Part of the Consolidated Financial Statements as of 31 December 2009; audited by KPMG AG Wirtschaftsprüfungsgesellschaft.

[5] Net Interest Income and Net Gains (Losses) on Financial Assets/Liabilities at Fair Value through Profit or Loss


Net Interest Income

The following are the components of interest and similar income and interest expense.

in € m.

2009

2008

2007

Interest and similar income:

 

 

 

Interest-earning deposits with banks

633

1,313

1,384

Central bank funds sold and securities purchased under resale agreements

320

964

1,090

Securities borrowed

67

1,011

3,784

Financial assets at fair value through profit or loss

13,634

34,938

42,920

Interest income on financial assets available for sale

496

1,260

1,596

Dividend income on financial assets available for sale

91

312

200

Loans

10,555

12,269

10,901

Other

1,157

2,482

2,800

Total interest and similar income

26,953

54,549

64,675

Interest expense:

 

 

 

Interest-bearing deposits

5,119

13,015

17,371

Central bank funds purchased and securities sold under repurchase agreements

280

4,425

6,869

Securities loaned

269

304

996

Financial liabilities at fair value through profit or loss

4,503

14,811

20,989

Other short-term borrowings

798

1,905

2,665

Long-term debt

2,612

5,273

4,912

Trust preferred securities

680

571

339

Other

233

1,792

1,685

Total interest expense

14,494

42,096

55,826

Net interest income

12,459

12,453

8,849

Interest income recorded on impaired financial assets was € 133 million, € 65 million and € 57 million for the years ended December 31, 2009, 2008 and 2007, respectively.

 

Net Gains (Losses) on Financial Assets/Liabilities at Fair Value through Profit or Loss

The following are the components of net gains (losses) on financial assets/liabilities at fair value through profit or loss.

in € m.

2009

2008

2007

1

Includes € 176 million, € 17.9 billion and € 3.5 billion from securitization structures for the years ended December 31, 2009, December 31, 2008 and December 31, 2007, respectively. Fair value movements on related instruments of € (49) million, € (20.1) billion and € (4.4) billion for December 31, 2009, December 31, 2008 and December 31, 2007, respectively, are reported within trading income. Both are reported under Sales & Trading (debt and other products). The total of these gains and losses represents the Group’s share of the losses in these consolidated securitization structures.

Trading income:

 

 

 

Sales & Trading (equity)

2,148

(9,615)

3,797

Sales & Trading (debt and other products)

5,668

(25,369)

(427)

Total Sales & Trading

7,816

(34,984)

3,370

Other trading income

(2,182)

1,155

548

Total trading income

5,634

(33,829)

3,918

Net gains (losses) on financial assets/liabilities designated at fair value through profit or loss:

 

 

 

Breakdown by financial asset/liability category:

 

 

 

Securities purchased/sold under resale/repurchase agreements

(73)

(41)

Securities borrowed/loaned

(2)

(4)

33

Loans and loan commitments

3,929

(4,016)

(570)

Deposits

(162)

139

10

Long-term debt1

(2,550)

28,630

3,782

Other financial assets/liabilities designated at fair value through profit or loss

333

(912)

43

Total net gains (losses) on financial assets/liabilities designated at fair value through profit or loss

1,475

23,837

3,257

Total net gains (losses) on financial assets/liabilities at fair value through profit or loss

7,109

(9,992)

7,175

Combined Overview

The Group’s trading and risk management businesses include significant activities in interest rate instruments and related derivatives. Under IFRS, interest and similar income earned from trading instruments and financial instruments designated at fair value through profit or loss (e.g., coupon and dividend income), and the costs of funding net trading positions, are part of net interest income. The Group’s trading activities can periodically shift income between net interest income and net gains (losses) of financial assets/liabilities at fair value through profit or loss depending on a variety of factors, including risk management strategies. In order to provide a more business-focused presentation, the Group combines net interest income and net gains (losses) of financial assets/liabilities at fair value through profit or loss by group division and by product within the Corporate and Investment Bank.

The following table presents data relating to the Group’s combined net interest and net gains (losses) on financial assets/liabilities at fair value through profit or loss by group division and, for the Corporate and Investment Bank, by product, for the years ended December 31, 2009, 2008 and 2007, respectively.

in € m.

2009

2008

2007

1

Includes the net interest spread on loans as well as the fair value changes of credit default swaps and loans designated at fair value through profit or loss.

2

Includes net interest income and net gains (losses) on financial assets/liabilities at fair value through profit or loss of origination, advisory and other products.

Net interest income

12,459

12,453

8,849

Net gains (losses) on financial assets/liabilities at fair value through  profit or loss

7,109

(9,992)

7,175

Total net interest income and net gains (losses) on  financial assets/liabilities at fair value through profit or loss

19,568

2,461

16,024

Net interest income and net gains (losses) on financial assets/liabilities at fair value through profit or loss by Group Division/CIB product:

 

 

 

Sales & Trading (equity)

2,047

(1,895)

3,117

Sales & Trading (debt and other products)

9,735

317

7,483

Total Sales & Trading

11,782

(1,578)

10,600

Loan products1

767

1,014

499

Transaction services

1,177

1,358

1,297

Remaining products2

239

(1,821)

(118)

Total Corporate and Investment Bank

13,966

(1,027)

12,278

Private Clients and Asset Management

4,160

3,871

3,529

Corporate Investments

793

(172)

157

Consolidation & Adjustments

649

(211)

61

Total net interest income and net gains (losses) on  financial assets/liabilities at fair value through profit or loss

19,568

2,461

16,024

Service Functions

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