Deutsche Bank AG

Ladies and gentlemen, welcome to the Q4 2025 analyst conference call and live webcast. I'm Moritz, the course call operator. I would like to remind you that all participants will be in a listen-only mode and the conference is being recorded. The presentation will be followed by a question and answer session. You can register for questions at any time by pressing star and 1 on your telephone. For operator assistance, please press star and 0. The conference must not be recorded for publication or broadcast. At this time, it's our pleasure to hand over to Ioanna Patrinić, Head of Investor Relations. Please go ahead.

Thank you for joining us for our fourth quarter and full year 2025 preliminary results call. As usual, our Chief Executive Officer, Christian Seling, will speak first, followed by 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, Joanna, and good morning from me. Let me start with the key message we delivered on all our 2025 targets. Thanks to strong momentum across all our businesses, we reported revenues of 32 billion euros. This represents compound annual revenue growth of 6% since 2021, the midpoint of our target range of 5.5% to 6.5%. We self-funded this growth by achieving 2.5 billion euros of operational efficiencies and delivered a cost-income ratio of 64%. in line with our target of below 65%. Asset quality remains solid. Credit loss provisions at 1.7 billion euros are down year on year and in line with our most recent expectations. We delivered record profits in 2025 with pre-tax profit of 9.7 billion euros and net profit of 7.1 billion euros. Post-tax return on tangible equity was 10.3%, meeting our full-year target of above 10%. We see this as a great start towards our commitment of greater than 13% by 2028. We are also delivering on our capital objectives. We finished the year with a strong CET1 ratio of 14.2%, even after a number of capital headwinds absorbed in the fourth quarter. James will detail these shortly. And thanks to our robust organic capital generation and delivery of our capital efficiency program, we again raise distributions to shareholders. With a proposed one-euro dividend per share and an authorized share buyback of one billion, distributions in respect of 2025 will represent 2.9 billion euros in line with our 50% payout commitment. As a result, cumulative distributions for 2021 to 2025 would reach 8.5 billion euros, exceeding our original 8 billion euro target. And we will be looking to do a further share buyback this year. And importantly, over these last few years, we have significantly strengthened our foundations. We have positioned Deutsche Bank to further increase value creation in the years ahead by scaling our global house bank. Let's look at how we delivered the improved profitability. As we explained at our investor deep dive in November, we have transformed Deutsche Bank into a simpler, more focused business with a significantly improved financial profile. We delivered on our revenue ambition of around 32 billion euros this year an increase of 7% compared to the prior year or 26% since 2021 due to our diversified business mix and revenue composition. Cost discipline remained strong in 2025. Non-interest expenses came in at 20.7 billion euros, down 10% year on year. We kept adjusted costs broadly flat and achieved a material reduction in non-operating costs reflecting lower litigation expenses. Our 2025 cost base is nearly 1 billion euros lower than in 2021, a reduction of around 4% over this period. Operational efficiencies enabled us to self-fund foundational investments in our technology architecture, control environment, and client franchise. This cost reduction, combined with our strong revenue growth, created significant operating leverage. In 2025 alone, we delivered operating leverage of 17%, and our pre-provision profit was 11.4 billion euros, up three-fold since 2021. This resulted in record profits in 2025, with pre-tax profit of 9.7 billion euros, up by 84% year on year. The improvement in our profitability was delivered through the successful execution of our global house bank strategy across all our divisions, as you can see on slide four. All four businesses have delivered a reduction in their cost-income ratios and substantial improvement in profitability since 2021, leading to double-digit returns in 2025. Corporate Bank delivered revenue growth of more than 40% since 2021. The revenue mix benefited from a normalized interest rate environment and, importantly, from our actions to increase fee income. This helped us to deliver stable revenues in 2025 despite lower rates and ethics pressures. Going forward, the action we took in recent years mean the corporate bank is well positioned to scale the global house bank model by further leveraging our global network, product capabilities, and client relationships. Our investment bank has transformed over the past few years. In fact, our efforts were focused on deepening and broadening the franchise with targeted investments into existing and