DB - Earnings call transcript Q2 2022

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Operator

Good afternoon ladies and gentlemen, thank you for standing by. I'm Franzi, your chorus call operator. Welcome, and thank you for joining the Deutsche Bank's Q2 2022 Analyst Call. Through our today's presentation all participants will be in a listen-only mode. The presentation will be followed by a question-and-answer session. Instructions]. [Operator like the conference Investor now Patriniche, to turn of Head Relations. to would over the Ioana I Please go ahead.

Ioana Patriniche

Thank you call. results second quarter for joining us for our XXXX

As the Moltke. The will as always, db.com. Christian our Executive to Financial section presentation, usual, download of available Followed website on Chief von first. Relations by Sewing, James Officer, is our Chief Investor speak Officer, our

currently let presentation not at get materials. started, the me We we contains develop hand me statements, we you of the that, to just With you Before that the ask Christian. may forward-looking which as notice our to expect. therefore remind let over end take of warning precautionary

Christian Sewing

become terrible our not A me of a we, half more the a Thank first for as and millions other well. for challenging, people. today. least the you, XXXX macro and pressures associated to results from welcome with to devastating continues economy are global warm banks, conditions in the environment the first Ioana. that like war have be not quarter quarter our the immune second end you And the of of and be as impacts. result Ukraine discussing Since It's pleasure to

from impact media target. will you ratio will As have seen XXXX our our cost/income release, they

we and Core our an Nonetheless, transforming our We and challenging. are though even Bank, have of once unprecedented are continuing both to is operating again proven work path more towards our the proud return we for the very on tangible Group bank that resilience. environment, us equity ahead are targets despite

XXXX. years our mix And year-on-year. will growth and beyond. was X% the the as business businesses, We bank operating quarter, all that of of have we investments an our a achievements, by year, since we and of half by revenue second gains a we return now quarter thought very generated Core competitive, in first continued are more X% possible we trends support more revenues in is first is X.X% share first And increase of of half impressive equity, on and of the second and driven up and X% resilient grew six half In year-on-year. quarter €XX franchise XXXX. Bank highest we in delivered an across particularly market the businesses proud four sustainable than revenues ago. the three The this in the months billion, profit core second saw the tax saw post first delivered growth from of group momentum, XXXX tangible Our

improved our also profitability We and efficiency.

First of leverage. driven was half profit operating year-on-year, positive up post-tax by XX% billion €X.X

risk the than adhere cost/income lower Our loans credit principles Provision prudent the uncertainty. reflecting months, XX% six for continue six market ratio management first was comparable X to in we finally, basis processes. the to a and overlay, was management elevated losses points average XX And of period. months, including for percentage points first

ratio the position to quarter, of a Tier XX%. quarter with equity compared capital We capital first the stable. common finished X remained Our second up

businesses, X. Now through let Slide our you in me take core progress the on

equity institutional Investment environment In of executed unfavorable challenging the than marked can FIC across the equity of Advisory tangible Origination XX% and under which continued captured interest FIC €XX with despite momentum Bank tailwinds, It this X%. We year growth tangible delivered to on six half past business saw rate first led on & the inflows environment. above supporting And Corporate clients, in first our into a alongside tangible more growth higher revenue of return assets franchise which, saw more the This new Bank, year-on-year. XXXX corporate result across client XX%. business XX% net branches. in return across divisional You equity. of see in an the as half with a on interest for closure strategy. And contributed the billion, supports strong leading the continued despite our market, Private Bank months, the loans reflected activities, X% increase ten we distribution a All-in, its highest revenues the activity Investment loan challenging on revenues management a to income. The both return plans that in our our optimize to growth businesses, level. were the growth it and with especially M&A had the more despite delivery years. the strong at channels In Bank, XXX diligently

year-on-year, of X% the same and Asset invest fees, XX% delivered growth the environment. market business revenue Management continued initiatives volatile the by despite tangible equity. to growth time, driven higher on management a delivered and transformation in platform return At

significantly. the profitability of start Looking have transformation, back progress since of improved Bank we the the at the Core

First billion XXXX. half tax before than in the period to profit same €X.X doubled more compared of

strong we to year the already months six asymmetries on revenue created for accounting more As derivatives market are a the valuation revenue much Group a led XXXX, in see around driven other as on compound by million and half & of division. have years at let we revenues of our of three first the rates X. Nonetheless, than growth delivered temporary These our me balance by expected progress summarize since hedge first sheet. half our were particularly business the beginning of exits timing in in mainly of with despite driven rates the to used the bank's and differences, our results the transformation the XXXX, momentum annual better ahead the plan franchise either or we revenues, as in volatility encouraged slide drag line are with expected is transformation These ago. revenue in each stronger highest to corporate strong growth potential. €XXX for include

was core average XX last performance in contributed which revenues of XX% we businesses, the increase with our C&O, X%. annual stable pleased of are months. especially revenues Excluding the in revenues the the than divisional over And in more businesses four

XXXX X%. we Moving Core our pre-provision more of plans our first XX% made executed basis, divisions are ahead delivered encouraged progress the efficient. return On up XXXX, in we on to a X, the on target performance significant make and we profitability, of a from by our clearly our in our on diligently Bank, half, as X.X% tangible which focused, profitable, to equity slide in

the now growth While we initiatives. Management years we Bank that stable a just in to improvements strategy. mentioned, our Asset due in XX%, as This is also increasing what effects our our our bank contribution offsetting ago the of from created line, uncertain clear success continues Bank see a balanced, this Private and are of complex Investment And volatility, by Exactly to pleased we business to is thus with pre-provision Corporate visible Bank, profit benefited our C&O our some so is while to majority when resilient improvement introduced we especially evidence perform, market we businesses, through the the very their promised FIC franchise. three our more driven win compete environment. and to

in the shareholders in can improved first coming remain that as the We from protection outlook. place profit expect hikes trends Overall, we comfort our the to years. Core operating of creates interest a billion half, believe of with these tougher pre-provision take of rate be and in many stronger in beneficiaries margins, Bank to €X.X macro-economic it

return in a significantly on by making, unlike made Let just have margins helped me negative strategy, company to at investments now ongoing years, being we to further to equity the over with as ratio the grow half we management to-date, XX turn and prior cost to and we first years these core cost/income our our on shared actions. time, tangible time. in to our you reduce as two focused clear to in for into year. to and the territory our improved businesses, focus of deliver the through percentage the us and take At investments as efficiencies In this management progress importantly we just and operating and Slide introduced from This progress X journey controls, XX% XXXX to been have the plan particularly X%, strict our base. ago same new points continued IDD managing which March, increase our cost included to technology well deliver

we of businesses, in X.X volatility the Ukraine. the from inflation, macro-economic from from bank on first has materially, litigation, six some headwinds changed differences These we impacted And valuation on environment for via compensation high the in and same drag and expected months. in favorable also larger offsets for ratio return tangible timing time, also of At percentage equity notably arising some are in setbacks around points our while than the year. However, cost/income exchange relating recent balance the of from generated levies, resulting stay higher-than-expected war items been saw the market to which our costs our items and an X.X points impact us faced uncontrollable on reductions, most and with C&O. of foreign our percentage likely to the and the planned

strategy cost/income Exactly but reason a to lever to do despite the will the our efficiency, the for and the XXs. more underlying to as we potential. as revenue items were guidance to have amended low not our cost initial Reflecting benefit run controllable with using and Together the a vision year-end contained, created a goals technology, These important decided invest ratio between And today, transformation make, our behind here higher business, targets. strategy environment were over is costs this human and last this growth some these the plans conservative company to one-year and long-term years. successful plan. and sacrificing without we to us investments a our decision our approach, ratio our is our drive no inflationary a challenging achieving for for to are our we controls stand because target we our this expenses capital, strategic long-term. not despite a the year long-term long-term that investment and and growth ahead. discipline, trade-off Given in this taken realistic belief seeing cost/income to want Therefore, in stick we on in year horizon, pressures which key have for continue longer three mid to we

are on on we will we to pressures take the ease considering necessary. environment, and and ready are to facing additional the are where our measures executing uncertain we work actions However, plans decisive

we our reducing are less XX.X% planned than towards more for continuing We XX% working and to for is our if for and at of point different on year, end tangible our more target tangible equity remain scenarios challenging. this off target return than we equity our work rate the of to year. towards this ahead prepared we of target committed run continue And and ratio the XXXX well return cost/income path are to even the on step

me time sheet, Let balance on some now to talking our Slide X. spend

macro Our challenging are of clear that we balance metrics environment means solid, more from enter a sheet a which strengths. position

been at maintain the quarter intend keep We our volatility. have XXX period regulatory above this sheet XX% of conservatively of and end, so to we buffer balance ratio With managing a a basis doing points requirements. through CETX

