Deutsche Bank
Annual Report 2013
Deutsche Bank Annual Report 2013
17 – Equity Method Investments

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17 – Equity Method Investments

Investments in associates and jointly controlled entities are accounted for using the equity method of accounting.

The Group holds interests in 115 (2012: 141) associates and 20 (2012: 26) jointly controlled entities. One associate is considered to be material to the Group, based on the carrying value of the investment and the Group’s income from this investee.

Significant investments as of December 31, 2013

 

 

Investment

Principal place of business

Nature of relationship

Ownership percentage

1

The Group has significant influence over the investee through its ownership share and board seats.

Hua Xia Bank Company Limited1

Beijing, China

Strategic Investment

19.99 %

Summarized financial information on Hua Xia Bank Company Limited

in € m.

Nine months ended Sep 30, 20131

Full year to Dec 31, 2012

1

The figures are based on the latest publically available financial statements of the investee as of September 30, 2013.

2

The Group received dividends from Hua Xia Bank Company Limited of 78 € million during the reporting period 2013 (2012: 43 € million).

Total net revenues

4,107

4,896

Net income

1,369

1,572

Other comprehensive income

(79)

(35)

Total comprehensive income2

1,290

1,537

 

 

 

Total assets

187,305

181,310

Total liabilities

177,343

172,210

Net assets of the equity method investee

9,962

9,100

Reconciliation of total net assets to the Group’s carrying amount

in € m.

Nine months ended Sep 30, 20131

Full year to Dec 31, 2012

1

The figures are based on the latest publically available financial statements of the investee as of September 30, 2013.

2

The quoted market price for Hua Xia Bank Company Limited is € 1,605 million as per September 30, 2013. An impairment test according to IAS 36 confirmed a recoverable amount in excess of the carrying value. Deutsche Bank determines the recoverable amount of its investment in Hua Xia Bank Company Limited on the basis of value in use and is employing a DCF model, which reflects the specifics of the banking business and its regulatory environment in China. The DCF model uses earning projections and respective capitalization assumptions. Estimating these involves judgment and the consideration of past and current performances as well as expected developments in the respective Chinese market and in the overall macroeconomic and regulatory environment. The value in use of Hua Xia Bank Company Limited is sensitive to the earnings projections, to the discount rate applied and to long-term expectations. The discount rates applied have been determined based on the capital asset pricing model.

Net assets of the equity method investee

9,962

9,100

Group's ownership percentage on the investee's equity

19.99 %

19.99 %

DB's share of net assets

1,991

1,819

Goodwill

340

340

Intangible Assets

64

65

Other adjustments

69

69

Carrying amount2

2.464

2.293

Aggregated financial information on the Group’s share in associates and joint ventures that are individually immaterial

in € m.

Dec 31, 2013

Dec 31, 2012

Carrying amount of all associates that are individually immaterial to the Group

1,037

1,284

 

 

 

Aggregated amount of the Group's share of profit (loss) from continuing operations

59

85

Aggregated amount of the Group's share of post-tax profit (loss) from discontinued operations

0

0

Aggregated amount of the Group's share of other comprehensive income

69

(38)

Aggregated amount of the Group's share of total comprehensive income

127

47