Annual Financial Statements and Management Report of Deutsche Bank AG 2017 2017 of Deutsche Bank AG Report Management and Statements Financial Annual Deutsche Bank

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Annual Financial Statements and Management Report of Deutsche Bank AG 2017 2017 of Deutsche Bank AG Report Management and Statements Financial Annual Deutsche Bank Deutsche Bank Annual Financial Annual Financial Statements and Management Report of Deutsche Bank 2017 AG Statements and Management Report of Deutsche Bank AG 2017 Deutsche Bank Content 1 — Management Report 3 Operating and Financial Review 15 Outlook 21 Risks and Opportunities 25 Risk Report 51 Compensation Report 93 Internal Control over Financial Reporting 96 Non-financial Statement 115 Information pursuant to Section 289 (4) of the German Commercial Code and Explanatory Report 119 1a – Appendix to the Management Report: Report on equal treatment and equal pay 2 — Annual Financial Statement 122 Balance Sheet as of December 31, 2017 124 Income Statement for the period from January 1 to December 31, 2017 125 Notes to the Accounts 3 — Confirmations 180 Responsibility Statement by the Management Board 181 Independent Auditor’s Report 1 Management Report 3 Operating and Financial Review 3 Our Organization 7 Economic Environment 7 Executive Summary 10 Income Statement 13 Balance Sheet 15 Outlook 21 Risks and Opportunities 25 Risk Report 25 Risk Management Principles 25 Risk Management Framework 26 The Risks of Deutsche Bank AG within the Group Network 27 Risk Management Organization 30 Risk Strategy and Appetite 32 Risk Measurement Tools 33 Types of Risk 38 Risk Profile 39 Credit Risk 41 Market Risk 42 Operational Risk 43 Leverage Ratio 45 Liquidity Risk 46 Capital Requirements and Adequacy 51 Compensation Report 52 Management Board Compensation Report 77 Employee Compensation Report 90 Compensation System for Supervisory Board Members 93 Internal Control over Financial Reporting 96 Non-financial Statement 115 Information pursuant to Section 289 (4) of the German Commercial Code and Explanatory Report 119 1a – Appendix to the Management Report: Report on equal treatment and equal pay Deutsche Bank Operating and Financial Review Annual Financial Statements and Deutsche Bank Group Management Report of Deutsche Bank AG Operating and Financial Review Our Organization Deutsche Bank Group Deutsche Bank: Our Organization Headquartered in Frankfurt am Main, Germany, we are the largest bank in Germany and one of the largest financial institutions in Europe and the world, as measured by total assets of € 1,475 billion as of December 31, 2017. As of that date, we employed 97,535 people on a full-time equivalent basis and operated in 60 countries out of 2,425 branches worldwide, of which 65 % were in Germany. We offer a wide variety of investment, financial and related products and services to private individuals, cor- porate entities and institutional clients around the world. As of December 31, 2017 we were organized into the following three corporate divisions: ‒ Corporate & Investment Bank (CIB) ‒ Private & Commercial Bank (PCB) ‒ Deutsche Asset Management (Deutsche AM) The three corporate divisions are supported by infrastructure functions. In addition, we have a regional management function that covers regional responsibilities worldwide. Prior periods presented throughout this report have been restated in order to reflect our new segmental structure that was announced on March 5, 2017. In line with our targets originally announced, from 2017 onwards, Non-Core Operations Unit (NCOU) ceased to exist as a separate corporate division of the Group. We have operations or dealings with existing or potential customers in most countries in the world. These operations and deal- ings include working through: ‒ subsidiaries and branches in many countries; ‒ representative offices in many other countries; and ‒ one or more representatives assigned to serve customers in a large number of additional countries. For Deutsche Bank AG, the most important branches besides our operations in Germany are located in London, New York, Cayman Islands and Singapore. These branches are mainly providing services in the Corporate & Investment Bank and Wealth Management divisions. Please see below for an overview on our corporate divisions. Corporate & Investment Bank (CIB) Corporate Division Overview Our Corporate & Investment Bank division (CIB) comprises of our FIC Sales & Trading, Equity Sales & Trading, Financing, Origination & Advisory and Global Transaction Banking businesses. The integrated division brings together the wholesale bank- ing expertise, coverage, risk management, and infrastructure across Deutsche Bank into one division. This enables CIB to align resourcing and capital across our client and product perimeter to offer further benefits to the Bank’s priority clients. Products and Services The FIC Sales & Trading and Equity Sales & Trading businesses combines sales, trading and structuring of a wide range of financial markets’ products, including bonds, equities and equity-linked products, exchange-traded and over-the-counter deriva- tives, foreign exchange, money market instruments, and structured products. Coverage of institutional clients is provided by the Institutional Client Group and Equity Sales, while Research provides analysis of markets, products and trading strategies for clients. All our trading activities are covered by our risk management procedures and controls which are described in detail in the Risk Report. 