Deutsche Bank - Earnings Call - Q4 2022

Transcript

Speaker 0

So once again, welcome to everybody, ladies and gentlemen, here at Tau Neusen Lager Frankfurt. I also would like to welcome all those who once again have joined us in front of their computer screens. During the pandemic, we have all learned that virtual formats also have got their advantages. So we retained some of the good elements and that means you cannot only follow us in the digital format, but you can also send us questions via Zoom or e mail and you can do so in German and in English. Furthermore, all of the participants can also follow the event in both languages in two channels.

And like last year, on the German channel, we will not translate the English questions and answers, So that's where you will always hear the original, which has been the request of the past. And furthermore, this year, the event is not only broadcast on our website, but also on LinkedIn for the first time. So welcome to all those who have joined us on LinkedIn. So it's going to be a true hybrid event and that's why we've also tried to make sure with our arrangement and set up here that you can follow the event in the best way possible. Please give us your feedback on this later on as well.

Now, so much for my introduction. Let's start with our CEO, Christens Zeeving and our CFO, James von Moltke, who will now give you an overview of the results of the year 2022 and also an outlook on to the next year. And then I'll be back here for the Q and A session. And with that, it's over to Christian Sewing.

Speaker 1

Ladies and gentlemen, dear journalists, I'd also like to extend a warm welcome to all of you. Now after two years of meeting only virtually, I'm very pleased that many of you have come to Tauno Sanlager in person again. Of course, I'd also like to extend an equally warm welcome to those who have joined our Annual Media Conference digitally. Now today, we're looking back at a year that was marked by political tensions, economic challenges, and human suffering. Now this applies first and foremost to Russia's war of aggression against Ukraine.

Even after almost a year, the images of the horror that this war brings to the people continue to stun me. Now the same time, I admire the courage, resilience, and solidarity of the Ukrainian people. It is our hope they will be rewarded for this, and it is our duty to support them in their fight against the aggressor. Now this is about nothing less than defending our values and freedom. The war, ladies and gentlemen, has also created serious economic consequences, especially with regard to the energy and commodity markets.

This has contributed to making $20.22 a year of economic challenges, a year of extreme volatility in the markets, a year of price increases not seen in decades, a year of massive but necessary central bank responses. Now all in all, it's been a year of complexity and uncertainty. Ladies and gentlemen ladies and gentlemen, the management board is very proud of what we've achieved as a bank in this environment. As announced this morning, we closed 2022 with a pretax profit of €5,600,000,000 which is an increase of 65%. We have thus turned in the best result in fifteen years.

Now this is indeed a milestone for Deutsche Bank. We owe this success to strong growth in our client business, but also to further reduction in costs. Now let's start with revenues. Compared to 2021, which was already a very good year, we were able to grow revenues by another 7% to €27,200,000,000 the highest figure since 2016, even though at that time, we were still active in more businesses such as in equity sales and trading. Now this exceeded our expectations at the beginning of the year and is well above the €25,000,000,000 revenue benchmark we set ourselves for 2022, so this year at the beginning of our transformation.

At the same time, we maintained cost discipline. We reduced noninterest expenses by 5% year on year to just over EUR 20,000,000,000. We adjusted costs in spite of increasing prices declined by 3% on a currency neutral basis. We're just as disciplined in managing our risk. Something which is particularly important these days.

Our loan loss provision at a rate of EUR 1,200,000,000.0 or 25 basis points of average loan volume was higher than in 2021, granted. But in such a challenging environment, this is still a very moderate level. With us underlined what has been distinguished what has distinguished us for many years, now this is first class risk management. These result these results show two things. First, how well we held our ground in another challenging year.

And secondly, how successful our transformation has been over the past three point five years. Ladies and gentlemen, we achieved the key goals we set ourselves in 2019. And this, despite the double shock of a pandemic and a war in Europe that back then no one could have foreseen. When it comes to a post tax return on tangible equity, we had set ourselves a target of 8% for 2022. Today, we posted a reported ROTE of 9.4% for 2022.

Admittedly, this includes evaluation effect on deferred tax assets, but it still reflects our improved profit outlook. And as you know, we had already notified the market of parts of these effects. In terms of costs, we shifted from an absolute target to a costincome ratio over the course of the transformation. Now we had set ourselves a low to mid 70% target for the 2022 and at 75%, we remained in this range despite the cost pressures in an inflationary environment. Finally, we also kept our promise that we will always maintain a solid balance sheet during our restructuring.

At the 2022, our CET1 ratio stood at 13.4% and thus clearly above our benchmark of 12.5%. When it comes to our leverage ratio, we delivered almost exactly on target. Now these are just plain figures, but actually they are the expression and result of immense efforts and great achievements of our employees. They have taken on our strategy from day one and identified with our goals despite all the restrictions and sacrifices and cuts for them that came with it. And even in the most difficult times, they've given their role to ensure that we as a bank can be there for our clients in the best possible way.

Now this commitment cannot be overestimated. And on behalf of the entire management board, I'd like to thank all my colleagues in our bank most cordially for this. Everything that we have achieved during these three point five years of transformation, we achieved thanks to you. It is your success story. Ladies and gentlemen, let me take a closer look at what we have achieved in recent years in order to get where we are today.

I'd like to do this looking at the five priorities that we established in 2019. Priority number one was the exit from non strategic businesses and activities. And here, we delivered consistently. We exited institutional equity sales and trading and divested our hedge fund business as well as the IT subsidiary, Postbank Systems and most recently, our network of personal financial advisers in Italy. Now our impressive progress here is reflected in the figures of our capital release unit.

Since the 2019, we reduced leverage exposure from noncore activities by slightly over 90% and risk weighted assets, excluding operational risks, by more than 80%. At the same time, we realigned our four core businesses so that they deliver maximum value for our clients. Now this was our second and as I see it, most important priority because this focus on clients is what enabled us to achieve the stable and balanced growth of recent years. Let me give you a few figures. Although we exited businesses and reduced our balance sheet, our revenues in 2022 were almost 2,000,000,000 higher than in 2018.

At the same time, our bank has become much more diversified. Nearly two thirds of its revenues now come from our so called stable businesses. A significant share of this is generated by the Corporate Bank and the Private Bank. Now after having suffered from low interest rates for a long time, they can now finally realize their full growth potential. In 2022, both divisions have achieved double digit revenue growth and record results.

Now as James will show you in detail later. Asset management had a harder time last year as almost all asset classes experienced a slump. Now against this backdrop, it held up well with only a slight decline in revenues. And despite the decline in stock market valuations last year, now since the transformation began, assets under management have increased by more than EUR 100,000,000,000. Now hope this is not to diminish the performance of our investment bank.

With its focused setup, it has shown a strong, actually excellent development since 2019. Many had feared that clients would leave us because we no longer offer equity trading. Instead, we consistently gained market share because clients appreciate our specialization in the fixed income and currencies business. Now thanks to this strength, we were also able to more than compensate for the industry wide dry spell in origination and advisory last year. Now this shows that we are well balanced not only as a bank as a whole, but also inside of our divisions.

All in all, ladies and gentlemen, we thus exceeded the earnings forecasts that we made at our invested deep dives in 2019 and 2020 in all our businesses. Our third priority was to reduce costs. I have already touched upon this, but let me mention the most important figures again. At 75%, our cost income ratio is now 18 percentage points lower than in 2018. During this period, we reduced our annual run rate of costs by more than EUR 3,000,000,000.

Thus, we have shown that Deutsche Bank can reduce costs, can economize something that you and others, well, not entirely without merit, have doubted for a long time. And we will continue to monitor our expenses closely in the future in order to continue in this successful path. We will not let up on cost discipline. This means that we will deliver the next EUR 2,000,000,000 in savings by 2025 as we announced last year in March. Over and above this, we are working on additional measures to reinvest in our business and counteract inflation.

But one thing is also clear, cost discipline must not come at the expense of our future viability. And this is why we promised, and this is priority number four, we promised in 2019 to invest a cumulative €13,000,000,000 in our technology by the 2022 and to reinforce our internal control systems with a further €4,000,000,000 investment. Ladies and gentlemen, we did not only keep these promises, but even made nearly EUR 15,000,000,000 available for technology projects in order to make faster progress in this essential area for the future. Now this is paying off. We streamlined our technology landscape and decommissioned a number of programs and apps.

This has helped us to reduce our technology costs by million year on year in 2022. Thanks to our strategic partnerships with Google Cloud and NVIDIA as well as our own Procris, we're using more and more cloud based apps. Last year alone, we doubled the number. Now this makes us faster and more efficient. Unity, one of the most sophisticated and complex banking IT project ever is now on the home stretch.

