexity # of countries/presences China Market size and growth (7)-(10) CAGR 2014- CAGR 2014- Growth 2
Slide 33: Transform our operating model: Redesigning operating and governance models
6 Transform our operating model: Redesigning operating and governance models Strategy 2020 Today Strategy 2015+ Jun 2012 Raise level of efficiency: redesign front-to-back processes and operations Comprehensive assessment of status quo Reduce complexity: right-size in line with Operational Excellence
Slide 34: Transform our operating model: Top-down savings targets
6 Transform our operating model: Top-down savings targets Target In EUR bn Gross cost savings p.a. Cum. CtA Details on next page Narrow perimeter (e.g., de-emphasizing of Additional product/client segments, locations) ~3.5 ~3.7 gross savings Increase efficiency (e.g., process streamlining, IT/Op
Slide 35: Contributing ~EUR 3.5bn additional organic gross savings
6 Transform our operating model: Contributing ~EUR 3.5bn additional organic gross savings In EUR bn Target Gross cost savings p.a. Cum. CtA Structural efficiency levers Rightsizing of FTE and platform in alignment with: Narrow – Exit of structurally unprofitable businesses ~1.3 ~1.4 perimeter – Coun
Slide 36: Summary: Six decisions to reshape the Bank
Summary: Six decisions to reshape the Bank Aspirations Deliver sustainable client-driven franchise by: Leverage reduction: Reposition 1 ‒ Reducing transactional business and focus product suite gross ~EUR 200bn, CB&S ‒ Invest in client solutions, advisory and equities net ~EUR 130-150bn Net le
Slide 37: Agenda
Agenda 1 Taking stock 2 Strategy 2020 3 Delivering value Deutsche Bank Jürgen Fitschen and Anshu Jain 27 April 2015 36
Slide 38: Result: A reshaped business model
Result: A reshaped business model Targeted indicative resource utilization (CRD4 exposure) by 2020 Afflu- Change 2020 vs. 2014 Mass ent / Corp- retail(1) HNWI orates Institutions / other 2014 Re-affirming our Clients commitment to clients: at the center 2020 of what we do Advi- Cash As
Slide 39: Germany: Remaining among the market leaders across all our businesses
Germany: Remaining among the market leaders across all our businesses Investment Banking – Corporate Finance Retail Banking Fees, FY14, in EUR m Net revenues, FY13/FY14, in EUR bn 2020 370 Public Peer 29 sector Peer ~150 banks Peer 21 Peer ~150 4 Peer ~120 Private 4 2020 Peer ~110 sector Peer 3 bank
Slide 40: Medium term ambitions
Medium term ambitions Our targets Leverage ≥5% RoTE(1) >10% ratio Organic gross ~EUR 3.5bn CET1 savings ~11% ratio CIR ~65% Our aspiration Payout ratio(2) Aspiration to deliver 50%+ dividend payout ratio Note: Gross cost savings are countered by increasing cost from inflation, FX changes, cost of gr
Slide 41: What comes next
What comes next Today Strategy 2020 announcement Refine key levers Operating Design detailed transformation roadmap model review Refine governance and operating model Footprint Finalize outcomes of global country review decisions Engage stakeholders and initiate implementation Breakdown
Slide 42: Strategy 2020: Focusing Deutsche Bank to deliver value
Strategy 2020: Focusing Deutsche Bank to deliver value A leading global bank based in Germany What’s constant What changes Client-centricity: placing our clients Refocusing on clients who offer at the centre of what we do mutually beneficial partnerships Moving toward a more focused Keeping a global
Slide 43: 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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