Key Performance Indicators

Group Key Performance Indicators

Status end of 2014

Target for 2015

Target for 2016

1

Based on Net Income attributable to Deutsche Bank shareholders; adjusted for litigation, CtA, impairment of goodwill and intangible assets, other severances and CRR/CRD 4 Credit Valuation Adjustment (CVA)/Debt Valuation Adjustment (DVA)/Funding Valuation Adjustment (FVA). Calculation is based on an adjusted tax rate of 34 % for the year ended December 31, 2014.

2

Reported Cost/income ratio based on total noninterest expenses as a percentage of total net interest income before provision for credit losses plus noninterest income. Adjusted Cost/income ratio based on noninterest expenses, adjusted for litigation, CtA, impairment of goodwill and intangible assets, policyholder benefits and claims, other severances and other divisional specific cost one-offs; divided by reported revenues.

3

Cost savings (gross) resulting from the implementation of the OpEx program.

4

Costs to achieve (CtA) savings are costs which are directly required for the realisation of savings in the OpEx program.

5

The CRR/CRD 4 fully loaded Common Equity Tier 1 ratio represents our calculation of our Common Equity Tier 1 ratio without taking into account the transitional provisions of CRR/CRD 4. Further detail on the calculation of this ratio is provided in the Risk Report.

6

The fully loaded CRR/CRD 4 Leverage Ratio represents our calculation based on the revised CRR/CRD 4 following the delegate act as published on Jan 17, 2015. Further detail on the calculation of this ratio is provided in “Balance Sheet Management” of this report.

Post-tax return on average active equity1

(adjusted) 7.1 %
(reported) 2.7 %

~ (adjusted) 12 %

~ (reported) 12 %

Cost/income ratio2

(adjusted) 74.4 %
(reported) 86.7 %

~ (adjusted) 65 %

~ (reported) 65 %

Cost savings3

€ 3.3 bn per annum

€ 4.5 bn per annum

 

Costs to achieve savings4

€ 2.9 bn

€ 4 bn

 

CRR/CRD 4 fully loaded Common Equity Tier 1 ratio5

11.7 %

Greater than 10 %

Greater than 10 %

Fully loaded CRR/CRD 4 Leverage Ratio6

3.5 %

~ 3.5 %

~ 3.5 %

Cost management is a key driver in our strategy. Sustainable performance is about prioritising long-term success over short-term gain. This means investing in people and infrastructure to make us fit for the future. The Operational Excellence (OpEx) Program is transforming the franchise with more than 160 projects across the organisation. We have already invested € 2.9 billion to rationalise and standardise processes and to save time and resources. We expect the majority of the expenditures originally targeted for 2014 will be spent in 2015 in line with regulatory developments to deliver a stronger and more efficient platform. With € 3.3 billion of cost savings per annum recognized in 2014 we are currently ahead of our plan.

in € bn.

Targeted
Investments

Targeted
Incremental Savings

2012

0.6

0.4

2013

1.7

1.2

2014

1.5

1.3

2015

0.2

1.6

Total

4.0

4.5

We are still committed to achieve our Strategy 2015+ target of € 4.5 billion in annual cost savings. We will continue to focus on investing in technology, streamlining our organization and simplifying processes to ensure more efficient resource use.

In our May 2014 announcement, we targeted an adjusted cost-income ratio of approximately 65 %. Since that announcement regulatory induced projects as well as incremental headcount to strengthen control functions, and to comply with additional regulatory requirements, as well as increased ongoing charges such as bank levies, have resulted in cost spend beyond previous expectations. Additionally market challenges, especially the low interest rate environment, have continued and in some regions worsened in the period, impacting our revenue growth. Although we will strive to reach the cost-income ratio target we expect these regulatory and market environment headwinds to substantially challenge our achievements in 2015.

In 2014, our post-tax return on equity was impacted by various factors including the strengthening of our capital base. Our progress towards our revised target of an adjusted post-tax return on average active equity target of around 12 % will continue to be impacted by regulatory induced costs, additional bank levy charges, the on-going challenging market conditions and volatile effective tax rates. We will continue to work towards our target but progress will be difficult with the current headwinds.

Capital management remains a key focus for the Bank. In 2014, we further reduced our risk weighted asset (RWA) position in line with Strategy 2015+ and we will continue to demonstrate a strict RWA discipline in 2015. We will carry on with our de-risking program, although the speed of de-risking is anticipated to slow as the NCOU portfolio decreases in size. Our CRR/CRD 4 fully loaded Common Equity Tier 1 capital ratio (CET 1 ratio) at year end 2014 was 11.7 %, already exceeding our Strategy 2015+ target of greater than 10 % and we expect to remain in excess of the target in 2015. However we expect regulation to continue to develop. The European Banking Authority’s Regulatory Technical Standards, such as Prudent Valuation, and the transition to a Single Supervisory Mechanism may have a significant impact on our capital positions in 2015.

We have reduced our leverage exposure already significantly. The issuance of new capital and the reduction of CRD 4 exposure helped us to strengthen our leverage ratio to 3.5 % by the end of 2014. We expect regulatory requirements to evolve in the coming year, as described above. Due to continued active CRD 4 exposure management we are nevertheless highly committed to achieve our fully loaded CRR/CRD 4 leverage ratio target of about 3.5 % by end of 2015.

Client’s interests are at the centre of all our actions. Bank business will be changing fundamentally within the next few years and this transformation has already started. Social media, blogs and forums will offer relevant services, information and products to clients and hence will foster the redesign of customer relationships through digital technology and innovation. In addition, our businesses will be working more closely and intensively together to deliver ‘One Bank’ to our clients as cooperation is key to achieving our vision to be truly global.

We continue to focus on cultural change, embedding our values and beliefs and improving our control environment. Our Three Lines of Defense program has been launched to comprehensively analyse our internal control system and ensure the strengthening of our governance structures and control processes. We continue to promote diversity and partnership throughout the organization with the belief that both are integral to achieving our vision of being the leading client-centric global universal bank.


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