Deutsche Bank
Strategy
St
t
2020
2020:
Delivering Value
Press Conference
Frankfurt 27 April 2015
Frankfurt,
Jürgen Fitschen and Anshu Ja
ain
Co-Chief Executive Officers
Strategy 2020: Focusing Deutsch
he Bank to deliver value
A leading
g global
g
bank based in Germany
y
What’s constant
What changes
Client-centricity: placing our clients
at the centre of what we do
Refocusing on clients who offer
mutually beneficial partnerships
Keeping a global footprint
Moving toward a more focused
geographic reach
Maintaining a universal banking
product offering
Tightening our product perimeter –
not all things to all people
Proactive stance on future regu
ulatory direction and robust controls
Deutsche Bank
Jürgen Fitschen and Anshu Jain
27 April 2015
1
Deutsche Bank’s unique positioning is a long-term
competitive
titi advantage
d
t
Market position of Deutsche Bank
Positioning of Deutsche Bank
Capital markets expertise and global cash /
trade platform
CB&S
Germany
Europe
Global
No. 1
Top 1-3
Top 5
International reach with
strong home base in
Europe
Leading domestic retail franchise
positioned
ii
d ffor multi-channel
li h
ld
delivery
li
PBC
No 1((1))
No.
Gl b l model
Global
d l anchored
h d iin one off th
the world’s
ld’
strongest economies
GTB
No. 1
Top 1-3
Top 5-10
Global asset and wealth proposition
Deutsche
AWM
No. 1
Top 1-3
Top 5-10
(1) Among private sector banks
Deutsche Bank
Source: Dealogic, BVI, Coalition, Lipper, BCG, Scorpio, compan
ny data
Jürgen Fitschen and Anshu Jain
27 April 2015
2
Agenda
1
Taking stock
2
Strategy 2020
3
Delivering value
Deutsche Bank
Jürgen Fitschen and Anshu Jain
27 April 2015
3
Taking stock: Strategy 2015+ acchievements
Balance and
performance
Capital
position
Resilience
Cultural
C
lt l
change
Core business balance
b
and performance: All core
businesses exc
ceeding EUR 1 billion IBIT for the first time(1)
Stronger capital position, with strong deleveraging, derisking and near-doubling of CET 1 ratio
More resilient: Substantially invested in infrastructure and
regulatory comp
pliance
Embedding dee
ep-rooted cultural change
(1) In FY 2014
Deutsche Bank
Jürgen Fitschen and Anshu Jain
27 April 2015
4
In 2012, we identified five key leve
ers
Deutsche Bank
Capital
Strong capital base and capital
management toolkit
Competencies
Businesses built on the best people and
world-class products
Clients
Focused portfolio of clients and regions
based on our ability to generate value
Culture
Culture that sustainably rewards
performance in line with societal values
Costs
Disciplined cost management and
consistent productivity gains
Jürgen Fitschen and Anshu Jain
27 April 2015
5
Capital: Significantly improved ca
apital strength
CRD4 fully loaded
CRD4,
loaded, in %
CET1 ratio
Leverage ratio
RWA, in EUR bn
>530
431
Leverage exposure, in EUR trn
~1.8
1.5
11.1
3.4
~1.7x
~1.9x
<2.0
<6.0
6.0
Jun 2012(1)
Mar 2015
Jun 2012(1)
Mar 2015
(1) Estimates based on June 2012 Basel 3 / CRD4 rule interpretation
Deutsche Bank
Jürgen Fitschen and Anshu Jain
27 April 2015
6
Competencies: Four EUR 1 billio
on+ businesses
Reported IBIT
IBIT, full year(1), in EUR bn
Profit growth outside investment banking…
…delivers a better balanced bank
6.8
 Strategic priority: four strong pillars
1.0
5.2
0.2
0.7
45%
1.2
1.3
15
1.5
52%
 IBIT in all four core businesses exceeds
EUR 1bn for the first time
 Robust investment banking
g earnings
g
 PBC, GTB, Deutsche AWM in 2014:
2.9
3.3
2012
2014
Deutsche AWM
GTB
 Performance, balance, diversification
PBC
CB&S
(1) 2014 does not reflect C&A clear-out adjustments as per 1Q2015 disclosure
Deutsche Bank
- 52% of core business IBIT
- IBIT up by
b ~50%
50% since
i
2012
Jürgen Fitschen and Anshu Jain
27 April 2015
Note: Figures may
y not add up due to rounding differences
7
Culture: Embedding deep-rooted
d cultural change
What’s different
Responsibility
for controls
How we engaged our staff
~700 people added to strengthen contro
