Credit Exposure from Lending

Our lending businesses are subject to credit risk management processes, both at origination and on an ongoing basis. An overview of these processes is described in the credit risk section of this Risk Report.

Loan book categories segregated into a lower, medium and higher risk bucket

 

Dec 31, 2013

Dec 31, 20121

in € m.

Total

thereof: Non-Core

Total

thereof: Non-Core

1

Amounts for December 31, 2012 reflect the new business division structure established in 2013 and are additionally restated according IFRS 10.

2

Loans largely unwound in March 2013.

3

Thereof vendor financing on loans sold in Leveraged Finance amounting to € 353 million and in Commercial Real Estate amounting to € 22 million as of December 31, 2013 (€ 3.0 billion and € 1.3 billion as of December 31, 2012, respectively).

4

Includes loans from CMBS securitizations.

5

Includes loans managed by CPSG.

6

Includes other smaller loans predominantly in our CB&S business division.

Lower risk bucket:

 

 

 

 

PBC Mortgages

154,444

7,372

151,078

8,579

Investment-Grade/Postbank Non-Retail

30,751

1,077

31,855

3,356

GTB

72,868

0

69,963

0

DeAWM

33,147

934

30,661

1,140

PBC small corporates

16,601

280

18,779

1,953

Government collateralized/structured transactions2

33

0

1,149

0

Corporate Investments

28

28

2,464

2,464

Sub-total lower risk bucket

307,871

9,690

305,950

17,493

Moderate risk bucket:

 

 

 

 

PBC Consumer Finance

20,204

796

20,242

1,343

Asset Finance (Deutsche Bank sponsored conduits)

12,728

2,832

14,786

6,395

Collateralized hedged structured transactions

11,470

3,328

12,756

3,992

Financing of pipeline assets3

375

22

4,312

1,316

Sub-total moderate risk bucket

44,778

6,977

52,096

13,047

Higher risk bucket:

 

 

 

 

Commercial Real Estate4

15,832

3,410

27,285

14,784

Leveraged Finance5

4,707

633

5,095

744

Other6

8,983

2,504

11,642

4,095

Sub-total higher risk bucket

29,522

6,548

44,022

19,623

Total loan book

382,171

23,215

402,069

50,162

The majority of our low risk exposures is associated with our PBC retail banking activities. 81 % of our loan book at December 31, 2013 was in the low risk category, slightly improved versus the prior year end.

Our higher risk bucket predominantly relates to commercial real estate exposures which decreased by € 11.5 billion at December 31, 2013 compared with prior year-end. Our credit risk management approach puts strong emphasis specifically on the portfolios we deem to be of higher risk. Portfolio strategies and credit monitoring controls are in place for these portfolios.

Impaired loans and allowance for loan losses for our higher-risk loan bucket

 

Dec 31, 2013

Dec 31, 2012

 

Total

thereof: Non-Core

Total

thereof: Non-Core

in € m.

Impaired loans

Allowance for loan losses

Impaired loans

Allowance for loan losses

Impaired loans

Allowance for loan losses

Impaired loans

Allowance for loan losses

Commercial Real Estate

1,592

698

1,109

443

2,065

554

1,318

353

Leveraged Finance

119

116

0

1

64

81

4

3

Other

403

136

372

127

576

160

539

134

Total

2,114

951

1,481

570

2,705

795

1,861

490

While the volume of impaired loans in our higher-risk loan bucket significantly decreased by € 591 million or 22 % in 2013, allowance for loan losses increased by € 156 million or 20 %. This reverse development leads to an increase in the coverage ratio in our higher-risk bucket from 29 % to 45 %. This development was driven among others by a small number of large commercial real estate loans with disproportionately low coverage ratio that were partially written down and subsequently consolidated due to the Group obtaining control over the structured entity borrower during the second and third quarters of 2013.


Key figures comparison

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