Deutsche Bank
Annual Report 2012
Deutsche Bank Annual Report 2012
Deutsche Bank Group

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The Deutsche Bank Group

In September 2012 we published our strategic and financial aspirations for 2015 in our Strategy 2015+. For the Group our financial objectives for 2015 include

  • a post-tax return on average active equity of at least 12 %,
  • fully loaded Basel 3 Core Tier 1 target ratio of more than 10 %,
  • a cost/income ratio of below 65 % and
  • annual cost savings of € 4.5 billion.

Corporate Banking & Securities targets in 2015 a post-tax return on average active equity of approximately 15 %, a cost/income ratio of less than 65 % and a RWA equivalent of less than € 200 billion. Global Transaction Banking and Asset & Wealth Management aim to double income before income taxes to approximately € 2.4 billion and € 1.7 billion, respectively. Private & Business Clients targets an income before income taxes of approximately € 3.0 billion and a cost/income ratio of less than 60 %. For these businesses including Consolidation & Adjustments in total we aim to achieve a post-tax return on average active equity of at least 15 %.

Our aspirations are based on a number of key assumptions, including normalization/stabilization of asset valuations, revenue growth in line with the market, the absence of fundamental changes to current regulatory frameworks on capital or separation of business activities, global GDP growth in the range of 2 % to 4 % per annum over the period, a EUR/USD exchange rate of approximately 1.30 and the achievement of selective consolidation-driven market share gains.

To support the aspirations of our Strategy 2015+ a number of strategic initiatives were launched which include the establishment of a dedicated Non-Core Operations Unit, targeted de-risking activities as well as a specific program to increase our operational excellence.

We reaffirm our commitment to the universal banking model and to our four business segments. Additionally, in order to accelerate our deleveraging activities we set up a dedicated Non-Core Operations Unit in 2012. As a distinct division, the unit will be transparent, fully accountable, and empowered to manage and sell non-core assets in the most efficient manner for the Bank and our shareholders. Its key objective is reducing Basel 3 equivalent RWAs to approximately € 90 billion by the end of the first quarter 2013 and to less than € 80 billion in total by December 31, 2013.

We remain committed to managing our capital to comply with all regulatory thresholds even in stress scenarios. The Core Tier 1 capital ratio stays a management priority. Given our excellent progress on de-risking, we have increased our planned de-risking from € 90 billion to over € 100 billion to be achieved by March 2013. Accordingly, we have now raised our fully loaded Basel 3 Core Tier 1 target ratio to 8.5 % as of March 31, 2013, and continue to expect more than 10 % as of March 31, 2015.

We aim to secure our long-term competitiveness by achieving operational excellence with major reductions in costs, duplication and complexity in the years ahead. In context of our Operational Excellence Program (OpEx) we plan to invest approximately € 4 billion with the aim of achieving full run rate annual cost savings of € 4.5 billion in 2015.

in € bn.

Targeted Investments

Targeted Incremental Savings

1

Numbers may not add up due to rounding.

2012

0.6

0.4

2013

1.7

1.2

2014

1.6

1.4

2015

0.2

1.5

Total1

4.0

4.5

In 2012, we have already invested € 0.5 billion and achieved savings of € 0.4 billion.

Of the planned OpEx savings in 2015, nearly 40 %, or € 1.7 billion, relate to the infrastructure areas, including investing in new integrated IT platforms, rationalizing regional back-office activities and centralizing procurement. Some initiatives within the scope of the businesses are a new and more cost-efficient IT platform in PBC, streamlined AWM business, more efficient sourcing and a move to more cost-efficient locations. We further plan to consolidate our real-estate footprint by putting properties up for sale. Based upon activities in 2012, we have already identified cost savings of € 800 million in 2013. Currently a small portion of identified and submitted initiatives is still under review. Depending on the final decision on the initiatives, there is a risk that the overall cost to achieve demand is higher than originally envisioned and that the overall saving target is not reached.

The implementation of our initiatives or the realization of the anticipated benefits might be negatively impacted by certain factors. Economic factors that might impact us are the continuation of the European sovereign debt crisis, the recurrence of extreme turbulence in the markets in which we are active, weakness of global, regional and national economic conditions and increased competition for business. Additionally, regulatory changes might increase our costs or restrict our activities as capital requirements are in focus and different authorities are pushing for structural changes. Given the fact that these governmental initiatives are all subject to discussions, we cannot quantify any future impact as of today. Due to the nature of our business, we are involved in litigation, arbitration and regulatory proceedings in jurisdictions around the world and such matters are subject to many uncertainties. Whilst we have resolved a number of important legal matters and made progress on others, we expect the litigation environment to continue to be challenging.