ols
in businesses
Culture and conduct workshops with >6,000
bankers
ba
e s in C
CB&S
&S
Risk
governance
Diversity
~180 transactions escalated through
Reputational Risk Management Process
s
~25% of all senior leadership appointme
ents
were female
Compensation
5 years max; strengthened clawbacks
deferral
Material risk
Compensation Negative consequences for ~50 materia
al
takers
Up to five years; strengthened clawback
ks
deferral
risk takers due to cultural considerations
s
compensation
C lt
Culture
seminars
i
for
f >400
400 MD
MDs
in Germany
+34% increase in risk culture and compliance
trainings globally vs. prior year
10 employee teams received Co-CEO
sponsored “Living the Values” award
Source: HR Culture initiative
Deutsche Bank
Jürgen Fitschen and Anshu Jain
27 April 2015
8
Costs: Invested significantly in effficiency, controls and
systems
t
Operational Excellence program delivered
Achieved 2012-2014/
delta to FY15 target(1)
FY14 target(1)
Cost savings,
sa gs, in EUR
U b
bn
1.7
2.8
~5.8
2.3
1.1
1.6
19
1.9
3.3
Infrastructure
 Invested in sustainable,
Regulatory iinvestments
 Enhanced regulatory
efficient, scalable platforms
 Implemented structural
preparedness
2013
2014
Business / stability investments
 Standardized technology
 Improved data integrity
 Consolidated ffinancial and
initiatives to reinforce savings
 Optimized front-to-back
2012
Total
Efficiency investments
regulatory repo
orting processes
 Supported
S
t d selected
l t d growth
th
 Strengthened regulatory
processes
compliance
(1) Communicated targets as of Investor Day 2012
(2) Includes EUR ~0.1bn cost savings in NC
COU
Achieve, (OpEx & Powerhouse CtA, excluding severance payments); CtB: IT Change-the-Bank costt
Deutsche Bank
CtA and CtB(3), in EUR bn
4.5
2.2
Businesses(2)
Investments in our platform
Jürgen Fitschen and Anshu Jain
27 April 2015
(3) Includes DB platform investments both within and outside OpEx; CtA: Cost-to-
9
However, we have also faced sign
nificant setbacks
Environment
Execution
 Regulatory bar raised:
 Cost of regulatory compliance
and new controls materially
higher than originally
foreseen
‒ FBO / CCAR(1) rules in the US
‒ TLAC(2)
‒ Leverage ratios in Europe / US
Regulation
‒ Bank levies
‒ CRD4 compensation rules
Costs of
regulatory
compliance
‒ Bank structure reforms /
German bank separation
 Record low interest rates taking
Macro
Costs of
legacy /
litigation
a toll on deposit gathering
business
Costs of
complexity
 Costs of resolving legacy
issues and litigation soared,
particularly in the US
(1) Foreign Banking Organizations (FBO) / Comprehensive Capital Analysis and Review (CCAR)
Deutsche Bank
 Execution of efficiency drive
Jürgen Fitschen and Anshu Jain
27 April 2015
negatively impacted by high
operational and structural
complexity
 High level of optionality
Business
model
maintained – at a cost
(2) Total Loss Absorbing Capacity (TLAC)
10
The efficiency drive has been larg
gely 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
~1.0
(3.3)
(0.3)
23.8
FX
2014
~1.6
~(0.3)
~EUR
EUR 0.7bn
0 7b run-rate
t
impact of portfolio
actions in 2015
2012 OpEx
baseline(2)
OpEx savings
Portfolio
actions(3)
Regula
atory &
control costs
Other cost
effects
Note: Numbers may not add up due to rounding
(1) Excludes Cost-to-Achieve, litigation, policyho
older benefits and claims, other severances and smaller specific one-offs and impairments
(2) 1H 2012 x 2 as communicated at Investor Day 2012 (3) Mainly divestment of Cosmopolitan off Las Vegas, Tilney, Deutsche Card Services and BHF
Deutsche Bank
Jürgen Fitschen and Anshu Jain
27 April 2015
11
Agenda
1
Taking stock
2
Strategy 2020
3
Delivering value
Deutsche Bank
Jürgen Fitschen and Anshu Jain
27 April 2015
12
A rigorous strategy review process focused on
d li i value
delivering
l
Macro assumptions
Regulatory
g
y assumptions
p
Competitive landscape
Client / product trends
Dec 2014
Environment
analysis




