Economic Capital usage for Operational Risks

The economic capital usage for operational risk increased by € 235 million, or 4.7 %, to € 5.3 billion as of December 31, 2013.

Economic Capital Usage for Operational Risk by Business Division

 

 

2013 increase (decrease) from 2012

in € m.

Dec 31, 2013

Dec 31, 2012

in € m.

in %

Corporate Banking & Securities

2,475

2,049

426

21

Global Transaction Banking

96

38

59

156

Deutsche Asset & Wealth Management

580

559

22

4

Private & Business Clients

803

227

576

253

Non-Core Operations Unit

1,298

2,145

(847)

(40)

Total economic capital usage for operational risk

5,253

5,018

235

5

The economic capital usage for operational risk increased to € 5.3 billion as of December 31, 2013, compared with € 5.0 billion at year-end 2012. This is mainly driven by the implementation of a change in our AMA Model to better estimate the frequency of Deutsche Bank specific operational risk losses entering it. The change led to an increased economic capital usage of € 191 million. An additional driver was the increased operational risk loss profile of Deutsche Bank as well as that of the industry as a whole. The related operational risk losses that have materialized and give rise to the increased economic capital usage are largely due to the outflows related to litigation, investigations and enforcement actions. The economic capital continues to include the safety margin applied in our AMA Model, which was implemented in 2011 to cover unforeseen legal risks from the recent financial crisis.

The execution of our divestment strategy in NCOU has resulted in a reduced balance sheet, which triggered a review of our operational risk allocation framework. In line with the NCOU business wind down, we reallocated economic capital for operational risk amounting to € 892 million to our Core Bank in the third quarter of 2013.


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