deposit stable funding ratio completed coverage will XXXX sources, at fund for of continue position majority above to our billion our our issuance regulatory And through we liquidity is already planned is predominantly we XXX%, robust; our and balance requirements. Our base. sheet €XX

to through positioned Slide our that felt we the what environment. changed loan by balance our why crisis And XXXX, has current caught surprise, Moving not pandemic unknowns, we and low changed is diversified; our navigate to market went we well the challenges approach explain risk risk book, is management. sheet presents to have through we in well the X, to while were and different nor which many as

of have could the me around consisting on you bank. of lending this Germany. the Bank, could is and impact in be XX% Corporate Concerns course of Bank that remind of have German material economy a the impact gas must Let supply the consider we prudent mainly over and and on retail Private our in mortgages our

what However, items to to and managed our we potential as profitability deem conservatively have can continue means improved will always do our we the and pre-provision period And development macro-economic control, balance in the based the we of this we and our the monitor on sheet so in are Furthermore, our on and will of this impact we forecasts portfolios. evolves, through intend manageable volatility. resilient. update outlook see as allowances we environment

investment ESG to We reflecting with several again. as the and will has of of are implies with nonetheless, to on that loan billion rate sustainability in growth We backdrop activity, which ESG a and by the excluding businesses, muted cumulatively lower end activity and XXXX, volumes, sectors as a sustainable corporate volumes targets our cover finance compared companies billion an year per to previous target assume see responses against XXXX. €XXX on pleased and investment simply X. later this XXXX cumulative of capital our reduction billion, ESG all These DWS, a asset intensive at Deep included reached financing and Next, in And in and is let we Ukraine. issuance also me overall year. total cumulative by factors. After activities of more war average billion briefly publish effect of exceed we on year. market prioritized been reaffirm their Slide rates have sustainability €XXX quarters, lower second this €XXX of levels activity the end generate muted impacted track our investments And €XXX believe which Sustainability are for target lower to Dive the billion track pick XXXX temporary we activity on portfolios, carbon this up we the from to €XXX financing finishing now least can you of XXXX are least to slide. at valuations, the in our

zero with details clients how and this in strategy decarbonization We on our event describe their partnering will share are net we efforts. further our at

Finally, September Deutsche sustainability effect of the Chief from its Sustainability further creating Officer position will strengthen by Bank XXXX. with governance X,

Slide our transformation, let Bank Thanks Before on summarize over X. hand I strategically. to me James, track progress our Deutsche on to the year is this right

improvement to continues substantial challenging, year market in be show half profitability. our a the Although results

leading revenue in We and generation strong our our are material strategy to on delivering businesses improvements returns. saw

in So, year, half while everyone pressures robust geopolitical achieved else, we the the a first confronted with satisfactory environment. as are and performance -- extraordinary the economic of very from we and

towards shocks work stated to strategy, our and continue towards will absorbing on We these our executing trajectory.

unchanged. to me tangible management. book to robust clear; on XXXX and resilient, loan have targets that, capital objectives. continue we and And measures deliver to James. we to plans execute on hand With our remains our continue over And Our be equity on let now risk return remain distribution to

James von Moltke

Christian. Thank you

our Total the X% revenues billion me were will down Let start quarter, on year-on-year €X.X C&O. year-on-year, despite were group billion, charges. XXXX, excluding than mainly FX up the Noninterest in negative financial for of charges Adjusted with XX. of and a restructuring performance were of modestly transformation movements on and for lower shortly. bank and levies these compensation €X.X Slide revenues X% less summary expenses up the transformation second higher by X% costs including I detail quarter severance lower costs. and driven

the XX%, of the year deferred positive line effective the broadly remainder as mix now change tax value the of we net effective the geographic tangible profit of and quarter result before for book average quarter. related to €X.X of increase for and of up rate year-on-year. billion quarter, the rate basis a €X.XX for benefitting earnings. loans a reflects with year-on-year. income expect €X.X €XX.XX, Our X.X% for adjustments an profit The €XXX generated losses XX% for of of tax in tax XX% was the is We for million provision XXXX XX the or first share The in which credit of was per higher was points billion, equity half XXXX. the an our tax group return a including was X% and on on from rate Tangible valuation a

turn Slide of We XX% the year the the billion, profit reported now prior performance Noninterest adjusted for quarter on quarter. Core on Let's to €X.X expenses year on were €X.X a for Core the down quarter. were tax X% year-on-year. up billion Bank's quarter, increased XX. X% and Bank X% before revenues the costs prior up

of Our And XX% ahead X%. cost/income year in period. post-tax was full-year down X.X%, prior for at above XX%, target ratio in of Bank our the on the the equity Core return from tangible quarter came

still our the roll on some U.S. driven increase margin point loan the for average rate longer-term dollar provide we continue half approximately Average by the over bonus portfolios. on was the also expect detail were basis of XXXX, effects, rise interest that interest interest Normalizing predominantly offset due also reflecting will NIM TLTRO of by Slide these me U.S. rises net X% to first assets increase XX. by underlying six it strengthening driven two favorable higher earning basis The from to was Let positive a books we points modestly up was growth rate. short-term the NIM one-off NIM dollar by as interest balances. and environment. The hedge effect evolution it as minus lower in and one-offs, includes euro rates deposit rate but supported benefited cash

to move we Before costs. on

comment we briefly from is billion spreads, previously €X now the We revenue more for the me rate relative curve XXXX. NII shared accounting higher costs issuance will updated Even Let favorable interest current IDD. benefit expect by with guided guidance. environment you for on the the implied March be we to increased than significantly at the than the by outlook XXXX our

Slide XX. Let's now to turn on costs

base. series As we ratio as impacted income information pressures and absorb items, investments technology. controls said, XXXX outlined, as necessary preserve target, a of in we've has uncontrollable and Christian cost and This are there our cost previously on our to look

levies, we FX XX, increased reduction bank Compensation almost performance, by declined by look and with excluding opening And on increases bank IT increased neutral reflecting charges or compared year or offset down X% If increased the prior-year basis, Turning decreased line year-on-year effects. half non-compensation FX million X% But basis. of million excluding by lower excluding million, costs salary in FX the costs million excluding flat we costs declined costs compensation to we costs €XX FX saw but of on X% effects. headcount. and neutral costs, effects. transformation Tech the and the the saw compensation On Slide excluding million costs €XXX €XX Tech benefits by million we an transformation entirely €XX quarter excluding effects. an Berlin €XX adjusted or Variable associated by €XX of more in X% and FX and were costs. increase charges levies, FX million about Center. Berlin compensation or business incurred at our were accrual essentially one-off the reflects expectations. categories a non-compensation benefit performance in All This with in the the Center. €XXX an associated higher to with adjusted related specifically,

full-year let change you a to me have give guidance. sense us drivers to Now of that moving caused review, our some the

First, nearly our approximately basis as we talked XX expected, million about higher to ratio. bank points cost contributing than €XXX levies income were we

have now we XX points. Second, and expect least at basis them €XXX than events, be to to litigation risen amounting planned, expenses additional recent on based higher an million

Center full-year real basis expect we migration and for Third, Berlin our Tech million, around points related from €XXX to costs. estate XX staff the

future The performance, despite performance outlook business performance. elements good we'd a higher the the result of base already relate as good decisions. second expenses quarter, which Thereafter, business a costs first our In to of the of year. variable that continues cost flagged management controllable more some to muted are mostly better somewhat for where we've as there had well half make are as

hires the future we IDD. made with presented line we to in the growth As plans previously support communicated, strategic at growth

on are and even we Moving we pressures. that controls, add to costs consistently expected we related investments, sacrifice higher will though than to cost the not said

while to In investment into to growth will as are further bank, addition, initiative upgrading opportunity infrastructure. infrastructure ratio. these the early and will reduce delivering and we the Focus cost/income front in back the well us to in bank and efficiencies year, of invest areas further Bank, in growth corporate efficiency the saw Corporate revenue as revenues the streamlining payments back initiatives. front an attractive our and support global payments costs, The marginal help investments further investments

€XXX sequential with year, for credit mentioned, headwinds revenue uncertainties. relate composition management of Provision Private prior-year from a The on million quarter a of in a The loans prior bank partly provisions the Christian second of X portfolio to basis, order Ukrainian materialized. number investments to level compensated the points right by these a deterioration we effects large million, small driven some Bank was parameters the this basis in our the incremental the decrease driven new believe Stage portfolio emerging as for ratio X to these prior-year may Bank. as second the net in provision have sale. quarter. increased by from Stage we despite while million, Russia had not yet and Russian quarter, such in a decided developments, continue on a release. the was portfolio for benefited quarter annualized and average Corporate changes a overlay on an macroeconomic million the or long-term. X of provisions in compared provisions As weigh new losses also truly This The €XX impairments, million. to on release €XXX cost/income the of are decisions a positive to names year new benefited lower €XXX was portfolio, provision while the of which €XX macroeconomic XX Bank and to compared few the improved reflect otherwise collateralization. by Investment and was increase

