Deutsche Bank

Annual Report 2017

Financial Position

 

 

 

2017 increase (decrease)
from 2016

in € m.

Dec 31, 2017

Dec 31, 2016

in € m.

in %

Cash and central bank balances

225,655

181,364

44,291

24

Interbank balances (w/o central banks)

9,265

11,606

(2,341)

(20)

Central bank funds sold, securities purchased under resale agreements and securities borrowed

26,703

36,368

(9,665)

(27)

Trading assets

184,661

171,044

13,617

8

Positive market values from derivative financial instruments

361,032

485,150

(124,118)

(26)

Financial assets designated at fair value through profit or loss

91,276

87,587

3,690

4

thereof:

 

 

 

 

Securities purchased under resale agreements

57,843

47,404

10,439

22

Securities borrowed

20,254

21,136

(882)

(4)

Loans

401,699

408,909

(7,210)

(2)

Securities held to maturity

3,170

3,206

(36)

(1)

Brokerage and securities related receivables

83,015

105,100

(22,085)

(21)

Remaining assets

88,256

100,213

(11,957)

(12)

Total assets

1,474,732

1,590,546

(115,814)

(7)

Deposits

580,812

550,204

30,608

6

Central bank funds purchased, securities sold under repurchase agreements and securities loaned

24,793

29,338

(4,545)

(15)

Trading liabilities

71,462

57,029

14,433

25

Negative market values from derivative financial instruments

342,726

463,858

(121,132)

(26)

Financial liabilities designated at fair value through profit or loss

63,874

60,492

3,382

6

thereof:

 

 

 

 

Securities sold under repurchase agreements

53,840

50,397

3,442

7

Securities loaned

1,040

1,298

(258)

(20)

Other short-term borrowings

18,411

17,295

1,116

6

Long-term debt

159,715

172,316

(12,601)

(7)

Brokerage and securities related payables

106,742

122,019

(15,276)

(13)

Remaining liabilities

38,098

53,176

(15,079)

(28)

Total liabilities

1,406,633

1,525,727

(119,094)

(8)

Total equity

68,099

64,819

3,280

5

Movements in Assets

As of December 31, 2017, total assets decreased by € 115.8 billion (or 7 %) compared to year-end 2016.

The overall decrease was primarily driven by a € 124.1 billion reduction in positive market values from derivative financial instruments, mainly attributable to interest rate products as changes in interest rate curves were inversely correlated to changes in the mark-to-market values, as well as foreign exchange rate products primarily driven by lower volatility and decline in customer flows.

Brokerage and securities related receivables decreased by € 22.1 billion primarily driven by lower cash/margin receivables in line with lower collateral requirements corresponding to the decrease in negative market values from derivative financial instruments and lower receivables from unsettled regular way trades.

Loan volume decreased by € 7.2 billion mainly driven by foreign exchange rate movements, in particular the strengthening of the Euro versus the US Dollar.

These decreases were partly offset by an increase in cash and central bank balances by € 44.3 billion, mostly driven by deposits and proceeds from our capital raise as well as a result of our liquidity management activities.

Trading assets increased by € 13.6 billion primarily driven by our debt securities portfolio due to increased client activity and increased bond positions in EU and US rates businesses.

The overall movement of the balance sheet included a decrease of € 77.8 billion due to foreign exchange rate movements mainly driven by strengthening of the Euro versus the U.S. Dollar. The effects from foreign exchange rate movements are also reflected in the development of the balance sheet line items discussed in this section.

Movements in Liabilities

As of December 31, 2017, total liabilities decreased by € 119.1 billion (or 8 %) compared to year-end 2016.

The overall reduction was primarily driven by a € 121.1 billion decrease in negative market values from derivative financial instruments primarily due to the same factors as the movements in positive market values from derivative financial instruments as discussed above.

A € 15.3 billion decrease in brokerage and securities related payables also contributed to the overall reduction, primarily due to the same factors as the movements in brokerage and securities related receivables as discussed above.

Long-term debt decreased by € 12.6 billion primarily due to higher outflows compared to new issuances in aggregate.

The overall decreases were partly offset by a € 30.6 billion increase in deposits during the period, due to increased customer inflows as a result of campaigns in our Private and Commercial Bank as well as cash management initiatives in our transaction banking business. In addition, we saw a recovery in deposit balances during 2017 as we regained client deposits following outflows in the second half of 2016.

Trading liabilities increased by € 14.4 billion, mainly attributable to increased trading activities in EU and US rates businesses.

Similar to total assets, the impact of foreign exchange rate movements during the period is already embedded in the overall movements in liabilities as discussed in this section.

Liquidity

Liquidity reserves amounted to € 280 billion as of December 31, 2017 (compared to € 219 billion as of December 31, 2016). We maintained a positive liquidity stress result as of December 31, 2017 (under the combined scenario).

Equity

Total Equity as of December 31, 2017 increased by € 3.3 billion compared to December 31, 2016. The main factor contributing to the increase was a capital increase of € 8.0 billion from the issuance of 687.5 million new common shares in April 2017. The effect of the capital increase was partly offset by the following items: a net loss from exchange rate changes of € 2.6 billion (related especially to the U.S. dollar), the net loss attributable to Deutsche Bank shareholders and additional equity components of € 751 million, cash dividends paid to Deutsche Bank shareholders of € 392 million, the reduction of unrealized gains (losses) of both financial assets available for sale and derivatives hedging the variability of cash flows, net of tax of € 348 million, coupons paid on additional equity components of € 298 million as well as costs of the capital increase, net of tax of € 135 million.

Regulatory Capital

Our Common Equity Tier 1 (CET 1) capital according to CRR/CRD 4 as of December 31, 2017 increased by € 3.0 billion to € 50.8 billion, compared to € 47.8 billion as of December 31, 2016. Risk-weighted assets (RWA) according to CRR/CRD 4 decreased by € 12.9 billion to € 343.3 billion as of December 31, 2017, compared to € 356.2 billion as of December 31, 2016. Due to the increase in CET 1 capital and decrease in RWA, the CRR/CRD 4 CET 1 capital ratio as of December 31, 2017 increased to 14.8 % compared to 13.4 % as of December 31, 2016.

Our fully loaded CRR/CRD 4 CET 1 capital as of December 31, 2017 amounted to € 48.3 billion, € 6.0 billion higher compared to € 42.3 billion as of December 31, 2016. Fully loaded CRR/CRD 4 RWA were € 344.2 billion, € 13.3 billion lower compared to € 357.5 billion as of December 31, 2016. This resulted in the fully loaded CRR/CRD 4 CET 1 capital ratio as of December 31, 2017 increasing to 14.0 % compared to 11.8 % as of December 31, 2016. For details of the development please refer to “Management Report: Risk and Capital Performance: Capital and Leverage Ratio”.