Deutsche Bank

Annual Report 2017

Non-Core Operations Unit

in € m.

 

 

 

2017 increase
(decrease)
from 2016

2016 increase
(decrease)
from 2015

(unless stated otherwise)

2017

2016

2015

in € m.

in %

in € m.

in %

N/M – Not meaningful

1

Segment assets represent consolidated view, i.e., the amounts do not include intersegment balances.

2

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

3

See Note 4 “Business Segments and Related Information” to the consolidated financial statements for a description of how average shareholders’ equity is allocated to the divisions.

Net revenues

(382)

794

382

N/M

(1,176)

N/M

thereof:

 

 

 

 

 

 

 

Net interest income and net gains (losses) on financial assets/liabilities at fair value through profit or loss

(1,307)

(362)

1,307

N/M

(944)

N/M

Provision for credit losses

128

51

(128)

N/M

76

148

Noninterest expenses

 

 

 

 

 

 

 

Compensation and benefits

68

86

(68)

N/M

(18)

(20)

General and administrative expenses

2,678

2,921

(2,678)

N/M

(243)

(8)

Policyholder benefits and claims

0

0

0

N/M

0

N/M

Impairment of goodwill and other intangible assets

(49)

0

49

N/M

(49)

N/M

Restructuring activities

4

(1)

(4)

N/M

5

N/M

Total noninterest expenses

2,701

3,006

(2,701)

N/M

(304)

(10)

Noncontrolling interests

(4)

1

4

N/M

(5)

N/M

Income (loss) before income taxes

(3,207)

(2,264)

3,207

N/M

(943)

42

Assets1

5,523

23,007

(5,523)

N/M

(17,485)

(76)

Risk-weighted assets2

9,174

32,896

(9,174)

N/M

(23,722)

(72)

Average shareholders' equity3

1,682

3,735

(1,682)

N/M

(2,052)

(55)

2017

From 2017 onwards, Non-Core Operations Unit (NCOU) ceased to exist as a standalone division. The remaining legacy assets as of December 31, 2016 are now managed by the corresponding operating segments, predominately Corporate & Investment Bank and Private & Commercial Bank.

2016

During 2016, NCOU successfully executed its de-risking strategy and reduced its portfolio in size to achieve its year-end closure target. Activity focused on initiatives aimed at delivering efficient capital contribution and de-leveraging results, which took place across a number of portfolios. These included the resolution of long-dated derivative exposures as well as various bond sales and further unwinds across the correlation and negative basis portfolios. The sale of our stakes in Maher Port Elizabeth and Red Rock Resorts were also completed in the period.

Net revenues for NCOU in the reporting period were negative € 382 million versus positive € 794 million in the prior year. This was predominately driven by de-risking losses of € 821 million, mainly from an unwind of long dated derivative exposures and related assets, partially offset by a gain of € 368 million in relation to Red Rock Resorts. In addition portfolio revenues declined following asset sales including Maher Prince Rupert, which was partially offset by lower valuation adjustments and mark-to-market impacts. Net revenues in 2015 included € 219 million from a specific litigation recovery and a gain of € 195 million on the sale of Maher Prince Rupert.

Provisions for credit losses increased by € 76 million, in comparison to 2015. This was predominantly driven by higher provisions taken against the European residential mortgages and commercial loans which included IAS 39 reclassified assets.

Noninterest expenses decreased by € 304 million, or 10 %, in comparison to 2015 predominately due to lower litigation related expenses. Costs excluding litigation charges were 18 % lower year-on-year, driven by asset sales including Maher Prince Rupert in 2015.

The loss before income taxes increased by € 943 million to € 3.2 billion, compared to 2015. The increase was primarily driven by losses from de-risking activity, while noninterest expenses were lower.