Page on capital to Moving XX.

capital a effects, €XXX capital capital for X share other payments from Tier in dividend deductions previous to of and Risk point net the reflects XXXX, now for our weighted higher ratio includes FX FX of full-year a reflecting Risk increase line and compared net weakening over drag our the CETX ratio basis translation three XXXX. from generation assets This down Euro marginally CETX came quarter. significant compared on losses million were Market Tier dividends an offset in increase last for to additional by and multiplier. SvaR more the increase quarter risk RWA. strong the and for deduction in increased, XX%, quantitative was organic operational Common principally ended basis guidance in points RWA previous a with of XX quarter. VaR X comprehensive Our at reduction Equity from higher ratio This common income. than principally coupon capital CETX credit

of Our impact cash, a and of million the including a in reflecting were leverage leverage offset ECB quarter. higher basis second year-on-year. by Core ATX points Bank basis issuance, revenues our capital our X.X%, on that, Corporate points of recognition ratio, was let’s XX. April, five Euro now Tier in which from FX basis and in increase with X significant exposure, translation was higher Higher two €XXX quarter in growth. Bank over loan Bank like-for-like earnings billion, points early turn €X.X from weakening the strong including Slide basis effects, to performance the added Corporate the quarter settled the quarterly three starting points XX% ratio. partially XX our With businesses, the This to

increased revenue operating and business from by charging was XX. environment the XX%, partially growth the strong million reported revenues by driven Deep a in growth credit the in in Provision businesses. with reflecting Services for revenues declined basis items. by specific XXXX. XX% year-on-year profitability year-on-year. strong costs rose performance, Corporate billion the benefitting Higher non-compensation and by revenue Markets trading, Slide the across of were and by and Bank a driven movements. in & double year-on-year macro-economic Noninterest modest Corporate FX partly grew and XX% at Treasury one-off year-on-year of presented Business The Bank Ukraine. combined macro million higher net higher the on of the in flat. more loans all our We leverage Corporate in revenues million interest movements. Financing in This the at segments. by and loan and movements. and commitments credit revenues of on by offset increased significantly lower Slide second on lower costs €X prior-year million lower rate in revenues of to improving mainly in revenues the and to prior-year on was quarter, December prior-year the the environment three by Client deposit offset Institutional improving compared efficiency. by and €XXX Continued segments operating Emerging and ratio line the €XXX positive challenging quarter our in growth was after release Banking expense initiatives than up loan fee billion €XXX €XX grew Return quarter, Services driven litigation Investor impacts expenses to and €XXX prior revenues rate by second matter, were Bank and quarter broadly with the higher by €XXX Advisory account by of Origination saw an I a interest the reflecting billion excluding quarter to was X% both from Corporate tax Revenues year-on-year, a tangible for in X% I’ll rate compensation environment turn Investment the Services. due income before FX impact deposit and improvements FX item to to compared improvements benefits environment, will year-on-year €X deposit and related of noninterest non-operating quarter, to increased due Noninterest repricing. cost/income and the XX%, expenses now war increased billion of driven Treasury losses resulted wide to a now expenses more XX.X% quarter, in came volumes. with Dive in turn industry equity profit trading interest increase XX. by

the increased year-on-year, strengthening. across loan primarily impact of loan higher U.S. Financing the businesses originations and the Our balances by driven dollar

€XX assets number Provision We movements. predominantly increase The continue client industries. trading exposure the to reflects to lending for average reflecting Leverage maintain of impact the and a while well-diversified XX higher, X a of activities million, commitments was larger small year-on-year points Stage weighted benefited year-on-year in portfolio increased across prior-year was a support was regions The FX events, risk flows. driven basis release. or loans. losses increase impairment from by credit of and

by flows, Slide when FIC increased from trading segment higher Strong management. also and quarter Sales compared benefiting macro was Trading Turning trading. Foreign to Emerging revenues lower by significantly prior-year. effective risk & on second and in Markets credit and to in partially XX% across XX. client disciplined the Rates across offset driven Revenues were in businesses by performance Exchange the and significantly by Revenues and activity revenues market

During our Foreign overall Euromoney business by doubled Leader FX strong was more across than in by share XXXX Emerging performance regions. Market revenues FX the market driven the Markets quarter, Survey. significantly driven challenging the ranked Financing and a & revenues revenues In but markdowns. year-on-year. flat XX% Credit were revenues down were were trading distressed environment. Origination included Advisory, essentially Exchange materially revenues reported lower by commitment reduced

commitment a feel as by revenues markdowns versus increased XX% by pool leveraged lower fee were the was lower, of XX%. industry industry market Advisory quarter. gains Revenues XX% Debt revenues in the fee to reduced an markdowns, origination capital Excluding pool XX% markets were driven impact decline. year-on-year. reduced the share reduced origination pool driven approximately approximately XX%, due fee reduction of addition revenues by of reflecting prior-year in to Equity by debt the €XXX the This million, in industry XX% declined pool approximately materially revenues.

valuation and the X% Revenues Turning items. million closures. movements €XX and to BGH costs exchange lower quarter, down impacts release Negative incremental €X.X charges expenses as also provision if movements from to The cost compensation FX on adjusted workforce and service supported specific litigation Revenue Bank savings X%. impact business the was the XX% periods in X% costs related branch up offset ruling or driven mostly initiatives and rate and expenses. by noninterest €XXX were ruling, internal including allocations billion, in XX. the volumes. of of reductions BGH Private reduction prior-year Slide million net were transformation as well compared Adjusted of for from reflected the litigation impacts lower restructuring higher the a year-on-year higher growth to across and by year-on-year, was

Private of XX%, the in cost/income the the of in tax profit of first improved a tangible prior-year XX% a period and compared result, rose to post-tax before from €XXX swung prior-year to quarter, ratio the X%. In half million a on million. loss to As Bank XXXX €XX to the return equity

non-performing billion Assets reflecting exchange net assets changes €X movements. movements in of inflows by quarter. A the prior-year offset XX loans, loss book. book. sales, by the allowances credit or loan impact weighted loan beneficial following releases XX% basis €XX a €XX XX% and €XX billion for was was tight losses and points reflecting high-quality Provision of credit billion rate regulatory under risk loan of growing market million year-on-year down declined management of a increased in from partly and by average discipline Risk negative

Assets net offset ruling fee grew income net of and across Slide Business impact of revenues Bank by adjusted XX. in the than in Private volumes periods. or the Management for on mainly products. BGH the lower €X up higher interest adjustments challenging Revenues segment more in the under a income to net billion inflows with into Turning X% Valuation environment. XX% were investment market more Germany

Entrepreneurs Americas revenues a X%, attracted up movements and Banking billion and was in deposits net increase higher deposits. from items Management net addition, €X higher or In our Private FX Premium increased our excluding the billion, Management Italy. quarter, revenues in Bank impact. revenue in a €X specific to new quarter, €X Private market this €X driven billion. more recent aligned interest reflecting loans interest have into by and continued income model. the The with volume revenue had and loans excluding we in revenues also in were were Assets Wealth increases. X% were up were mainly billion consumer investment loan items. under the in International new Starting mainly by In the products of Italy. positive by attributable coverage in supported International The Net net challenging Bank, Bank €X Revenues despite in X% disclosure client inflows billion rate client environment. growth & finance client X%, for specific deposits, growth

the costs prior-year. net financials. value items DWS performance including of adjusted interest are includes other not and XX%, on Higher fees, fair of by higher expenses into service offset by deferred Noninterest market versus costs, Revenues and a certain and consistent have matters their positive with reflects continued combined usual X% will stand-alone the as seen costs compensation impacts Higher up XX platform partly marketing, further grew despite more the reflecting costs. X% offset grew hiring non-compensation part from enforcement the increased in you higher guarantees, the investments lower other prior-year illiquid fees reminder: DWS fees turbulence. produced by costs, carried regulatory as Management inflows transformation. performance with prior-year by led compensation in products. valuations revenues. compared that results, lower and X%. were resilient This to Management than As increased Slide Asset segment My well costs the professional the in

