26 – Non-Current Assets and Disposal Groups Held for Sale

Within the balance sheet, non-current assets and disposal groups held for sale are included in other assets and other liabilities.

in € m.

Dec 31, 2013

Dec 31, 2012

Cash, due and deposits from banks, Central bank funds sold and securities purchased under resale agreements

574

0

Trading assets, Derivatives, Financial assets designated at fair value through P&L

525

0

Financial assets available for sale

2,917

4

Loans

2,032

0

Property and equipment

212

2

Other assets

411

101

Total assets classified as held for sale

6,670

107

 

 

 

Deposits, Central bank funds purchased and securities sold under resale agreements

4,425

0

Trading liabilities, Derivatives, Financial liabilities designated at fair value through P&L

439

0

Long-term debt

856

0

Other liabilities

544

78

Total liabilities classified as held for sale

6,264

78

As of December 31, 2013, there were € 2 million of unrealized net gains (losses) relating to non-current assets and disposal groups classified as held for sale included in accumulated other comprehensive income (net of tax).

BHF-BANK

On September 20, 2012, the Group had announced that it reached an agreement with Kleinwort Benson Group, a wholly owned subsidiary of RHJ International (“RHJI”), on the sale of BHF-BANK AG (“BHF-BANK”). The transaction was subject to substantial regulatory approvals from the BaFin. Following certain amendments made to the initial transaction structure, involving changes to the buyer consortium and the terms of the purchase consideration, the BaFin confirmed to RHJI in the fourth quarter 2013 that all of the regulatory filings submitted for the acquisition of BHF-BANK were considered complete. As a consequence of this, BaFin commenced the formal review period for the approval of the entire transaction, which expired in February 2014.

Based on these facts and circumstances, the Group concluded that a sale within one year is considered highly probable. Accordingly and as of December 31, 2013, the Group classified BHF-BANK as a disposal group held for sale, allocated within the Non-Core Operations Unit (NCOU). Its reclassification to the held-for-sale category triggered an impairment loss of € 183 million before income tax, which was recorded in other income of the Group’s income statement of the fourth quarter 2013. The associated post tax impact was € 125 million. Due to the revised transaction structure, the Group recognized an additional charge of € 14 million recorded in the Group’s income statement of the fourth quarter 2013.

Out of the Group’s above mentioned total assets (liabilities) classified as held for sale, € 6.4 billion (€ 6.1 billion) are related to BHF-BANK. Its financial assets available for sale portfolio (€ 2.9 billion) included unrealized net gains of € 5 million, which were recognized directly in equity (accumulated other comprehensive income). These unrealized net gains remain in equity until the investment in BHF-BANK is sold, at which time the gain will be reclassified from accumulated other comprehensive income to the income statement.

On February 21, 2014, RHJI announced that the BaFin has confirmed that it has no objections to the proposed acquisition of BHF-BANK. The acquisition is subject to certain conditions prior to closing, which is expected to take place before the end of March 2014.

Other Non-Current Assets and Disposal Groups Held for Sale as of December 31, 2013

During 2013, the Group had classified several office buildings as held for sale. The premises, which were previously held as property and equipment, are included within the Corporate Divisions Non-Core Operations Unit (NCOU) and Private & Business Clients (PBC). Each of the buildings is expected to be sold within one year. Their classification as held for sale did not result in an impairment loss, except the building held in PBC, for which an impairment charge of € 4 million was recorded in other income of the fourth quarter 2013.

Furthermore, the Group classified parts of its Wealth Management business in the UK as held for sale. The business, which is included in DeAWM, is expected to be sold within one year. Its classification as held for sale led to an impairment loss of € 5 million, which was recognized in other income of the fourth quarter 2013.

Also during 2013, the Group classified within CB&S several disposal groups consisting of foreclosures as held for sale. All assets are expected to be sold within one year. Their classification as held for sale did not result in an impairment loss. The respective assets have been measured at fair value less costs to sell on a non-recurring basis, with fair value measurement categorized as level 3 in the fair value hierarchy.

Disposals in 2013

Division

Disposal

Financial impact1

Date of the disposal

1

Impairment losses and reversals of impairment losses are included in Other income.

Non-Core Operations Unit

Building held as property and equipment.

None.

Fourth quarter 2013

Deutsche Asset & Wealth Management

Building held as property and equipment.

None.

Third quarter 2013

Global Transaction Banking

A wholly owned subsidiary, providing merchant acquiring services to multi-national clients.

None.

Second quarter 2013

Deutsche Asset & Wealth Management

Disposal group mainly consisting of real estate fund units.

None.

First quarter 2013

Non-Current Assets and Disposal Groups Held for Sale as of December 31, 2012

Division

Non-current assets and disposal groups held for sale

Financial impact1

Additional information

1

Impairment losses and reversals of impairment losses are included in Other income.

Global Transaction Banking

A wholly owned subsidiary, providing merchant acquiring services to multi-national clients.

None.

Disposal in the second quarter 2013

Corporate Banking & Securities

Several disposal groups, consisting of foreclosure assets.

None.

Disposals in 2013

Deutsche Asset & Wealth Management

Disposal group mainly consisting of real estate fund units.

None.

Disposal in the first quarter 2013

Disposals in 2012

Division

Disposal

Financial impact1

Date of the disposal

1

Impairment losses and reversals of impairment losses are included in Other income.

Former Corporate Investments

The exposure in Actavis mainly consisted of € 4.0 billion in loans and € 33 million in equity method investments.

As a result of the substantial progress towards an agreement for a third party to acquire Actavis, the Group recognized an impairment loss of € 257 million in the first quarter 2012, before its classification as held for sale. The classification as held for sale did not result in any additional impairment loss. Ongoing negotiations with the buyer may result in an adjustment to the contractual purchase price.

Fourth quarter 2012

Former Corporate Investments

Several buildings held as property and equipment.

None.

In 2012

Corporate Banking & Securities

A disposal group mainly including traded loans, mortgage servicing rights and financial guarantees.

An impairment loss of € 22 million was recorded in 2011.

First quarter 2012

Former Asset & Wealth Management

Several disposal groups and several assets previously acquired as part of the acquisition of the Sal. Oppenheim Group.

None.

In 2012

Change in Classification in 2012

Division

Change in classification

Financial impact1

Date and reason for change in classification

1

Impairment losses and reversals of impairment losses are included in Other income.

Corporate Banking & Securities

An investment in an associate.

The classification of the investment as held for sale led to an initial impairment loss of € 2 million in 2011 and, due to a change in the fair value less cost to sell, to a reversal of that impairment loss of € 2 million in the first quarter 2012.

Second quarter 2012, as despite attempts to sell there have not been any buyers.


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