Deutsche Asset & Wealth Management Corporate Division (DeAWM)

2014 to 2013 Three Months Comparison

In the third quarter of 2014, Deutsche AWM continued to benefit from higher market levels, increased net new money and greater assets under management. An increase in market volatility during the quarter increased client activity and trading revenues. However, performance continues to be impacted by increased regulatory costs and an ongoing low interest rate environment, which challenges deposit revenue margins.

In Deutsche AWM, net revenues were € 1.3 billion in the third quarter 2014, remaining stable compared to the third quarter 2013.

Management Fees and other recurring revenues increased by € 25 million, or 4 %, due to an increase in the average assets under management for the quarter following positive flow, increased market levels and foreign currency effects. Performance and transaction fees and other non-recurring revenues were up € 21 million, or 9 %, driven by higher transactional volumes from structured products and foreign exchange products for private clients. Net interest income increased by € 12 million, or 9 %, due to increased lending volume and improved lending margins in the third quarter of 2014. Other product revenues increased compared to the third quarter 2013 by € 50 million, or 61 %, mainly due to net gains on fair value changes. Mark-to-market movements on policyholder positions in Abbey Life decreased by € 106 million versus third quarter 2013.

Provision for credit losses remained unchanged compared to the third quarter 2013 at very low levels.

Noninterest expenses of € 977 million in the third quarter 2014 decreased by € 5 million, or 1 %, compared to the third quarter 2013 driven by lower policyholder benefits and claims, offset by prior year litigation reserve release, increased compensation costs mainly in respect of greater regulatory reporting requirements, and higher costs-to-achieve related to OpEx.

Income before income taxes was € 288 million in the third quarter 2014, an increase of € 6 million, or 2 %, compared to the third quarter 2013.

In the third quarter 2014, invested assets were € 1,006 billion as of September 30¸ 2014, an increase of € 51 billion versus June 30, 2014, mainly driven by foreign exchange movements of € 31 billion, inflows of € 17 billion and market appreciation of € 5 billion. Net inflows of € 17 billion were recorded across all products, with strong flows in both retail and institutional business.

2014 to 2013 Nine Months Comparison

In the first nine months of 2014, Deutsche AWM continued to benefit from higher market levels, increased net new money and greater assets under management. This has been offset by lower performance fees, reduced client activity and increased regulatory costs.

In Deutsche AWM, net revenues in the first nine months of 2014 decreased by € 82 million, or 2 %, compared to the first nine months of 2013. Management Fees and other recurring revenues increased by € 89 million, or 5 %, due to an increase of the average assets under management driven by positive flow and market effect. Performance and transaction fees and other non-recurring revenues were down € 66 million, or 10 % driven by lower performance fees in alternatives, and lower transaction revenues from capital markets and foreign exchange products for private clients. Net interest income increased by € 23 million, or 5 %, due to increased lending volumes and improved lending margins. Other product revenues increased compared to the first nine months of 2013 by € 44 million, or 18 %, partly due to higher revenues from alternative products. Mark-to-market movements on policyholder positions in Abbey Life decreased by € 172 million, or 45 %, versus the first nine months of 2013.

Provision for credit losses decreased by € 20 million compared to the first nine months of 2013 mainly resulting from lower specific client-related lending provisions and the recovery of prior losses in the second quarter 2014.

Noninterest expenses of € 2.8 billion in the nine months of 2014 decreased by € 142 million, or 5 %, compared to the first nine months 2013 driven by lower policyholder benefits, lower costs-to-achieve related to OpEx and the positive impact of ongoing OpEx program measures, offset by litigation reserve release in the prior year and increased compensation costs mainly in respect of greater regulatory reporting requirements.

Income before income taxes was € 662 million in the first nine months of 2014, an increase of € 80 million, or 14 %, compared to the first nine months of 2013, mainly due to lower noninterest expenses.