At the turn of the year, we transferred 4,000,000 private clients account from Postbank to Deutsche Bank systems. Well, admittedly, not everything went smoothly and there are still some restrictions for clients. But we are working on it. And at the same time, the team that's been driving the implementation of Unity for years is already preparing the next big customer migration at Easter. Across the bank, we've also strengthened our controls amongst other things by increasing the number of employees and control functions by more than a quarter.

We are fully aware though that there's still work to do in this field. All investments in technology and controls were funded with our own resources. And this is also true, by the way, for the expenditure on the restructuring of our bank. Now this goal, our fifth priority, was also considered unattainable by many observers in 2019. In the past three point five years, our CET1 ratio remained above our target of 12.5% in every quarter and it only fell slightly below 13% twice in the period.

And this was despite the fact that regulatory changes during this period negatively impacted our CET1 ratio as did the costs of our transformation. We managed to offset these effects with the steadily increasing profitability of our core bank, but also thanks to the success of our capital release unit. At this point, I'd like to clear up a common misconception. Contrary to some pessimistic forecast, this entity has done exactly what its name implies, namely freeing up capital through rapid reduction of risks. James will explain this in more detail in a second.

Now ladies and gentlemen, all this has laid the foundation for us to return more capital to our shareholders. Now after distributing a significant sum for the first time last year, we want to take the next step this year and propose to the Annual General Meeting an increase in the dividend by 50% to $0.30 per share. Now ladies and gentlemen, we are, of course, aware of the fact that a dividend in this amount can only be an interim step. Sharing our success with our shareholders is an essential part of our strategy. We set ourselves a target payout ratio of 50% for 2025, and we aim to return a total of EUR 8,000,000,000 in capital for the years 2021 to 2025.

We are and remain committed to this amount. Despite the uncertainties in the geopolitical and economic environment. Our ambition is supported by the continued increase in profitability, which we also expect for 2023 as well as our robust capital structure. Now of course, share buybacks also remain part of our toolkit for the current year. However, we continue to exercise prudence and want to retain a degree of flexibility regarding next step.

At present, in view of the given macro and regulatory environment, we consider it too early to make any statements of volume and timing for buybacks in 2023. We are optimistic, however, that uncertainties will further diminish in the course of the year and that we will be able to reward our shareholders for their loyalty in this way. Now already now, stock market reactions are increasingly positive. Between July 2019 and the beginning of the war in Ukraine, our shares had increased by 90%, which was the highest level since the 2018. This is before the entire market took a dive when the war began.

In the meantime, the shares have made up a large part of these losses and analysts' comments are more friendly with eight out of 17 analysts that actively cover shares currently recommending them as a buy, this is almost half only to have a sell rating. Now this hasn't happened for many years. We've seen positive reactions from other quarters too. In the past eighteen months, we received four upgrades from leading rating agencies. Most recently, in October, Moody's raised our bank's credit ratings for the second time in fourteen months and in the midst of a period of economic uncertainty.

Now this is a very important signal of trust and confidence, which brings dual benefit. The good clients can do more business with us and at the same time, our funding cost decrease. Moreover, we received multiple awards across all businesses. Now to highlight just one, in 2022, we were named Bank Risk Manager of the Year by the Trade General RiskNet and this for the second year in a row. In a year, ladies and gentlemen, in which risk management is more important than it has been for decades, this award is particularly valuable.

What is just as valuable and gratifying to us is the very positive feedback from our clients and the unwavering support of our employees for our path. Now all of this encourages us to continue on our path with determination and confidence. Now in a moment, I will explain the next stage of our strategy. But first, James will give you a more detailed overview of our figures for the past year. James, over to you.

Speaker 2

Thank

Speaker 0

you, Christian, and a warm welcome from my side. I would like to discuss our 2022 financial results in more detail. As Christian mentioned, pretax profit was €5,600,000,000 for the year 2022, up 65% over 2021. Despite the headwinds in the global economy, we delivered our best results for fifteen years. The turnaround in profitability since we launched our transformation in 2019 is considerable.

Profit growth was driven by sustained revenue growth in our core business together with continued cost discipline. At the same time, risk provisions remained contained despite the challenging macroeconomic environment. Profit after tax was €5,700,000,000 In addition to growth in pretax profits, we recognized a valuation adjustment of €1,400,000,000 on U. S. Deferred tax assets in the fourth quarter, which is the result of our strong performance in our U.

S. Business since the start of our transformation. This positive effect is a partial reversal of the negative valuation adjustments we recognized in 2019. Therefore, this does not have an impact on the amount of the taxes we pay. This positive tax effect contributed about two seventy basis points to our full year 2022 post tax return on tangible equity.

Let me now look in more detail at the drivers of this profit growth, starting with revenues. In 2022, revenues grew 7% year on year to €27,000,000,000 As a result, we have increased revenues every year during our transformation. This reflects our more focused business model, which enabled us to offset the impact of business exits. We demonstrated our ability to support our clients particularly well in a volatile and uncertain economic environment. Every one of our strong core businesses contributed to this revenue growth since 2019.

This revenue growth has been accompanied by substantial cost cutting. We have reduced annual costs by around €3,000,000,000 since the pre transformation year of 2018. In 2022, non interest expenses were €20,400,000,000 which is down 5% compared to 2021. Adjusted costs ex transformation charges and bank levies were flat to 2021, but down 3% if adjusted for FX movements. We achieved these reductions since 2018 despite our investments in technology and controls, which Christian has discussed, and also despite inflationary pressures and despite business volumes, which are at a significantly higher level than what we expected three years ago.

Against this backdrop, we achieved a cost income ratio of 75% last year, above our initial ambition at the beginning of our transformation, but still down 10 percentage points year on year and down even 18 percentage points compared to 2018. We have thus proven our ability to grow and invest in our businesses while retaining cost discipline. Let's now turn to our risk management. Our provision for credit losses remained contained in 2022 despite a slowing economy in the context of the war in Ukraine. Provision for credit losses was €1,200,000,000 in 2022, which is higher than in the more favorable economic conditions of 2021.

But still, at 25 basis points of average loans, it was still contained. This is in line with the guidance, which we gave back in March, shortly after Russia's invasion of Ukraine. Deutsche Bank's loan loss provisions as a proportion of average loans are significantly below our peer group average. That is the result of our high quality and well diversified loan book, around half of which is in Germany. And it is also proof of our disciplined risk management.

As Christian will discuss in further detail, we are also turning slightly more optimistic regarding economic development. And all of this gives us confidence that in 2023 provision for credit losses will remain between twenty five and thirty basis points. And currently, we expect these to be rather at the lower end of that range. Let me now turn to capital, another key dimension of our strategy. We finished 2022 with a common equity Tier one capital ratio of 13.4, comfortably ahead of our target minimum of 12.5% at all times throughout the transformation.

And we have faced not only the impact of absorbing transformation related costs, but also the impact of changes in regulation. Together, these impacts have resulted in a reduction of our CET1 ratio by more than two seventy basis points. However, these impacts have been offset not only by growing profitability, but also by the success of derisking in our capital release unit. Net unit has contributed around 45 basis points to our CET1 ratio during the transformation process. I will come back to this in a moment.

First, let's discuss our four core businesses. Let me start with the Corporate Bank. In 2019, we said that the Corporate Bank would play a crucial role for Deutsche Bank's refocused business and our 2022 results demonstrate that. Revenues grew 23% to €6,300,000,000 compared to the prior year, its highest ever level since the foundation of that business. And here, we have recorded strong growth across all business areas.

Rising interest rates and business volume growth, including €18,000,000,000 in deposit growth and a €9,000,000,000 increase in average loans during 2022 contributed to 39% growth in net interest income. Fee and commission income grew by 7% during the year. The Corporate Bank also more than doubled its profit before tax to 2,100,000,000 leading to a post tax return on tangible equity of 12.5%. Profitability was not only driven by growing revenues, but also by a 5% reduction in non interest expenses. The Investment Bank grew revenues in 2022 by 4%.

Growth was driven by our fixed income and currency business, which grew by 26% to EUR8.9 billion. This is the highest level for ten years. The realignment of this business as key part of our transformation strategy has paid off. Growth in FICC more than offset the impact of significantly lower revenues in origination and advisory of €1,000,000,000 against a backdrop of significantly lower activity across the industry. Profit before tax in Investment Bank was again substantial at €3,500,000,000 although slightly below a very strong year in 2021.

This partly reflected a six percent rise in non interest expenses driven by FX movements and higher bank levies than in the previous year. The investment banks post tax RoTE was 9.2%. The Private Bank also had a very successful year. Revenues grew by 11% or 6% if adjusted for specific items such as the gain on the sale of our financial advisory business in Italy and the impact of the BGH ruling, which impacted revenues in 2021. We delivered solid revenue growth in both the Private Bank Germany and the International Private Bank.

