Deutsche Bank AG

Ladies and gentlemen, thank you for standing by. I'm Stuart, your Chorus Call Operator. Welcome and thank you for joining the Deutsche Bank Q4 2021 Analyst Call. Throughout today's recorded presentation, all participants will be in a listen-only mode. The presentation will be followed by a question and answer session. If you would like to ask a question, you may press star followed by one on your touchtone telephone. Please press the star key followed by zero for operator assistance. We'd now like to turn the conference over to Joana Patranich, Head of Investor Relations. Please go ahead.

Thank you for joining us for our preliminary fourth quarter 2021 results call. As usual, our Chief Executive Officer, Christian Saving, will speak first, followed by our Chief Financial Officer, James Von Malka. The presentation, as always, is available to download in the Investor Relations section of our website, db.com. Before we get started, let me just remind you that the presentation contains forward-looking statements which may not develop as we currently expect. We therefore ask you to take notice of the precautionary warning at the end of our materials. With that, let me hand over to Christian.

Thank you, Joana. A warm welcome from me as well. It's a pleasure to be discussing our and full year 2021 results with you today. We are now almost three quarters of the way through the strategy we launched in 2019. The progress we have made shows 2021 was a pivotal year in this transformation journey. And this is evident across the performance of all our businesses. Firstly, we have demonstrated the strengths of our franchise. Since the start of our transformation, our franchise has done more than prove its resilience. In fact, it has grown beyond our original expectations. And of course, the market environment was more supportive. But it is the fundamental strength of our client relationships which we have increased in light of our strategic focus on core businesses. This is reflected in the market share gains we made in key businesses over the past two years. And we remain encouraged to see client engagement continuing to grow. We delivered revenues of 25.4 billion euros in the full year of 2021, an increase of 6% year on year, and we expect to grow from this base. Secondly, we continue to work intensively on transforming the bank. In 2021, we accelerated our transformation and positioned the bank for the most important measurement year of our compete to win strategy. Having booked transformation charges of 1 billion euros and approximately 500 million euros of restructuring and severance in 2021, we have now recognized 97% of our total anticipated transformation related effects. Our transformational efforts and investments over the past years are paying off and will help drive reductions in our expenses in future quarters and years. We continue to be absolutely focused on the future on capturing these benefits through further cost saving measures. So we remain confident we are on the right path to our 70% cost income ratio. We also delivered on another important milestone within our capital release unit by completing the transition of prime finance to BNP Paribas. The leveraging exceeded our plans and our leverage exposure in the CRU is down to 39 billion euros from 72 billion euros at the end of 2020 and down 84% since we launched our strategy in mid 2019. And finally, transformation delivered significantly improved profitability in 2021. Our pre-tax profit of 3.4 billion euros more than tripled compared to 2020 despite higher transformation charges. We reported net profit of 2.5 billion euros, a more than fourfold increase compared to 2020 and Deutsche Bank's highest full year profit since 2011, once again, despite absorbing additional transformation charges. As we announced yesterday evening, this organic capital generation along with our confidence about our future trajectory allows us to distribute 700 million euros of capital to our shareholders, the concept to our commitment of 5 billion euros. Now let me take you through the financial highlights of what we have achieved in the 12 months of 2021 and since 2019 on slide two. We have grown revenues and reduced expenses each year since 2019 while at the same time executing on our transformation. We again delivered positive operating leverage at group level in 2021 and reduced our cost income ratio from 88 to 85% year on year. 2021 provision for credit losses declined 71% year on year to 12 basis points of average loans. This reflects the benign credit environment, but also the strengths of our conservative loan book and sound risk management. Return on tangible equity for the core bank is 6% for the full year and .5% on an adjusted basis. This sets us on a clear path to our group target of an 8% return on tangible equity in 2022. Our focus on transformation has driven steady improvements in underlying profitability which can be seen on slide three. In the core bank we have more than doubled our adjusted profit before tax since 2019 including an increase of 46% in the last 12 months. Our improved profitability was a major driver for the three rating upgrades we received in 2021, the latest by S&P in November. This is not only a recognition of our transformation success, but it also further supports our client engagement and revenue momentum. The capital release unit delivered another year of significant portfolio reduction and we continue to be committed to minimizing the D&L impact on group profitability including through future cost reductions. A key driver of higher profitability is our sustainable revenue performance which I will now turn to on slide four. Revenues excluding specific items in the core bank stood at 25.3 billion euros in 2021, up 5% compared to 2020 and 11% since 2019. This is a key driver of higher profitability. Revenues in the corporate bank were flat year on year as underlying business growth and continued deposit repricing of set interest rate headwinds and we are particularly encouraged to see growth accelerate this quarter. In the investment bank revenues increased 4% year on year compared to a strong 2020 on a higher contribution from origination and advisory while