3 Deutsche Bank 1 – Management Report Annual Financial Statements and Management Report of Deutsche Bank AG Corporate Finance is responsible for mergers and acquisitions (M&A) as well as debt and equity advisory and origination. Re- gional and industry-focused coverage teams ensure the delivery of the entire range of financial products and services to our corporate and institutional clients. Global Transaction Banking (GTB) is a global provider of cash management, trade finance and securities services, delivering the full range of commercial banking products and services for both corporate clients and financial institutions worldwide Distribution Channels and Marketing As part of our strategy, we are re-focusing and optimizing our client coverage model to the benefit of our core clients. We are exiting client relationships where we consider returns to be too low or risks to be too high while also strengthening our client on- boarding and know-your client (KYC) procedures. Growth in corporate client activity is also expected to create opportunities in the institutional client segment. Overall, Deutsche Bank expects the majority of growth to come primarily from enhancing the returns on the existing resources by more selectively deploying capital to priority clients. Private & Commercial Bank (PCB) Corporate Division Overview The Private & Commercial Bank (PCB) Corporate Division consists of our four Business Units Postbank, Private & Commercial Clients Germany, Private & Commercial Clients International and Wealth Management. PCB services personal and private clients, small and medium-sized corporates and affluent clients and offers a broad range of financial and advisory services from standard retail products to highly sophisticated financial solutions. We follow an omni-channel approach and our clients have various alternatives to access our services and products (branches, advisory centers, mobile networks of independent advisors and online/mobile banking). Our Corporate Division comprises the following units operating in Deutsche Bank AG: In our Private & Commercial Clients Germany (PCC Germany) business unit, we also focus on private and commercial clients in Germany and provide a wide range of financial services including complex advisory solutions for our private clients. For small and medium-sized corporate clients, we offer an integrated commercial banking coverage model by collaboration with experts in the Corporate & Investment Bank. The Private & Commercial Clients International (PCC International) business unit provides banking and other financial services to private, commercial and corporate clients in Europe and India. In Europe, we operate in five major banking markets: Italy, Spain, Belgium, Portugal and Poland. In December 2017, we entered into an agreement to partially sell the retail business in Poland in order to sharpen PCB’s focus and to reduce complexity. We will continue to serve foreign currency mortgage retail borrowers in Poland and will also remain present with our Corporate & Investment Bank operations, including Global Transac- tion Banking. The Wealth Management (WM) business unit serves wealthy, high-net-worth (HNW) and ultra-high-net-worth (UHNW) individu- als and families. We support our clients in planning, managing and investing their wealth, financing their personal and business interests and servicing their institutional and corporate needs. We also provide institutional-like services for sophisticated clients and complement our offerings here by closely collaborating with experts in the Corporate & Investment Bank and in Deutsche Asset Management. Products and Services In our home market Germany and internationally, we offer our clients a wide range of financial services from standardized as well as comprehensive services for retail clients, to solutions for demanding clients in Private Banking and Wealth Management, to business and commercial client coverage. Our Postbank, PCC Germany and PCC International business units provide banking and other financial services to private and commercial clients in Germany, Europe and Asia with some variations in the product offering among countries that are driven by local market, regulatory and customer requirements. Products for our retail and private clients are designed to meet all basic financial needs and to provide them with advisory
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