We also attracted new net business volumes of €41,000,000,000 in 2022, which include €30,000,000,000 of new net inflows into assets under management and €11,000,000,000 of new net client loans. The private bank thus delivered profit before tax of €2,000,000,000 more than five times higher than in 2021. This was also driven by a reduction of non interest expenses by 11%, thanks in part to lower litigation and restructuring costs. Adjusted costs came down 5%, which partly reflects the benefits of transformation measures and disciplined cost management. As a result, the private bank delivered a post tax RoTE of 10.6%.

Let's turn to our asset management, DWS, which demonstrated resilience in a year of very challenging financial markets. Revenues were down only slightly, reduced by 4% to €2,600,000,000 during the year. A 4% rise in management fees was more than offset by substantially lower performance fees. Profit before tax also came down by 27% to €598,000,000 reflecting this modest decline in revenues and also a 10% rise in non interest expenses. The rise in costs reflected strategic hirings and investments in technology and also a normalization of certain non compensation expenses such as travel and marketing activities, which recovered from the low levels during the pandemic.

Costs also include an impairment on intangible assets related to a historical acquisition, which we recognized in the fourth quarter. Let me conclude by coming back to the capital release unit. That unit has delivered on or ahead of our expectations on all dimensions. The CRU has consistently has been consistently successful in freeing up capital from non strategic activities. The unit reduced our leverage exposure by 43 to €22,000,000,000 in the course of 2022.

And that brings us to a total reduction of 91% since the unit was created. Since the beginning of 2019, this has contributed around 55 basis points to Deutsche Bank's leverage ratio, which was 4.6% at the 2022, which is in line with a target of approximately 4.5%. The CRU also made continuous progress in reducing risk weighted assets in 2022. At year end, RWAs were €24,000,000,000 which is down by 63% since the creation of the Capital Release Unit and significantly ahead of the target of €32,000,000,000 Excluding allocated operational risk RWAs, the RWA reduction since mid-twenty nineteen is as much as 83%. Furthermore, the CRU has also successfully reduced the cost of this de risking.

In 2022, the unit reduced its loss before tax to €932,000,000 down 32% year on year. The CRU has reduced adjusted costs by around €2,500,000,000 that is more than 75 percent compared to pre transformation levels. As a result, as mentioned, the CRU has been net capital accretive for Deutsche Bank as the benefit of RWA reduction for our CET1 ratio since the beginning of 2019 has outweighed the negative impact of the costs of derisking in the same period. This not only enables us to deploy more capital to finance activities of our clients and grow our core business, but also supports our aim to distribute more capital to our shareholders. All in all, the CRU has fulfilled its mandate.

As we announced this morning, it will cease to be reported as a separate segment. Its remaining portfolio will in the future reported under the corporate and other segment. That includes our review of the 2022 review results. And now it's time to look ahead. And for that, I hand back to Christian again.

Thank you very much.

Speaker 3

Thank

Speaker 1

you, James. This brings us to what lies ahead. The geopolitical and economic situation is complex. No doubt about this, but we are prepared for it. And we have already proven in the past that we can deal with such situations.

In addition, the latest data suggest that a global recession is likely to be milder than feared or that it may even be averted altogether. There are many reasons for this encouraging development. Well, the swift and decisive response by governments has had a clear positive impact and also stabilized consumer confidence. At the same time, companies have once again proven to be very robust and resilient, and they are looking into the future with more optimism, especially since China reopened after the COVID lockdown. In Germany, the IFO business climate index improved for the fourth consecutive months in January, and the economic expectations measured by the research institute ZEW were back in positive territory for the first time since Russia's invasion of Ukraine.

Also, the very mild weather has also played a major role in energy prices falling sharply so that all in all, we are getting through winter rather well. Now it looks as if us Europeans just had a bit of good luck on our side in a very difficult situation. But what's next? Our economists expect that the German economy will be flat in 2023 and that there'll even be a slight growth of 0.5% in Eurozone. They believe that The US economy will grow by 1.1%.

For 2024, however, the outlook for The U. S. Is less favorable for the second half of the year. This is due to there being a danger that significantly high interest rate will trigger a recession in the second half of the year. Now I have no doubt that both the Fed and the ECB will continue to raise interest rates and it's important that they do.

Ladies and gentlemen, departure from this path would jeopardize the fight against inflation and thus pose a risk to long term economic development. Now this is why we are supportive of the central banks continuing on their consistent course. Now why do I see risk? Now because inflation might be stickier than many people think. So far, we expect an easing of consumer prices for 2023 and then even more so for 2024.

However, we should not lose sight of the risks included in this forecast. Those come in particular from the labor market where there is a shortage of skilled workers in Europe as well as in The United States. Also, the reopening of China, which is of course to be welcomed, could also have a strong inflationary effect if Chinese demand for goods and raw materials were to rise rapidly during the year. And this is why, ladies and gentlemen, we must not let up now. So all in all, we are now slightly more optimistic as I already said.

But of course, there are still uncertainties and the volatility that characterized the past year will certainly be here to stay to some extent in 2023 because inflation is still present and other risks have not gone away either. This applies, first of all, to the war in Ukraine with its unforeseeable outcome, but also to other conflicts such as the tensions between United States and China. The tense situation with regard to global supply chains has eased somewhat, but they remain fragile and prone to disruptions. Same applies to energy supply, especially in Europe. The multiyear refinancing wave, which starts this year, brings a number of challenges for companies and countries.

At the moment, they are more confident because risk premiums have come down. However, weaker borrowers in particular still remember well how funding costs soared last year. In a volatile environment with rising interest rates, repetition of this cannot be ruled out entirely. So we will still have to deal with a variety of risks. But in the past, we impressively demonstrated that we can manage our own risks.

And we want to continue to do what we've already done successfully in the past crisis years, namely managing our clients' risks. We help them to secure their investments and assets to gain access to liquidity and short term financing and to hedge against those risks. At the same time, however, it is important not to lose sight of the future despite all the concerns about the present. The need to prepare for digital and sustainable transformation has not diminished at all. And we are also working on this with our clients.

Now persistently high volatility due to shifts in the macro environment, advancing digitalization and transition to a sustainable economy. These are the three trends we highlighted as the key economic drivers for the coming decade at our investors deep dive in March. Now we also explained to you back then why as a global house bank, we see ourselves particularly well positioned to support our clients with these trends. This is because we've been their financial partner in all matters for years and through every cycle, and we know their needs. Because we have a unique global network and can provide local expertise in around 60 countries worldwide.

Because we are an experienced risk manager and adviser and have the balance sheet strength to provide financing and because we offer sophisticated products and modern digital platforms by deploying the entire spectrum of our bank for the benefit of our clients. The past year under cored how we feel the strength with life and how much our clients appreciate and need us as a global house bank, especially in times of high volatility and uncertainty. Ladies and gentlemen, more than 80% of all revenues generated by the Corporate Bank in 2022 came from clients who purchased more than one product from us. Now this shows the depth of our client relationships. We accompany our clients on an international scale.

More than half of our revenues generate with global companies headquartered in Germany were booked outside our home market. Compared to 2021, our corporate coverage team increased revenues by more than 40 across our fixed income and currency product, especially driven by FX and interest rate hedges. So we are the risk manager of our clients. And this, of course, is due to the overall environment, but it also shows how much our clients trust in our risk management expertise. And clients also rely on our ability to find solutions to them.

This is reflected in the many tailor made and often innovative products that we launched last year. Now we are happy to say that many of these solutions now have a sustainability component. Our clients' demand for sustainability solutions continue to be high in 2022 despite the economic uncertainty. That is good news because we must not let up in the fight against the climate crisis. At Deutsche Bank, we continue to contributing to more sustainable economy.

In 2022, we appointed Jorg Eichendorf, whom you all know well, as our first Chief Sustainability Officer. He cooperates with all businesses and infrastructure functions to ensure that we embed sustainability even more firmly in our processes, develop attractive ESG products and solutions and in particular, intensify and in particular and I think this is the most important thing, intensify the transformation dialogue to support our clients on the road to becoming more sustainable themselves. Now this is the only way we can achieve the ambitious sustainability goals we have set ourselves, we have set for the economy as a whole. Now in 2022, we managed to do this. We surpassed the mark of €200,000,000,000 in sustainable investments and findings that we set ourselves.

Let me remind you that we had originally set ourselves this goal for the 2025 and then brought it forward twice. Achieving this now is an important success and the first major step on the way forward, which is to lead us to €500,000,000,000 by 2025. Now at our sustainability deep dive on March 2, we will further elaborate on our next steps on our sustainability journey. I do not want to anticipate this now. Just let me say, we have a lot in store.