Jan 2015
Competitive
position
 Sustainable competitive advantages
 Evolving challenges
Feb 2015
Emphasis /
d
de-emphasis
h i
 Client segments
 Product areas
 Regions
Mar 2015
Strategic
g
models
Apr 2015
Today
y
Up to
90 days
Deutsche Bank
Further detailing
Jürgen Fitschen and Anshu Jain
27 April 2015




Range of models developed
Detailed strategic and financial assessment
Downside assessment
Model selection
An
nnouncement: Strategy
gy 2020
 Detailed operating model and governance
implications
13
We analyzed our operating enviro
onment…
P iti outlook
Positive
tl k
Key themes
Macro
Outlook 2015 to 202
20
Negative outlook
 US and Asia: recovery / sustainable growth
 Europe: historically low interest rates persist
al tensions create uncertainties
 Rising geopolitica
 Improving global outlook anchored to US and EM growth
Recovering
markets
 Primary markets benefit from buoyant valuations
Improving
competitive
dynamics
 Global universal leaders consolidate further
Tighter
regulation
Deutsche Bank
 Return of volatilityy supports tentative recovery in fixed
income and curre
ency markets
 Business model choices:
c
a transatlantic divide
 Requirements forr capital, leverage, liquidity and funding
continue to increa
ase
 Additional challen
nges arise from resolution, TLAC, bank
levies, RWA harm
monization and continued subsidiarization
Jürgen Fitschen and Anshu Jain
27 April 2015
14
…especially trends that affect ourr clients’ needs
Our clients are getting…
…leading to…
Population aged 60+, 2010 vs. 2050
Increasing demand for sophisticated wealth
transfer and
a protection
Wealthier and
more senior
Increasing concentrattion of wealth in emerging
markets
s’ megacities
Urban
# off UHNWI iin ttop 25 cities,
iti
2013
vs. 2023
+128%
# of large corps in EM
EM, 2010 vs
vs. 2025
Emerging
markets
centered
Technologically
savvy
+1.1bn
Rising importance off large, emerging market
corrporates
Growing focus on conve
enience, price transparency,
product access an
nd data-driven models
+322%
# transactions in US digital
g
channels,,
2014 vs. 2020
+34%
Global credit stock, 2010 vs. 2020
Growing demand / supply
s
in capital market
funding and securitiz
zation in Europe and EM
Capital markets
deepening
+84%
Strong sustained client demand for glob
bal multi
bal,
multi-product
product banking partnerships
Source: United Nations, BCG, McKinsey, Knight Frank, PWC
Deutsche Bank
Jürgen Fitschen and Anshu Jain
27 April 2015
15
Our strategic levers remain critica
al, and we add a sixth
Emphasis for future
Deutsche Bank
Capital
Expanding our focus on CET1 with a
commitment on le
leverage,
erage RWA harmoni
harmonization
ation
and liquidity
Competencies
Reshaping our investment banking and retail
businesses and investing in the future
Clients
Focusing on those that value a mutually
beneficial partnership with their banks
Culture
Continuing the journey of culture
transformation
Costs
Pulling all levers to deliver on costs
Control
Further investing in robust controls and
resilience
Jürgen Fitschen and Anshu Jain
27 April 2015
16
We have taken six key decisions
1
Rep
position CB&S
2
Re
eshape retail
3
Digitalize DB
4
Grow GTB and Deutsche AWM
5
Rationa
alize our footprint
6
Transform our operating model
Deutsche Bank
Jürgen Fitschen and Anshu Jain
27 April 2015
17
1 Reposition CB&S: Delivering a sustainable, resilient and
well-controlled
ll
t ll d iinvestment
t
tb
bank
 Emphasis
H / M / L= high / medium / low

