Deutsche Bank Deutsche Bank: Adapting to a new world Anshu Jain Co-Chairman of the Management Board and the Group Executive Committee Deutsche Bank Financial Services Conference New York, 4 June 2013 Deutsche Bank Anshu Jain, DB FIG Conference, 4 June 2013 financial transparency. Agenda 1 A changed environment from a year ago 2 Deutsche Bank’s journey Deutsche Bank Anshu Jain, DB FIG Conference, 4 June 2013 financial transparency. 1 Macro/Market trends: Over the past year, decisive intervention has bought us time One year ago: Concerns Action Result Italy implied default (40% recovery), in % 40 ― Break-up of the “[… ] the ECB is ready to Eurozone do whatever it takes to 30 preserve the euro […]” ― Default of large 20 economies Mario Draghi, 26 July 2012 10 Jun-11 Dec-11 Jun-12 Dec-12 Jun-13 “To support a stronger Case Shiller Index, rebased to 100 at Jun-12 ― Pre-election economic recovery, [we] 106 uncertainty agreed to increase policy accommodation by 104 ― Fiscal cliff purchihasing agency MBS” 102 ― Pace of recovery Federal Reserve, 13 Sep 2012 100 Jun-12Sep-11 Dec-12 Mar-13 “The People ' s Bank of China GDP, in % ― Hard landing in China said […] that it will 10 China increase policy flexibility to support the economy” 5 ― Potential bubbles Hard landing Reuters, 9 May 2013 0 Q2 12 Q3 12 Q4 12 Q1 13 Source: Capital IQ, Federal Reserve Bank of St. Louis, DB Research Deutsche Bank Anshu Jain, DB FIG Conference, 4 June 2013 financial transparency. 2 Macro/Market trends: Understandably, markets have responded Lower costs of borrowing Rising equity markets US HY debt yields, in % Indexed to 100 on 31 May 2012, Euro Stoxx 50 MSCI EM in % S&P 500 DAX 20 +35% 130 +34% 15 120 +27% 110 +13% 10 100 5 90 20062007 2009 2011 2013 Jun-12Sep-12 Nov-12 Mar-13 Jun-13 Decreasing volatility Reduced correlation VIX (S&P 500)(1) Realized S&P 500 intra-index correlation, in % 25 50 20 40 15 30 10 20 Jun-12 Sep-12 Nov-12 Mar-13 Jun-13 Jun-12 Sep-12 Nov-12 Mar-13 Jun-13 (1) 10 day moving average Source: Bloomberg, DB Research Deutsche Bank Anshu Jain, DB FIG Conference, 4 June 2013 financial transparency. 3 Macro/Market trends: As ever, intervention creates winners and losers 10 year Treasury note yield, in % Banks Savers (1) 18 Household NIM, European banks , in % Retail deposit rates , in % p. a. borrowers ~1.5% of UK/EU/US GDP 16 2.0 11% Government 1.8 4.0 lost interest borrowers income to savers 14 65% Asset prices 1.4 12 Lower 10 unemployment 2008 2013E 2009 2013E WlthWealth managers Insurers 8 Margins, European wealth & Running yield(2), in % 6 private banking, in bps 104 30% 9.7 28% 4 73 707.0 2 0 1953 1965 1978 1990 2003 2013 2008 2013E 2008 2013E (1) Includes 40 European banks covering about half of Europe's banking assets (2) European non-life insurance margins as % of net written premiums Source: Bloomberg, Eurostat, Company data, DB Research, Deutsche Bank Anshu Jain, DB FIG Conference, 4 June 2013 financial transparency. 4 Regulation trends: In addition to quantum of regulation, the risk of balkanization has increased Change in regulatory intensity United States Europe Asia Proposals likely delayed / Additional recent proposals affecting European banks: relaxed: More nuanced regulation by ― Prudential rules / Basel 3 ― Bank structure reform country aiming for open, ― Volcker / Swaps push out ― Fed FBO rules welcoming but well regulated markets ― No likelihood of “structural” ― Financial transaction tax reforms ― CRD 4 incl . comp reform 2012 2013 2012 2013 2012 2013 Japan delays cross-border European banks warned to US banks call for easing of rules amid US and European expect tougher scrutiny Basel 3 uncertainty Financial Times, 4 January 2013 Financial Times, 16 May 2013 AsiaRisk, 22 May 2013 Deutsche Bank Anshu Jain, DB FIG Conference, 4 June 2013 financial transparency. 5 Regulation trends: A leverage ratio is undoubtedly important, but has significant flaws that could lead to perverse outcomes Leverage ratios were not a good indicator of bank stability in the past... ...and cannot be used alone Leverage ratios(1) at peak of crisis or prior to failure or (2) acquisition No government intervention — Does not take into account quality of assets: Significant government intervention cash is considered equivalent to toxic mortgages 34x 34x Failed / acquired 28x 27x 25x — Does not take into account liquidity reserves 24x 23x 23x 22x 21x 16x — Does not take into account funding profile: some 13x banks with low leverage have high dependence on short-term funding — Encourages banks to sacrifice low return assets (including repos, simple derivatives) – resulting in higher funding and hedging costs for governments and companies (1) US GAAP or estimated pro-forma US GAAP equivalent for IFRS reporting banks (2) Deutsche Bank, UBS, Barclays, RBS, Credit Suisse, JPMorgan Chase, Société Générale, BNP Paribas as of 31 Dec 2008, Bear Stearns as of 31 March 2008, Lehman Brothers as of 30 June 2008, Merrill Lynch and Citi as of 30 Sep 2008 Source: Company data Deutsche Bank Anshu Jain, DB FIG Conference, 4 June 2013 financial transparency. 