2010 to 2009 Six Months Comparison


For the first six months of 2010, net revenues were € 16.2 billion, up 6 % versus € 15.2 billion for the first six months of 2009. Net revenues in the first six months of 2010 reflected net mark-downs of € 298 million and the aforementioned charge related to Ocala Funding LLC of approximately € 270 million, while net revenues in the prior year period reflected mark-downs and impairments of € 1.5 billion.

In CB&S, net revenues in Sales & Trading (debt and other products) were € 5.9 billion, a decrease of € 258 million, or 4 %, compared to the first six months of 2009. The reduction reflects lower revenues in Foreign Exchange, Money Markets and Rates due to lower volatility and tighter bid-offer spreads compared to the first half of 2009. These were partially offset by strong Credit Trading revenues and the non-recurrence of losses from legacy positions, as well as lower mark-downs in the first half of 2010. In Sales & Trading (equity) revenues were € 1.6 billion, an increase of € 444 million, or 39 %, versus the first six months of 2009. The increase in revenues compared to the first half 2009 reflected the non-recurrence of losses incurred in Equity Derivatives in the first quarter of the previous year. Prime Finance and Cash Equities showed a solid performance in an increasingly competitive environment. Revenues in Origination and Advisory were € 1.1 billion in the first six months of 2010, an increase of € 32 million compared to the first six months of 2009. In Advisory, revenues were € 256 million, up € 54 million from first half of 2009 reflecting increased market activity and market share. Debt Origination revenues increased by € 25 million, or 4 %, reflecting gains in market share and rank. Equity Origination revenues decreased by € 47 million, or 16 %, reflecting lower deal activity compared to the prior year period. Loan products revenues were € 863 million in the first six months of 2010, a decrease of € 267 million, or 24 %, from the same period last year. The decrease was primarily due to mark-to-market losses on loans held at fair value. Net revenues from other products were € 135 million in the first six months, an improvement of € 770 million from the first half 2009. The prior year period included an impairment charge of € 500 million relating to The Cosmopolitan Resort and Casino property and private equity investment losses, both recorded in the first quarter 2009. On April 1, 2009, management responsibility for The Cosmopolitan Resort and Casino property changed from CB&S to the Group Division CI.

GTB generated net revenues of € 1.7 billion in the first six months of 2010, an increase of € 386 million, or 29 %, compared to the first six months 2009. GTB’s six months performance has been positively impacted by the first time consolidation of the business acquired from ABN AMRO. This led to additional net revenues of € 338 million, thereof € 208 million representing negative goodwill. Excluding the impact of the acquisition, the increase was driven by continuing growth in Trade Finance, as well as a strong performance in the Trust & Security Services business.

AWM reported net revenues of € 1.9 billion for the first half of 2010, a significant increase of € 738 million, or 65 %, compared to the first half of 2009. Revenues in the first half of 2010 included € 291 million related to Sal. Oppenheim Group, which was consolidated for the first time in the first quarter 2010. Discretionary portfolio management/fund management revenues in AM were € 90 million higher, driven by improving market conditions and higher asset-based fees. Advisory/brokerage revenues increased by € 92 million compared to the first six months of 2009 due to increased transaction volumes. Revenues from other products were € 409 million higher in the first six months of 2010 compared to the prior year period, resulting from the inclusion of Sal. Oppenheim Group and the non-recurrence of prior year impairment charges of € 230 million related to RREEF investments.

In PBC, net revenues were € 2.9 billion, up € 61 million, or 2 %, compared to the first half of 2009. Revenues from portfolio/fund management, credit products and deposit and payment services all increased. These revenue increases were partially offset by a decrease in revenues from other products, reflecting results in PBC’s asset and liability management function and a gain on the disposal of an available for sale security in the prior year period.

Net revenues in CI were € 196 million in the first six months 2010 and included € 263 million related to Deutsche Postbank and € 39 million from the sale of investments, partly offset by an impairment charge of € 124 million on The Cosmopolitan Resort and Casino property. In the first six months 2009, net revenues were € 813 million. These included € 821 million related to Deutsche Postbank, € 192 million from the sale of industrial holdings and mark-to-market gains from our option on Hua Xia Bank. These gains in 2009 were partly offset by impairment charges of € 302 million on our industrial holdings.

During the first half of 2010, provision for credit losses was € 506 million, versus € 1.5 billion in the same period last year. Provision for credit losses in the current period included € 154 million related to assets reclassified in accordance with IAS 39, compared to € 726 million in the prior year period. In CIB, provision for credit losses was € 167 million, versus € 1.1 billion in the first half of 2009. This decrease was driven primarily by lower charges taken in respect of assets reclassified in accordance with IAS 39 as well as a slightly stronger credit environment. In PCAM, provision for credit losses was € 349 million, versus € 391 million in the first six months of 2009, predominantly reflecting lower provisions in PBC.

Noninterest expenses for the first six months of 2010 were € 11.3 billion, up 8 % versus € 10.5 billion for the first six months of 2009. Compensation and benefits of € 6.6 billion were up 8 %. This development was primarily driven by increased compensation deferred from previous years and includes accelerated amortization of deferred compensation for employees eligible for career retirement as well as the U.K. bank payroll tax of € 176 million. The inclusion of Sal. Oppenheim Group and the commercial banking activities from ABN AMRO increased compensation by € 209 million and € 34 million, respectively. The ratio of compensation and benefits to revenues was 41 % for the first six months of 2010, versus 40 % in the prior year period. General and administrative expenses for the first six months were € 4.6 billion, up 9 % versus the first half of 2009. This increase reflected higher IT and professional services costs, foreign exchange movements, the aforementioned acquisitions and related integration costs. Other noncompensation expenses in the reporting period included an impairment charge of € 29 million on intangible assets and € 140 million policyholder benefits and claims.

Income before income taxes for the first six months of 2010 was € 4.3 billion, versus € 3.1 billion for the first six months of 2009. Pre-tax return on average active equity was 22 %, versus 19 % in the prior year period. Per our target definition, pre-tax return on average active equity was 21 %, versus 20 % in the prior year period.

Net income for the first six months of 2010 was € 2.9 billion, versus € 2.3 billion for the first six months of 2009. The tax expense of € 1.4 billion recorded for the first half of 2010, versus a tax expense of € 876 million in the first half of 2009, benefited from the tax exempt negative goodwill related to the business acquired from ABN AMRO, partly offset by the non-tax deductible bank payroll tax in the U.K. Diluted earnings per share were € 4.35, versus € 3.53 in the prior year period.