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

 

Sep 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 %

1

Diversification benefit across credit, market, operational and strategic risk (largest part of business risk)

Credit Risk

19

11

7

1

3

0

13,099

42

Market Risk

17

10

1

5

5

9

14,475

47

Operational Risk

11

4

0

3

5

0

6,778

22

Business Risk

6

0

0

0

2

0

2,497

8

Diversification Benefit1

(10)

(3)

(1)

(2)

(3)

0

(6,017)

(20)

Total EC in € m.

13,202

6,742

2,383

2,155

3,667

2,682

30,831

100

In %

43

22

8

7

12

9

100

0

 

Dec 31, 20131

 

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 %

1

Amounts allocated to the business segments have been restated to reflect comparatives according to the structure as of September 30, 2014.

2

Excluding strategic risk which was not included in the calculation of the diversification benefit for 2013.

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

Business Risk

5

0

0

0

1

0

1,682

6

Diversification Benefit2

(7)

(3)

(1)

(2)

(4)

0

(4,515)

(17)

Total EC in € m.

11,176

6,671

2,039

2,010

3,566

1,710

27,171

100

In %

41

25

8

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 (Deutsche AWM) business are guarantees on investment funds, which we report as nontrading market risk. Otherwise Deutsche AWM’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; and assets with significant capital absorption but low returns. 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.