6 Competitive trends: As expected, higher regulatory thresholds are leading to consolidation Increasing concentration… ...and higher returns for industry leaders % of business accruing to the top 5 firms FY 2007 IB adjusted pre -tax RoE average 2011 / 2012, grouping based on FY 2012 IB market shares, in percent 59 22 56 45 43 40 3638 36 11 5 Debt S&TEquity S&T Corporate Asset Top-3 # 4-6 # 7-9 (1) Finance Management (1) Top 5 within top 30 listed asset managers; based on AuM at period end Source: Bloomberg, Company data, DB Research Deutsche Bank Anshu Jain, DB FIG Conference, 4 June 2013 financial transparency. 7 Agenda 1 A changed environment from a year ago 2 Deutsche Bank’s journey Deutsche Bank Anshu Jain, DB FIG Conference, 4 June 2013 financial transparency. 8 Deutsche Bank delivered strong results in 1Q 2013 In EUR bn, unless otherwise stated Group Core Bank(1) 1Q 2013 1Q 2012 1Q 2013 1Q 2012 Net revenues 9.4 9.2 9.0 9.0 Total noninterest expenses (6.6) (7.0) (6.1) (6.3) Performance Income before income taxes 2.4 1.9 2.6 2.4 highlights Net income 1.7 1.4 1.8 1.8 Post-tax return on eqqyuity(2) 12.3% 10.3% 16.8% 17.0% Capital Core Tier 1 capital ratio (B2.5) 12.1% 10.0% n/a n/a position Core Tier 1 capital ratio (B3) 8.8% <6.0% n/a n/a (1) Core Bank includes CB&S, GTB, AWM, PBC, and C&A; numbers may not add up due to rounding (2) Based on average active equity Deutsche Bank Anshu Jain, DB FIG Conference, 4 June 2013 financial transparency. 9 Capital: We outperformed our ambitious organic capital targets thanks to significant asset sales and hedging... Two quarters of outperformance Significant RWA reduction (1) Pro-forma Basel 3 CT 1 ratio (fully loaded), in %, at period end Pro-forma Basel 3 RWA equivalent relief, 1 Jul 2012 to 31 Mar 2013, 100% = EUR 103bn Improved process & Asset sale/ >10.0 data discipline(2) hedging 8.5 888.8 7.8 17% 7.2 <6.0 Non-core Roll out of Bank 42% adddvanced 13% models 11% Target Over- Target Over- Target VaR multiplier achieved achieved reduction Core Bank 17% Dec 2011 Dec 2012 Mar 2013 Mar 2015 (1) RWA plus equivalent of items currently deducted 50/50 from Tier 1/Tier 2 capital whereby the Tier 1 deduction amount is scaled at 10% (2) Previously referred to as “Operating model improvement” Deutsche Bank Anshu Jain, DB FIG Conference, 4 June 2013 financial transparency. 10 Capital: …which created the platform for us to raise equity and become one of the best capitalized banks in the world Set of announced capital measures DB now one of the best capitalized banks(1) Pro-forma Basel 3 CT 1 ratio (fully loaded), in %, at period end ― Issued 90m new shares raising EUR 2.96bn 10.1 Ex-rights ― Strong investor demand and 10.0 issue rapid boo k bu ilding 989.8 ― Positive reactions across all 9.6(2) stakeholders 9.5 ― EUR 2.0bn eligible AT1/LT2 939.3 capital 9.0 Additional ― Addressing recovery and 8.9 subordina- resolution ppglanning 878.7 ted capital ― >50% already achieved with 8.6 benchmark callable Tier 2 issue 8.4 (1) Including Morgan Stanley, Bank of America, Citigroup, Goldman Sachs, JPMorgan Chase, Credit Suisse, UBS, BNP Paribas, Société Générale, Barclays (2) Pro-forma after consideration of the EUR 2.96bn capital raise Source: Company data Deutsche Bank Anshu Jain, DB FIG Conference, 4 June 2013 financial transparency. 11 CB&S: Strengthening our leading franchise despite a challenging environment Example challenges Business response Resource reduction in CB&S since June 2012 Macroeconomic Resource concerns (7)% (6)% reduction (10)% (17)% RWA(1) FTE(2) Cost(3) Adj. assets Lower industry volumes — Integration of FIC Key strategic measures — Unique Markets Electronic Trading platform Continued — Rationalization of Equities complex regulatory uncertainty Rankings in 2012 #1 #5 #1 #1 #2 #2 Strengthened Global FX Global CF Global FI US FI EU FI APAC FI Increased public franchise #1 #1 #1 #1 #1 scrutiny Prime EU CF EU APAC EMEA Brokerage Equities Equities CF HY (1) Basel 2.5 (2) Front office only (3) 1H2012 and 1Q2013 run-rate operating costs Source: Greenwich Associates; Euromoney; Dealogic; Global Custodian Deutsche Bank Anshu Jain, DB FIG Conference, 4 June 2013 financial transparency.