Deutsche Bank Tom Hughes - Head of Asset Management Member of the Group Executive Committee

 
Deutsche Bank Tom Hughes - Head of Asset Management Member of the Group Executive Committee
Deutsche Bank

Tom Hughes
Head of Asset Management
Member of the Group Executive Committee
UBS Global Financial Services Conference
New York, 12 May 2004
Deutsche Bank Tom Hughes - Head of Asset Management Member of the Group Executive Committee
Deutsche Bank’s                                                           Josef Ackermann
Management Team                                                           Chairman of Group Executive Committee
                                                                          and Spokesman of the Board
                                                                          Swiss, born 1948

        Group Board                                     Global Business Heads
                                                                    CIB                                    PCAM
                 Clemens Börsig,              Michael Cohrs,                            Tom Hughes,
                 CFO/CRO                      Corporate Finance                         Asset Management
                 German, born 1948            American, born 1956                       American, born 1957

                                             Jürgen Fitschen,
                Hermann-Josef                                                          Rainer Neske,
                                             Global Banking Division/
                Lamberti,                                                              Private &
                                             Global Transaction Banking
                COO                          German, born 1948                         Business Clients
                German, born 1956                                                      German, born 1964

                                             Anshu Jain,
                                             Global Markets
                Tessen von                                                             Pierre de Weck,
                                             Indian, born 1963
                Heydebreck,                                                            Private Wealth Management
                CAO                                                                    Swiss, born 1950
                German, born 1945
                                             Kevin Parker,
                                             Global Equities
                                             American, born 1959

                                     GROUP EXECUTIVE COMMITTEE
Investor Relations 05/04 · 2
Deutsche Bank Tom Hughes - Head of Asset Management Member of the Group Executive Committee
Agenda

     1           1Q2004 results at a glance

     2           Successful transformation

     3           Management Agenda Phase 2

     4           Market recognition

     5
     4            Summary

Investor Relations 05/04 · 3
Deutsche Bank Tom Hughes - Head of Asset Management Member of the Group Executive Committee
Record performance in 1Q2004

                                    EUR                    EUR                  Underlying                                               EUR
   Net income
                                  up 1.2 bn               0.94 bn               pre-tax profit                  up 45%                  1.4 bn

                                                            EUR                 Underlying                                               EUR
   Total revenues
                                  up 23%                    6.2 bn              revenues                        up 13%(1)               5.9 bn

   Adjusted RoE                                                                 Underlying
   (post-tax)(2) up 18ppt                                      15%              RoE (pre-tax)                   up 9ppt                    22%

„ Substantial increase in profitability
„ Continued strong revenue momentum, especially in Sales & Trading
  and Origination as well as North America and Asia / Pacific
„ Successful turnaround of PCAM, further strengthening of CIB franchise
„ Continued improvement of asset quality
„ Well on track to deliver on our targets
(1) Adjusting for currency movements and de-/consolidations, underlying revenues would have been approx.EUR 5.2 bn (EUR 0.3 bn reduction) for 1Q2003
(2) Adjusted return on average active equity (post-tax)
Note: Data compared vs. 1Q2003
Investor Relations 05/04 · 4
Agenda

     1           1Q2004 results at a glance

     2           Successful transformation

     3           Management Agenda Phase 2

     4           Market recognition

     5
     4            Summary

Investor Relations 05/04 · 5
Globally diversified franchise

                       Group                                                              Asset Management
                underlying revenues                                                      underlying revenues
                  by region, 2003                                                           by region, 2003

                        Total: EUR 21.9 bn                                                       Total: EUR 2.7 bn

     Rest of                                                                   Rest of
     Europe                                           Germany                  Europe                                    Germany
                               30%                                                                    29%

                                            33%                                                                    28%

                          27%                                                                     38%
                                     10%                                                                           6%
       Americas                                                                 Americas
                                               Asia-Pacific                                                        Asia-Pacific

Note: Revenues are attributed to countries based on the location in which the Group's booking office is located.
Figures may not add up due to rounding differences.
Investor Relations 05/04 · 6
Improved underlying profitability
In EUR bn
               Underlying pre-tax profit                   Underlying pre-tax return on equity