And this day, ladies and gentlemen, is not only true for sustainability, but for the entire bank. At last year's invest deep dive, we announced that the transformation of our bank shall be followed by a phase of sustainable profitability. A phase in which we use our strong position in all businesses, in all four businesses to expand market share. A phase in which we continue to increase revenues and profits without letting up on cost discipline, as I just mentioned, and a phase in which we generate significant amounts of capital and return. On the one hand, we want to use this to make hard distributions to our shareholders and on the other hand, to reinvest in our business in order to enable further growth.

Of course, in this phase, we are also focused on making rapid and significant progress with regard to controls and regulatory deficits that partly still exist in some areas. Ladies and gentlemen, this is just as important for us as an increase in profitability. After all, ladies and gentlemen, strong controls are the foundation for sustainable growth and we know that we still need to get better here. Last year, we defined the following goals and ambitions that we want to achieve by 2025. And today, we are reaffirming these.

An average annual revenue growth of 3.5% to 4.5%, equivalent to a revenue level of more than EUR 30,000,000,000 at the end of that period. Cost to income ratio of less than 62.5% on the basis of a roughly the same annual costs. As mentioned at the beginning, we are planning to make savings by 2025 that will go beyond the EUR 2,000,000,000 originally announced. Thus, we aim to preserve the space for investing in future growth in spite of the high inflation. On this basis, we aim to achieve a post tax return on tangible equity of more than 10%, while at the same time keeping our CET1 ratio at around 13%.

Finally, we have set ourselves the target of capital distributions to our shareholders totaling EUR8 billion for the years 2021 to 2025. The payout ratio is to rise to 50%, as I already mentioned. Now this continues these objectives continue to apply, no ifs or buts. Given the volatile environment and the many uncertainties, the path to this goal may not always be linear, mind you. However, we have the right strategy, the right business model, and most importantly, the right team to be successful in difficult times.

And we want to get better every year. Now that also applies to 2023. And please bear with me, ladies and gentlemen, month of January strengthened our confidence, absolutely so. As things stand and thanks to high interest rates and further business growth, we expect our revenues this year to be roughly around the midpoint of a range between 28,000,000,000 and €29,000,000,000 We expect our costs to be essentially flat compared to 2022 and also our loan risk provision should be roughly where it was in 2022. So all in all, ladies and gentlemen, this would mean that we can achieve yet another increase in pretax profit this year.

Now this is what all of us at Deutsche Bank are working towards with discipline, with absolute determination, with absolute focus on our clients. In times like these, our clients do need Deutsche Bank. We saw exactly this in 2022. They need their global house bank. And the need for global house bank will increase further ladies and gentlemen.

Thank you for your attention. James and I look forward to your questions.

Speaker 4

Christian, James.

Speaker 0

Thanks, Christian. Thanks, James. And this brings us to our Q and A session. Now here in the room, we do it in the traditional way, quick show of hands, and then you will be entered on our list. For those of you who have joined us via Zoom, now you have got two options.

On the one hand, you can ask your question directly here in the room via Zoom, please ask for the floor via the chat or you send us an e mail at annul. Mediaconferencedebi dot com. And you can ask your questions in German and in English. Now, we've got about one hour for our Q and A session. And therefore, quick request is that you limit yourselves to two questions in the first round to give everybody the chance to take the floor.

And the first question comes from Tom Sims from Reuters. No, I'm Tom Sims today, says the lady. And then Marta Obersch. Yes. Marta Obersch from Reuters.

Good morning. Could you please be a bit more elaborate on this positive tax effect and explain it to us? And well, according to the news, in the fourth quarter, certain settlement costs for litigation and regulatory measures were also posted. Could you give us some more details on this as well? Thanks for the question.

Please forgive me if I answer it in English. I still do not feel fully at ease in Germany in such a q and a session.

Speaker 2

The DTA, it is we have a net present value of the benefits of future tax savings associated with our tax characteristics, so, essentially to do with past losses referred to as as tax loss carryforwards. We have to value those on the balance sheet from time to time. And when there's evidence that the value of those tax characteristics has increased based on, frankly, the greater estimate of future profitability of our US operations, then then the value of those attributes goes up. And we run it through the p and l in this quarter, 1,400,000,000. Recall that in July, we actually wrote off about $2,800,000,000 of the deferred tax assets, and at that time, reflecting a more conservative view of the future value of those assets.

So from time to time, they're revalued in our accounts just like with peers. It is a bigger number than we anticipated. As Christian mentioned, we we were seeing some of this as a likely event this year. We also had a smaller amount in 2021. On the litigation item, we really don't speak to the individual events or matters that that drive our litigation provision.

Simply, it was higher than than we expected, And I'll leave the answer at that. Marta, thank you for the question.

Speaker 4

Then

Speaker 0

the next questions on my list from Michael Meiss, Handelspruit, Olaf Storbeck, Financial Times and then Hanno Muslau of FAZ. But now first, Michael Meiss from Handelsblatt. Well, it seems that the list is not fully up to date. Well, first, Jasmine. But the lady is not using a microphone.

The interpreter is very sorry. In the year 2022, this tax effect saved your return target, I think, because I think it was 2.7 percentage points and the cost income ratio also was near the upper range of what you wanted to achieve after adjustments. So against this backdrop, I would like to know what went wrong so that you needed this tax effect to reach your targets? And what gives you the confidence? So where will all the improvements come from that will allow you to reach your targets in 2025 unless you have another positive tax effect?

Well, let me start, Ms. Osman. Now first of all, if you have reached what you have achieved today after three point five years of transformation, I think that is something nobody here would have expected. So we are absolutely satisfied. That's a great result for the bank.

The bank is an absolute growth trajectory. Nobody would have expected a stable business to grow the way they did. And that gives us the overall confidence also looking ahead that the more than 10% of return on tangible equity can be achieved. So against this backdrop, I think we should not just focus on that single tax effect alone. We've got a solid, a robust and a bank which is able to generate profits in a sustainable manner and gain market shares, number one.

Secondly, we've always said that we will have that tax effect in 2022. And last year, to be fair, in the beginning of the year and also in 2019, there are two things we had not expected, especially the terrible war in Ukraine. And if you look at the valuation adjustments this year, I think we managed them very well with CHF1.2 billion. Of course, they are CHF 300 or 400,000,000 higher than planned initially. But I think that's something which is easy to understand for everybody.

And at the same time, and that's something that is beyond our control, we had to pay higher levies into the European banking fund. And of course, there are also some impacts over the last two or three years related to the pandemic or if you look at the volatility in the markets. And of course, there's one or the other cost increase that was impossible for us to predict. So achieving this return target of more than 8% or slightly below 8%, if we adjust for the tax effects, which we had not planned for. I mean, we had included CHF400 million beforehand.

And then I'd like to come back to another number, where we also had given ourselves a target, which shows that in a volatile environment, we achieved what we wanted to achieve. We said that the core bank will achieve 9% return on equity. And I think, James, in 2022, we are at 8.5%. If you now take the higher loan loss provisions into account due to the war, then this takes exactly to the nine percent. So I can only repeat what I said, great results.

This bank delivered, especially all of its employees. And if I then see that in every quarter, we increased our market shares also in the last quarter in many areas. And if I look at the start into the year, then I'm not worried at all about our targets for 2025. And I think the 8.5% in the core bank is without the tax effect. Yes, that's absolutely right.

Yes, thank you for that addition. Thank you very much. Next question now, Olaf Storbeck, Financial Times. Please wait for the mic. I've got a question on Adani.

Last autumn, you completed two transactions with or for Adani. And on that occasion, you also accepted shares as collaterals. How many of them do you still have in the books? How high are the risks for the bank? And has there already been a margin call or will there be one?

And my second question is about DWS. Stefan Hoops now quite frankly says that the free float should be increased in order to make the share more attractive. What's your view on this? And what do you think about Mr. Hope's suggestions to change the covenants structure and also to possibly get rid of the so called KGAA structure?

Now let me start and James, you jump in at any time, please. Now Mr. Storbrik, I think you will understand that you will not comment on individual clients. We cannot do so. I can only refer to what James has told you in a most impressive manner that over the last fifteen years, in risk management in almost every year in relative terms, we did better than our peers.

And this proves that we've got our risks under control that we can structure and diversify them. And against that backdrop, I'm really quite confident in this regard. The second thing about DWS. Now, of all, I'm always happy about new incentives and new impetus. That's what we need.

Otherwise, we'd not be able to make progress. First of all, I'm absolutely happy about how quickly Stefan Hopes got accustomed to this new job and what he achieved in DWS. You know that 2022 was not an easy year and an easy environment, so I achieved quite a lot. And of course, the fact that we are thinking about the ways to make the share more attractive, of course, that's normal. That's always what we need to do, but there's nothing to announce in this regard.

And if there's anything we need to discuss, then we first do that internally. Thank you very much. Next question is by Hannah Nuslau, Frankfurt Algemein at Saitung. Please wait for the mic. Just a second.