Invest
Aspiration
2020
CRD4
usage
Top 3 global Debt S&T business


H
Top 5 global Corporate Finance hou
use


L
Top 5 Equities S&T franchise





M

M

M

M
Top 5 global commodities business

L di provider
Leading
id uncleared
l
d CDS

Leading global repo franchise

L
Long
d t d uncleared
dated
l
d derivatives
d i ti





Emphasize client solutions versus flow
Multi- vs.
vs single-product relationship
ps
Adjust
perimeter
Deutsche Bank
CRD4 leverage consumption
20122014
Optimize country presence
Refocus
De-emphasis
Jürgen Fitschen and Anshu Jain
27 April 2015
M
H
H
H
18
w
investing
1 Reposition CB&S: Trimming while
Optimizing our client franchise
Grow
Size of bubble relates to CRD4
leverage exposure
2014
Aspiration 2020
Corporate Finance
Cash Equities
Equity Derivatives
#1-2
Credit Solutions
FX
EM Debt
O ti i
Optimize
CB
B&S revenue ra
ank(3)
Rates and GLM
Rates and
GLM(1)
Prime Finance
EM Debt
Flow Credit
Maintain
#3-5
FX
Pi
Prime
Fi
Finance
#6 9
#6-9
Equity
Derivatives
Single name
CDS(2)
Flow Credit
Com
mmodities(5)
Credit Solutions
Invest in
Corporate
Finance
and
Cash
Equities
Reduce
Repo
Long-dated
Long
dated uncl. derivatives
Exit (2013-2014)
Commodities
Low
RoA((4))
High
Single Name CDS(2)
Note: Rates & GLM includes RMBS, Credit Solutions includes Distressed Product Group
(1) Redu
uction mainly in long-dated uncleared derivatives and repo (2) Excluding single name CDS in Asia,
CEEMEA and LatAm
(3) Based on Coalition index (DB internal structure)
(4) Revenue returrn on CRD4 exposure
(5) as at FY2013
Deutsche Bank
Jürgen Fitschen and Anshu Jain
27 April 2015
19
a re-deploying balance
1 Reposition CB&S: Shrinking and
sheet
h t
CRD4 leverage exposure, in EUR bn
Expected impact of
exposure reduction
Targeted leverage expo
osure
reduction: gross ~EUR 200bn;
2
net ~EUR 130-150b
bn
>900
 ~EUR 0.8bn
deleveraging exit costs
 ~EUR 0.6bn negative
(80-90)
(80
90)
run-rate
t revenue
impact…
50-70
(50-60)
(40 50)
(40-50)
 …more than offset by:
‒ Revenues
Re en es from re
re-
~700
0
deployment; and
(30-40)
1Q
2015
Disposal of Reduced Reduced Derivati
client
ves rolllow-yielding product
off
assets perimeter perimeter
‒ Market growth
8
FY18
targe
et
grosss
Redeploy
ment and
growth(1)
FY18
target
net
(1) FX outlook assumed constant vs. April 2015
Deutsche Bank
Jürgen Fitschen and Anshu Jain
27 April 2015
20
2 Reshape retail: Substantial investments in Postbank
since
i
2010
Postbank in 2010
Balance sheet
(total assets,
in EUR bn)
Substa
antial investments
Postbank today(1)
 Dis
sposed
p
/ wound down
215
non
n-core assets
EUR
R 42.3bn:
155
‒ EUR
E
3.7bn structured
Non-customer
assets
(in EUR bn)
c
credit
portfolio
103
r
real
estate portfolio
57
‒ EUR
E
25.5bn
25 5bn
Shareholder
equity
(average, in EUR bn)
‒ EUR
E
13.1bn commercial
deleveraging financial
d
m
markets
business
5.6
 Inve
ested in platform and
6.6
efficiency
cienc EUR 1
1.2bn:
2bn
Return on assets
(IBIT / total assets,
in %)
‒ Service
S
quality, sales
1.4
2.9
‒ IT
I platform upgrades:
Leverage ratio
(in %)
and process efficiency:
a
~
~EUR
0.5bn
~
~EUR
0.7bn
2.5
3.1
(1) FY2014 Source: Postbank Annual Report 2010 / 2014
Deutsche Bank
Jürgen Fitschen and Anshu Jain
27 April 2015
21
f
has led us to
2 Reshape retail: A number of factors
reconsider
id Postbank’s
P tb k’ strategi
t t ic fit with
ith DB
Key factors
Leverage
Postbank’s mortgage and home loan
ns
products drive high returns at high balance
b
sheet usage
cially
Resulting 3.1% leverage ratio espec
onerous given DB’s G-SIB status
Implications
DB's proactive focus on ≥5%
medium-term leverage ratio would
negatively impact Postbank’s product
portfolio and g
p
growth p
prospects
p
Cross-selling between DB and Postb
bank :
Cross-sell
Funding
‒
Made more costly and onerouss by
evolving regulation
‒
s
Limited by differing client needs
Postbank’s contribution to group-wid
de
funding and liquidity limited by regula
atory
constraints
Substantially less scope for revenue
synergies between Postbank and DB
Group-wide limits constrain
Postbank’s ability to efficiently deploy
