Deutsche Bank

Annual Report 2017

Deutsche Bank Performance

In 2017, Deutsche Bank generated income before income taxes of € 1.2 billion. The result reflects lower noninterest expenses compared to 2016 and was impacted by significant revenue headwinds. A one-time tax charge of € 1.4 billion as a result of the U.S. tax reform led to a net loss of € 0.7 billion. During the year, we successfully resolved a number of legacy litigation matters and continued to invest in control improvements. We made tangible progress in executing on technology and business strategic initiatives. In addition, we maintained a high level of liquidity and capital which was supported by a successfully executed capital raise in April 2017 and by prudent balance sheet management.

Group Key Performance Indicators

Status end of 2017

Status end of 2016

1

Based on Net Income attributable to Deutsche Bank shareholders and additional equity components. For further information, please refer to “Supplementary Information: Non-GAAP Financial Measures” of this report.

2

Total noninterest expenses excluding impairment of goodwill and other intangible assets, litigation, policyholder benefits and claims and restructuring and severances For further information, please refer to “Supplementary Information: Non-GAAP Financial Measures” of the report.

3

Total noninterest expenses as a percentage of total net interest income before provision for credit losses plus noninterest income.

4

Risk-weighted assets and capital ratios are based upon CRR/CRD 4 fully-loaded.

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

Further detail on the calculation of this ratio is provided in the Risk Report.

Net revenues

€ 26.4 bn

€ 30.0 bn

Income (loss) before income taxes

€ 1.2 bn

€ (0.8) bn

Net income (loss)

€ (0.7) bn

€ (1.4) bn

Post-tax return on average tangible shareholders’ equity1

(1.4) %

(2.7) %

Post-tax return on average shareholders' equity1

(1.2) %

(2.3) %

Adjusted costs2

€ 23.9 bn

€ 24.7 bn

Cost/income ratio3

93.4 %

98.1 %

Risk-weighted assets (RWA)4

€ 344.2 bn

€ 357.5 bn

CRR/CRD 4 fully loaded Common Equity Tier 1 ratio5

14.0 %

11.8 %

Fully loaded CRR/CRD 4 leverage ratio6

3.8 %

3.5 %

Net revenues in 2017 were € 26.4 billion, a decline of € 3.6 billion, or 12 % from 2016. The decline principally reflected the impact of challenging market conditions and strategic business disposals. It included the negative impact of € 348 million from Debt Valuation Adjustments (DVA), € 213 million from Currency Translation Adjustment (CTA) realization on disposals, € 164 million related to the tightening of our own credit spreads and € 157 million related to a partial sale of the retail business in Poland in 2017. Additionally, revenues in 2017 declined as 2016 included a revenue contribution of € 618 million from Hua Xia Bank Co. Ltd., € 161 million from Private Client Services (PCS) as well as € 537 million from Abbey Life, which were sold in 2016. Excluding these effects, our net revenues were lower by 5 %, as compared to 2016. Revenues in Corporate & Investment Bank (CIB) were impacted by higher funding costs, a consistently low level of volatility, subdued client activity, as well as client and perimeter adjustments in Global Transaction Banking (GTB). Revenues in Private & Commercial Bank (PCB) declined, primarily from the impact of business disposals and pressure on deposit revenues from the low interest rate environment. The decline was partly offset by growth in revenues from loans and investment products and positive impacts from workout activities in Sal. Oppenheim. Revenues in Deutsche Asset Management (Deutsche AM) decreased significantly as compared to 2016, primarily related to the non-recurrence of revenues from Abbey Life which was sold at the end of 2016, proceeds on the sale of Deutsche AM India and a write-up related to Heta Asset Resolution AG (HETA), both recorded in 2016.

Noninterest expenses in 2017 were € 24.7 billion, a decrease of € 4.8 billion or 16 %, from 2016. The reduction was mainly driven by lower litigation expenses, lower impairment of goodwill and other intangible assets and the absence of policy-holder benefits and claims related to Abbey Life. Partly offsetting were higher accruals for variable compensation due to a return to a normalized variable compensation framework in 2017.

Adjusted costs in 2017 were € 23.9 billion as compared to € 24.7 billion in 2016, a decrease of € 843 million or 3 %. The improvement was primarily driven by lower legal fees, reduced costs for external advice and the wind-down of NCOU, partly offset by the aforementioned higher accruals for variable compensation.

Income before income taxes was € 1.2 billion in 2017 compared to a loss before income taxes of € 810 million in 2016. The improvement of € 2.0 billion was mainly driven by significantly lower impairment of goodwill and other intangible assets as well as significantly lower litigation charges.

Income tax expense was € 2.0 billion in 2017, including the aforementioned one-time tax charge of € 1.4 billion attributable to the re-measurement of U.S. Deferred Tax Assets as a result of the U.S. tax reform.

We reported a net loss of € 735 million in 2017, driven by the aforementioned one-time tax charge, as compared to a net loss of € 1.4 billion in 2016.

Our CRR/CRD 4 fully loaded Common Equity Tier 1 (CET1) ratio was 14.0 % at the end of 2017, up from 11.8 % at the end of 2016, resulting from proceeds of the capital raise in April 2017. The phase-in CET 1 ratio at the year-end 2017 was 14.8 %.