Regulatory Capital Ratios


The KWG and the SolvV reflect the capital adequacy rules of Basel 2.5 and require German banks to maintain an adequate level of capital in relation to their regulatory capital requirements comprising counterparty credit risk, operational risk and market risk. Counterparty credit risk and operational risk must be covered with Tier 1 capital and Tier 2 capital (together “regulatory banking capital”). Market risk must be covered with regulatory banking capital (to the extent not required to cover counterparty credit and operational risk) or Tier 3 capital (together with regulatory banking capital, “own funds”).

The following table shows our eligible regulatory capital, including transitional items pursuant to Section 64h (3) KWG, available to cover the minimum capital requirements by risk type:

Coverage of Minimum Capital Requirements

 

Dec 31, 2012

Dec 31, 2011

in € m.

Regulatory capital requirements

Available regulatory capital

Regulatory capital requirements

Available regulatory capital

Counterparty credit risk and operational risk

22,464

57,251

25,077

55,545

Market risk

4,245

34,787

5,448

30,468

As of each of December 31, 2012, and December 31, 2011, we held regulatory capital well above the required minimum standards. The increase of regulatory capital in 2012 of € 1.7 billion, thereof € 1.4 billion in the form of Tier 1 capital, reflected primarily reduced capital deduction items.

The German Banking Act and Solvency Regulation rules required us to cover our market risk as of December 31, 2012 with € 4,2 billion of total regulatory capital (Tier 1 + 2 + 3) compared to € 5.4 billion as of December 31, 2011. We met this requirement entirely with Tier 1 and Tier 2 capital that was not required for the minimum coverage of credit and operational risk.

Basel 2.5 requires the deduction of goodwill from Tier 1 capital. However, for a transitional period the partial inclusion of certain goodwill components in Tier 1 capital is allowed pursuant to German Banking Act Section 64h (3).

As of December 31, 2012, the transitional item amounted to € 236 million compared to € 319 million as of December 31, 2011. In our reporting to the German regulatory authorities, this amount is included in the Tier 1 capital, total regulatory capital and the total risk-weighted assets, as shown in the tables above. Correspondingly, our Tier 1 and total capital ratios reported to the German regulatory authorities including this item were 15.2 % and 17.1 %, respectively, on December 31, 2012 compared to 12.9 % and 14.6 %, respectively, on December 31, 2011.

As of December 31, 2012, regulatory capital ratios on a standalone basis for Deutsche Bank AG and for its subsidiaries Deutsche Bank Privat- und Geschäftskunden AG, norisbank GmbH, DWS Finanz-Service GmbH, Deutsche Bank Europe GmbH and Sal. Oppenheim jr. & Cie. AG & Co.KGaA are not disclosed as these companies have applied the exemptions codified in Section 2a KWG. As a result, they are exempted from the obligation to comply with certain regulatory requirements of the Banking Act on a standalone basis, including solvency calculations and reporting of regulatory capital ratios. These exemptions can only be applied if, among other things, there is no material practical or legal impediment to the prompt transfer of own funds or repayment of liabilities from Deutsche Bank AG to the respective subsidiaries or from all subsidiaries in the Group to Deutsche Bank AG.

Deutsche Postbank AG, which we have consolidated since December 3, 2010, is considered a significant subsidiary of the Group. Here, “significant” is defined as an entity whose relative individual contribution to our risk-weighted assets exceeds 5 % of our overall RWA. In December 2012 Deutsche Postbank AG has issued a waiver notification in accordance with Section 2a KWG to the German Supervisory Authority, the application of which is currently under discussion between Deutsche Postbank AG and the Supervisory Authority. Notwithstanding, the Tier 1 capital ratio as of December 31, 2012 and the total capital ratio for the Deutsche Postbank Group including Deutsche Postbank AG with goodwill components allowed pursuant to Section 64h (3) KWG amounted to 12.0 % and 15.9 %, and 10.8 % and 14.9 % as of December 31, 2011, respectively.

Failure to meet minimum capital requirements can result in orders to suspend or reduce dividend payments or other profit distributions on regulatory capital and discretionary actions by the BaFin that, if undertaken, could have a direct material effect on our businesses. We complied with the regulatory capital adequacy requirements in 2012. Our subsidiaries which are not included in the regulatory consolidation did not report any capital deficiencies in 2012.