                                        163%        3.6                          9ppt    13%
            1.7                 1.4                           5%          4%

          2001                 2002                 2003     2001         2002           2003

                    Underlying revenues                       Underlying cost/income ratio
                                9%                                                6ppt
           22.8                                              89%
                               1.9                  21.9                  85%
             2.7*
                                                                                         79%
           20.1

          2002                                      2003     2001        2002            2003

* FX impact and consolidations / deconsolidations
Investor Relations 05/04 · 7
De-risking the Bank
At year-end (except provision for credit losses), in EUR bn
                               Loans                          Problem loans

           265                                        12.7                (39)%
                                       (14)%                       10.8
                               172             148                                6.6

          2001                 2002            2003   2001         2002           2003

             Provision for credit losses                     Alternative assets
                                       (50)%
                                2.1                   11.9                (56)%
                                                                    9.7
            1.0                                1.1
                                                                                  4.3

          2001                 2002            2003   2001         2002           2003

Investor Relations 05/04 · 8
Returning excess capital to shareholders

              Tier 1 ratio                                   Dividends                    Share buy-back
                                                                                       In m shares

             9.6%              10.0%                                1.50
                                                                           (1)
                                                                                             62
                                                                                                       58
                                                        1.30

                                                                                                         (3)
                                                                                                      29
                                                                                 (2)
                                                                       873
                                                              756                            40

       end 2002                end 2003                    2002      2003                 2002/03    2003/04

                                                     Dividend per share, in EUR
                                                     Total dividend, in EUR m                 Shares retired

(1) Proposed
(2) Includes treasury shares
(3) As of 31 March 2004; total capital consumption of EUR 1.8 bn
Investor Relations 05/04 · 9
CIB - Top tier investment bank
Net revenues FY 2003:                                                                                                        Other revenues
CIB vs. major peers, in EUR bn                                                                               GTB             Transaction services

        17.6                                                                                                                 Loan products
                            16.2                                                                             CB&S            Investment banking
                                              14.2                                                                           Sales & trading

                                               1.9               11.7
                                               1.5                                  10.0
                                                                                                       9.3                8.9                8.6
                                               1.5

                                               9.2

     Citigroup             JPM                               Goldman Morgan                           UBS               Merrill           Credit
                          Chase                               Sachs  Stanley                                            Lynch             Suisse

Note: Credit Suisse and UBS: only total Investment banking and Loan products available; translation into EUR based on average quarterly FX rates;
figures may not add up due to rounding differences
Source: Company data
Investor Relations 05/04 · 10
PCAM – a world leading asset gatherer
PCAM invested assets, as of 31 Dec 2003, in EUR bn
                                                  PCAM vs. major peers

                     Fidelity
                      UBS(1)
            Merrill Lynch
           State Street(2)
       Deutsche Bank                                                     872
       Morgan Stanley
           Credit Suisse
               Citigroup
              JPM Chase
       Goldman Sachs

                                0                             500          1,000   1,500

Note: Translation into EUR based on spot rates
(1) Excluding Private Banks and GAM
(2) Investment Servicing and Investment Management in total
Source: Company data
Investor Relations 05/04 · 11
Asset Management - speedy and disciplined execution
of strategy…
                                     2002                                         2003                            2004

                    Acquisition of          Outsourcing   Sale of           Out-               S&P Fund        DB Real Estate
                    ZFS’s German            of US         Passive           sourcing           Awards for      raises USD 1.2
                    and Italian AM          transfer      Asset             of fund            best            billion Global
                    business                agency        Manage-           operations         performing      Real Estate
                                                          ment              in the U.S.        mutual fund     Opportunities
                                                                                               company         Fund
                                                                                               across
                                                                                               Europe

  „ Scudder acquisition               Launch of global     Pan-European               „ Outsourcing of
    & integration                     investment           launch of DWS                Scudder Retirement
  „ Acquisition of RREEF              platform             as mutual fund               Services middle /
    & creation of DB Real                                  brand                        back office
    Estate                                                                            „ Outsourcing of
                                                                                        Japanese back office

Investor Relations 05/04 · 12
…refocusing the business…
Asset Management invested assets, in EUR bn

                                                  YoY development

      800
                      726
      700
                                                                            41
      600                                                568                              567
      500                          (157)*                                        (42)
      400

