Deutsche Bank Performance

The key financial highlights for the Group in the period can be summarized as:

  • Group net revenues of € 31.9 billion in 2013, down 5 % versus 2012 largely reflecting revenue declines in CB&S;
  • Income before income taxes of € 1.5 billion, up 79 % from 2012;
  • Net income increased from € 316 million in 2012 to € 681 million in 2013;
  • CRR/CRD 4 pro forma fully loaded Common Equity Tier 1 ratio was 9.7 % (Basel 2.5 CET 1: 12.8 %) at the end of 2013, compared to 7.8 % (Basel 2.5 CET 1: 11.4 %) at the end of 2012;
  • Adjusted pro forma CRR/CRD 4 leverage ratio was 3.1 % at year-end 2013;
  • CRR/CRD 4 pro forma fully loaded risk-weighted assets of € 350 billion (Basel 2.5 RWA € 300 billion) as of December 31, 2013 down by 11 % compared to December 31, 2012 (down 10 % based on Basel 2.5 RWA).

2013 was the second consecutive year in which we have invested in the bank’s future growth and in further strengthening our controls while addressing ongoing legal and regulatory issues. Costs-to-achieve of our Operational Excellence (OpEx) Programm and litigation expenses impacted our financial results in 2013. We expect 2014 to be a year of further challenges and disciplined implementation; however, we still intend to achieve our 2015 targets and deliver on our strategic vision for Deutsche Bank.

Net revenues in 2013 were € 31.9 billion, a 5 % decline from 2012. Most of the decline in net revenues was attributable to CB&S, along with slight decreases in GTB and NCOU, while PBC revenues were stable and DeAWM revenues increased. Noninterest expenses in 2013 were € 28.4 billion, down 9 % from 2012, reflecting significant cost reductions as well as a substantial reduction in impairment charges for goodwill and intangible assets as compared to 2012. The cost reductions included a € 1.2 billion (9 %) decrease in our compensation and benefits expenses in 2013 compared to 2012, due to reduced bonus and retention awards and as a result of the ongoing implementation of OpEx. Expenses also included significant litigation-related expenses of € 3.0 billion in 2013 (2012: € 2.5 billion).

In this context, we generated net income of € 681 million in 2013 (2012: € 316 million) and income before income taxes of € 1.5 billion (2012: € 814 million).

The financial Key Performance Indicators (KPIs) of the Group are detailed in the table below:

Group Key Performance Indicators

Status end of 2013

Status end of 2012

1

The adjusted pro forma CRR/CRD 4 leverage ratio represents our calculation following the publication of CRR/CRD on June 27, 2013. Not available for end of 2012. Further detail on the calculation of this ratio is detailed in the Risk Report.

Post-tax return on average active equity

1.2 %

0.5 %

Cost/income ratio

89.0 %

92.5 %

Cost savings

€ 2.1 bn per annum

€ 0.4 bn per annum

Costs to achieve savings

€ 1.8 bn

€ 0.5 bn

CRR/CRD 4 pro forma fully loaded Common Equity Tier 1 ratio

9.7 %

7.8 %

Adjusted pro forma CRR/CRD 4 leverage ratio1

3.1 %

 

The post tax return on average equity increased from 0.5 % in 2012 to 1.2 % in 2013, but remains below the target of greater than 12 %.

Despite lower net revenues compared to the prior year, the cost/income ratio improved from 92.5 % in 2012 to 89.0 % in 2013, reflecting the continued reduction of noninterest expenses in the course of our OpEx Programm.

OpEx Programm annual cost savings of € 2.1 billion were achieved in 2013, surpassing the target of € 1.6 billion. Cumulative costs to achieve were € 1.8 billion (thereof € 1.3 billion spent in 2013 and € 0.5 billion spent in 2012).

Due to the increase in net income, the issuance of new shares and the accelerated capital formation and de-risking activities in 2013, our Basel 2.5 Common Tier 1 capital ratio improved to a record level of 12.8 % as of December 31, 2013. The CRR/CRD 4 pro forma fully loaded Common Equity Tier 1 ratio also increased substantially from 7.8 % in the preceding year to 9.7 % at the end of 2013, reflecting substantial progress on portfolio optimization and de-risking of non-core activities.

The adjusted pro forma CRR/CRD 4 leverage ratio was 3.1 % at the end of 2013 based on a CRR/CRD 4 pro forma leverage exposure of € 1,445 billion as of December 31, 2013.

Risk-weighted assets based on Basel 2.5 at year-end 2013 were € 300 billion, versus € 334 billion at year-end 2012, largely due to management actions aimed at de-risking our business. During 2013, we achieved a reduction in CRR/CRD 4 pro forma fully loaded risk-weighted assets to € 350 billion.