Internal Capital Adequacy

As the primary measure of our Internal Capital Adequacy Assessment Process (ICAAP) we assess our internal capital adequacy based on our “gone concern approach” as the ratio of our total capital supply divided by our total capital demand as shown in the table below. Our capital supply definition is aligned with the CRR/CRD 4 capital framework.

Internal Capital Adequacy

in € m.
(unless stated otherwise)

Sep 30, 2014

Dec 31, 2013

1

Includes deduction of fair value gains on own credit-effect relating to own liabilities designated under the fair value option as well as the debt valuation
adjustments.

2

Includes fair value adjustments for assets reclassified in accordance with IAS 39 and for banking book assets where no matched funding is available. A € 87 million positive adjustment for assets reclassified in accordance with IAS 39 was not considered.

3

Includes noncontrolling interest up to the economic capital requirement for each subsidiary.

Capital Supply

 

 

Shareholders’ Equity

66,352

54,719

Fair Value gains on own debt and debt valuation adjustments, subject to own credit risk1

(453)

(537)

Deferred Tax Assets

(6,850)

(7,071)

Fair Value adjustments for financial assets reclassified to loans2

0

(363)

Noncontrolling Interests3

0

0

Hybrid Tier 1 capital instruments

14,720

12,182

Tier 2 capital instruments

6,665

9,689

Capital Supply

80,435

68,619

 

 

 

Capital Demand

 

 

Economic Capital Requirement

30,831

27,171

Intangible Assets

14,672

13,932

Capital Demand

45,503

41,103

 

 

 

Internal Capital Adequacy Ratio in %

177

167

A ratio of more than 100 % signifies that the total capital supply is sufficient to cover the capital demand determined by the risk positions. This ratio was 177 % as of September 30, 2014, compared with 167 % as of December 31, 2013. The change of the ratio was driven by an increase in capital supply. Shareholders’ Equity increased by € 11.6 billion mainly driven by the capital increase completed on June 25, 2014. Hybrid Tier 1 capital instruments increased by € 2.5 billion mainly driven by the issuance of Additional Tier 1 Notes on May 20, 2014. Further details are explained in the section “Capital Management”. Tier 2 capital instruments decreased by € 3.0 billion mainly due to called capital instruments. The increase in capital demand was driven by higher economic capital requirement as explained in the section “Overall Risk Position”.

The above capital adequacy measures apply for the consolidated Group as a whole (including Postbank) and form an integral part of our Risk and Capital Management framework.