XX% ratio As in quarter same last from by increased the last year. expenses. million before the a tax cost/income year, to declined over higher XX% Profit result, reflecting €XXX the of X% period the

as effects. products passive the by in management such billion have net flows to in Alternatives. performance margin the billion from equity, under in €XX and negative Multi-Asset impact FX by and the by exclusively market partly reflecting quarter, offset were due net quarter declined outflows outflows higher €XXX almost partly mitigated products, cash in of outflows, translation billion Net margin of €XX low positive and Assets active

in from inflows contribution. The outflows prior-year fee to with XX.X cash, management net revenue a basis in the has largely margin points in period, positive the and improved products. Excluding higher-margin lower-margin in reflecting were XX.X period flat flows

to Other of a significant & negative Slide €XXX valuation impacts €XX XXXX, quarter in €XXX Corporate a of positive loss of and timing prior-year on a the to Corporate pre-tax driver Moving XX. this contribution interest of loss the used in the similar of sheet. million valuation quarter. losses impacts, the balance Group's and recovered arise market the Valuation were are maturity. first derivatives expected These These million the driven prior-year accounting approach to hedge pre-tax timing be Other results and reported in are & by quarter was second A as instruments the and to rates, of the compared €XX with underlying quarter. on over in differences quarter. to million time million, volatility compared

Unit due negative and impacts in The broadly €XX improvement the Slide quarter. costs were recovery now as funds lower market this cost Release before declined transfer an linked the Unit and to to the the operational the impacts the XX. €X Assets shareholder financial lower billion million, liquidity volatile. to Transfer improvement exposure than year-on-year by since quarterly were negative the Release year-on-year on Risk million leverage €XX RWAs the of service significantly de-risking, the can were as loss the markets a transfer Pricing funding was risk in the transitional charges inception. €XXX Finance primarily by turn the remained the recorded costs deleveraging. bank's other versus progress Noninterest flat activities. million costs, an by flat of €XXX Revenues reduced of the making reductions the business tax from million on of guidelines more as legacy period, billion as €XX XX% Prime Finance as certain management funding to reflecting risk completion We period. well addition, compensation lower OECD reduction lowest pricing prior-year quarter, prior-year internal Capital CRU risk a lower loss by quarter, quarter internal Capital with non-recurrence broadly allocated second Expenses driven prior-year of the not Prime the for framework driven million CRU's impacts increases CRU In adjusted year-on-year operational driven improvement reduced XX% that include and expenses costs. offset €XX from in by by became and In prior-year more and million, to relating €X activities prior-year. divisions, quarter. Weighted in This by continued risk These de-risking. million were associated to and €XXX from the offset in defined

achieving Dive through Looking excluding are of costs the full-year at of for Investor in that the charges the to €XXX million remainder we target reaffirmed adjusted confident XXXX. XXXX, we of transformation Deep

and risk small year. record We to also to for further down aim a weighted leverage negative opportunistically revenue drive assets will expect the and

our challenges quality XX. the Group in XXXX. the €XX of of billion Bank strength billion The Turning finally performance testament of businesses to on strong Slide the Therefore, the Core revenue and confirm our franchise, the we is outlook despite for €XX the guidance to for ahead. can to XXXX

Christian credit right losses core are and committed and with the our expected war uncertainty slowing of continue noted, remains environment as plan, strategy the and in our we will on expenses provision to of focus and we guidance, Ukraine, our its Group as loans, in including average is long-term. see costs. for are delivery, on basis previous on However, other currently for markets our the we committed at we we our points Consistent around unprecedented believe including measures one impact our and the growth XX dislocations. the current pressures, the cost to XXXX remain and execute to But credit we as

downside full-year believe than sheet a target CETX our XXXX the stress confident and and we greater of our We we do of remain supplies in remain our disruption with And confident ratio we will capital are see the closely portfolios. can have deliver our XX.X%. targets impact conditions not Germany. prudently today of We of We in analyzed we trajectory. particularly look potential to detailed as clients, I of to path, many on actions continue management and our adverse cost me of your this Ioana support forward not taken present these more to risk, and conversations let questions. but scenario to based that, do course, scenarios, on of scenario potential with distribution the have the to monitor back manage balance With regards in are we gas hand

Ioana Patriniche

you, Thank we're ready now And with James. operator, that, take to questions.

Operator

at begin question-and-answer Instructions]. gentleman, Ladies this will session. we and [Operator the time

sir. go Chris ahead from Goldman Please from Hallam is Sachs. question first The

Chris Hallam

everybody. afternoon, good Yes,

questions. quick two So

First, on revenues.

you the You've it end end wouldn't for But say group that a high probably secondly, to bias And clearly I €XX through billion some you before storm on gas. speak, be to then saw that helpful? Is perhaps Germany's risk year. the in anymore. the range. the divisional reiterated billion fair guidance parts, upper you've €XX mentioned to see you if just think eye And of to so to moving comes could tail of talk that bias would the of it when the

steps your which that clients gas in to that speak could So a -- through themselves for taking how expect of you constraints to corporate how And are significant activity? becomes feed cost risk? would scarcity on to the tangible would the environments you to prepare an

Christian Sewing

clearly €XX be which think, years QX, seen on the three is turning the revenues of mean, going the I and I forward. more billion and billion. have everything us €XX see both that more I which all with are getting billion composition That higher of first take your €X.X months you over one me for weeks. and end each billion. half see €XX to We that And And invested into the into that again, very this range the the let of That that I rates number client we James And of businesses side, we in And billion. to I Bank, €XX the business you do be we the lower lower last since really extraordinary that the looking number the which seen the further four to on have remain all Private actually into with €XX And now with and again, and you about, happy tailwinds, would Corporate does revenue will the have with think actually in that. saw they Chris's into the quarter billion range, revenues, a items, to reaction, we that which To was bias would of with are at why we we we gave number crossed mean, QX, higher Well, trend to and confident for private guidance that €XX and for question. or take billion see quarter. account which when that least QX. per very Bank is very really which seen not is the trajectory we can quarter. a suggest the billion, banking. from I to not which in trajectory, units, in I a the QX i.e., corporate therefore talked what billion QX very see the range means is the with come clearly I and any upside have we strong continues good us, have least the Look per we because see, thank year which at result the have And we honest, €X.X to have the interest higher €X.X the which honest, question. we revenue in like the that,

given the resiliency And management, can would given same million plan €X.X of a even where view, business, in that the that quarter. continuity some And volatilities with our bank, is a we think each range for have is say I are Asset I investment around to billion. you this €X number we always this, billion there business. in the which €XXX if for

this. which number, a is I this plan think overall, we can

to to Bank strategy loan the to hence, into if all Private or coming of your there resilience and €XX the question. other James you of may range clearly If then upper you be in €XX billion. comments billion the see of add it and billion to with put your Corporate V&T symmetries take to €XX path particular in see now the together there course, coming On provision loss we we volatility, And also that confident through the range €XX risk Bank back, some from the our account is part upper the be billion on the of billion. €XX the in very in this the also and

seen and impressive. DAX possibility is say the mind on here corporates. there the First financial also to the we to or coordination on and industries family have production attention the work cooperation Germany, very, talk obviously, high. corporate is I also obviously owned done the of is side that, the and being on clients, mid-cap as resilience and and leaders the a gas in being the should between having of of across work to top preparation what but level, On to the situation in side, the I And all, that bear government very great

where right pandemic loan of obviously cannot say scenarios, from the clearly crossed years UFC €X.X past a we lot supplies that while level a high. government very €X.XX level again, corporates scenario, from And a also actively where had in we for the we taking think government I individual ago, resilience. if pretty such always where loss year, last corporate and but programs now, scenario billion situation week, is to German are have running, of two could the situations the stepped case in come to So all we of billion like do this of through proactively a steps actually of downside in alternative what in how to preparedness the this account into you you in for regard, I see also think, see the this or experience And talk a the high in. year. are provisions that leaders, the to we I actually analyzing

corporate the to given into also are looking by the the government. German very support, we the next Obviously, to which portfolio. preparedness of all Next corporates is healthy

with portfolio, German you moderate of the ATVs. corporates. degree majority with really risk think portfolio looking residential diversified portfolio investment if actually mortgages grades, the are concentration highly a And German a high into is no the We with a of about portfolio

confident. have And on view we our clearly Deutsche me side, actual first class in base side, level this And and regard, a is in the that the before. is high attention in concerning. we Bank and of So corporate the good see which portfolio, therefore, makes preparedness, portfolio the what my this on the from case given everything can development not in range

Chris Hallam

thanks. clear, Very

Operator

Please Hallett question And KBW. go the is Tom ahead. from from next

Tom Hallett

Hi, guys, thanks my for taking questions.