      300

      200

      100

         0
                   31 Dec       FX / Disposal “Like-for-like” Performance        Flows   31 Dec
                    2002           impact                                                 2003

* FX impact of EUR 54 bn, disposal of Passive Asset Management EUR 103 bn
Investor Relations 05/04 · 13
…towards higher-margin products
Asset Management underlying revenues, in EUR m                                                                       FY 2002
                                                                                                                     FY 2003
                 2,987
                                                 2,856           2,869
        2,686                    2,685
                                                                                                                 –     YoY Change (%) in
2,515                    2,522           2,520                                                                         EUR / local currency
                                                         2,373
                                                                         2,198 2,226
                                                                                                         1,994
                                                                                   1,754 1,764
                                                                                                 1,649                                 1,613
                                                                                                                 1,551 1,578

                                                                                                                               1,253           1,228

       7             -16/1         -6/13           -17/0          -23/-8        -21/-5     -6/12          -22/-14        -21/-5           -24/-9

                 JP Morgan        Franklin        Alliance        Morgan       Putnam    Goldman         AMVESCAP       Citigroup      Merrill Lynch
                                 Templeton        Capital         Stanley                 Sachs

Source: Company data
Investor Relations 05/04 · 14
Agenda

     1           1Q2004 results at a glance

     2           Successful transformation

     3           Management Agenda Phase 2

     4           Market recognition

     5
     4            Summary

Investor Relations 05/04 · 15
Management Agenda Phase 2 – springboard for growth
In EUR bn

        13%            Underlying return on equity, pre-tax                                      25%

                                                                                    ~2.0         ~6.5

                                                                           0.4       9%
                                                      0.8
         3.6

                                (0.3)

   Underlying               Adjustment         Planned cost Lower provision        Revenue    Pro forma
   pre-tax profit           for currency         reduction for credit losses (at    growth    underlying
       2003                 movements*                     expected loss level)              pre-tax profit
* Underlying revenues, operating cost base, and provision for credit
  losses pro forma adjusted for year-end rates 2003 (USD, GBP, SGD only)
Investor Relations 05/04 · 16
Strong revenue momentum in high margin products ...
Growth products in all businesses (revenue growth 2003 vs. 2002)

                                   Credit Trading (GCF)                               125%
                                       AM Hedge Funds                          97%
                                  Convertibles (Equities)                   88%
                                   Derivatives (Equities)            48%
        Commercial Mortgage Backed Securities                       46%
                                   New Issues Syndicate            41%
                                         AM Real Estate            38%
       Private Wealth Management Asia / Pacific              19%
                                                             17%              >20% of
                        Integrated Credit Trading (GM)
                                                                           Group revenues
                                PBC Referred insurances     14%
                                         PBC Brokerage      12%

Investor Relations 05/04 · 17
... targeted by systematic growth initiatives
across the group                                                                         EXAMPLES
                                 „ Continue investing in our best-in-class derivatives businesses
             Global Markets
                                 „ Closing the product and distribution gap to top 3 in U.S. fixed income
                                 „ Consolidating leadership positions in high margin businesses
             Global Equities
                                 „ Expanding Structured Products into Asia and the U.S.

             Global Corporate „ Further building USA M&A, ECM and debt products business
   CIB

             Finance          „ Expand our leading high yield franchise in Europe
             Global Banking      „ Introducing market-based loan pricing
             Division            „ Expanding cross-sell delivery of Deutsche Bank products
             Global Trans-       „ Selling risk management products through Trade Finance
             action Banking      „ Insourcing of third parties’ bank payment services
             Asset               „ Strengthening 3rd party distribution in Europe
             Management          „ Expanding alternative investments offerings
  PCAM

             Private Wealth      „ Selective hiring of senior relationship managers
             Management          „ Upgrade of product mix and pricing structure
             Private &           „ Engaging in active margin management
             Business Clients    „ Increasing customer penetration by targeted cross-selling

Investor Relations 05/04 · 18
Building out 3rd party distribution capabilities …
Examples of retail invested assets growth through 3rd party co-operations
of DeAM Europe           Growth net sales local funds market 2003
                                  Growth net sales DeAM through 3rd party 2003
                 UK                                                                  Germany
                                  DeAM 2003 invested assets through 3rd party

