Corporate Banking & Securities Corporate Division

in € m.

 

 

 

2013 increase (decrease)
from 2012

2012 increase (decrease)
from 2011

(unless stated otherwise)

2013

2012

2011

in € m.

in %

in € m.

in %

N/M – Not meaningful

1

Segment assets represent consolidated view, i.e., the amounts do not include intersegment balances.

2

See Note 4 “Business Segments and Related Information” to the consolidated financial statements for a description of how average active equity is allocated to the divisions.

Net revenues:

 

 

 

 

 

 

 

Sales & Trading (debt and other products)

6,903

9,190

8,539

(2,288)

(25)

651

8

Sales & Trading (equity)

2,737

2,288

2,235

449

20

53

2

Origination (debt)

1,557

1,417

1,055

140

10

362

34

Origination (equity)

732

518

559

214

41

(41)

(7)

Advisory

480

590

621

(110)

(19)

(31)

(5)

Loan products

1,234

899

930

336

37

(31)

(3)

Other products

(21)

547

(39)

(567)

N/M

586

N/M

Total net revenues

13,623

15,448

13,899

(1,826)

(12)

1,549

11

Provision for credit losses

190

81

50

109

134

31

62

Total noninterest expenses

10,353

12,459

10,144

(2,106)

(17)

2,315

23

thereof:

 

 

 

 

 

 

 

Restructuring activities

147

244

0

(96)

(40)

244

N/M

Impairment of intangible assets

0

1,174

0

(1,174)

N/M

1,174

N/M

Noncontrolling interests

16

17

22

(1)

(6)

(5)

(23)

Income (loss) before income taxes

3,063

2,891

3,684

172

6

(793)

(22)

Cost/income ratio

76 %

81 %

73 %

N/M

(5) ppt

N/M

8 ppt

Assets1

1,111,592

1,464,721

1,580,190

(353,128)

(24)

(115,469)

(7)

Risk-weighted assets

118,689

117,056

147,161

1,633

1

(30,105)

(20)

Average active equity2

20,687

20,790

13,604

(103)

0

7,186

53

Pre-tax return on average active equity

15 %

14 %

27 %

N/M

1 ppt

N/M

(13) ppt

2013

Full year 2013 performance was significantly impacted by continued market uncertainty, in particular regarding the U.S. Federal Reserve’s decision on tapering its quantitative easing program, coupled with a reduction in liquidity and slowdown in client activity.

The full year 2013 net revenues were € 13.6 billion, a decline of € 1.8 billion or 12 % from the € 15.4 billion in 2012. The net revenues were impacted by three valuation adjustment items. First, a mark-to-market loss of € 265 million related to mitigating hedges for pro forma Capital Requirements Regulation (CRR)/Capital Requirements Directive 4 (CRD 4) risk-weighted assets (RWA) arising on Credit Valuation Adjustment (CVA). Second, a loss of € 21 million related to the impact of a Debt Valuation Adjustment (DVA) on certain derivative liabilities. Partly offsetting these was a gain of € 83 million related to the Funding Valuation Adjustment (FVA) on certain derivatives exposures. Excluding these items, both 2013 and 2012, net revenues decreased by € 1.3 billion, or 8 %, compared to the full year 2012.

Sales & Trading (debt and other products) net revenues were € 6.9 billion, a decrease of € 2.3 billion, or 25 % compared to the prior year. Revenues in Rates were significantly lower than the prior year, due to lower client activity reflecting weaker liquidity and ongoing market uncertainty. RMBS business was impacted by the de-risking activity undertaken this year, exacerbated by weaker liquidity and continued market uncertainty, resulting in significantly lower revenues compared to the prior year. Commodities revenues were significantly lower than the prior year, driven by reduced client activity and a challenging trading environment. Despite increased volumes, revenues in Foreign Exchange were lower than the prior year due to lower volatility and margin compression. Deutsche Bank was ranked number one in the Euromoney Annual Foreign Exchange poll, for the ninth consecutive year. Revenues in Emerging Market, Flow Credit and Credit Solutions were in line with the prior year.

Sales & Trading (equity) net revenues were € 2.7 billion, an increase of € 449 million, or 20 % compared to the prior year. Equity Trading Revenues increased and Equity Derivatives revenues increased significantly from prior year driven by higher client activity and an improved market environment. Prime Finance revenues were in line with the prior year.

