Dear Shareholders,

Our General Meeting this year will take place only a few weeks after the 145th anniversary of the founding of Deutsche Bank on March 10, 1870. We mention this because the bank is facing challenges similar to the ones back then. In 1876, Georg von Siemens, Deutsche Bank’s Spokesman at the time, wrote to the co-founder Adelbert Delbrück:

“Deutsche Bank’s objective was challenging right from the very start. It involved establishing a business in Berlin that was unusual at the time. We could hardly expect much assistance with this endeavor from our fellow businessmen, and only a few would be able to help us at all. The only way to obtain the credit we required abroad was through a large commitment of capital …”
(Source: Karl Helfferich, 1923: Georg von Siemens, Ein Lebensbild aus Deutschlands großer Zeit.)

As this excerpt from Siemens’s biography by Karl Helfferich shows, discussions back then focussed not only on strategy and capital, but also on the bank’s business mix. We are writing this letter at a time when the results of the bank’s strategy review launched in 2014 are not yet available. However, it is not difficult to predict that they could give rise to critical discussions depending on the various perspectives. This was no different back in the days of the bank’s founding fathers. It is in the nature of entrepreneurialism to sometimes act against conventional opinions. What matters here is that management sets out its strategy based on a thorough consideration of the firm’s own traditions, strengths and weaknesses as well as an analysis of the current and anticipated business environment, and then resolutely pursues this course. Without disciplined implementation, even the best strategy cannot succeed. Your Supervisory Board will continue to support the bank’s strategic development by providing advice and monitoring implementation of the plans carefully. To summarize the year under review:

First quarter of 2014: In the first three months of the year, the Supervisory Board and its committees held 21 meetings. We addressed the financial statements for the year 2013, the proposed dividend and the ongoing corporate planning. In particular, we had to focus on the settlement of the legal dispute with the Kirch Group, and we continue to deal with related follow-up matters today. Other litigation cases and regulatory investigations, for example, regarding inter-bank offered rates, foreign exchange trading and CO2 emission certificates trading were deemed so important that we resolved to subject them to closer monitoring by the Supervisory Board, and in particular by the Integrity Committee, which we established in 2013. In light of the political and economic risks for the bank, we carried out an in-depth analysis of the emerging geopolitical risks in Ukraine and Russia.

Second quarter of 2014: During the second quarter, twelve meetings of the Supervisory Board and its committees took place in addition to the bank’s General Meeting. The Supervisory Board attached special importance in this period to the successful capital increase and the issuance of Additional Tier 1 capital. Another focal point of our discussions with the Management Board was on strengthening control functions, in particular, through two projects: Three Lines of Defense and House of Governance. We receive progress reports on these projects regularly.

The General Meeting in May approved the proposal to set the ratio of fixed to variable compensation at one to two for the members of the Management Board and the bank’s employees, in accordance with the provisions of the European Capital Requirements Directive IV. We adjusted the Management Board’s contracts and verified that the required principles were implemented throughout the bank. Operational risks and the challenges posed by a potential negative interest rate environment were discussed, along with the progress made in improving the bank’s regulatory and financial reporting system.

In place of Ms. Suzanne Labarge, who resigned from the Supervisory Board as of June 30, 2014, we gained an equally highly qualified sucessor, Ms. Louise Parent, as of July 1, 2014. Ms. Parent will stand for election by the General Meeting in May 2015. It is already clear that, in particular, her extensive experience enriches the Supervisory Board.

Third quarter of 2014: In the summer months, twelve meetings of the Supervisory Board and its committees were held, as well as a strategy workshop with the Management Board, the heads of the business divisions and the Supervisory Board. This established the basis for a broad-based discussion launched by the Management Board in the fourth quarter on the further development of Strategy 2015+. Additionally, regular discussions took place in this context on the Management Board’s succession planning. Focal points here were on actively fostering women in senior management positions as well as diversity in general in the workforce.

During this quarter, the Supervisory Board examined its own effectiveness and the cooperation with the Management Board through measures including group discussions as well as in-depth interviews with the individual members of the Management Board and Supervisory Board. This created the basis to report on the assessment under to the new requirements of Section 25d (11) of the German Banking Act.

In addition to several smaller changes, one of the measures we implemented to enhance the effectiveness of your Supervisoy Board was to elect Ms. Dina Dublon as Chairwoman of the Risk Committee, which led to a broader distribution of tasks. During the third quarter, we also focussed closely on IT security topics and regulatory requirements for electronic trading.

Fourth quarter of 2014: At the 17 meetings in the fourth quarter of the year, two developments played a big role. The first was the expansion of the Management Board through the appointment of Mr. Christian Sewing and Dr. Marcus Schenck. As of January 1, 2015, Mr. Sewing has been responsible for Legal and Group Audit on the Management Board. Following the General Meeting, Dr. Schenck will take on Management Board responsibility for Finance. We are convinced the bank has gained two outstanding managers for its Management Board. This realignment of Mangement Board responsibilities creates additional capacities and allows for an increased focus in the work of the Management Board. We firmly believe the Management Board is now better positioned to overcome the challenges ahead in the interests of the bank, its staff and shareholders.

A second focal point of our work in the fourth quarter was the long awaited Asset Quality Review by the European Central Bank and the Stess Test by the European Banking Authority. The results your bank achieved here were exceptionally good and in some ways signficantly surpassed external expectations. For the Audit Committee, the decision to agree to the publication of the results was straightforward, as we consider this to be a confirmation of the solid performance in this area over the past few years.

In November, the European Central Bank took over as Deutsche Bank’s lead regulator. The Management Board and Supervisory Board will do everything they can to live up to the high expectations of the bank’s new regulator. In accordance with the relevant provisions of the German Banking Act and the Regulation on Remuneration in Financial Institutions, we thoroughly examined the 2014 compensation plans and the implementation of consistent performance evaluation systems and checked if these are aligned to the bank’s risk-bearing capacity.

Finally, we would like to express our thanks to all our colleagues for their intensive work on the Supervisory Board. Of course, our special thanks for the progress made are due first and foremost to the bank’s staff members and the Management Board. We will continue to do everything we can to live up to the trust you place in us. As in 1870, there is still a great deal to be done – and every one of us has a role to play in contibuting to the sustainable success of Deutsche Bank.

On behalf of the Supervisory Board,

Dr. Paul Achleitner
Chairman

Frankfurt am Main, March 2015

Alfred Herling
Deputy Chairman