its funding overhang
DB’s ability to fully realize value of
o Postbank’s acquisition eroded
in the face of changed regulatorry environment and our strategy
Deutsche Bank
Jürgen Fitschen and Anshu Jain
27 April 2015
22
2 Reshape retail: Postbank decconsolidation process and
ti li
timeline
Intention to launch squeeze-out
Next steps
 Cease integration efforts especially in IT
and middle/back-office operations
 To pprepare
p
the execution of our strategy,
gy,
we acquired additional 2.7% of Postbank
shares
Im
mmediately
 Revert to stand
stand-alone
alone business and
operating models
 Yet maintain the efficiency and service
 Our ownership moved from 94.1% to
quality improvements
96.8%
 Intention to launch squeeze-out at a
Postbank shareholders’ meeting by
August 2015
 Completion
C
l ti off squeeze-outt expected
t d att
the latest by year-end 2015
 Pursue squeeze-out of Postbank minorities
2Q
Q-4Q
2
2015
at Postbank shareholders’ meeting
g
 Prepare subsequent re-IPO process
 Squeeze-out provides us with flexibility
with regard to domination agreement
By
y end
2
2016
Deutsche Bank
Jürgen Fitschen and Anshu Jain
27 April 2015
 Launch re-IPO
23
2 Reshape retail: Transform our private and commercial
client
li t franchise
f
hi
“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 clients”
Client
Intelligence
Personal
advice
Digital
transformation
Private and
Commercial
Clients
Platform
Deutsche Bank
Relationship banking for advisoryfocused private, business and MidCap
clients in Germany and Europe
OmniIndustry-leading digital channels and
channel
more efficient physical network
distribution
Digital
g
access
Processes
Jürgen Fitschen and Anshu Jain
27 April 2015
Advisoryled client
franchise
Superior
product
offering
Focus on investment, mortgage and
business / MidCap solutions
State-ofthe-art
platform
Lean IT / operations platform through
standardization and reduced
complexity
24
2 Reshape retail: A leading advvisory bank
Substantial actions planned…
…to
o deliver our new PBC
 Sharpen distribution model
2016-2020
2016
2020
‒ Up to 200 branches closed by 2017
‒ Strengthen omni-channel
capabilities
 Continue to invest in efficiency and
service quality
 Invest in digital capabilities
‒ ~EUR 100m invested so far
‒ Targeting EUR 400-500m further
investments by 2020
 Optimize infrastructure and front-toback cost reduction
(1) Based on revenues
Deutsche Bank
 Leading
L
digitally-enabled advisory bank for >13m
c
clients
with strong home base in Europe
‒
No. 1 advisory bank in Germany(1) for >8m
No
private, business and MidCap clients
‒
Strongholds in five other attractive European
markets with in total ~5m clients
 Uplift
U
of asset productivity through emphasis on
i
investment
and insurance products
 Fully
F
digitized omni-channel distribution model
with ~500 specialized advisory centers in
w
G
Germany
y and premium
p
service
 Competitive
C
cost efficiency
Source: Company data
Jürgen Fitschen and Anshu Jain
27 April 2015
25
ore Digital Bank
3 Digitalize DB: Becoming a mo
Banking on the verge of major digital disruption
Investin
ng in disruptive technologies in financial services – e.g.
Deliiver
Custo
omer
Experrience
Tipping point
Digital Media
Captture
Ne
ew
Revenues
Consumer
Mainstream
clients
Traditional
Media
Ena
able
Ou
ur
Platfform
Targ
get
Ne
ew
Clie
ents
DB Innovation Labs
Nucleus
New banking propositions to:
‒ Offer new products; e.g. in payments,
messaging client data
messaging,
‒ Reach new client segments
‒ Expand to new geographies
Targeting up to EUR 1bn of incremental
group-wide investment through 2020(1)
New trends
(1) Of which EUR 400-500m relate to retail ; see page 25
Deutsche Bank
Autobahn App Market
FinanzPlaner 2.0
maxblue 2.0
Laggards
Banking
industry
Early
adopters
Banking via Apple Watch
Fingerprint login
Source: McKinsey
Jürgen Fitschen and Anshu Jain
27 April 2015
26
4 Grow GTB: Continue to investt in scale
Trajectory to build on
Why we want to grow
g
GTB
GTB performance(1)
IBIT
Revenues
In EUR bn
0.9
+36%
3.4
+23%
2010
1.2