you've an Russian following-up the on off the book cost basis in and any managed corporate the to risk, point which provided you the ratio, this is most a the useful maintain of revised parts also secondly, impact complete scenario? And under shut XX stressed cost pretty Could Just Would under targets, And color then group on you've income you on higher obviously but the target. just higher of sort the naturally revenue the be you've front timing end if I more month loaded? us just of take implies of hefty bit and ratio, end some because I also some or to end of increases that the tell us over give costs. XX guidance, just guess it income a gas. pretty that back sensitivity cost little period? industries RFP could

ratio? that of upper So been you And And could have How happened cost the RFP you be guidance? bands would the what or income hit next you. that through how us you year keep then Thank unchanged? beyond? walk just given guidance your to new have target and confidence to lower able in

James von Moltke

on and Tom. It's want James, take Thanks, gas the Sure. both scenario. to Christian add may I'll

at And up note, at months And perspective, have us ago, as shutoff level. moment their resilience going really a So meaning to work other manufacturing, the of the we can as IFRS team. look, going, portfolio, that as lot situation, potentially in a This situation. the what bottoms bottoms a steel, described you saw gas can on bottoms affected pretty client-to-client a looking a industry you like Christian within their exposed risk together our imagine, down, that the given looking an broad both discussions up imagine scenario. and past that's you. most top X and From several with done there's you have about deep chemicals, up you the industries provided of up is of the industries. confidence from We've if energy some through in list automotive,

provisions. portfolio at stressed general about variables. what from and macroeconomic feel X pretty We swath our And also good drive looking of looked FLI Top bottom that would and a we we've at ECL of And our So the Stage teaching that, model. perspective. down, that's up been the we downgrades very in but scenario course, impacts the in is broad think in the variables conditions, both then downgrades scenarios with we a us stress To apply. in we that Obviously, severity, reasonably we reflected the was in its again, conservative it's timing. in and variables think that scenario hard published our are the compare on about or more similar the it's ECB to put the line-by-line, less with that your MEVs X question line June.

So that a measure gives all basis rough be us points, XX think about half-half. would we

see to today, impact the that So is downgrades an We they sort order would both 'XX. of we're need as that, the increment impacts XX envisaging would don't But July. produce in already scenario reflect of increment and just in with conditions a essentially have that's an Consensus present and have in the in started of an 'XX, from basis The 'XX. and in had that to Stage it's X basis X to XX of extremely a points conservative, those amount. points scenario. timing

good think would we scenario. we points, rough XX that what So while is a conservative a think conservative would in basis be already measure

the portfolio given date. given outlined, is that itself guidance Christian that think we And in see we've we in today. prudent we what to As fact, of the XX again, don't see

bottom answer more down less a day 'XX. a that half-half. shifts But likely condition, is short could and scenario view of work every into by as amount up. by, becomes it saying you our huge top In of goes scenario So simplify the

hard run in about see mid talking several we income pressures, of been us hard providing the world our for effects manage always of a see some And possibly me bit you low targets, ratio. check. to deliberately. cost range cost to in of chosen XXs flat rate, to can. -- of We rate, We've with as €XX terms a it start also to group we about now quarter impact In we're run Essentially, development. run been we've income that numbers let We're a that of that was rate a half ratio, some that's that our prepared cost a we a that But tune working given as hitting or sort the remarks. absolute quarters. In in deliberately. million is talked keep provided working as the live but call

to, revenue last to our we of talked expense that an range produces that ratio the the that essentially and outcomes Christian number, guidance that given where So remains year, talked cost about. range flat income

think the to RoTE been Now, provisions, there are supportive working series on obviously, we've number, what's there. to the of talked line. on although in we our we've are And tax And in incremented see variables. measures going an some a RoTE. other Clearly, had opportunity we that do about, we

operating a environment that measure But So cautious what that as lever, more note strike target. determination. we're management's communicating to looking We're the to every we on is about at you'd every have we can in. we're expect, deliver take

how rate income and color some about on targets. So RoTE that's hopefully cost the we're the thinking

Christian Sewing

to and Yes, just too a downside And conservative you, said loan scenario. by scenario. think by is each the And very either when packages each comes are more which in is governments a day I I what I the really Look, knowing conservative the and has corporates supply production so But redistribution, going of not the from in we use I looking is, plan have And item tell again, scenario I again, what I have view, only agree going scenario, one poured in. from the only in Again, this step part coming. redistribution to I the And again, that James to every would their conservative. and it so Also, items real number. think the is way, hence, with itself chains also rightfully important to from financially of loss Germany happened. add and can day in prepare a better. downside provision. that. their on, a what's believe, is again, my this when back have past, that. to a they discussions not do of scenario experience like base our for case From sourcing, and themselves believe prepared obviously, also line, a

Tom Hallett

Super, thank you.

Operator

Adam from is Mediobanca. Please ahead. question from next The Terelak go

Adam Terelak

I a color mean it you on coming Can increase second revenues XXXX? we you NII the half. bit said about for also interest on or year. expect, Thank I the rest materially for income tailwind questions. and support for and bit for of more year? of afternoon. one the One is What Good cost net cost, a income? have of sort on an you update the all this know that but will in this

So a become of just this what common -- year? what And bit what's that is of means. a color

an likely see revenues? bottom whether we revenue cost to think CBPB What costs revenues end you implicitly NII is €XX end it's Does revenue the you. of mean of And billion top go. the secondly, income? manage saying on So trying that to cost cost the range up on that attached the you're mentioned then basis from more sequential of range? Thank on likely output income more the driving where revenues second So is the on is you've half might this you're through a where can and year? kind actually of trajectory, guidance, the income

Christian Sewing

managing obviously we're and question how it fair about outcomes. to and in of Yes, that those the so that terms working thinking that's Tom second is to

€XXX beginning So yes, €XXX and compared the 'XX, On to about revenues, part that's for We quarter. in to look talked the million second of our up revenues, in support question. really 'XX, there's the second substantial perhaps million, your as €XXX QX, €XXX million €XXX year recognized is some it perhaps the by, million. accelerating goes year we most at million the of started, from point the to in we've had when

we'd same in some just come to think that's second the So just There that €X kind twos. is be we the spreads about about range, we're probably issuance about I realized. XX. But high say is see the half. net in curve in to in, that, now March expect mathematically credit but needs for that in from from were more a number, that If even cautious all because of 'XX on you billion lifts, forward measure, the and thing, can that that offset when costs,

significant of it's realized. the go curve, So just of QX, interesting bit little the terms in if the TLTRO, to minus upside happen. a you long there's of the how from there's some the XX end an the from of tearing end as impact, in and dynamics thing in some front curve all zero, modeling One

be might in acceleration and it QX, up less quicker in little then QX. So, a a plateau or

in of bend curve, that related So seeing the we're we significant but rate a see bit upside a the in forward. might

Adam Terelak

a small up amount. still just But for QX,

Christian Sewing

we couple But in you QX. QX Yes, expect unusual NIM guidance, gave may yes, NIM, would was some unusual expanding stuff items in and bit a QX, I of there an of there an in a be in and acceleration little QX.

Adam Terelak

very Great, clear.

Operator

Your from question from is Brupbacher Please Daniele ahead. UBS. next go

Daniele Brupbacher

cost. less more Center, bit Briefly assume compensation. the on Thanks these on well about a additional the Berlin of thank Can Tech and again the like you. et like cost is controllable afternoon cetera. side, for you disclosure more talk some Good decisions controllable I on items management

on and year can the beginning mentioned And a remarks, you I and it can implement specific additional these terms Christian, secondly, quantify think be measures, cost that for prepared qualitatively obviously the a can of lot quantification? rate you what at that, that the this of might timing, of sensitivity more even a your bit right you you probably in is then attention. mentioned at you gets

deposit down changes think balance balance change X%, also their behavior assume assuming goes are I you're let's static sheet. assumptions in X%. How people So sheet? the sensitive base these to a

would Thank you. sensitivity? that this impact how So

James von Moltke

So go lot to there. Daniele, a through

that Christian hand and perhaps every two. to a with we've costs, excluding the or off at it our year-on-year, then looking is and and of either exceptions start Look, flat with or me line FX down I'm year-on-year called costs, come back on Let schedule one sensitivity. and I'll rate out

managed about thing to the keep million talked and it salary flat. that in benefits little we year-on-year up only Tech Cash €XX moved line FX. a over So excluding it we really is call is as bonus, has Berlin the out the we've year-on-year, Center that

about anti-financial to up and we We for mostly level low That's investment that's our parties, an important to crime, up. an make. That's as some expenses which we've have from year. talked line third investment. entertainment last related unusually that's have a then travel And

and demonstrating the can and year-on-year control. comparisons we including pressure, as noncompliance, things at discipline both real being control, we're items, there about We the and just of inflation, pressure is look the I see compensation but execution. you there these about talk so, focus lots that across on And the in talk line

