2006 was a very good year on the international stock markets. The DAX German Share Index climbed to 6,597 points, its highest level since February 2001. With a gain of 22%, the DAX outperformed the Euro STOXX 50 (up 15%) and the Dow Jones Industrial Average (up 17%). In this favourable environment, and especially against the background of a positive profit outlook for our bank, the Deutsche Bank share outperformed the market, rising 24% for the year, or 2 percentage points more than the DAX. This came on top of a similar gain in 2005.

The Deutsche Bank share got off to a promising start at the beginning of last year. After a sustained upswing, our share price touched the € 100 mark in May for the first time in five years. Growing concerns over rising interest rates and inflation, especially in the U.S.A., and the widespread fears of a cyclical downswing then prompted many investors to take profits. This put pressure on the DAX and also on our share, which declined to € 80.74 in June, slightly below its level at the beginning of the year. Contrary to expectations, however, business activity remained robust. Investors gradually regained their confidence in the face of softening oil prices, easing inflationary pressures and improved prospects for corporate profits. The still relatively favourable valuation of German quoted companies, and the lack of attractive alternatives outside the stock market provided additional stimulus. The DAX stabilized and moved upwards steadily without substantial volatility. The momentum in the Deutsche Bank share also contributed to this, with the price reaching its annual high at € 103.29. Our share then eased slightly to € 101.34 by the end of the year.

As measured by long-term relative returns, the Deutsche Bank share is also a very attractive investment. An investor who bought Deutsche Bank shares for the equivalent of € 10,000 at the beginning of 1980, reinvested dividends and subscribed to capital increases without injecting additional funds, would have had a portfolio worth € 166,775 at the end of 2006. This corresponds to an average return of 11% per annum - outperforming the DAX, which rose by roughly 10% per annum over the same period.

Deutsche Bank concentrates trading in its shares on liquid stock exchanges

Following a detailed review, Deutsche Bank started in May to concentrate the listings of its Global Registered Share on those stock exchanges which offer most liquidity for investors trading in its shares - predominantly our German home market, followed by the New York Stock Exchange, which together accounted for roughly 99% of trading volume in 2005. Accordingly, in 2006 trading in our share was terminated at the stock exchanges of Amsterdam, Brussels, London, Luxembourg, Paris, Tokyo, Vienna and Zurich.