Market le
eader in
‘annuity-- like’
business
s to corporate
and instittutional clients

High Retu
urn-onEquity bu
usiness

World-cla
ass cost
efficiency
y

Corporate
e ‘deposit
engine’ and
a net
liquidity provider
p
4.1
Indexed
2010
+12%
112
exposure supporting corporates
and financial institutions
■ EUR >1bn investment in our core
product engines
Germany
Europe
US
Asia
2014
(1) 2014 does not reflect C&A clear-out adjustments as per 1Q2015 disclosure
Deutsche Bank
■ EUR 50bn+ incremental leverage
2014
Global peer revenues(2)
100
Planned investments
Jürgen Fitschen and Anshu Jain
27 April 2015
(2) Peer set consis
sting of BoA, JPM, Citi, BNY, HSBC, State Street and Standard Chartered
27
ng on a strong trajectory
4 Grow Deutsche AWM: Buildin
Focused transformation...
...with strong delivery momentum
Select examples
Rationalization
Net New Assets
AuM, in EUR trn
In EUR bn
 Divested EUR 30bn non-core AuM
0.9
1.0
 De-listed and closed small funds
Integration
40
17
 Created global AM client coverage
 Integrated investment platforms
Simplification
(25)
2012
 Reduced 11 booking centers(1)
 Rationalized legal entities
 Decommissioned 126 IT applications
 Track record of consistent inflows
 Launched innovative products
 Expanded U/HNWI coverage
(1)Including AM manufacturing centers
(4) Excluding Abbey Life gross-up
Deutsche Bank
(2) Net, full-time equivalents 1Q2015 vs. 2Q2012
Jürgen Fitschen and Anshu Jain
27 April 2015
1Q15
Revenues(4)
In EUR bn
4.1
 Invested in platform efficiency
Growth
2014
IBIT(3)
 ~15% headcount reduction(2)
Transformation
1.2
4.4
~7x
1.0
0.3
0.2
2012
1.2
2014
1Q15
(3) 201
14 does not reflect C&A clear-out adjustments as per 1Q2015 disclosure
28
4 Grow Deutsche AWM: Invest to capture future growth
Significant global growth opportunities forr
the industry
A M in
AuM,
i USD trn
t
Balance Sheet:
U/HNWI growth
h
220
152
 Prudently grow lending balance sheet
5-10% p.a. to support client needs
5-6% p.a.
Wealth
Management
Planned investments to capture growth
Emerging
market growth
h
Client coverage:
 Increase U/HNWI relationship managers in
key markets by 15% in the next two years
 Increase product specialists
2013
2020E
Ageing
population
AuM, in USD trn
5-6% p.a.
Asset
Management
102
Alternatives
and Passive
69
2013
2020E
Custom
solutions
Investment performance and solutions:
 Develop innovative Retirement and
Strategic Beta offerings
 Further enhance Alternatives and MultiAsset investment capabilities
Operating model:
 Continue to streamline footprint to further
improve CIR
 Invest in technology and digital
capabilities to better serve clients
Sources: Credit Suisse Global Wealth Report 2014; PwC Asset Management 2020: A brave new wo
orld 2014; BCG Global WM Industry Survey 2014
Deutsche Bank
Jürgen Fitschen and Anshu Jain
27 April 2015
29
5 Rationalize our footprint: Centers of economic power
are shifting
hifti
Towards emerging markets
# of large caps in EM(1)
Towards mega-cities
GDP in largest 600 cities
>2x
>3x
2010
>2020
2007
# of UHNWI((2)) in top 25 cities
AuM in EM
+30%
>2x
2012
(1)
Companies with >USD 1bn in annual revenues
Deutsche Bank
>2020
>2020
(2) Individual with net worth of >USD 30m
Jürgen Fitschen and Anshu Jain
27 April 2015
2013
>2020
S
Source:
McKinsey, Knight Frank, PWC
30
5 Rationalize our footprint: Exiit or reduce our presence
while
hil iinvesting
ti in
i hi
high
h growth
th h
hubs
b
Key drivers of our footprint
optimization decisions
- De-emphasize
+
# of countries/presences
 Reducing complexity
 Market size and growth
China
CAGR 20142019, in %
(7)--(10)
70
 Importance for
international large caps /
MNCs
Representative 15(2)
offices
60 63
60-63
 Regulatory and political
ability to compete
Operating
locations
CAGR 20142020, in %
Growth 20112014, in %
~57
~13
7
~7
Real
GDP
environment / outlook
 DB market position /
Emphasize – examples
Wholesale
revenue pool
DB
revenues
India
CAGR 20142019, in %
55
CAGR 20142020, in %
Growth 20112014, in %
 Size of current local
~14
presence
~8
 Cost of operations
Today
y(1)
increasing
(1) One country exited compared to YE 2014
Deutsche Bank
(2) Including remote presences
Jürgen Fitschen and Anshu Jain
27 April 2015
Aspiration
p
Real
GDP
Wholesale
revenue pool
~10
DB
revenues
Source: McKinse
ey, DB Research
31
6 Transform our operating model: Redesigning operating
and
d governance models
d l
Strategy 2020
Strategy 2015+
Tod
day
Jun 2012
Comprehensive assessment of status quo
Operational Excellence launched
Raise
R
i llevell off efficiency:
ffi i
redesign
d i ffront-to-back
tt b k
processes and operations
