Deutsche Bank

Annual Report 2017

Noninterest Expenses

in € m.

 

 

 

2017 increase
(decrease)
from 2016

2016 increase
(decrease)
from 2015

(unless stated otherwise)

2017

2016

2015

in € m.

in %

in € m.

in %

2

Includes litigation related expenses of € 0.2 billion in 2017, € 2.4 billion in 2016 and € 5.2 billion in 2015.

Compensation and benefits

12,253

11,874

13,293

380

3

(1,419)

(11)

General and administrative expenses1

11,973

15,454

18,632

(3,481)

(23)

(3,178)

(17)

Policyholder benefits and claims

0

374

256

(374)

(100)

117

46

Impairment of goodwill and other intangible assets

21

1,256

5,776

(1,235)

(98)

(4,520)

(78)

Restructuring activities

447

484

710

(37)

(8)

(226)

(32)

Total noninterest expenses

24,695

29,442

38,667

(4,747)

(16)

(9,225)

(24)

N/M – Not meaningful

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1 includes:

 

 

 

 

 

 

 

IT costs

3,798

3,872

3,664

(74)

(2)

208

6

Occupancy, furniture and equipment expenses

1,849

1,972

1,944

(123)

(6)

28

1

Professional service fees

1,769

2,305

2,283

(536)

(23)

22

1

Communication and data services

686

761

807

(75)

(10)

(46)

(6)

Travel and representation expenses

405

450

505

(45)

(10)

(56)

(11)

Banking and transaction charges

744

664

598

80

12

66

11

Marketing expenses

309

285

294

24

8

(9)

(3)

Consolidated investments

0

334

406

(334)

N/M

(72)

(18)

Other expenses2

2,414

4,812

8,129

(2,398)

(50)

(3,317)

(41)

Total general and administrative expenses

11,973

15,454

18,632

(3,481)

(23)

(3,178)

(17)

Compensation and benefits

2017

Compensation and benefits increased by € 380 million, or 3 %, to € 12.3 billion in 2017 compared to € 11.9 billion in 2016. The increase was primarily driven by higher variable compensation, reflecting the return to normal compensation programs in 2017. This increase was partly offset by a decrease in salaries, due to lower headcount and favorable foreign exchange movements, by reduced cost for amortization of prior years’ deferrals and by lower severance expense.

2016

Compensation and benefits decreased by € 1.4 billion, or 11 %, to € 11.9 billion in 2016 compared to € 13.3 billion in 2015, primarily due to significantly limited 2016 variable compensation.

General and administrative expenses

2017

General and administrative expenses decreased by € 3.5 billion, or 23 %, to € 12.0 billion in 2017 compared to € 15.5 billion in 2016. The decrease was mainly due to a € 2.2 billion reduction in litigation charges compared to 2016. Professional service fees declined by € 536 million driven by lower legal fees and reduced business consulting cost.

2016

General and administrative expenses decreased by € 3.2 billion, or 17 %, to € 15.5 billion in 2016 compared to € 18.6 billion in 2015. The decrease was mainly due to a € 2.8 billion reduction in litigation charges compared to 2015. Effects from favorable foreign exchange rate movements as well as reductions in various expense positions were partially offset by higher IT cost, including higher depreciation for self-developed software.

Policyholder benefits and claims

2017

No policyholder benefits and claims were reported for 2017 following the sale of Abbey Life business at the end of 2016.

2016

Policyholder benefits and claims increased by € 117 million, or 46 %, from € 256 million in 2015 to € 374 million in 2016 and were solely driven by higher policyholder benefits and claims recorded in the Abbey Life business. These charges were offset by net gains on financial assets/liabilities at fair value through profit or loss on policyholder benefits and claims.

Impairment of goodwill and other intangible assets

2017

Impairment charges on goodwill and other intangible assets decreased from € 1.3 billion in 2016 to € 21 million in 2017, primarily due to the non-recurrence of prior year charges. The 2016 charge reflected an impairment of € 1.0 billion in Deutsche AM, triggered by the sale of Abbey Life and an impairment of € 285 million in CIB following the transfer of certain businesses from Deutsche AM.

2016

Impairment charges on goodwill and other intangible assets decreased by € 4.5 billion, or 78 %, to € 1.3 billion in 2016, from € 5.8 billion in 2015. The decline as compared to 2015 was primarily due to the absence of 2015 charges, notably € 3.6 billion in PCB and € 2.2 billion in CIB.

Restructuring

2017

Restructuring expenses amounted to € 447 million in 2017 compared to € 484 million in 2016. Restructuring charges for 2017 are primarily related to the planned merger of Private and Commercial Clients Germany and Postbank.

2016

Restructuring expenses were € 484 million in 2016 compared to € 710 million in 2015 due to execution of strategic measures.

Income Tax Expense

2017

Income tax expense in 2017 was € 2.0 billion (2016: € 546 million). The effective tax rate of 160 % (2016: negative 67 %) was mainly impacted by a one-time charge of € 1.4 billion resulting from the U.S. tax reform and other changes in the recognition and measurement of deferred tax assets.

2016

Income tax expense in 2016 was € 546 million (2015: € 675 million). The effective tax rate of negative 67 % (2015: negative 11 %) was mainly impacted by non-tax deductible goodwill impairment and litigation charges.

Net income (loss)

2017

The 2017 result was a net loss of € 735 million, driven by the aforementioned one-time tax charge attributable to the re-measurement of U.S. Deferred Tax Assets as a result of the U.S. tax reform, compared to a net loss of € 1.4 billion in 2016.

2016

The 2016 result was a net loss of € 1.4 billion as compared to a net loss of € 6.8 billion in 2015.