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REGULATORY CAPITAL
The following two tables present a summary of the Group’s regulatory capital and risk position. Amounts presented for 2008 are pursuant to the revised capital framework presented by the Basel Committee in 2004 (“Basel II”) as adopted into German law by the German Banking Act and the Solvency Regulation (“Solvabilitätsverordnung”). The amounts presented for 2007 are based on the Basel I framework and thus calculated on a non-comparative basis.
|
in € m. |
Sep 30, 2008 |
Dec 31, 2007 | ||||
|---|---|---|---|---|---|---|
| ||||||
|
|
Basel II |
Basel I | ||||
|
Tier 1 capital: |
|
| ||||
|
Common shares |
1,461 |
1,358 | ||||
|
Additional paid-in capital |
17,608 |
15,808 | ||||
|
Retained earnings, common shares in treasury, equity classified as obligation to purchase common shares, foreign currency translation, minority interest |
18,145 |
17,717 | ||||
|
Noncumulative |
8,742 |
5,602 | ||||
|
Items to be fully deducted from Tier 1 capital (inter alia |
(12,069) |
(12,165) | ||||
|
Items to be partly deducted from Tier 1 capital1 |
(1,102) |
N/A | ||||
|
Total Tier 1 capital |
32,785 |
28,320 | ||||
|
Tier 2 capital: |
|
| ||||
|
Unrealized gains on listed securities (45 % eligible) |
39 |
1,472 | ||||
|
Other inherent loss allowance |
N/A |
358 | ||||
|
Cumulative preferred securities |
1,198 |
841 | ||||
|
Qualified subordinated liabilities |
7,648 |
7,058 | ||||
|
Items to be partly deducted from Tier 2 capital1 |
(1,102) |
N/A | ||||
|
Total Tier 2 capital |
7,783 |
9,729 | ||||
|
Available Tier 3 capital |
– |
– | ||||
|
Total regulatory capital |
40,568 |
38,049 | ||||
REGULATORY RISK POSITION AND CAPITAL ADEQUACY RATIOS
|
in € m. |
Sep 30, 2008 |
Dec 31, 2007 | ||
|---|---|---|---|---|
| ||||
|
|
Basel II |
Basel I | ||
|
260,132 |
314,845 | |||
|
21,646 |
13,973 | |||
|
37,670 |
N/A | |||
|
Total risk position |
319,448 |
328,818 | ||
|
Tier 1 capital ratio in % |
10.3 % |
8.6 % | ||
|
Total capital ratio in % |
12.7 % |
11.6 % | ||
Basel II requires the deduction of goodwill from Tier 1 capital. However, for a transitional period the German Banking Act allows the partial inclusion of certain goodwill components in Tier 1 capital pursuant to KWG section 64h (3). While such 
goodwill components are not included in the regulatory capital and capital adequacy ratios shown above, the Group makes use of this transition rule in its capital adequacy reporting to the German regulatory authorities.
As of September 30, 2008, the transitional item amounted to € 1,127 million. In the Group’s reporting to the German regulatory authorities, the Tier 1 capital, total regulatory capital and the total risk position shown above were increased by this amount. Correspondingly, the Group’s reported Tier 1 and total capital ratios including this item were 10.6 % and 13.0 % at the end of the quarter.
