Deutsche Bank Tom Hughes - Head of Asset Management Member of the Group Executive Committee
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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’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
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
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 · 4Agenda
1 1Q2004 results at a glance
2 Successful transformation
3 Management Agenda Phase 2
4 Market recognition
5
4 Summary
Investor Relations 05/04 · 5Globally 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 · 6Improved 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 · 7De-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 · 8Returning 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 · 9CIB - 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 · 10PCAM – 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 · 11Asset 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 · 14Agenda
1 1Q2004 results at a glance
2 Successful transformation
3 Management Agenda Phase 2
4 Market recognition
5
4 Summary
Investor Relations 05/04 · 15Management 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 · 16Strong 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 · 18Building 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 · 20Scudder’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 · 21DB 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 · 22Global 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 · 23Agenda
1 1Q2004 results at a glance
2 Successful transformation
3 Management Agenda Phase 2
4 Market recognition
5
4 Summary
Investor Relations 05/04 · 24Recognition 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 · 25Client 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 · 26Asset 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 · 27Agenda
1 1Q2004 results at a glance
2 Successful transformation
3 Management Agenda Phase 2
4 Market recognition
5
4 Summary
Investor Relations 05/04 · 28Summary
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 · 29Cautionary 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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