Christian Sewing

to my comment. specific question, your to Daniele,

least CTO we And the way. people to completing the can going shown actually obviously each with and plan. the exactly for the the most But draw other with have right is course, have course, is order our in our in want your we we're also absolutely part again, the kicked always project. business last into is €X not cost where in on that think hand, actually decision we the convinced you but we or our substantiated detailed a compensation I'm on each said comes me compensation. deliberate you James our not can we automation can always that we are we always efficiency a that years long-term are now, a we find one three for into not On should changed, whether we that. focus think and levers of And why And we are in is of which it I believe which another wouldn't processes, questioning do on which so doing Now, of Every in in now Rebecca business. deliver cost. this to restructuring we are with how is think has accrue every able we've are actually three we have IDD, being long-term will there, is restructuring done data, Office Same running, is line and we into and good 'XX, that laser what we not obviously that infrastructure, that in with bringing and projects in this developed of that is is And part QX. monthly after Head side, we not that, further our further reason But because the actually and substantiating just every well have plan, more. program kicked the a this And also saying, to increased the doing of when number the the where significantly is we we reduction of we for automation has we on invest how But cost that revenue each also to 'XX, we this of change. billion, James coming so the down the 'XX. our reduced plan, through area, of are reemphasize cost been where will of done there of last that What exactly off off items is table have except Otherwise, do whether what the the performance you top again, every company. that, was show now that we let whether more, what years. we the And not time controllable taken we on on have looking of the into changed, and spend, around our investment on do and our the over part stop that controls. it further cost situation a have actually have we doing in are have Short, on are we efficient talking review, efficiencies for said is you whenever which have investment is And the hand to what are revenue now. given where of shown, basis. then we spend situations just because to reinvest we then I most to in underlying use investment of

the makes that for rest And measures. we given confident in through developing in we but also assured think additional have have the are me to 'XX. the our that that we So target that hand. I delivering levers are guidance, going we we But are continuously 'XX to you

James von Moltke

around, terms dynamics of XX work, around models, living I in So appendix XX this just you disclosure, Daniele, that know many on in your Slides we're our attention because through rate sensitivity draw charging the is there's fascinating interest you. shift of the actually monetary so the tools Central just how and deck, and the numbers they the Bank, what have deposit policy and to

forward Adam's an now to mentioned, XX you sheet a about rate forward disclosure static balance gave May December the to June question you the to and and balance gives As we the related about response the XX the sheet. bringing Page update also that sensitivity, upside, rates.

products a sense time, there. this plus also disclosure, in over at in we that static used XX given those of we've useful It's a there, at change given And risk that the it you So there's we that elements to of of those also is sheet. and an question lot confusing rate be each changes there's looked dates sheet the an cycle, XXX with The that you as hopefully of interesting bit you. time, balance kind interest dynamics. disclosure update a see curves on is to certain opportunity. Page going as in in it And that's question, there the we've the of phrased our an to begins, interesting value an there's balance there's

looking deposit For several the asset are rate attempting from a an and now looking most banks at added we're shareholder and rising general to opportunity to there's have we've the Equally, types past environment. years, from that side a more suppress at the asset deposit us valuable balance been sheet, in in growth, the to drive value value books perspective. of the

you of product the our into growth and both volume the different pricing think place to we and build have and the something emphasis of composition. planning upside of that with working it's and the in So sheet that work if to we like But as in different also balance to businesses growth segments. terms a we're some accordingly that produce on it we

Daniele Brupbacher

very much. you great. That's Thank

Operator

from question Payen ahead. is Cheuvreux. from The go Kepler Please Nicolas next

Nicolas Payen

you that PB given Thanks developments please afternoon. have in here? very backdrop, IT my update good headline questions. the it for an merger Can project costs we much. of against the And from does potential on there? Yes, play taking delay Thank how Germany, on on the

Christian Sewing

consents the Sure. had as customer Look, it with in has add necessary the High operational that And Project agreements, in the actually Unity, delay disclosed, as of the to of of is I of a waves for repaper in of both businesses. infrastructure moved that number Transfer of we a supporting like we Nicolas, year if transition, take ruling some we also would remediation IT been quickly, and very last our merger, you Court German our to result which we've are the there consents deal steps transition, what the thanks the to execution where the including the one factors that around there's Technology customer question. where call but well. after was

And delay transition. take decision. not we decision. into the do to was really We're risk right a We risk working to So on that to hard based XXXX is testing. the incredibly want decision think with it

environment that extend €XXX the answer XXXX later XXX as the you'll is think will life the to to reduction second us expenses We little is 'XX, absolutely your unchanged. in we incur of these and more the out that destination. achieve see the in question, But disclosure, 'XX. environment. that unchanged destination start of the euros million about in a environments, we bit But As our ultimate test we to for unchanged, called expense in essentially cause

Nicolas Payen

Thank you.

Christian Sewing

you. Thank

Operator

question from next is from Please ahead. JPMorgan. Abouhossein Kian go The

Kian Abouhossein

cost you and and have €X maybe for taking XXXX, clearly taking now costs. income is higher. questions relative an the thanks not revenues, questions. the roughly guidance, actually more cost revenue different income but two but step billion just had at my more the cost billion Yes, issue Deep I target you're to assuming €X because old the XX, you're clearly looking marginal around in Dive of flat a also is back of And

your on how is than your actually just question would So understand year, and on cost target trying where a we basis. investment, I'm of the cost on return XX.X, what this lower based more bit going we're XXXX these investments and achieve revenues should to be into because a second clearly stated that's are guidance €XX and billion, to my going measure your

should even should on higher deltas trying a to line should I'm we cost XXXX? an why in by try lower and with go to So really have on costs higher relative revenues, the be basis. understand confidence that revenues why absolute than with basis And secondly,

James von Moltke

Deep company a that we've December higher that is revenue the be transformation it And both running to look, two of significant were since of we're start, at some XX, expenses increases time. speaks want And and there come we then significantly and driven, and add, will revenues investor December I then in Kian, Chris, Dives and July 'XX Sure, James may in it's And XXXX. to it that's the that frankly the ahead that in we'd the bigger terms. success where naturally, reflects, with thought you expenses.

approaching billion way about now the the we that So this it's that explain. ago to you XX a year, need number the to essentially €X.X talked if Deep I plus all you walk from in XX.X two or minus Dive years December flat that's to

the FX, about lot, The talk great And Single at it €XXX Germany is is expense about in this revenue first both Fund, together deposit and bank in in about Resolution know, length talked, case, assumptions to the relative that a insurance €XXX the the in XXXX. the line we December also million and we've is expense but that million. levies you impacts with then about as and our

that outside the revenue assumptions if another retention that call the on our coheres mechanical are that million things with like and also of to variable at you We on compensation, estimate control. VAN billion a would So €XXX picture. so two bonus those or just relative

on that's of in that a the that more year, for year, of well driver And difference. than these importance just IT where investments for the have. the forward. Christian's those still ago depends back it's company the we've then of decisions is As a than us investments started noted, you franchise on the this about talking the invested be going expected -- the been future we the controls. to we just the it speaking we about but performance broadly year of this in more see make focused we really We billion reducing have half over and a would now, And wrong and to decision

Now, the how able of investment we've that to us we you've minus, a oriented a some identify, right front And invested business that been in businesses but in about then heard the to office. of for and has the savings us been and we've we plus or had go, to Actually, some future. as surprise additional needed it's think we've revenue across know, investments you that that. talk number far

of picture rough movements. a that's the So

then a company. future. is of think with lot problematic And the absolutely we it of rest say, are investments running I it As is for a that IT critical the bigger controls and

Christian Sewing

X in a let bank But a which go and presentation, because if thoughtful. bit are me we absolutely bank management, 'XX on six after the we of have that income on And from question. see in in compare targets, your given that see actually months businesses the ratio, in 'XX, also that. for have actually, the trajectory I private out and very from we Page cost there the close asset chance our on and four IDD we little you the after you yet investment thanks Kian, the to And there in believe is fully year-on-year QX. I end that where to a year, are I revenue XX% to at also based NIM I Also, comments not that said where do wanted QX see corporate the of be fair a bank. to in growth, further we the think But James, very get the deliberately the to

then obviously costs to paying went next the which are lever said see the you remediation, into all 'XX, is 'XX, in investments to James XX.X%. come into further that XX% which say in the regulatory So will automation. just result what that that which we controls, is that then what above also 'XX, so into is actually And off the

other like if about X businesses income fall see bank But actually further it trajectory levy, right instance. ratio. the cost there Page get divisional part, But falls But investments away. to there to get important you be. already of the the on the it's presentation, and want investments the for with You will And automation. we to are that, we'll the uncontrollable which something away their just very the think see where exactly