                  4.9%                                                           7.3%
                           8.0%                                                              18.4%

                                                                                   EUR 23.5 bn
          EUR 3.0 bn

               Spain                                                                Switzerland

      10.9%                                                                      -0.1%   -0.1%
                        72%                                                                      5.9%

                                                                                    EUR 3.4 bn
          EUR 0.5 bn

Source:DB Equity Research,
DB internal figures
Investor Relations 05/04 · 19
… from a position of strength

  Ranking of mutual fund managers in Europe by invested assets*, in EUR bn

    140
               126        126         120
    120

    100                                            88
                                                               86          86
                                                                                        79           78         77
     80                                                                                                                    72         71
                                                                                                                                                 68
     60

     40

     20

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* ) incl. retail funds sold to institutional investors, excluding real estate funds       Source: Lipper Global Fund Analyser -12/2003
Investor Relations 05/04 · 20
Scudder’s net flows supported by 3rd party distribution

  Net flows (long-term, open and closed-end funds), in USD m

                                                                           962
             1,000

                    0

           (1,000)                                                 (710)

           (2,000)
                                    (2,125)

           (3,000)
                                     2001                          2002    2003

Note: Non-proprietary channel only / Strategic Insight 2001-2003
Investor Relations 05/04 · 21
DB Real Estate

   „ One of the world’s leading managers of combined equity real estate
     and real estate securities
   „ Over EUR 46 bn in assets under management as of 31 March 2004
   „ Global perspective with local operations including offices in US,
     Germany, UK, Italy, Australia and Asia
   „ Extensive experience and continuity of management
   „ Diverse products and investment strategies ranging from core to
     opportunistic
   „ Themes for 2004:
     - Opportunistic funds
     - Continued capital flow into direct side
     - Cooling down of REIT market

Investor Relations 05/04 · 22
Global Hedge Funds

   „ DB Absolute Return Strategies, our global fiduciary hedge fund
     management business, offers a comprehensive hedge fund platform
     to clients worldwide

   „ Managing over USD 9 bn in single- and multi manager hedge fund assets,
     our senior management hedge fund team has been together for over ten
     years and emphasize a disciplined investment management and risk
     control process concentrated on achieving attractive risk-adjusted returns
     through single-manager and fund-of-fund strategies

   „ The focus of a boutique combined with the infrastructure, network and
     wealth of resources of a large financial institution, DB Absolute Return
     Strategies employs over 130 professionals in offices in Summit, NJ, New
     York, London, Sydney and Tokyo

Investor Relations 05/04 · 23
Agenda

     1           1Q2004 results at a glance

     2           Successful transformation

     3           Management Agenda Phase 2

     4           Market recognition

     5
     4            Summary

Investor Relations 05/04 · 24
Recognition by the stock market
Share price development since 1 Jan 2003 (in EUR(1))
Indexed, 1 Jan 2003 = 100

175
                                                                                                               51%
150

                                                                                                               25%
125
                                                                                                               21%
100
                                                                                   Index international
  75                                                                               peers(3)

                                             Index German
  50                                         peers(2)

  1 Jan 03                                    30 Jun 03                                    1 Jan 04      6 May 04

(1) International peers’ share prices converted into EUR based on daily FX rates
(2) Allianz / Dresdner Bank, Commerzbank, Hypovereinsbank
(3) Citigroup, JP Morgan Chase, Merrill Lynch, UBS, Credit Suisse
Source: Bloomberg
Investor Relations 05/04 · 25
Client focus resulting in award winning franchise

                                                        Winning categories
                                            „   Bank of the Year
                                            „   Bond House of the Year
                                            „   Euro Bond House (5th year running)
                                            „   CDO House
                                            „   European High-Yield Bond House
                                            „   EMTN House
                                            „   ECP House
                                            „   Emerging Currency Bond House (3rd yr. running)
                                            „   Nordic Currency Bond House (2nd yr. running)
                                            „   Equity Derivatives House
                                            „   European Equity-Linked House

                                                               International Financing Review (IFR)
                                                                          “Review of the year 2003”

