Regulatory Capital

 (unaudited)

The following table presents the risk-weighted assets, regulatory capital and capital adequacy ratios for the Group of companies consolidated for regulatory purposes. Amounts presented are pursuant to the revised capital framework presented by the Basel Committee (“Basel II”) as adopted into German law by the German Banking Act and the Solvency Regulation (“Solvabilitätsverordnung”).

in € m.
(unless stated otherwise)

Jun 30, 2010

Dec 31, 2009

1

A multiple of the Group’s value-at-risk, calculated with a confidence level of 99 % and a ten-day holding period.

2

Excluding transitional items pursuant to section 64h (3) German Banking Act.

Credit risk

244,613

217,003

Market risk1

24,670

24,880

Operational risk

34,177

31,593

Total risk-weighted assets

303,460

273,476

Tier 1 capital2

34,316

34,406

thereof: Core Tier 1 capital2

22,752

23,790

Tier 2 capital

1,858

3,523

Tier 3 capital

Total regulatory capital2

36,174

37,929

Tier 1 capital ratio2

11.3 %

12.6 %

Core Tier 1 capital ratio2

7.5 %

8.7 %

Total capital ratio2

11.9 %

13.9 %

The following table presents a summary of the components of the Group’s Tier 1 and Tier 2 capital.

in € m.

Jun 30, 2010

Dec 31, 2009

1

Pursuant to section 10 (6) and section 10 (6a) in conjunction with section 10a German Banking Act.

2

Excluding transitional items pursuant to section 64h (3) German Banking Act.

Tier 1 capital:

 

 

Core Tier 1 capital:

 

 

Common shares

1,589

1,589

Additional paid-in capital

14,917

14,830

Retained earnings, common shares in treasury, equity classified as obligation to purchase common shares, foreign currency translation, noncontrolling interests

26,067

21,807

Items to be fully deducted from Tier 1 capital (inter alia goodwill and intangible assets)

(12,316)

(10,238)

Items to be partly deducted from Tier 1 capital:

 

 

Deductible investments in banking, financial and insurance entities

(2,277)

(2,120)

Securitization positions not included in risk-weighted assets1

(4,165)

(1,033)

Excess of expected losses over risk provisions

(1,063)

(1,045)

Items to be partly deducted from Tier 1 capital1,2

(7,505)

(4,198)

Core Tier 1 capital

22,752

23,790

Additional Tier 1 capital:

 

 

Noncumulative trust preferred securities

11,564

10,616

Additional Tier 1 capital

11,564

10,616

Total Tier 1 capital

34,316

34,406

Tier 2 capital:

 

 

Unrealized gains on listed securities (45 % eligible)

519

331

Cumulative preferred securities

300

294

Qualified subordinated liabilities

8,544

7,096

Items to be partly deducted from Tier 2 capital1,2

(7,505)

(4,198)

Total Tier 2 capital

1,858

3,523

Basel II requires the deduction of goodwill from Tier 1 capital. However, for a transitional period, section 64h (3) German Banking Act allows the partial inclusion of certain goodwill components in Tier 1 capital. 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 June 30, 2010, the transitional item amounted to € 445 million. In the Group’s reporting to the German regulatory authorities, the Tier 1 capital, total regulatory capital and the total risk-weighted assets shown above were increased by this amount. Correspondingly, the Group’s reported Tier 1 and total capital ratios including this item were 11.4 % and 12.0 %, respectively, at the end of the quarter.

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