Good morning, Mr. Sewing. One of the twenty nineteen targets had always been to cut 18,000 jobs. Now if I look at your headcount and this did not happen, maybe you can tell us where you cut jobs and where you also increased the headcount at the same time. Vacancies is my next question.

I think you've got some more than two years ago. So where do you want to further increase your headcount? And then the second key question for me is about Cumex. Now, how many employees are currently being investigated? And how many of these are current or former Board members?

And what is Deutsche Bank here still facing in this regard? Thank you. Now when it comes to headcount, and I think that's the difference to the numbers that you're quoting of previous years. Now there are three things to bear in mind. Number one, during the transformation, Mr.

Musler, of course, we also went through a learning curve and we went through a whole lot of internalization because that turned out to be more efficient, more cost effective for us. So we did not plan by positions, but by costs. And therefore, lot of external employees were internalized. We were happy about that because that gives us much more efficiency. And I think it's about 6,000 jobs of this kind.

And then in the same period, there's one thing which we did not do in spite of the crisis. We did not stop hiring people from universities, graduates, because I think this bank has to invest into its future. We always said cost discipline is important, but please not to the detriment of our ability to shape the future. Every year, we hire thousands of graduates, which was also slightly above plan. And then two more things to take into account, Mr.

Musler, and I also announced this quite frankly, I think James or I, we gave you the number. In the controlled environment, we increased our headcount by more than a quarter. We now feel at ease now. I think we're now on the right track, but we just needed to hire more people in this function. And the other thing, and that's what makes me most happy, is growth, Mr.

Muestler. We are now a much stronger bank with much higher revenues. And if you've got significantly higher revenues, then of course, we also need to support from employees in the businesses, but also in the infrastructure functions. And all of this results in what we changed last year, namely that we switched from absolute numbers to the cost to income ratio because that allows us to much better manage the bank into the future. So against this backdrop, I think this is the answer to your question.

But this does not mean that we're not keeping a close eye on our headcount. And we've also been able to show you that we can decrease this. Now unfortunately, we are not able and allowed to comment on COMEX because these are ongoing proceedings, so I cannot comment this any further. I hope you will understand. Thank you very much.

Well, we now continue with Stephen Arens, then Philippe Hapdank and then Jean Philippe Lacour. Now first please, Stephen Arens from Bloomberg. Microphone. Good morning. I've got two more questions.

The first one on buybacks. Other banks have announced major buybacks and dividend programs. Deutsche Bank did not do so, although the CET1 is above the target of 13%. And in spite of the positive macroeconomic outlook you gave us. So could you give us more details on why you want to refrain from these actions?

Although you said there will be share buybacks in 2023, if I remember it rightly, then deposit better. Now how much is that at Deutsche Bank? And what is this going to be during the course of the year? Thanks, Mr. Arendt.

Well, you gave the answer yourself to the first part of your question. Yes, we will do buybacks. That's part of our 8,000,000,000 capital return between 2021 and 2025, which we committed ourselves to, and we were going to stick to that, no doubt about this. I think you can see a continuous increase of the dividend as we also announced today. And buybacks is part of our toolkit in this regard.

And of course, we remain committed to what we promised. But and I gave you a detailed outlook on to the geopolitical and economic situation. We want to wait during the next couple of months to see how the economy evolves. First and foremost, of course, we want to stand by our customers and clients whom we want to support. And I'm firmly convinced and looking at our development in the past few years, I'm absolutely convinced that buybacks are part of our toolkit.

Now we have taken a conservative approach at Deutsche Bank, which served all of us well. And if you've got a clear picture, then it's the right time for us to take these decisions that I'm quite confident that we will all reach that point in 2023. But let's wait for the first quarter next couple of months. But if it continues us now, then I'm quite confident. James?

Speaker 2

Deposit beta. So essentially, quickly do banks pass on interest rate rises to their customers. We model that in our in our forward looking analysis, as do all other banks. And as you've heard from some of our competitors, the banking industry, in a sense, is outperforming what its models might have suggested for a beta. In other words, how how quickly interest rate rises are being passed to to customers.

This interest rate cycle is is quite unusual, in in two characteristics. One is the the level from which we are moving in Europe negative, The United States essentially zero, and also the pace at which we're moving. In a sense, I think the models don't capture, you know, those those entry point, articles. And so we're traveling, as I think many of our peers are, well below the model betas. We would expect that to begin to catch up over time.

But but while that lag is is persisting, it's been a benefit to to the interest rate driven earnings of of the banking sector, including Deutsche Bank.

Speaker 4

Okay. Next question

Speaker 1

is from Bergen Seidung, Philipp Hapdank. Good morning. I have three questions. First two, with regard to the Corporate Banking. The revenue increase was quite extreme.

Since 2019, revenue increase had been flat. Now that there are interest rate to have, revenues go up. So I'd like to know how much in percentage points is attributable to high interest rates? How much of the leap in revenues? And then also additional question, what does it take in Corporate Banking to be sustainably profitable and also to earn the capital costs in a sustainable fashion?

And last question with regard to loan loss provisions. In which areas worries you the most? Is it rather private clients, retail clients, real estate? What worries you this year?

Speaker 2

Of your two questions, you'll see on page seven of our financial data supplement, we show the composition of revenues in the corporate bank over the years, and I referred to it also in my prepared remarks. So net interest income was up by 39%, fee and commission income up by 7%, and there are other components of the revenues in the corporate bank as well. Your point about sustainable profitability, you know, as I in in a sense, just answering Stephen Aaron's question, we've come from what I would call an unnatural environment for interest rates that had a significant impact on the corporate bank and also the private bank. So negative interest rates essentially meant that a big portion of our business, the deposit books, were structurally unprofitable. But we are seeing now the a resumption or a normalization of of that performance, which has had a a dramatic impact.

But we think that's sustainable because it is a normal environment to have positive and ideally upwardly sloping yield curves. And so the the corporate bank can now benefit from that. And I would call that a normalization, but we think it's sustainable. But I think it's also important to bear in mind, Christian referred to how we are serving clients as a risk manager, as a payments counterparty, as a global network, as well as a lender and deposit taker to to clients in the in the corporate bank. And as we build the business volume, as transactions grow up, as the assets under custody go up in the business, so too will the business rise.

So you're seeing it not just in the interest income but also in other forms of income, and we do believe that that that growth in revenue is is sustainable.

Speaker 1

Additional answer on sustainable growth in the corporate bank. Yes. We do, of course, benefit from the interest rates, but the most income is outside of net interest income. So and I think this just shows that the underlying client business is very strong. This was also the case in the past few years, but here we had, so to speak, a negative compensation due to the negative interest rate.

But the growth, be it with deposits, be it with payments, be it trade finance, there is growth. This is just reality. And when I look at the figures for the next two years and our plans, I can tell you that the growth in percentages will be bigger, the growth outside of NII, which just shows that the growth of revenues, growth of business is sustainable in Corporate Bank. And don't forget, it's not just like this in Investment Bank, but for cash management in global terms. The full rating upgrades that we got had an enormously positive effect because many large clients, many institutional clients of us who use us for cash management, for example, have a little bit of counterparty rating, of course.

And thanks to those four upgrades, we got a lot of tailwind. So I'm not worried about the sustainability of the business with an eye revenues in the Corporate Bank. Also, the same is true for the return on equity. I'm very happy that this core business of Deutsche Bank is positioned as it has, and it will become even more enjoyable. Just wait and see.

Now law and risk provisions. We don't see any problems because we manage well. We don't have any concentration risks that would raise major doubts with James or myself. Know, of course, when it comes to sectors of industries, wherever you have funding or refinancing risks and high interest rates have to be paid, have to keep the eye on the ball, no doubt about it. For example, commercial real estate, sometimes also leveraged lending.

It's also due to the fact why our risk appetite was reduced already in the first quarter of last year because of course we saw what happened there. And when it comes to the normal company client and private client business on a global scale and in Germany, we are very happy about the diversification in our portfolio. James already mentioned it. Half of the loan book actually is based in Germany and the lion's share made up of, for example, private mortgage business with moderate loan to value. So and we also have proven that we have great underwriting conditions and requirements.

In a year without a war and without this inflation, it will be higher. But I think at a rate of 25 basis points, we are well on track, and we can stand up to competition.

Speaker 2

The consumer loan portfolio and and particularly mortgages, first of all, a loan to value. So a conservative loan to value in the loan book is is the first protection. But importantly, the structure of the German mortgage market is one where most of our clients have locked in fixed rates of interest for a long time, on average thirteen years. So the the refinancing risks in in our portfolio are actually very limited in in over the next several years, as that rolls over. And that's, I think, an important feature of of why we're confident.

Speaker 1

All right. This gets us to our first question from Zoom by Jean Philippe Lacour from AFP. Hello. Good morning. Can you hear me well?

