Risk Profile

Our mix of various business activities results in diverse risk taking by our business divisions. We measure the key risks inherent in their respective business models through the undiversified Total Economic Capital metric, which mirrors each business division’s risk profile before taking into account cross-risk effects at the Group level.

Risk Profile of our Business Divisions as measured by total Economic Capital

 

Jun 30, 2014

 

Corporate Banking & Securities

Private & Business Clients

Global Transaction Banking

Deutsche Asset & Wealth Management

Non-Core Operations Unit

Consoli­dation & Adjustments

 

Total

in %
(unless stated otherwise)

 

 

 

 

 

 

in € m.

in %

Credit Risk

16

12

7

1

3

0

11,923

40

Market Risk

21

10

1

5

3

8

14,456

48

Operational Risk

10

4

0

2

5

0

6,385

22

Diversification Benefit

(10)

(3)

(1)

(2)

(3)

0

(5,730)

(19)

Business Risk

8

0

0

0

2

0

3,004

10

Total EC in € m.

13,410

6,786

2,267

2,096

3,024

2,456

30,038

100

In %

45

23

8

7

10

8

100

0

 

Dec 31, 2013

 

Corporate Banking & Securities

Private & Business Clients

Global Transaction Banking

Deutsche Asset & Wealth Management

Non-Core Operations Unit

Consoli­dation & Adjustments

 

Total

in %
(unless stated otherwise)

 

 

 

 

 

 

in € m.

in %

Credit Risk

17

14

7

1

5

0

12,013

44

Market Risk

17

11

1

6

6

7

12,738

47

Operational Risk

9

3

0

2

5

0

5,253

19

Diversification Benefit

(7)

(3)

(1)

(2)

(4)

0

(4,515)

(17)

Business Risk

5

0

0

0

1

0

1,682

6

Total EC in € m.

11,181

6,671

2,033

2,010

3,566

1,710

27,171

100

In %

41

25

7

7

13

6

100

0

Corporate Banking & Securities’ (CB&S) risk profile is dominated by its trading in support of origination, structuring and market making activities, which gives rise to market risk and credit risk. Further credit risks originate from exposures to corporates and financial institutions. Under CB&S’ current business model, the remainder is derived from operational risks and business risk, primarily from potential legal and earnings volatility risks, respectively.

In contrast to this, Private & Business Clients’ (PBC) risk profile is comprised of credit risk from retail, small and medium-sized enterprises (SMEs) lending as well as nontrading market risk from investment risk, modeling of client deposits and credit spread risk.

Global Transaction Banking’s (GTB) focus on trade finance implies that the vast majority of its risk originates from credit risk with a small portion from market risk mainly in relation to derivative positions.

The main risk driver of Deutsche Asset & Wealth Management’s (DeAWM) business are guarantees on investment funds, which we report as nontrading market risk. Otherwise DeAWM’s advisory and commission focused business attracts primarily operational risk.

The Non-Core Operations Unit (NCOU) portfolio includes activities that are non-core to the Bank’s strategy; assets materially affected by business, environment, legal or regulatory changes; assets earmarked for de-risking; assets suitable for separation; assets with significant capital absorption but low returns; and assets exposed to legal risks. NCOU’s risk profile covers risks across the entire range of our operations comprising credit risks and also market and operational risks (including legal risks) targeted where possible for accelerated de-risking.