06 – 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.

2010

2009

2008

Interest and similar income:

 

 

 

Interest-earning deposits with banks

691

633

1,313

Central bank funds sold and securities purchased under resale agreements

446

320

964

Securities borrowed

133

67

1,011

Financial assets at fair value through profit or loss

15,589

13,634

34,938

Interest income on financial assets available for sale

700

496

1,260

Dividend income on financial assets available for sale

137

91

312

Loans

10,222

10,555

12,269

Other

861

1,157

2,482

Total interest and similar income

28,779

26,953

54,549

Interest expense:

 

 

 

Interest-bearing deposits

3,800

5,119

13,015

Central bank funds purchased and securities sold under repurchase agreements

301

280

4,425

Securities loaned

278

269

304

Financial liabilities at fair value through profit or loss

6,019

4,503

14,811

Other short-term borrowings

375

798

1,905

Long-term debt

1,490

2,612

5,273

Trust preferred securities

781

680

571

Other

152

233

1,792

Total interest expense

13,196

14,494

42,096

Net interest income

15,583

12,459

12,453

Interest income recorded on impaired financial assets was € 146 million, € 133 million and € 65 million for the years ended December 31, 2010, 2009 and 2008, 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.

2010

2009

2008

1

Includes € 39 million, € (176) million and € 17.9 billion from securitization structures for the years ended December 31, 2010, December 31, 2009 and December 31, 2008, respectively. Fair value movements on related instruments of € 163 million, € (49) million and € (20.1) billion for December 31, 2010, December 31, 2009 and December 31, 2008, 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)

198

2,148

(9,615)

Sales & Trading (debt and other products)

3,429

5,440

(25,212)

Total Sales & Trading

3,627

7,588

(34,827)

Other trading income

31

(1,954)

998

Total trading income

3,658

5,634

(33,829)

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

35

(73)

Securities borrowed/loaned

(2)

(4)

Loans and loan commitments

(331)

3,929

(4,016)

Deposits

(13)

(162)

139

Long-term debt1

83

(2,550)

28,630

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

(78)

333

(912)

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

(304)

1,475

23,837

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

3,354

7,109

(9,992)

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 & 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 & Investment Bank, by product, for the years ended December 31, 2010, 2009 and 2008, respectively.

in € m.

2010

2009

2008

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

15,583

12,459

12,453

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

3,354

7,109

(9,992)

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

18,937

19,568

2,461

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)

2,266

2,047

(1,895)

Sales & Trading (debt and other products)

9,204

9,725

409

Total Sales & Trading

11,469

11,772

(1,486)

Loan products1

778

777

922

Transaction services

1,497

1,180

1,368

Remaining products2

336

240

(1,821)

Total Corporate & Investment Bank

14,081

13,969

(1,017)

Private Clients and Asset Management

4,708

4,157

3,861

Corporate Investments

(184)

793

(172)

Consolidation & Adjustments

331

649

(211)

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

18,937

19,568

2,461

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