fixed income and currencies revenues were essentially flat. In the private bank strong business volume more than offset interest rate headwinds and the impact of foregone revenues from the BGH ruling in April. As a result revenues were stable year on year. Overall we saw strong underlying growth in client lending. Our total loan book is currently at 476 billion euros up 10% year on year with all these business contributing to this lending momentum. Asset management delivered significant revenue growth of 21% year on year driven by strong management and performance fees. Assets under management closed at a record 928 billion euros. Group revenues excluding specific items were 25.3 billion euros in 9% increase from 2019. While we certainly benefited from favorable market conditions in some business areas 2021 revenues also demonstrate our ability to offset headwinds in light of our business mix. And thus 2021 revenue provides a more than credible base to grow from here and this is confirmed by the momentum carried through the first weeks of 2022. Now let me turn to cost on slide 5. We have reduced our cost income ratio by 24 percentage points since 2019 with non interest expenses declining by 14% to 21.5 billion euros over two years. Year on year 2021 expenses were up 1%. The increase reflects higher transformation related effects of 1.5 billion euros up 21% year on year predominantly driven by transformation charges of 1 billion euros more than double the amount we booked in 2020. At the same time our adjusted costs declined by 1% despite higher volume and performance related expenses reflecting improved business performance. 2021 was an investment year and we made significant improvements in technology. These efforts have already delivered savings in 2021 however we made a strategic decision to reinvest them to support lower costs in the future. We have also worked to deliver on the commitment to invest in our control environment. James will provide further detail on how our efforts will help us to achieve lower costs by the first quarter of this year. I would now like to highlight the progress made in our core businesses on slide 6. The corporate bank continues to execute on its growth strategies as evident by increasing loan and fee income growth in the fourth quarter. About 100 billion euros of deposits are being within the scope of repricing agreements and this contributed 109 million euros in revenues to our fourth quarter results and more than 360 million for the full year. The refocus of our investment bank on its core strengths has paid off. We have delivered year on year revenue growth in origination and advisory for eight consecutive quarters as well as market share gains in FIC. And demonstrating our joint platform we are the leading bank for EMEA investment debt issuance and the leading market maker in European government bonds in the fourth quarter. The private bank continues to grow net new business across assets under management and loans. Business growth of 45 billion euros in 2021 outperformed our full year target of over 30 billion euros by half. We have made significant progress in optimizing our distribution network including the closure of more than 180 branches during the year. In asset management, assets under management reach a record level of 928 billion euros driven by strong net inflows of 48 billion euros last year. Importantly, 40 percent came from ESG products where we continue to work to cement our leadership position in this field. The dynamics in all four core businesses show that our refocus business model is paying off and that our clients are supportive and believe in our capabilities. Let me now update you on our progress on sustainability on slide seven. In 2021 our cumulative yield of 4.5 percent of ESG financing and investment volume stood at 157 billion euros versus an ambition of 100 billion euros excluding DWS. And this puts us well on track to meet or likely exceed our year end 2023 target of at least 200 billion euros. We grew our market share in issuance of ESG products which increased from 2.2 percent in 2019 to 4.6 percent in 2021. Sustainability is a topic which continues to drive client engagement allowing us not only to innovate new products but to also provide advisory services validating our client centric approach. Our commitment to sustainable financing is reflected in our actions. We are a founding member of Net Zero Banking Alliance and we joined the Forrest Investor Club as a founding member in the United States. Before I hand over to James, let me summarize our progress this year on slide eight. The hierarchy of our 2022 priorities rose in the last year and remains unchanged. We are on track to meet our targets of an 8 percent post-tax return on tangible equity supported by a 70 percent cost income ratio. We are delivering resilient revenues and our business were stable to offset many of the headwinds we faced in 2021. Our core businesses are performing in line with or ahead of our expectations. That positions us to deliver on our revenue ambitions in 2022. We continue to be absolutely focused on cost saving measures. In 2021, we intensified our transformation efforts and took further steps to drive long-term efficiencies. We executed on a wide range of the transformation measures we began to formulate three years ago and as you know, we initiated additional measures in 2021. Having put 97 percent of the expected transformation related effects behind us, we have created a clear path to our 2022 cost income ratio target. And importantly, the benefits of these efforts are not limited to 2022. Our relentless focus on executing our transformation agenda means we navigated the bank to structurally lower costs, but also positioned it to capture future revenues opportunities. These strong foundations will drive steadily increasing profitability, which will lead to future improvements in shareholder returns. Our intention to distribute 700 million euros for 2021 is the start of our commitment to distribute the 5 billion euros of capital we communicated previously. And we look forward to discussing our future plans with you at our next investor deep dive in March. With that, let me now hand over to James.