Reduce complexity: right-size in line with
reduction of business perimeter
Initiatives to strengthen compliance,
remediate regulatory issues and improve
platform stability
Improve controls: continue to invest and modify
governance and organizational
g
g
model
Significant investments, hiring key people,
establishing organizational procedures
Enhance resolvability: simplify legal entity
set-up
Details of operating model and governance enhancement initiatives
to be announced in up to 90 days
Deutsche Bank
Jürgen Fitschen and Anshu Jain
27 April 2015
32
6 Transform our operating model: Top-down savings
t
targets
t
Target
In EUR bn
Gross cost
savings p.a.
Details on next page
Additional
gross savings
Remaining
2015 OpEx
savings
(Examples)
 Narrow perimeter (e.g., de-emph
hasizing of
product/client segments, locations)
 Increase efficiency (e.g., process streamlining, IT/Ops
platform
l f
optimization)
i i i )
 Modernize DB's non-retail IT infrrastructure/ application
footprint jointly with a strategic partner
p
 Complete roll-out of our strategicc global investment
management platform for Deutsche AWM
Cum. CtA
~3.5
~3.7
1.2
1
2(1)
1.0
1
0(2)
Additional cost
reductions p.a. Cum. CtA
 Deconsolidate Postbank
Disposals
 Completed NCOU exits
33
3.3
03
0.3
 Other portfolio measures
Note: Gross cost savings are countered by increasing cost from inflation, FX changes, cosst of growth, cost of regulatory compliance and other cost increases
(1) Reflects overall FY2015 OpEx savings already included in separately disclosed OpEx numbers; no adjustments from incremental savings
(2) Already included in separately
disclosed OpEx numbers
Deutsche Bank
Jürgen Fitschen and Anshu Jain
27 April 2015
33
6 Transform our operating model: Contributing
~EUR
EUR 3
3.5bn
5b additional
dditi
l organic
ic gross savings
i
In EUR bn
Target
Gross cost
sa ings p
savings
p.a.
a Cum.
C m CtA Structural
Str ct ral effficiency
ficienc le
levers
ers
Narrow
perimeter
Increase
efficiency
Total savings
~1 3
~1.3
~2.2
~3.5
~1 4
~1.4
Rightsizin
ng of FTE and platform in alignment with:
– Exit off structurally unprofitable businesses
– Countrry exits / non-presence
– Branch
h closures
~2.3
Unlock ad
dditional efficiency potential through
– Autom
mation of manual processes
– IT/Ops
s footprint optimization and insourcing
– Furthe
er non-compensation costs (e.g., procurement)
optimizzation
– Infrastructure functions re-alignment
~3.7
Targ
geting ~15% reduction of adjusted costs by 2020
Note: Gross cost savings are countered by increasing cost from inflation, FX changes, cosst of growth, cost of regulatory compliance and other cost increase
Deutsche Bank
Jürgen Fitschen and Anshu Jain
27 April 2015
34
Summary: Six decisions to resha
ape the Bank
Aspirations
1
2
Reposition
CB&S
 Deliver sustainable client-driven fra
anchise by:
‒ Reducing transactional businesss and focus product suite
‒ Invest in client solutions, advisory and equities
 Re-focus through deconsolidation of
o Postbank
 Transform DB into a leading digitally
ly-enabled
enabled advisory bank for
Reshape
retail
private and commercial clients
 Invest with focus on a) customer exxperience, b) revenue
3
Digitalize
DB
4
Grow
GTB and
Deutsche AWM
5
Rationalize
our footprint
 Rationalize our geographic footprin
nt
 Invest in high growth hubs (e.g., Ch
hina, India)
 Redesign our operating and govern
nance model to achieve
6
Transform
our operating
model
opportunities c) enable our platform
opportunities,
m and d) new clients
m,
 Invest in scaling-up GTB
 Aggressively invest in future growth
h of Deutsche AWM
higher efficiency, reduced complexity, even stronger controls
and easier resolvability
 Leverage reduction:
gross ~EUR 200bn
200bn,
net ~EUR 130-150bn
 Net leverage reduction of
~EUR 140bn
 Closure of up to 200
branches
 Group-wide net
investment of up
p to
EUR 1bn by 2020
 Increase in leverage
exposure by 30-40%
 P&L investment of
>EUR 1.5bn
 Exit / reduction of
presence in 7-10
countries
 Changes to governance
and structure
 Additional ~EUR 3.5bn
gross savings
Note: Gross cost savings are countered by increasing cost from inflation, FX changes, cosst of growth, cost of regulatory compliance and other cost increases
Deutsche Bank
Jürgen Fitschen and Anshu Jain
27 April 2015
35
Agenda
1
Taking stock
2
Strategy 2020
3
Delivering value
Deutsche Bank
Jürgen Fitschen and Anshu Jain
27 April 2015
36
Result: A reshaped business mod
del
Targeted indicative resource utilization (CRD4 exposure) by 2020
 Change 2020 vs. 2014
AffluMass ent / Corpretail(1) HNWI orates
Institutions / other
2014