Kian Abouhossein

It's very helpful. If I more may just one follow-up.

expecting end Assuming billion, lower this that than the but let's at €XX significantly year. say don't up what you're revenues

Let's cost space? you say €XX are billion. How flexibility in having much really the

Christian Sewing

I regain I the that, a a €XX share businesses, hypothetical that in the question. trajectory cannot that the see XXXX. I costs that Project the see company both costs. to that are end quite also up scenario, on end in well Cairo and the the have side. I mean, at we on And you mean, would billion, Honestly, -- I but of I than of scenario think want market react FTE day our this client answer understand passion compensation feedback -- if obviously, of I course, more momentum. will take see have, the costs we we done XX% compensation because the of we but then, what with cannot we based that with think we

same see cost the is Of course, that also significant expect would the amount. that processes, front in functions away will at to be and case into our again, of a into revenues time, our are so will the you control the which investments And it, the back line. payoff investments from far what other cutback reduce we

again, even we see back. James immediately then different say cannot prone scenario, which on all, be completely would to these a but at would items I cut be So two I

James von Moltke

environment we in than offset an is the I The direction is if anticipated then near then we than opposite interest There's were rate of term in only about of terms but travel the would is we talked revenues as on thing better that March economy the the maybe is in the weaker to all suggesting which earlier, growth, volume the room thinking, add shortfall than is billion some that's to we depend our of going starting a thought our such March, to But and length thing. basically of then after absorb how we we downturn volume better a and severity of downturn is on the point assumptions. lot in a growth back quickly get to a now. then relative

Kian Abouhossein

dislocation, it's more that revenues. income perspective, year the think hearing would by from just impact in let's potential you. NII, Thank I your assuming your markets, say clearly I was thinking upside. which fixed but

James von Moltke

Thank you, Kian.

Operator

question Please Magdalena Stoklosa next Stanley. go Morgan from is from The ahead.

Magdalena Stoklosa

one Thank is I've your got you. afternoon. And very questions. Thank two you good about much. One lending and another FIC trading.

the growing could looking number and So quite recent you give with are us more a on nicely are the a book of literally sense either or us FIC particularly from kind sector quarter-on-quarter? a of you by from? demand one. you lending loan Could number in investment how pricing sort perspective. sense? of commanding by sense, that's the front if Because what So Where's you side. could? mix the are let's coming spreads trading, like growth, recently, question And start bank? the And book, and give kind product? across give you corporate a two, the you've Could your also, been Where us

of business you look to Do seen, We second year similar macro you. the of the terms at just of credit kind trading. that in the literally affects is likely expense, of of and have that of course of Thank today, half the here trend? strength the believe kind

James von Moltke

I'll James, again. Magdalena. Thanks, Sure. add. start And Christian may

seeing. longer been In leader driven we while demand, supply and those we types front businesses, to actually trends the a Bank, those that terms there's and seen terms market more good will in financing, in demand, see the think are in structured expect demand, we the the of Private as Corporate expect been side strong need things to of lending So investment appetite frankly, something and you've to spread. drivers affected chains, conditions. that our we risk also corporates growth, And our continue. bring some manufacturing be has real to with this that in three bank of that In Corporate it's see demand so has for that financing onshore, may Bank, all have trade lending obviously, would by Bank prepared we and continue certainly in book Bank, continue, Investment just we really But finance. know, we're really a across are you fill macroeconomic from been business,

also perhaps we that mortgages heavily very So recovered. than But right like. The now now remains has would growing, Bank favorable. spreads that the Private little a more we to been environment is bit think have related mortgage

that a that. March of see June, continued. to We'd we repricing there in a to recovered the and lag was recall, look have momentum in but like You'll through May, bit

risk growth in book now, all in front right frankly, In fixed three from half. would trading, the into trends still we those expect spreads second So, to we where and continue still improving. healthy within with appetite sit

spreads. sort the the view we probably half. drive economic remain second and market remains monetary do credit lot will a the be takes or stabilize will The activity the point. think, primary that see for trends So volatility weak side by They'll think in we'll of market, direction move We credit a of if on the at some environment emerge there's to there. policy. That will -- will -- a out And adjust normalize demand as you while. like of macro we in think markets

clear so the And normalization to, would how itself. manifest we takes of a not it credit expect to but for market, long that

Magdalena Stoklosa

end XXXX in the effectively teams a So a see with if the even the you high of on I just growth as which that, you're we're either properly the trends, bank, division investment or to in single-digits kind of can current at even depending potentially to lending moment? kind continuation and loan to of James, going higher see priced going confirm up

James von Moltke

Magdalena. teens. and view. softness, low if about when our is be it doubt X% of And thought Yes, that March, instead view. our there's I We of X% single-digits, I sort mid-single-digits, still talked current That would say be wouldn't would high probably in we

Magdalena Stoklosa

Okay, thank you.

James von Moltke

Yes, we feel good the about business. lending

Magdalena Stoklosa

Thanks for Thank you. that. very much

Operator

question next from Amit is ahead. The Barclays. from Goel Please go

Amit Goel

thank Hi, you.

the revenues guess to more, and it I investment flat the X.X want said being X is QX, still at to bank talking higher per Just section about delivered clearly in on talks you're main have about a follow-up the previously outlook I year-on-year, which report, check question. just quarter. the you

on check to of wanted just I there. the I would driving thought in tone effects it? what's so, that's intentional have would if And have So Especially also helping change currency if been kind an that.

James von Moltke

Yes, Amit.

intentional. There's yes, the softness -- So advisory. ongoing it really reflects in origination

speak. of this So last debt taken point half. the that year, cycle And been, a see as that's recovery continuing high as bit, nines for a essentially second some at that we it obviously, impacts year. the having we half represents, Remember And that our a earlier going for in also, view leveraged in through had revenue the markets that's it's expectations outlook call capital it our to down little IB. still it's second something flat is

and remains our performance, a but little year it earlier this relative April. So, a softening bit views of strong to in

Christian Sewing

I compare year when taken to think development last me we regard and -- one, not part this the investment say it's year. the into let very I strong this as this And which add, is mean, And obviously an one out talked year, also transaction, you be James. it I some which would this a extraordinary last year. bank. specific account in about of obviously And needs of called you

Amit Goel

But quarter thanks. in year? of the less for you'd per be billion than expecting revenues so this rest Okay, €X

James von Moltke

the in margin. It's

are to if you yes, the But and in wait -- have we of it's We see, margin Amit. like. variation,

Amit Goel

you. Okay. Thank

Operator

ma'am. The from next ahead, Reingen from question RBC. go is Anke Please

Anke Reingen

much very you for Yes, thank questions. my taking

through? charge. focus gas on And savings pass I out still start then The and be Thank €XX shutoff. XX Is the there. number just just and the secondly, that on and cost focusing be slides? very of just should seems and basis on just the looking cost And really, previously you to just news, I about billion XXXX you I inflation term to Should €XX.X to guess your that willing are the the we points income moving the it's And still And in I but should we a impact. seems back beyond XXXX much versus the the obviously more about cost be sort first IDB change mean, share cost XX billion path, small we you're still disclosed mean, I looking if GDP basis expectations. I on set. very if derive XX.X%? the XXXX have or just in 'XX. you just assumptions wondered thinking to it's XXXX you your past €X be on good like loaded, points is the putting on given base. to And being wondered given what is at coming looking absolute absolute just XX billion the your in put or investments like somewhat to to on ratio really a an number points the basis of you

consumer in very you the wondering it's and on revenues, an example. for of loans, seeing recent slows demand down. indicators, downbeat Thank in terms use potential of would to already if share more happy the seeing more And you risk as and you're was you're focus I were the if business So anything you're this for much. momentum confidence terms about confidence, to obviously,

James von Moltke

in about as the inflation. probably executing Christian there's the the pressure years, haven't XXXX, up of of a issue we them perhaps in re-forecast done talked be early we're 'XX, terms we We years more on the that several forward investing to impact measures going of tangible, are and next executing we're as But speak. in the about, drains very might talked structural Anke cost Unity the liked. to in we have than look, So look

Remember, feel of same. as alone, I side much on side, the higher revenues. said I looking the about interest the we the very there, So at think we're rate is travel the Unity, revenue on direction comfortable destination about

cost already or disclose views, to a about particularly our of no built basis, QX, But higher macroeconomic perspective, see to up relative we inflationary we So talk income we course, from what would change variables took rate a in given to early environment revenues, our again, that some need higher interim it's support to in higher have an report. on expenses. conservatism in the that we drains in ratio

is a slightly all which across weaker particular, by then stressed, So current think to most which stress we what think in all of handful is environment, includes of variables, done the into is the a our will feed standard in given deviations, of we stressful, our the the models. our appropriately fact, we've taken view, two variables be stress that I whereas step a of that off in appropriate variables

is, it GDP it's So stressful, easy a into to we do not simple it's number. appropriately translate think

many For just global feed there are that into that it's rather the And so sort of than macroeconomic reason Germany. variables it. model a

to into risk, there trying is. think us of severity of say, information this, you assess was work were quarter, think requirements why, manageable it's we of to important disclosure that went to number some a scenario what given for because investors forced in is it, As this to share terms felt share it's it, for but which A, lot the the share a to was whole share we we it and this we this of very it our downside important

