Dear Shareholders,

The Supervisory Board (photo)

The Supervisory Board from left to right:

Frank Bsirske, Dina Dublon, Stephan Szukalski, Suzanne Labarge, John Cryan, Henriette Mark, Dr. Johannes Teyssen, Bernd Rose, Sabine Irrgang, Peter Löscher, Dr. Paul Achleitner, Alfred Herling, Gabriele Platscher, Katherine Garrett-Cox, Professor Dr. Klaus Rüdiger Trützschler, Rudolf Stockem, Professor Dr. Henning Kagermann, Martina Klee, Timo Heider, Georg F. Thoma.

The past year was eventful and ultimately very challenging for your bank. Independent of the difficult economic conditions in many markets and the extensive changes taking place within the bank as part of Strategy 2015+, regulatory and legal issues came to the fore. These had a considerable impact on the bank both internally and externally.

Consequently, the Supervisory Board’s focus was divided roughly equally between our supervisory duties and our role as an advisory body. To fulfill our responsibilities, we not only met formally a total of 39 times in 2013, but we also organized ourselves more effectively. Your Supervisory Board has at its disposal not only a high level of professional expertise, but also an expanded committee structure which enables each member to contribute detailed and focused input.

Integrity Committee: First to mention here is the newly formed Integrity Committee, which looks closely at legal matters, reputational issues and general questions relating to social responsibility. It also monitors the bank’s cultural change process. After it was established in May 2013, the committee met five times under the chairmanship of Georg F. Thoma to discuss complex matters relating to legal and regulatory matters. During these meetings, it not only discussed specific cases but also considered their possible consequences for organizational change and future conduct. We believe, that by forming the Integrity Committee, we have created a best practice example for addressing environmental, social and governance (ESG) issues.

Audit Committee: Following his election last May, John Cryan assumed the chair of the Audit Committee from Dr. Karl-Gerhard Eick. We would like to take this opportunity to thank Dr. Eick once again for his nine years of service for Deutsche Bank. The Audit Committee met a total of eleven times in 2013 and analyzed the financials intensively on each occasion. It examined individual balance sheet items and looked at how the bank had dealt with specific inquiries from regulators. One focal point was how the bank addressed the issues raised by Group Audit. The appointment of external auditors also received particular scrutiny in light of the contesting lawsuits. The restructuring of the Group Audit function and an assessment of the bank’s risk systems featured prominently on the Audit Committee’s full agenda.

Risk Committee: A clear division of responsibilities between the Integrity Committee and the Risk Committee, which met six times in 2013, made it possible for the Risk Committee to focus less on legal risks and more on market, credit and operational risks. Given the difficult and, at times, very volatile market environment, this was crucial in 2013. The overlapping memberships in the Risk, Integrity and Audit Committees ensured close cooperation between these committees. Other topics discussed intensively included the EU requirements for recovery and resolution plans as well as the preparations for the upcoming stress tests by the European Banking Authority and the asset quality review by the European Central Bank.

Compensation Control Committee: Under the Capital Requirements Directive IV Implementation Act, Deutsche Bank is required in accordance with section 25d (12) of the German Banking Act to establish a separate Compensation Control Committee. The role of this committee is not only to advise the Supervisory Board on Management Board compensation, but also to support the Supervisory Board in monitoring the appropriateness of compensation structures for all employees of the bank. In this regard, the committee’s duties pursuant to the German Banking Act go beyond the scope of the German Stock Corporation Act’s provisions. To ensure an efficient start, we established the Compensation Control Committee last year. This allowed its members to take part in two workshops and engage in private study to familiarize themselves with the issues at hand. As a result, they were already able to contribute to reviewing the 2013 compensation round.

Nomination Committee: Although the bank already had a Nomination Committee, as required by the German Corporate Governance Code, it was previously tasked with seeking suitable shareholder representatives for the Supervisory Board and presenting them to the full Supervisory Board in preparation for the proposal for their election at the General Meeting. With effect from January 1, 2014, new requirements under the German Banking Act also apply. Now, the Nomination Committee is required not only to support the Supervisory Board in selecting shareholder representatives, but also in appointing Management Board members. Furthermore, it also has to perform an annual assessment of the Management Board and Supervisory Board, evaluating both boards in their entirety as well as each member individually. As is the case with the Compensation Control Committee, legislators have gone a step further here and require the Nomination Committee to review the selection criteria for the second management level. In the light of these expanded duties, representatives of the employees have also been appointed to the Nomination Committee. The Supervisory Board will submit a proposal to the Annual General Meeting for the Nomination Committee’s work to be compensated accordingly in the future.

Chairman’s Committee: This committee met eight times in 2013, addressing general governance issues as well as specific Management Board matters. Its tasks also included the preparation of our plenary sessions and the strategy workshop as well as the organizational restructuring of the committees specified above and their terms of reference. The preparations for the two General Meetings in 2013 and overseeing the bank’s capital increase also required our attention. During the year, we also prepared a review of the efficiency of the work of the full Supervisory Board and identified further potential for improvement, which includes enhanced training programs.

Supervisory Board: In addition to the seven regular plenary sessions, we also held a two-day strategy workshop in 2013. For the first time, the Chairman of the Management Board also participated in parts of this workshop. The focus here was on strategy, regulatory issues and succession planning. Furthermore, we held two-day introductory seminars on bank-specific issues aimed primarily, but not exclusively, at new members of the Supervisory Board. These seminars were widely attended, as were external training courses tailored to individual needs.

In addition to the work in the committees and full Supervisory Board, regular discussions also take place not only between the Chairman and Deputy Chairman of the Supervisory Board, but also among the three committee chairmen and with the Management Board.

We hope that this overview, which is complemented by the more detailed description in the Report of the Supervisory Board of the Financial Report, demonstrates how seriously we take our responsibilities. The topics covered in great detail in last year’s letter, especially our understanding that we have an obligation and responsibility to you in return for the trust you place in us, once again served to guide us through challenging times. We are convinced that Deutsche Bank will succeed in realizing its full potential to become the leading client-centric universal bank. One of the main reasons for this optimism lies in the quality of our employees. We thank them for their tireless work over what has been a very challenging year.

We still have a long way to go to achieve the social and competitive position you can expect. Improving Deutsche Bank’s reputation, also in the light of its less than satisfactory net results in 2013, will be essential. But, as the saying goes, even the longest journey begins with a single step. Over the past year, we already took many steps forward – and our destination is clear. Thank you for your support!

On behalf of the Supervisory Board,

Dr. Paul Achleitner, Chairman (signature)

Dr. Paul Achleitner

Frankfurt am Main, March 2014

Alfred Herling, Deputy Chairman (signature)

Alfred Herling
Deputy Chairman

Key figures comparison

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