Origination and Advisory generated revenues of € 2.8 billion for the full year 2013, an increase of € 244 million, or 10 %, compared to the prior year. Debt Origination revenues were higher, and Equity Origination revenues were significantly higher than the prior year reflecting strong global market debt and equity issuance activity. Revenues in Advisory were down from the prior year, due to reduced fee pool and deal volumes. Deutsche Bank was ranked number one in Europe by share of Corporate Finance fees, and number one in Europe in Equity Origination (all rankings sourced from Dealogic unless stated).

Loan products net revenues were € 1.2 billion for the full year 2013, an increase of € 336 million, or 37 %, compared to 2012, due to lower overall hedge costs, a lower proportion of lending activity measured at fair value, favorable movements in the credit spreads and continued strengthening in our commercial real estate franchise.

For the full year 2013, net revenues from Other products were negative € 21 million, compared to positive € 547 million in 2012. The decrease was mainly driven by non-recurrence of prior-year positive impact of a refinement in the calculation methodology of the Debt Valuation Adjustment (DVA) implemented in 2012 on certain derivative liabilities.

In provision for credit losses, CB&S recorded a net charge of € 190 million for the full year 2013, an increase of € 109 million, or 134 % compared to the prior year, driven by increased provisions taken in the Shipping portfolio.

Noninterest expenses were € 10.4 billion, a decrease of € 2.1 billion compared to € 12.5 billion for the prior year, which included an impairment of intangible assets. Excluding these charges, the decrease was driven by lower compensation and non-compensation expenses reflecting the continued implementation of OpEx measures, coupled with favorable foreign exchange rate movements, partially offset by increased litigation costs.

Income before income taxes was € 3.1 billion, compared to € 2.9 billion in the prior year, driven by non-recurrence of the impairment on intangible assets, lower compensation and non-compensation expenses, partly offset by lower revenues and higher litigation provisions.

2012

For the full year 2012, Sales & Trading (debt and other products) net revenues were € 9.2 billion, an increase of € 651 million, or 8 %, despite a negative impact of € 166 million relating to Credit Valuation Adjustments (CVAs) in the fourth quarter 2012 due to a refinement in the calculation methodology and RWA mitigation. Revenues in Rates and Credit Flow Trading were significantly higher than the prior year, driven by significantly higher Flow Credit revenues reflecting improved credit market conditions, and by higher Rates revenues reflecting strong client activity, particularly in Europe. Revenues in Structured Finance were higher than the prior year, reflecting a strong client demand, particularly for CMBS products. In contrast, despite increased volumes, Foreign Exchange revenues were lower than the prior year as a result of margin compression. Revenues in Money Markets were lower than the prior year due to lower volatility. In Commodities and RMBS, revenues were also lower compared to 2011. Revenues in Emerging Markets were in line with the prior year.

Sales & Trading (equity) generated revenues of € 2.3 billion in 2012, a slight increase compared to the prior year. Equity Derivatives revenues were significantly higher than the prior year which was negatively impacted by volatile market conditions. Equity Trading revenues were in line with the prior year with market share gains offsetting more difficult market conditions. In Prime Finance, revenues were lower than the prior year driven by lower margins.

Origination and Advisory revenues increased to € 2.5 billion, up € 290 million compared to the full year 2011. Deutsche Bank was ranked number five globally, by share of Corporate Finance fees, and number one in Europe. In Advisory revenues were down in comparison to the prior year. Deutsche Bank was ranked number six globally and number two in Europe. Debt Origination revenues increased due to corporate debt issuance, while Equity Origination revenues decreased, reflecting an industry wide decline in IPO activity in the first half of 2012. Deutsche Bank was ranked number five globally for Equity Origination, and number two in Europe. (All ranks from Dealogic unless otherwise stated).

For the full year 2012, net revenues from Other products were € 547 million, compared to negative € 39 million in 2011. The increase was driven by € 516 million relating to the aforementioned DVA on certain derivative liabilities.

Noninterest expenses were € 12.5 billion, a substantial increase of € 2.3 billion compared to € 10.1 billion for the full year 2011. Approximately half of the increase related to the impairment of intangible assets. The increase also included € 315 million cost-to-achieve related to OpEx. Additionally, noninterest expenses were impacted by adverse foreign exchange rate movements and higher litigation related charges. These increases were partially offset by the absence of a specific charge of € 310 million for a German VAT claim in the prior year, and lower non-performance related compensation costs reflecting the implementation of OpEx.

Income before income taxes was € 2.9 billion, compared to € 3.7 billion in the prior year, driven by the impairment on intangible assets, higher litigation related charges and cost-to-achieve related to OpEx, partly offset by higher revenues, the absence of the aforementioned German VAT claim in the prior year and OpEx related cost savings.