I have a bit of an echo. Okay. My question is on clients. Clients seems to be very, very important. We can feel this in your answers.

The speech mentions it about 30 times. Now can you give us an idea of how the number of clients has developed? How were you able to win new clients last year? Or did revenues increase primarily because you penetrate clients deeper, so you sell more products per client. I don't know, Santander said that they have 160,000,000 clients.

Well, perhaps that will be a dream figure for you, but could you give us could you give us a figure, ballpark? Also, Suisse, Goldman Sachs, perhaps for idiosyncratic reasons, but they will be laying off thousands of people. Now one of the colleagues already asked about the number of employees, your head count. Can you exclude as you stand here today that there will be a number of redundancies because the cost pressure will remain as it is? Thank you.

I start and James, add to that later. 160,000,000 clients, I'd love that. You're absolutely right. But I mean, we believe this as an ambition or wish, but not as a target. Okay?

Right. I mean, to be fair, the revenue increase is of course due to a deeper penetration of our client relationships. I cannot give you customer or the client figures in the various and the different businesses because every business and every division is different in that respect. I think I just mentioned that when it comes to the corporate bank and investment banking, we have an increasing number of clients. Why is that?

Because as I mentioned, our ratings became better and we do feel quite clearly that many customers are looking for an alternative to American banks, in investment banking and trading, for example. It is what it is. They want to have alternatives. They want to have alternative banking relationships. Doesn't changes nothing about the fact that our American competitors are, of course, excellent banks, but they want an alternative.

And I think this is also reflected in our market share. Yes, we have a deeper penetration of client relationships, but also additional clients in wealth management, private clients as well, increase of clients here. We benefit from a continuous growth. We invested in this area. Also when it comes to we hired, for example, additional relationship managers in Germany and outside of Germany, so it's a clear growth path.

And, you know, I'd say it's a mixture of deeper customer relationships and new clients. But what's important for me is that clients approach us and say, hey, you're back and you can be my expert. I'm sorry. I'm looking down at the screen. I should looking I'd be looking at you.

I'm sorry. I apologize. So clients do appreciate our deep expertise. And I think we're on a good path here. Briefly on Goldman and the other figures.

Well, first of all, I cannot comment what others do. Let me just say two things. A, as with the previous question, in 2018, we did have to reduce headcount, unfortunately so, right? So this did this would and if you take a three to four years average, we reduced headcount more than our competitors. But some of our competitors increased headcount considerably in the last one or two years, and they are taking this back now.

So on your question, we will be saving the €2,000,000,000 and we have incremental programs that were decided in the management board. So there is no guarantee that we will not be reducing headcount this, or the other way, but we also want to grow. We want to invest, for example, in technology. We want to get stronger there. So that will be the honest answer to your question.

I hope this answers your question, Jean Philippe. Thank you. An update on the list of questioners, Michael Schreiber, Patricia Kaufmann and Isabella Bufaki. Michael Schreiber, Deutsche Teitung. Hello, good morning.

Thank you. I have a few questions on the CRU. If I see this correctly, the portfolio has still not been reduced as you envisaged. So the leverage exposure is still twice the size you had planned. And the analyst consensus expects €1,900,000,000 on a cumulative basis up until 2025.

This is at least what I read in the consensus. So I'd be interested to know as to whether this is in line with your guidance or if your guidance is different. I mean the losses also result from relatively high administrative costs. Will they be reduced markedly when you transfer back to the corporate and others? And and another question.

I mean, these are mostly trading assets. Why is it not being transferred to the investment bank? Thank you.

Speaker 2

Question. On the assets that remain in the in the CRU portfolio that's moving into corporate and other, I'd I'd draw your attention to page 53 of the analyst deck that we published this morning where we give you the details of that portfolio. You're correct. Relative to the 2019, the original target we set in July '19, which was lower than where we are now, we we did raise that target then subsequently, reflecting a number of features, including, that we we simply didn't attach the liquidity reserves that you see to that portfolio, which was about $6,000,000,000 or is about $6,000,000,000 at the end of last year. So we adjusted that target, but relative to that adjusted target, we're below and comfortable with where we stand.

The answer to your question is this portfolio will simply run off over time. Most of it at this point is has been worked to the point where we would simply allow the contracts to run off. There's no clear avenue to accelerate that. And and, therefore, there's the management of assets of that nature is quite different from what the investment bank does, which a little bit gets to your third question. The reason to keep it as a segregated portfolio is, in a way, given how different those assets are from the assets in the core businesses, you don't want to distract the core business management, those client dialogues and so on with the questions to do with the the CRU.

We can isolate it. We can risk manage it, and see those those assets out to their maturity. We also show on page 53, by the way, the weighted average maturity of what what remains is about six and seven years. On the cost side, I would say we we hit the target of of 800,000,000 or less than 800,000,000 for the CRU costs in 2022. It's still a rapid decline from here.

So I would expect costs supporting those assets to be half or even less than half in '23 of in that $800,000,000 and probably half again of that in '25. So it the the costs, in particular, the allocated costs of the CRU run off pretty quickly, which means to your question about the remaining losses there, with essentially zero revenues or a very small negative revenue item. It's really a question about costs being pushed out of the company, that will drive the profitability of or the drag of that portfolio to be reflected in in corporate and other in the future.

Speaker 1

Does this answer your question? I hope so. And the next question

Speaker 5

Hi, good morning. Just a couple of questions. Number one, can you give a bit of flavor in terms of, customer behavior when it comes to corporate and households, at the beginning of the year? And the second is the outlook for the Investment Bank. What you're seeing now and what should you expect and we expect in the coming quarters, including leverage financing?

Thanks.

Speaker 3

Yes. Let me start. The customer behavior is, I try to outline in my prepared remarks, in particular in Germany, cautiously optimistic. But there, you really have to also differentiate, Patricia, between, the clients. We clearly see the global corporates also in Germany navigating through, all the challenges in 2022, I would say, in in a in a in a quite mature and solid and robust way.

Why? Because they have a lot of alternatives. They can move supply chains faster than a smaller mid cap company. So the concerns, also in the economy is different from large cap companies to mid cap companies, in particular, cap companies who have difficulties to pass on the prices. They are obviously then, more concerned about the outlook, and hence, it is so important to get the inflation down.

Inflation is the poison of the economy, and hence, we need to get control over this one. So it's not actually such a sectorial question. It's in particular a question large caps versus mid caps, and hence, the 200,000,000,000 support program, which in my view will not be even fully used, but was for giving support and also moral support was the right signal actually, to to the corporate world. In the, in the retail area, from a credit behavior, we cannot see any meaningful or material deterioration, be it on consumer finance, be it in the mortgage area. People, have obviously built up their savings a lot through the COVID time.

They are benefiting from that. You can see in certain areas, you can saw the you you saw that in the '23 that, in particular, people with lower income, they changed a little bit their consumption behavior, and and went for different products. You could see that and listen to to to the corporates in this regard. But when I when I overlook at the strengths of our employment market And if we manage to now get the inflation down, I do think that actually, we have a chance, to go through 2023 without a material decline in consumption also of the private people. So if you compare to the 2022, more optimistic, but it really depends, on, sort of, say, the background of the clients and also in what kind of business they are.

And on the corporate side, you really have to distinguish between large corporates and mid caps and small corps. Outlook IB, as James was saying and James should add, but, look, we had an outstanding FICC business not only in 2022. I think what Ram Nayak has done in reorganizing the FICC business is exemplary, and and we will thrive on that. Now do we see exactly the same amount of revenues in 2023 in the FIG business as 2022? Potentially not.

But, you know, if I just if I just look at the underlying flow business in January, then, they are on they are on full speed. And and I can see that people want to deal and want to do business with Deutsche Bank also in the FICC business. The good thing about the investment bank is that we are standing on three legs, and this is underestimated. We have a fantastic FIG franchise. We have a very mature financing business, and we have the O and A business.

We believe, and there are first indications, that the O and A business in '23, is coming back, not to a degree like we have seen it in '21, but it's coming back. And that will, in my view, compensate for a potential decline in the FICC business. So in this regard, I'm I'm very positive on the investment bank. And as I said, January has shown that we are here on the right track.

Speaker 2

I'd only add, I completely agree with with Christian's comments. You know, I sometimes think of it as a as a transition from macro to micro. So macro had an extremely strong 2022. And in the the microeconomic products, so episodic transactions, financings in in m and a, equity, debt capital markets, in particular, leveraged debt capital markets, and the credit sort of asset class as a whole, 2022 was a very weak year. In our case, we were fortunate, as Christian mentioned, the the the macro businesses performed in a in a spectacular way.

And and so as we transition, you know, you could see a a reasonably consistent revenue performance but with an underlying sort of portfolio mix shift there. And, again, that makes us feel quite good about the the both the the franchises we have and the mix of businesses that we have. Patricia, thank you for the question.