adjacent businesses, reinforcing our world-class franchise. As a result, we gained market share and client activity increased by a further 11% in 2025 compared to the previous year. We are also repositioning investment banking in capital markets, or IBCM, building on our German leadership and focused offering, investing in sector and product expertise to expand our advisory and ECM capabilities while maintaining the strength of our debt franchise. Private Bank has made tremendous progress with its transformation, creating a more focused, efficient, and connected franchise with a cost-income ratio below 70% and returns above 10% in 2025. The private banks, two complementary business, attracted 110 billion euros of net inflows since 2021, setting a strong foundation for the next stage of our plan. Our asset management arm, DWS, attracted 85 billion euros of net new assets in the last four years, with assets under management surpassing 1 trillion euros in 2025. And DWS, as a leading German and European asset manager with strong capabilities across asset types, is uniquely positioned to offer clients a gateway to Europe. We also delivered on our sustainability agenda across divisions. Sustainable finance volumes were 98 billion euros in 2025, the highest annual volume since 2021, with 31 billion euros raised in the fourth quarter alone. And we have achieved a cumulative total of over 470 billion euros since 2020. Together with significantly improved ESG ratings, our sustainable finance business activity sets a strong base to further strengthen and scale our sustainability agenda in years ahead. Delivering on our strategy has created significant shareholder value, as you can see on slide five. First, improved profitability contributed to a 25% increase in our attentional book value per share since 2021 to almost €31. And second, we have consistently increased shareholder distribution. For the financial year 2025, we plan to propose a dividend of €1 per share or around €1.9 billion in total at the AGM in May. We were pleased to have received supervisory authorization for a €1 billion share buyback. The resulting distributions of €2.9 billion are consistent with our goal of a payout ratio of 50% for 2025. Including these proposed distributions, we would reach cumulative distributions of €8.5 billion in respect of the financial years 2021 to 2025. As I mentioned earlier, we will evaluate the possibility of an additional share buyback in the second half of 2026. Before I hand over to James, I want to briefly address the next phase of our strategy on Flight 6. We have built a firm foundation for the next phase of our strategic agenda, which is all about scaling our global house bank. At the investor deep dive in November, we set out a roadmap to increase post-tax return on tangible equity from 10% in 2025 to greater than 13% over the next three years. We also set out our plans to further improve our cost-income ratio to below 60% from 64% in 2025. We plan to achieve this via three levers, focused growth, strict capital discipline, and a scalable operating model. Disciplined execution will accelerate value creation for our shareholders, including further increased capital distributions. As we guided, we are increasing our payout ratio to 60% this year. As we made clear in November, we have all the levers to achieve our goals in our hands today. We have planned prudently, and we see upside to our targets if the environment develops positively. 2026 is about taking the next steps to successfully deliver our strategy, and we are encouraged by the strong start to the year we have made so far. Delivering on our 2028 agenda will enable us to reach our long-term goal to become the European champion in banking as measured by a clearly defined set of criteria. A truly global bank, domiciled in Germany, the largest economy in Europe, and the number three economy in the world. A champion for our clients as their trusted partner in a world which remains uncertain. a champion for shareholders reflecting the value we create for them, and a great home for our talented people. A final thought before I hand over to James. Today's results mark the end of an era in more ways than one. This will be the last quarter in which I sit down together with my colleague James von Wolken to discuss our results with you. James joined us in 2017 And as you know, I was appointed CEO the following year. Since then, James has been a fantastic partner and a trusted counselor on Deutsche Bank's journey of transformation. It would be impossible for me to put into words everything James has contributed to what we have achieved on that journey. But there is one thing I can tell you. The successes we are discussing with you today owe a great deal to James' professionalism and his outstanding dedication to our bank. And in the past few months, I have witnessed a seamless transition to our incoming CFO, Raja Akram, who had a great start. Raja, it is a joy working with you. Thank you, James, for all you have done for Deutsche Bank.