Flora Bocahut

Flora Bocahut of Barclays Investment Bank questioned the feasibility of Deutsche Bank's €32 billion full-year revenue target, asking for drivers of confidence for H2, and sought clarification on the capital distribution policy, specifically how the 50% payout ratio interacts with the 14% CET1 ratio threshold for distributing excess capital.

Answer

CEO Christian Sewing expressed confidence in meeting the €32 billion revenue target, citing a strong FICC pipeline, a recovery in O&A with delayed deals moving into H2, and growth in Asset Management and the Private Bank offsetting any softness in the Corporate Bank. CFO James von Moltke confirmed the distribution policy, stating the 50% payout is not a hard cap and that capital sustainably above the 14% CET1 ratio would be considered for additional distribution.

Flora Bocahut from Barclays asked if there was a positive risk to the full-year cost guidance due to FX tailwinds. She also questioned the outlook for Origination & Advisory (O&A) revenues after the bank dropped its prior guidance, asking if a year-on-year increase was still possible.

Answer

CFO James von Moltke acknowledged the FX tailwind on reported costs but noted it largely neutralizes at the pre-tax profit level. CEO Christian Sewing affirmed his confidence that O&A revenues in 2025 would still exceed 2024 levels, citing a robust pipeline and no canceled deals despite the markdown in Q1.

Flora Benhakoun Bocahut from Barclays asked if there were any tangible signs of regulatory simplification, whether a steepening yield curve is a net positive or negative for the P&L, and about the potential FX headwind from a weaker U.S. dollar.

Answer

Executive Jerome Grivet stated bluntly that there have been no signs of regulatory simplification from lawmakers or the ECB. He explained that a steepening curve from lower short-term rates is not massively positive, as benefits are offset by lower hedge portfolio yields. A weaker U.S. dollar would be slightly negative for P&L, as dollar-denominated revenues exceed costs, but the impact is not considered massive as the exposure is managed regularly.

Flora Benhakoun Bocahut asked about any tangible signs of regulatory simplification, the potential P&L impact of a steepening yield curve, and the group's exposure to the U.S. dollar.

Answer

Executive Jerome Grivet stated there have been no concrete signs of regulatory simplification from lawmakers or the ECB. He explained that a steepening yield curve is not expected to have a major impact, positive or negative. On U.S. dollar exposure, he noted the bank aims for neutrality on solvency, and while a weaker dollar creates a minor negative P&L translation effect, it is not considered massive.

Flora Benhakoun Bocahut asked about the bank's appetite to change its 50% dividend payout policy. She also inquired about the regional banks' plan to increase their ownership to 65%, seeking the rationale for that specific limit and whether changes to the group's capital structure are being considered.

Answer

Jerome Grivet, Executive, stated that while the payout policy will be reassessed in the next medium-term plan, he doubts it will change from the 50/50 split between dividends and retained capital, as it has proven effective. He explained the 65% ownership limit is consistent with the regional banks' prior statements and affirmed there are currently no discussions about changing the group's efficient capital structure.

Flora Bocahut from Barclays asked about any observed impacts from the recent ECB rate cut and the rationale for maintaining the full-year net profit guidance despite a very strong first half.

Answer

Executive Jerome Grivet explained that the June ECB rate cut had minimal direct impact, though it psychologically increased competition in home loan pricing. He confirmed the full-year guidance is maintained because while H1 was strong, the bank accounts for normal H2 seasonality, which typically sees weaker activity in businesses like CIB during the summer and late December.

Asked about the drivers behind the strong increase in client loan balances in the global banking business and its implications for future revenue, and also inquired about the status of the bank's RWA optimization plans through securitization.

Answer

The growth in global banking loans was attributed to strong demand in capital markets and transaction banking in Europe and across corridors to the U.S. and Asia. Regarding RWA optimization, the bank confirmed its plans to use securitization but is waiting for more favorable pricing, expecting to execute these transactions in the second half of the year.