Speaker 4

Thank you. Then we have another Zoom question, which comes from, Isabella Bufaki with is solar.

Speaker 6

Good morning, and thank you for the opportunity.

Speaker 5

Good morning.

Speaker 6

I have two questions. The first question is on the global Deutsche Bank. If I'm not mistaken, 50% of your revenues come from outside Germany. So the global business is important and Italy should be your biggest markets outside Germany. So how important has been the Italian market contribution to your results?

And then if I may go back to the capital release unit, a question on your overall assessment because I remember bit of the excitement when you launched it. It's a very unique tool. And do you think that this has worked well? And as it is called the capital release unit, what is the capital aspect of it and the the 5,000,000 billion capital that should have been released with it? Thank you.

Speaker 3

Thank you, Isabella. Let me, take the first question, and James will take the second one. First of all, we miss you here in Frankfurt. You were always a visitor to Frankfurt. So next year, you are coming here personally too.

And, yes, Italy remains a key market for Deutsche Bank. There is no doubt. Actually, I was there last year in June, from the fourteenth to sixteenth. I enjoyed it. And so definitely, it's, it's on our key markets.

And I can even tell you, Isabella, that the 50% I was citing was only with the corporate relationships, which we have here in the home market that with the home names in Germany of the corporate names, we even do more than 50% of revenues, with them outside Germany. The overall revenues, and James will have the number, outside Germany, is even higher than 50%. I think we should be around 60 or even higher than 60%, James, but you will know these numbers. And as I said, you know, we committed to 60 countries. I do think in a in a situation where we are right now that you need global expertise, but also regional know how.

This global network is essential for our clients, and therefore, our strategy to be in Asia, to be in The US and in North America and parts of South America. But, of course, one of the key players in Europe, and obviously also The Middle East. And in Europe, Italy is the strongest market for us, after Germany, and you will understand that, this shall not change for Deutsche Bank.

Speaker 2

Thank you for the question on on CRU. So so there are a number of ways of of of estimating the capital that was released by the CRU over its lifetime. I gave two numbers in the prepared remarks. One was 55 basis points of leverage exposure, and the other was 45 basis points if you look at the CET1 ratio. And the calculation there is if you start, on 06/30/2019 and carry forward the difference of in those in the denominator in those ratios, that's your benefit.

And you would subtract from that the net losses that were accrued over that three point five year period of time to get a net number of 55 on the leverage ratio or 45 basis points on CET1. The other way to look at it is, as well as you correctly point out, is the tangible common equity. We finished the fourth quarter with an average allocated tangible common equity to the capital release unit of about 2,700,000,000. And relative to where we started, which I think was sort of six and a half, it's a it's a very big reduction in in that allocation and is a big part of of how we have shifted the way that the capital is allocated in the organization as a whole towards the core businesses, incidentally, towards the corporate bank, and private bank as part of our strategy and away from from the businesses that were deemed noncore at that time.

Speaker 0

All right. Another quick update. I've got another 10 names on my list. So we have to start minding the time. Barbara Scheder, Ingen, Schonauer and Frank Marameister will be next.

And so first, please, Barbara Scheder from Stuttgart at Zeitung. Thanks a lot. Mr. Von Moltke, now you got me confused. Can you repeat that explanation?

So the released capital, as you said, would be about €4,000,000,000 That would be was my first question. And secondly, Mr. Sewing, regarding asset management, you referred to the difficult circumstances of last year. Yes, of course, but there was also net outflows of €20,000,000,000 Is that also due to the greenwashing allegations against DWS? And how do you want to regain and rebuild confidence?

Speaker 2

I was citing was the remaining capital, not how much was released. So the remaining tangible common equity on an average basis in the fourth quarter allocated to CRU, you can see that on Page 24 of our financial data supplement is 2.7.

Speaker 3

Yes.

Speaker 0

And then also, was there a follow-up question? Yes. Maybe we could take the follow-up first. Yes. But how much was released?

Now I understood 2,700,000,000.0 starting point was $6,500,000,000 So the difference would be $4,000,000,000

Speaker 2

Like $4,000,000,000 That's correct. But I can get you as a follow-up, number of where we started on a restated basis at the 2018, for example, I'll follow-up for you with that number. It gives you the precise difference.

Speaker 3

On Zuran and Frager. And

Speaker 0

to your other question. Now first of all, these kind of allegations, of course, are never good for business. But if you look at our peers and if all in all, if you look at development over the years, then DBS has not only developed in an outstanding manner, but it has shown that it was able to increase its reputation. It managed the turnaround. So for that reason, especially for the 2022, we saw a significant improvement.

And in terms of clients, now to be honest, there was hardly any trouble there. Further details will certainly be answered by DWS, which is publishing its numbers today as well. All right. So this has have been all the answers for Ms. Scheder.

Fine. Then we will continue with Ms. Schunauer from FAZ. Good morning. I've got two questions.

Now I've understood that you're not too much worried about loan defaults, neither from private consumers nor from corporates. And you several times pointed out that you attach great importance to internal risk management and monitoring. Now here, I would like to know whether in 2023 or also already in 2022, this has been adjusted. So if there has been a kind of credit crunch, which means that the loans are not even granted anymore because you just raised the bar or tightened your criteria. But then the strategy forward, I mean, it sounds like a bit kicking the can down the road, which is not too bad.

But on the other hand, are investors also getting a bit nervous or getting excited so that you've got to tell them that what's coming after restructuring. I mean, will have to ask the question. So I do so, for example, about potential merger or maybe that's the white elephant in the room or you could also stay on your own. I'd like to know whether you're thinking about these things because I do not believe that you're not thinking about it at all. Well, I did not say that I'm not thinking about the strategy of Deutsche Bank.

So credit defaults or tightening the credit granting criteria? Well, it depends on the sector. In leveraged lending, for example, in the first quarter, our risk appetite for new funding was already lowered. And it is similar for the one or the other financing projects in commercial real estate. So fortunately, and that's what Mr.

Von Molkert's slide has shown. Fortunately, we're coming from a very conservative risk management basis. So there's not such a major need for adjustment. But you can see it every week, every month, and that's also important in our risk management. Now we also have to see what customers are using.

And in 2022, we saw many customers went for short term financing because they wanted to sue their liquidity and that they rather called fewer long term financing off. The same goes for the construction industry. If interest if cost of material increase due to inflation, then we also see a decrease in housing credits. Fortunately, we are so well diversified that we can compensate for this in other businesses. So here, customer demand is the one that matters.

And then strategy, well, we do have a clear strategy, which we also communicated to you in March 2022. And this is, yes, an evolution, not a revolution. We feel at ease with the four businesses and four divisions, but we know that in each of these divisions and also in each of our infrastructure units, we still can and have to get better. And for that reason, we all know exactly what we need to do until 2025 when it comes to client facing units or infrastructure units. And in the last three years, it really paid off that we focused on ourselves alone.

We are more advanced than many thought. We got where we wanted to get. And if in 2025, we have got more than 10% in this environment, that's something I'm fully convinced of. Then let's wait and see what happens then. Thank you very much.

Next question, Frank Malmeister from Platoum Brief. Well, thanks a lot. Now in fall, we had the wonderful IPO of a Stuttgart based carmaker. You were also a bit involved in that, but only a bit not the way it should be. And obviously, this was also a bit of an issue at your company that this was not so pleasant.

Now what are the consequences you've drawn from that to avoid this from happening again? Did you talk to them? I mean, you said that you exited equity trading and this did not have an impact, but maybe it did. Could you please elaborate on how you're going to handle this and how you're going to avoid this in the future? Well, I cannot guarantee you that this is not going to happen again, but we will leave no stone unturned to get better on our side.

I'm just smiling. I said, what can I tell you? Of course, this hurt us very much. It hurt me very much because that was an IPO, which we would have loved to be part of, but you've got to respect the client's decision. And the good thing is but that's for clients to say, it's always sounds better if they say it themselves.

But I think we contributed very much to the successful IPO of Porsche. As an absolute leading retail coordinator, that's also the feedback that we got. We learned where we were not that good, but that stays internally. And so what we learned stays in the house. I can tell you that we did learn our lesson.

Of course, that's obvious. And good thing is that we see exactly that attitude in our team. That's like in sports. If I lose a tennis match, then I've got to accept it, but I have seen how I can better. And that's what we do here as well.

And if you look around in Germany and Europe and if you're involved in nine out of 10 IPOs on a local basis, then this shows we are there, aren't we? All right. Next, we've got Filip Otto, Thomas Baumgartner and Chris Pink. First, Filip Otto. Thanks, Mr.

Seebing. Please help me. Now I've read a sentence in your employee letter saying that in global competition, we want to get into the attack mode. Now as you're choosing your words very deliberately, this sounds more than just growth. Now what do you mean by attack?

