38 – Related Party Transactions


Parties are considered to be related if one party has the ability to directly or indirectly control the other party or exercise significant influence over the other party in making financial or operational decisions. The Group’s related parties include

  • key management personnel, close family members of key management personnel and entities which are controlled, significantly influenced by, or for which significant voting power is held by key management personnel or their close family members,
  • subsidiaries, joint ventures and associates and their respective subsidiaries, and
  • post-employment benefit plans for the benefit of Deutsche Bank employees.

The Group has several business relationships with related parties. Transactions with such parties are made in the ordinary course of business and on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with other parties. These transactions also did not involve more than the normal risk of collectibility or present other unfavorable features.

Transactions with Key Management Personnel

Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of Deutsche Bank, directly or indirectly. The Group considers the members of the Management Board and of the Supervisory Board to constitute key management personnel for purposes of IAS 24.

The following table presents the compensation expense of key management personnel.

in € m.

2011

2010

2009

1

Prior year amount adjusted for expense of € 5 million in respect of Equity Upfront Awards granted to the members of the Management Board for 2010 financial year.

Short-term employee benefits

14

23

22

Post-employment benefits

3

3

3

Other long-term benefits

6

3

Termination benefits

2

Share-based payment

5

111

7

Total

28

42

32

The above mentioned table does not contain compensation that employee representatives and former board members on the Supervisory Board have received. The aggregated compensation paid to such members for their services as employees of Deutsche Bank or status as former employees (retirement, pension and deferred compensation) amounted up to € 2 million as of December 31, 2011, € 2 million as of December 31, 2010 and € 3 million as of December 31, 2009.

Among the Group’s transactions with key management personnel as of December 31, 2011 were loans and commitments of € 11 million and deposits of € 9 million.

In addition, the Group provides banking services, such as payment and account services as well as investment advice, to key management personnel and their close family members.

During 2010 and up to the first quarter of 2011, a member of key management personnel received payments from a Group company. At the time the contractual arrangement was closed the payor company was not included in the Group of consolidated companies.

Transactions with Subsidiaries, Joint Ventures and Associates

Transactions between Deutsche Bank AG and its subsidiaries meet the definition of related party transactions. If these transactions are eliminated on consolidation, they are not disclosed as related party transactions. Transactions between the Group and its associated companies and joint ventures also qualify as related party transactions. Pursuant to a revised version of IAS 24, “Related Party Disclosures” (“IAS 24 R”) the definition of a related party has been amended, in part, to clarify that an associate includes subsidiaries of an associate and a joint venture includes subsidiaries of the joint ventures. IAS 24 R was applied retrospectively for 2010.

Loans

in € m.

2011

20101

1

Prior year numbers were adjusted as a result of the adoption of IAS 24 R.

2

The increase in loans issued during 2011 is mainly related to the restructuring of a loan transaction.

3

The increase in loans issued during 2010 is mainly related to the restructuring of a loan transaction. Related interest income earned amounted to € 230 million during 2011 and € 24 million during 2010 since the restructuring in the fourth quarter 2010.

4

Loans past due were nil as of December 31, 2011 and 2010. For the above loans the Group held collateral of € 963 million and € 299 million as of December 31, 2011 and December 31, 2010, respectively.

Loans outstanding, beginning of year

4,329

1,002

Loans issued during the year

1,2112

3,5853

Loan repayment during the year

307

148

Changes in the group of consolidated companies

(13)

(126)

Exchange rate changes/other

(62)

16

Loans outstanding, end of year4

5,158

4,329

Other credit risk related transactions:

 

 

Allowance for loan losses

53

32

Provision for loan losses

22

26

Guarantees and commitments

262

255

Deposits

in € m.

2011

20101

1

Prior year numbers were adjusted as a result of the adoption of IAS 24 R.

2

The deposits are unsecured.

Deposits outstanding, beginning of year

220

369

Deposits received during the year

258

162

Deposits repaid during the year

190

220

Changes in the group of consolidated companies

(41)

(93)

Exchange rate changes/other

0

2

Deposits outstanding, end of year2

247

220

Other Transactions

Trading assets and positive market values from derivative financial transactions with associated companies amounted to € 221 million as of December 31, 2011 and € 149 million as of December 31, 2010. Trading liabilities and negative market values from derivative financial transactions with associated companies amounted to € 19 million as of December 31, 2011 and € 15 million as of December 31, 2010.

Other transactions with related parties also reflected the following:

Xchanging etb GmbH: The Group holds a stake of 49 % in Xchanging etb GmbH and accounts for it under the equity method. Xchanging etb GmbH is the holding company of Xchanging Transaction Bank GmbH (“XTB”). Two of the five executive directors of Xchanging etb GmbH and two members of the supervisory board of XTB are employees of the Group. The Group’s arrangements with Xchanging includes two outsourcing agreements with XTB. The first agreement relates to the provision of security settlement services with a contractual maturity until May 2016. The second agreement relates to the service relationship between XTB and Sal. Oppenheim with a contractual maturity until December 2014. The outsourcing arrangements are aimed at reducing costs without compromising service quality. In 2011 and 2010, the Group received services from XTB with a volume of € 104 million and € 113 million, respectively. In 2011 and 2010, the Group provided supply services (e.g., IT and real estate-related services) with volumes of € 20 million, respectively, to XTB.

Hua Xia Bank: The Group holds a stake of 19.99 % in Hua Xia Bank and has accounted for this associate under the equity method since February 11, 2011. Further details are included in Note 17 “Equity Method Investments”. In 2006, Deutsche Bank and Hua Xia Bank jointly established a credit card business cooperation as one of the major pillars of their strategic partnership. The cooperation targets the establishment of a future-oriented credit card business in China comprising the international know-how of the Group in the credit card business and local expertise of Hua Xia Bank. In 2011 a provision of € 50 million has been recognized for the cooperation. This provision captures the Group’s estimated obligation from the cooperation as of December 31, 2011 should the agreement not be extended beyond the current termination date of May 2013.

Transactions with Pension Plans

Under IFRS, certain post-employment benefit plans are considered as related parties. The Group has business relationships with a number of its pension plans pursuant to which it provides financial services to these plans, including investment management services. The Group’s pension funds may hold or trade Deutsche Bank shares or securities. A summary of transactions with related party pension plans follows.

in € m.

2011

2010

Deutsche Bank securities held in plan assets:

 

 

Equity shares

4

Bonds

16

Other securities

244

83

Total

248

99

 

 

 

Property occupied by/other assets used by Deutsche Bank

0

Derivatives: Market value for which Deutsche Bank (or subsidiary) is a counterparty

473

(2)

Derivatives: Notional amount for which Deutsche Bank (or subsidiary) is a counterparty

14,244

14,966

Fees paid from Fund to any Deutsche Bank asset manager(s)

24

24

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Deutsche Bank Annual Report 2011

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