37 – 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 of the parent company to constitute key management personnel for purposes of IAS 24.

Compensation expense of key management personnel

in € m.

2012

2011

2010

1

2010 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

17

14

23

Post-employment benefits

3

3

3

Other long-term benefits

14

6

3

Termination benefits

15

2

Share-based payment

16

5

111

Total

65

28

42

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 € 1.6 million as of December 31, 2012, € 2 million as of December 31, 2011 and € 2 million as of December 31, 2010.

Among the Group’s transactions with key management personnel as of December 31, 2012 were loans and commitments of € 7 million and deposits of € 13 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 through 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 payer 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 and their respective subsidiaries also qualify as related party transactions.

Loans

 

 

in € m.

2012

2011

1

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

2

The increase in repayments during 2012 is mainly related to the sale of a restructured loan transaction in Europe.

3

Loans past due were € 3 million as of December 31, 2012 and nil as of December 31, 2011. For the above loans the Group held collateral of € 570 million and € 963 million as of December 31, 2012 and December 31, 2011, respectively.

Loans outstanding, beginning of year

5,158

4,329

Loans issued during the year

436

1,2111

Loan repayment during the year

4,6112

307

Changes in the group of consolidated companies

0

(13)

Exchange rate changes/other

(58)

(62)

Loans outstanding, end of year3

925

5,158

Other credit risk related transactions:

 

 

Allowance for loan losses

47

53

Provision for loan losses

47

22

Guarantees and commitments

55

262

Deposits

 

 

in € m.

2012

2011

1

The deposits are unsecured.

Deposits outstanding, beginning of year

247

220

Deposits received during the year

284

258

Deposits repaid during the year

284

190

Changes in the group of consolidated companies

(3)

(41)

Exchange rate changes/other

1

0

Deposits outstanding, end of year1

245

247

Other Transactions

Trading assets and positive market values from derivative financial transactions with associated companies amounted to € 110 million as of December 31, 2012 and € 221 million as of December 31, 2011. Trading liabilities and negative market values from derivative financial transactions with associated companies amounted to € 4 million as of December 31, 2012 and € 19 million as of December 31, 2011.

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 include two outsourcing agreements with XTB. One agreement relates to the provision of security settlement services and has a contractual maturity of May 2016. The second agreement relates to the service relationship between XTB and Sal. Oppenheim and has a contractual maturity of December 2014. The outsourcing arrangements are aimed at reducing costs without compromising service quality.

In 2012, the Group received services from XTB with a volume of € 106 million (2011: € 104 million). In 2012, the Group provided supply services (e.g., IT and IT infrastructure services) with a volume of € 21 million (2011: € 20 million), 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 18 “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 Deutsche Bank AG in the credit card business and local expertise of Hua Xia Bank. A provision of € 87 million has been recognized for the cooperation. This provision captures the Group’s estimated obligation from the cooperation as of December 31, 2012.

Transactions with Pension Plans

Under IFRS, certain post-employment benefit plans are considered 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.

Transactions with related party pension plans

in € m.

2012

2011

Equity shares issued by the Group held in plan assets

7

4

Fees paid from plan assets to asset managers of the Group

38

24

Market value of derivatives with a counterparty of the Group

(242)

473

Notional amount of derivatives with a counterparty of the Group

14,251

14,244