2020
Advi- Cash Asset
sory mgmt mgmt Sales & trading
Lending(1)
2014
Germany(1)
Europe (ex. GY)

Americas
Asia


 Adapting our product
and resource
deployment
accordingly


2020

Products

 Serving client
segments
g
which
offer mutually
beneficial
partnerships in
services in which we
excel
Clients

 Re-affirming our
commitment to
clients:
li t att th
the center
t
of what we do
2014
2020

Regions

(1) 2014 including all of Postbank; 2020 excluding Postbank
Deutsche Bank
Jürgen Fitschen and Anshu Jain
27 April 2015
37
Germany: Remaining among the market leaders across all
our businesses
b i
Investment Banking – Corporate Finance
Retail Banking
Fees FY14
Fees,
FY14, in EUR m
2020
Public Peer
sector
banks Peer
370
Peer
~150
Peer
~150
Peer
Private
sector Peer
banks
Peer
~110
Peer
~100
Peer
29
21
4
~120
Peer
Net revenues,
revenues FY13/FY14
FY13/FY14, in EUR bn
~90
90
Peer
Asset Management(1)
4 2020
3
2
2
Wealth Management
Assets under Management, FY14, in EUR bn
2020
Assets under Management, FY14, in EUR bn
211
125
Peer
~113
Peer
Peer
~112
Peer
~50
Peer
~111
Peer
~50
Peer
~39
~40
~40
~25
Peer
Peer
~24
Peer
Deutsche Bank
~55
Peer
Peer
(1) Public funds including exchange traded products
Source: Company data, Dealogic, BVI
2020
(2)
~35
(2) Including Advisory Banking for wealthy private clients in PBC
Jürgen Fitschen and Anshu Jain
27 April 2015
38
Medium term ambitions
Our targets
Leverage
ratio
≥5%
CET1
ratio
~11%
11%
RoTE(1)
>10%
Organic gross
savings
~EUR 3.5bn
CIR
~65%
Our aspiration
p
Payout ratio(2)
Aspiration to deliver 50%+ dividend payout ratio
Note: Gross cost savings
g are countered by
y increasing
g cost from inflation,, FX changes,
g , cost of g
growth,, cost of regulatory
g
y compliance
p
and other cost increases
(1) RoTE: Post-tax Return on Tangible Equity is calculated as net income (loss) attributable to share
eholders as a percentage of average tangible shareholders' equity. Net income (loss) attributable
to shareholders is defined as Net income (loss) excluding post-tax income (loss) attributable to non-controlling interests. Tangible shareholders' equity is the shareholders’ equity per balance sheet
excluding goodwill and other intangible assets
(2) Through dividends and/or share buybacks
Deutsche Bank
Jürgen Fitschen and Anshu Jain
27 April 2015
39
What comes next
Today
Strategy 2020 announcement
Operating
model review
Footprint
decisions
Divisional and
functional strategies
 Refine key levers
 Design
n detailed transformation roadmap
 Refine g
governance and operating
p
g model
 Finalize
e outcomes of g
global country
y review
 Engage
e stakeholders and initiate implementation
 Breakd
down strategic roadmap into detailed
division
nal and functional plans
 Seque
S
nce change
h
managementt
In up to 90 days Follow-up announcem
ment
Deutsche Bank
Jürgen Fitschen and Anshu Jain
27 April 2015
40
Strategy 2020: Focusing Deutsch
he Bank to deliver value
A leading
g global
g
bank based in Germany
y
What’s constant
What changes
Client-centricity: placing our clients
at the centre of what we do
Refocusing on clients who offer
mutually beneficial partnerships
Keeping a global footprint
Moving toward a more focused
geographic reach
Maintaining a universal banking
product offering
Tightening our product perimeter –
not all things to all people
Proactive stance on future regu
ulatory direction and robust controls
Deutsche Bank
Jürgen Fitschen and Anshu Jain
27 April 2015
41
Cautionary statements
This presentation contains forward-looking statements. Forward-looking statements are statements that are not
hi t i l facts;
historical
f t they
th include
i l d statements
t t
t about
b t our beliefs
b li fs and
d expectations
t ti
and
d the
th assumptions
ti
underlying
d l i them.
th
These statements are based on plans, estimates an
nd projections as they are currently available to the
management of Deutsche Bank. Forward-looking statements therefore speak only as of the date they are made,
t
in light of new information or future events.
and we undertake no obligation to update publicly any of them
By their very nature, forward-looking statements involve
e risks and uncertainties. A number of important factors
could therefore cause actual results to differ materially from those contained in any forward-looking statement.
Such factors include the conditions in the financial markets in Germany, in Europe, in the United States and
elsewhere from which we derive a substantial portion of our
o revenues and in which we hold a substantial portion of
our assets, the development of asset prices and marrket volatility, potential defaults of borrowers or trading
counterparties, the implementation of our strategic initiatives, the reliability of our risk management policies,
procedures and methods, and other risks referenced in our filings with the U.S. Securities and Exchange
Commission
Commission.
Such
factors
are
described
in
detail
in
our
SEC
Form
20-F of 20 March 2015 under the heading “Risk Factors.” Copies of this document are readily available upon
request or can be downloaded from www.db.com/ir.
presentation may
y contain non-IFRS financial meas
sures. For a reconciliation to directly
y comparable
p
figures
g
This p
reported under IFRS, to the extent such reconciliation is not provided in this presentation, refer to the 1Q2015
p
and available at www.db.com/ir.
Financial Data Supplement, which is accompanying this presentation
Deutsche Bank
Jürgen Fitschen and Anshu Jain
27 April 2015
42