“Transformation is an over-used word. Only rarely does it genuinely encapsulate the
essential nature and extent of major change. For one firm, however, the word perfectly
describes the shift ... to a lean, aggressive, focused universal bank with a global bulge-
bracket pedigree in trading, distribution, capital markets and client solutions.
Deutsche Bank is IFR's 2003 Bank of the Year.”
Investor Relations 05/04 · 26
Asset Management performance awards
 Scudder            Dalbar Awards - Intermediary Sales Support

                    2003 - Pre Sales Intermediary Service Award
                    2003 - Post Sales Intermediary Service Award

  DWS               DMEuro / Standard & Poor’s Fund Awards (Germany)
                    “Best performing mutual fund company” 10 years in succession

                    2003: for 5 and 10 years

                    Special Award S & P - “Best International Equity Fund”

                    2003: DWS Vermögensbildungsfonds

 DeAM                Pension & Investments

                    „ DeAM ranked 2nd for “Top 250 Firms Ranked by Worldwide Assets” - May 26, 2003 -
                      Money Managers Directory
                    „ DeAM retained it’s standing as Americas 4th largest manager of Institutional Assets -
                      May 26, 2003 - Annual Survey of Institutional Asset Managers
                    „ DeAM ranked 1st for “Top 10 Managers of Real Estate Equity” (US Institutional, tax-exempt assets -
                      May 26, 2003
                    „ DeAM ranked 2nd for “Top 10 Managers of REITS (US Institutional, tax-exempt assets) -
                      May 26, 2003
                    „ RREEF/DB Real Estate ranked 2nd for “Largest Real Estate Investment Managers” -
                      September 29, 2003

Investor Relations 05/04 · 27
Agenda

     1           1Q2004 results at a glance

     2           Successful transformation

     3           Management Agenda Phase 2

     4           Market recognition

     5
     4            Summary

Investor Relations 05/04 · 28
Summary

     Strong momentum in 1Q2004 …                     … to achieve 25% RoE target

  Substantial increase in profitability           Strong product growth across
   following transformation with                    businesses
   record underlying pre-tax profit of             Dedicated initiatives in CIB and
   EUR 1.4bn (+45%)                                 PCAM to capture significant
  Underlying revenues up 13%*                      revenue potential
  Underlying pre-tax RoE of 22%                   One of the most diversified Asset
                                                    Management companies in the
  Strong Tier 1 ratio of 10.1%
                                                    world
  “IFR Bank of the Year 2003”
                                                   Return of excess capital:
  Continued improvement of asset                    - Ongoing share buy-back
   quality
                                                     - Proposed dividend increase
                                                       of 15% to EUR 1.50

* Adjusted for FX impact and de-/consolidations
Investor Relations 05/04 · 29
Cautionary statement regarding forward-looking
statements and non-U.S. GAAP financial measures
This presentation contains forward-looking statements. Forward-looking statements are statements
that are not historical facts; they include statements about our beliefs and expectations. Any statement
in this presentation that states our intentions, beliefs, expectations or predictions (and the assumptions
underlying them) is a forward-looking statement. These statements are based on plans, estimates and
projections as they are currently available to the management of Deutsche Bank. Forward-looking
statements therefore speak only as of the date they are made, and we undertake no obligation to
update publicly any of them in light of new information or future events.
By their very nature, forward-looking statements involve risks and uncertainties. A number of important
factors could therefore cause actual results to differ materially from those contained in any forward-
looking statement. Such factors include the conditions in the financial markets in Germany, in Europe,
in the United States and elsewhere from which we derive a substantial portion of our trading revenues,
potential defaults of borrowers or trading counterparties, the reliability of our risk management policies,
procedures and methods, and other risks referenced in our filings with the U.S. Securities and
Exchange Commission. Such factors are described in detail in our SEC Form 20-F of 25 March 2004 in
the section "Risk Factors." Copies of this document are available upon request or can be downloaded
from www.deutsche-bank.com/ir.
This presentation contains non-U.S. GAAP financial measures. For a reconciliation to directly
comparable figures reported under U.S. GAAP refer to the 1Q2004 Financial Data Supplement,
which is accompanying this presentation and available on our Investor Relations website at
www.deutsche-bank.com/ir.

Investor Relations 05/04 · 30
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