Results of Operations by Segment

The following is a discussion of the results of our business segments. See Note [2] to the consolidated financial statements for information regarding

  • our organizational structure;
  • effects of significant acquisitions and divestitures on segmental results;
  • changes in the format of our segment disclosure;
  • the framework of our management reporting systems;
  • consolidating and other adjustments to the total results of operations of our business segments;
  • definitions of non-GAAP financial measures that are used with respect to each segment, and
  • the rationale for including or excluding items in deriving the measures.

The criterion for segmentation into divisions is our organizational structure as it existed at December 31, 2007. Segment results were prepared in accordance with our management reporting systems.

2007


in € m. (except percentages)

Corporate
and In-
vestment
Bank

Private
Clients
and Asset
Management

Corporate Invest-
ments

Total
Manage-
ment
Reporting

Consolida-
tion & Ad-
justments

Total
Consoli-
dated

N/M – Not meaningful

1

Includes gain from the sale of industrial holdings (Fiat S.p.A., Linde AG and Allianz SE) of € 514 million, income from equity method investments (Deutsche Interhotel Holding GmbH & Co. KG) of € 178 million, and gains from the sale of premises (sale/leaseback transaction of 60 Wall Street) of € 317 million, which are excluded from our target definition.

2

The sum of corporate divisions does not necessarily equal the total of the corresponding group division because of consolidation items between corporate divisions, which are to be eliminated on group division level. The same approach holds true for the sum of group divisions compared to ‘Total Consolidated’.

3

For management reporting purposes goodwill and other intangible assets with indefinite lives are explicitly assigned to the respective divisions. Average active equity is first allocated to divisions according to goodwill and intangible assets; remaining average active equity is allocated to divisions in proportion to the economic capital calculated for them.

4

For the calculation of pre-tax return on average equity please refer to Note [2]. For ‘Total consolidated’, pre-tax return on average shareholders’ equity is 24 %.

Net revenues

19,092

10,129

1,517

30,738

7

30,7451

Provision for credit losses

109

501

3

613

(1)

612

Total noninterest expenses

13,802

7,561

220

21,583

(200)

21,384

therein:

 

 

 

 

 

 

Policyholder benefits and claims

116

73

–

188

5

193

Impairment of intangible assets

–

74

54

128

–

128

Restructuring activities

(4)

(9)

(0)

(13)

–

(13)

Minority interest

34

8

(5)

37

(37)

–

Income (loss) before income tax expense

5,147

2,059

1,299

8,505

244

8,749

Cost/income ratio

72 %

75 %

15 %

70 %

N/M

70 %

Assets2

1,895,756

156,391

13,002

2,011,654

8,695

2,020,349

Average active equity3

20,714

8,539

473

29,725

121

29,846

Pre-tax return on average active equity4

25 %

24 %

N/M

29 %

N/M

29 %

2006


in € m. (except percentages)

Corporate
and In-
vestment
Bank

Private
Clients
and Asset
Management

Corporate Invest-
ments

Total
Manage-
ment
Reporting

Consolida-
tion & Ad-
justments

Total
Consoli-
dated

N/M – Not meaningful

1

Includes gain from the sale of the bank’s remaining holding in EUROHYPO AG of € 131 million, gains from the sale of industrial holdings (Linde AG) of € 92 million, and a settlement of insurance claims in respect of business interruption losses and costs related to the terrorist attacks of September 11, 2001 of € 125 million, which are excluded from our target definition.

2

The sum of corporate divisions does not necessarily equal the total of the corresponding group division because of consolidation items between corporate divisions, which are to be eliminated on group division level. The same approach holds true for the sum of group divisions compared to ‘Total Consolidated’.

3

For management reporting purposes goodwill and other intangible assets with indefinite lives are explicitly assigned to the respective divisions. Average active equity is first allocated to divisions according to goodwill and intangible assets; remaining average active equity is allocated to divisions in proportion to the economic capital calculated for them.

4

For the calculation of pre-tax return on average equity please refer to Note [2]. For ‘Total consolidated’ pre-tax return on average total shareholders’ equity is 28 %.

Net revenues

18,802

9,315

574

28,691

(197)

28,4941

Provision for credit losses

(94)

391

2

298

(0)

298

Total noninterest expenses

12,789

7,000

214

20,003

(147)

19,857

therein:

 

 

 

 

 

 

Policyholder benefits and claims

–

63

–

63

4

67

Impairment of intangible assets

–

–

31

31

–

31

Restructuring activities

99

91

1

192

–

192

Minority interest

23

(11)

(3)

10

(10)

–

Income (loss) before income tax expense

6,084

1,935

361

8,380

(41)

8,339

Cost/income ratio

68 %

75 %

37 %

70 %

N/M

70 %

Assets2

1,468,321

130,642

17,783

1,576,714

7,779

1,584,493

Average active equity3

17,105

7,206

1,057

25,368

100

25,468

Pre-tax return on average active equity4

36 %

27 %

34 %

33 %

N/M

33 %