Christian Sewing

being, them mean, we chains. German a to that actually side. is supply bank, if clients actually or how looking are themselves I right strengths which to have on side I say, the regional lending to have manage but us reorganizing the actually they the we also enabler And with asking we the the on the to product the good we suite to from our that our navigate are in provide wealth actually on our only an situation, gas happening private corporates, James and that's which on consumer exactly I side, in not we according a for see from than for have the supply what the alluded also more is which side in order your chains, I me, actively they see about interaction time setup the because are it's reordering that, there question issues think particular corporates and we meant uncertainties what German for can feedback, Let filling management a on that their side the advice. therefore on on think from a volatilities client see in clients They magnitude it's with being have to supply are advice the those demand also and And also the are demand that dealing FX to for can their it's provide of in the time and is I business. the the to the certain particular, but hedge us corporate side, we business, on banking help the volatilities, chains.

very to honest, other advice than doing more is demand we're we So B, feel, activities loan be A very, the active.

Anke Reingen

Okay, thank much. very you

James von Moltke

Thank you, Anke.

Operator

Sigee The next question go from is from BNP. Jeremy Please ahead.

Jeremy Sigee

Thank you. please. Two questions,

you last stop related gas to Are discussion. scenario. interest First relating very from the regulators one the seeing to any

XX giving this either elements that? Do really or RWAs in moving then question any you inflation is of standard of to regulatory And already get down the a instance, some risk on strong it. normalizing sort RWAs? you you and more provided market particularly it precautionary discussions parts in half just RWA's, in to about year, around RWA's? scenario bps system any take a help the second that from was from see basis my provide any let's say, banking Did a for have got we've scenario, so going For your the banks that into for second question

James von Moltke

regulators to a no transparency there how there the And a of kind clear is to I And provide, good in normal. do for comes issues we're pandemic. is at close when think time, like transparency, our scenarios certain to it that Okay, first the in calculating. exactly management thing requirements sufficient scenario. we level and it And least when the the tell with hence we let I interest And of But such right the at no, came me is to previous a take our to of us, kind with what this the the running. are regulatory can think get. management believe we now And I we risk is the you upfront scenarios dialog obviously question. is something we there there experience also point regulators. they book risk that is positions of are I appreciate our

Christian Sewing

it Jeremy us RWA test. for the go risk quarter impacts RWA, on in as both you based they've you dislocated, done, whenever know, see And volatility to metrics this gets seems a on as the it as up market of and markets the tends did outlier couple

valuation any the additional altogether that credits including Russian see this in migration which about from case, through, capital climbed on some then pressure see also come far. like million into impacts so AVAs this have adjustments rating from obligors, And You you €XXX related year calculation. go that

growth do environment. how living we're it's back, of soon with right inflation, the being out see now you we saw goes we'd But more Reg the we'll hope high funded by, expect about bit the judge. Right us in there's to to of to XX work we're then so what be much And always which in little earnings. half get half, doing the expect model to on of rest to just And as that. the that visibility. events. now basis be talked round we've points as time the picture, year How a alleviate point RWA about for impact So back some from see second have exactly this how now is organic pressures, the see back I comes we we capital you that hard of and in much of as COVID, they but is that you hard over time, judge when, 'XX the appears to

at So back of we're kind how RWA half and in the of the the that's the capital looking year. picture

Jeremy Sigee

very much. Thank That's very you clear.

Christian Sewing

you, Thank Jeremy.

Operator

is The Citi. go Andrew ahead. from question next Please from Coombs

Andrew Coombs

well, please. afternoon. questions Two Good as

something of the you between is. I believe walk assume doesn't cost you thank please. when question, just that know it's the would I XXXX, originally gave to XX,XXX the headcount And doing for could similar Because you headcount do the today. guidance the I think it was set from at in target originally you're XX cost on if the to was you wondering and XX,XXX. step today, the so and Firstly, fall that also others delta the the I interest net include but I guidance should change second corporate the run-off income, then interested. impact excess of charging, what and include losing includes reserves, the deposit on And be material you gave in TLTRA. still

if you. TLTRA contribution. and Thank So the could that also just you current confirm

Christian Sewing

the Andrew, questions. for thanks So

disclosure question, XX last earlier Page the now And TLTRO. excluded the the yes impact. think On on the March disclosure in includes I

that we're hopefully changes but data how So providing little a clarifies and a little bit of the bit.

Andrew Coombs

you that to a And or gave excluding? guidance, cumulative including on basis, was

Christian Sewing

by end is the out at TLTRO Well, XX anyway.

So, XX little and run-off that's only bit a of factor 'XX. into a in

impact and and sort of of deposit the end. just that not the the numbers at because the long I charging, XXX, hedging, you the brought curious TLTRO, of unaffected mentioned, you So have curve a the forward impact as those gave on, of there's lot peering are I both I twos, and to trace has in this our say, lot there's the some of TLTRO. elements that are the by But point, middle a going through also rising of high

talked but little argue dynamics IDD to on, all beneficial. on one, answer we're a talked miss. walk about half maybe headcount, Look of the the expenses. about the company, bigger a on And broadly, earlier, would as going it's the lots this is, and I we of bit the that we that of running So represents

that And And internalization other half XX,XXX. we we're controls X,XXX would two amount that we I the of put in and talked of investments the by we've had company, bigger a sort the against assumed. about. So essentially missing make that IT, currently we've it running in right against to underestimated is buckets,

since XX:XX. it cost attribute in compensation, between I have we if sort just swing, internalized almost might call now variance the basically a versus started would that's non-comp. what a So of And was thought you factors, reductions been like you this, we've see we those X,XXX originally And to miss that's positions. two but why X,XXX

Andrew Coombs

great. you. That's Thank

Christian Sewing

you, Thank Andy.

Operator

go The Generale. from Lim next Please question is from Andrew ahead. Societe

Andrew Lim

Hi, taking my afternoon. questions. Thanks good for

But back NII and in one peak wondering NII, that I XX, So on translates the I Fed is cuts forecast, was markets and there factoring into Reserve 'XX can is expectations. observation how thereafter, your guess you curve, the to Slide onwards, the higher. that

coming I sticky if that tangible ROTE. for happen does peak what gas and Have that for it your margin mean asset more your to on that maybe transpires? scenario holistically, be how NII return loss rate down? will thinking compression terms was growth question should is start Russia and happen rate you've as then cutting down loan off what So in for scenario early then rate and loan an on that comes think secondly, you given but then guidance would that to Fed helpful funds value Germany, there, the at And would the And stressed, how would we your revenues? costs about of

Christian Sewing

So Andrew been on looked going there's the a second one, on no, we haven't quarter. this at lot

couldn't very on little of tell the of while. the impacts been that you, I scenario, focused the over So past risk we've managing the side of it all

question. that to So come time you to we'll in on have back

on see in beginning dollar the euro question dynamic one you'd you that from yes, then is in the scenario back to in it's what interesting early Page an much, and short the exposure get we we March first, is, by a although think, our stages you long would On at thing you kick lift is so is the XX, principle, look, of yes, about the through. the that in see the that begins I curve dollar, benefits to this cycle Euro the and outlined if look wane, lot talked not to perhaps a

curve end sensitivity Euro Page between no XX move can show and almost see dollar dynamic at in a the back is sensitivity can you the days. bit the doesn't we we And look you see XX it's So the forward as basis But how that little versus a that's the marginal in and on early at lot the point the would is XX. and U.S. here, well that there. opposite that true, much XX

Andrew Lim

That's you. great. Thank

Christian Sewing

pleasure. is It

Operator

turn at are Ioana no further like I Patriniche to for questions back There this time, would to and closing comments.

Ioana Patriniche

and second don't Investor quarter quarter you Thanks Thank speaking for that, to reach questions. you. joining out in Relations and hesitate our as with us we October. the with usual look to results XXXX follow-up any forward our your for third for team call to Please results in to

Operator

is gentlemen, and telephone. Ladies day. your concluded may joining for Thank have you pleasant and Goodbye. disconnect conference the you now and a

Deutsche Bank (DB) 27 Jul 222022 Q2 Earnings call transcript