What does this mean in global competition? Where do you want to take market share gain market shares? Well, I'm not going to give you the exact details, but I think if we win market shares on a consistent basis, then this means attacking for me. That's positive competition then. I think what was most important three point five years ago to identify those businesses where we've got the potential, the possibility to attack, whether it's a corporate bank, whether it's a FICC business, whether it's in wealth management, which Claudio DeSantis created in Asia and how we are winning market shares there, that's outstanding.

Just after this conference, look at the Wealth Management results in the fourth quarter versus our peers. Well, that's something we do not have to hide. That means attack doesn't mean that we have to resort to inorganic measures. We want to grow where we are strong, and we've got the capacities for that. And that's a positive kind of attack.

Speaker 1

When when when I look You know, this day, this is not what we want to communicate. But, you know, but I can tell you one thing. We have good and constructive discussions at the management board, the GMC, and also with our direct reports. I think tonight, we have several thousand people that we're talking to, and we will be addressing weaknesses quite openly. I don't know if we can do more on the cost side.

We have to do more there. And I meant it when I said in my speech that when it comes to remediation, regulatory controls, etcetera, we do have to make progress in 2023. No ifs and buts, you know. And if I say that, it will show you that you you cannot be satisfied with everything all the time, you know. But Martha from Frankfurt am Neue Press.

And mister Sieving, thank you much. You started off very emotionally with Russia, but you still have more than €800,000,000 in terms of loan commitments. How do you want to bring that down? What are the precautions or provisions? Did you see did you feel some pressure because there's others are bringing competitors are bringing it down faster?

And how many of your IT people moved to Germany?

Speaker 2

I can add. Look. We the our the remaining book in Russia is almost exclusively lending to multinational corporate subsidiaries of multinational corporates in Russia. We've actually brought that book down, I think, pretty considerably and in particular, the contingent book. We've done no new business in Russia, and we are in the process of winding down consistent with our contractual obligations, regulatory obligations to clients and the regulators domestically.

So we're quite pleased with the progress there. Equally, related to the Russia tech center, I think Bernd Leucher and his team were were very, very quick and agile in, first of all, reducing our reliance on on those development or developer capabilities, resources and shifting to other centers, opening the center in Berlin. We've made significant progress. We're not going to share individual numbers of resources in the two locations, but to suffice it to say that we've made a lot of progress in replacing the capabilities that we were previously looking for, from from the tech center in Russia prior to the war.

Speaker 3

The

Speaker 1

only thing I'd like to add is that we always said we continue to reduce things to bring it down. But when it comes to our global companies that have subsidiaries there, we will bring things down in lockstep with them. So necessarily then this takes time. So it's totally in line with our strategy and what we set out we would be doing. Is your question answered, Mr Baumgartner?

Speaker 2

Which comes from Chris Spink from IFR. Chris, can you hear us?

Speaker 7

Yes. Yes. Thank you very much indeed. I just wanted to go go back. You gave some outlook for the investment bank in the current year, and you said that January had started well.

To to what extent do you think the elevated levels of the FIC business last year were were a new normal, which we can expect for some time to come? Or or is it is it how much of it is a temporary thing related to the events of of last year? And, secondly, I would just quite like to know you were talking quite a lot about commercial real estate. Did you think that, there might be surprises there looking at issues coming up and and how tenants might reorganize their portfolios in the year ahead?

Speaker 2

So, Chris, maybe I'll start on the first, and Christian may take the second. We can add add thoughts. You know, it's an interesting question you asked because I I remember several years ago, there was this idea that there was a secular downward drift of FIC of the total FIC revenue wallet and within which you had some some cyclical behavior as well. I do think, and I'm gonna speak my own opinions, but, obviously, after a discussion with Ram, I do think we've turned a corner, and there is a secular increase in FICC revenues coming, or that we're in the middle of or or have at least started. And there will be cycles around that secular increase.

2022, no doubt, was was a was a high point in the cycle, but I think the underlying benefit, is there or improvement is there. What is the reason for that? I think the level of indebtedness in the world will continue to grow, perhaps shift a little bit by country region, corporate sovereign, what have you, but the the support for that will continue. I think in a in an environment where, long term liability holders need to continue to service those liabilities, pension assets, life insurance assets, have you. That is gonna continue, and we're gonna have a a large generation of of pensioners coming with the with the baby boom.

The complexity of the markets, the the, you know, more countries coming into developed currency locations and and issuance, currencies, you know, all of those things, I think, speak for secular growth in the business. We think we're well positioned around that, both in our issuance and in the market making and institutional sides of our business. So we think there's a good trend that's begun in fixed income, and our our the outlook we would have is that that'll continue.

Speaker 3

Look. And to your second question, I didn't mean that that, when I said that, obviously, the commercial real estate sector is a sector which we need to watch. I I don't have now specific concerns, or specific areas, but I do think that with, obviously, the higher interest in in in the refinancing for for some of our borrowers, and and for the overall environment, it is getting more challenging, and that means, that you need to, obviously monitor it very closely. Again, I do think from the structure of the book, as Olivier is presenting it, again, diversified, good LTVs, and I think strong underlying developments or strong underlying assets. And therefore, I'm not particularly concerned.

But from an overall segment point of view, it is one which needs, in my view, more watching, than a normal corporate segment.

Speaker 2

Chris, I hope that covers your questions. Okay.

Speaker 1

We have four names on the list. We will just about be able to do this with Gob Blechner, Anders Konas and Traskoena. And a second question from Olaf Straubach. So Natka Blechner the ARD Blechner from VDI News. I have a question on possibly credit defaults, for example, so already answered.

But Buffin warned just recently that due to an increase in interest rates, my many SMEs might go bankrupt. Don't you share these concerns? And then consolidation of the European banking sector. Missus Ewing, you always talk about this. You said that the banks have to do their homework, in particular, the Commerzbank.

Commerzbank now posted a billion a profit in the billions. Now would it be a good moment again for a German merger? Might you be interested in parts of Credit Suisse or do you believe that you will raise to glory again without any mergers and acquisitions. Well, of course, let me say, let me do away with one rumor. I never said that banks have to do their homework.

I said we have to do our homework. And I'm happy about the profit of Commerzbank, but when I talk about homework and people doing their homework, I always talk about our own bank and not about others. Now SMEs going bankrupt. I think we should be very cautious about this because German economy in a very, very difficult year, 2022, has proven to be incredibly robust and resilient. We have wonderful family companies, SMEs, mid sized companies who do everything they can in order to to go through these very difficult years.

Yes. Perhaps we might see an increase in back in in insolvencies in 2023 more so than in 2022, but a wave of bankruptcies. You know, people talking about a wave of bankruptcies, I think that's exaggeration. We should calm down perhaps a little. We don't see it in our portfolio.

Now talking from my position as the president of the banking association, I don't see it there either. And also my colleagues, the same is true for the savings banks, for example. The Volkswagen have a very good overview. Yes. There might perhaps be a high number of insolvencies, but I would never talk about an insolvency wave, for example.

And there's no data to there's no data to support this. Consolidation banks consolidation, yes, there will probably be consolidation, but it's not on my plate at the moment. We want to grow under our own steam. Okay. We will continue with brief questions and brief answers.

Anas Leagas from Persons Seidong. Quick question, but I would like to have a comprehensive answer, if I may. Okay. This is Postbank or the integration of Postbank IT. You mentioned in your speech, mister Sewing, and also before the annual media conference that you spent a lot of money for moving into the cloud.

Now the first product is on the market and obviously the market doesn't like it too much. So how fast will you be in correcting that? I mean I mean, do we have to expect from the beautiful new cloud world that it will be less expensive and more efficient for the bank, but actually not very much in line with the expectations of the clients? Well, you know, I'm very happy about the migration and how it was done over Christmas and New Year, more informing clients and accounts were migrated. And, yes, we did have individual problems, in particular, on Monday morning and then Tuesday.

I mean, the failure that we had on Thursday had nothing to do with the migration at all. The technical migration of assets and customers, etcetera, went absolutely smoothly. But then when it comes to but on Thursday morning, had problem with online banking. We are awfully sorry. You know, we gotta learn from that.

We can certainly get better here. But we had a couple of thousand complaints. I mean, every complaint is one complaint too much. But if you migrate 4,000,000 clients and accounts, you know, this is still something where you shouldn't be negative only. But this was the biggest and most complex IT migration in the European banking system since we had this type of migration.

So I know I think kudos to mister Leuchert and Karl von Rohr and the teams and how they managed to do things. But one is also very one thing is also very clear. The smaller things that happens, and it sections that happen shouldn't happen, and they will, of course, do everything they can in order to make things even more smoothly around Easter for the next migration.

Speaker 2

You asked about online mobile banking and the cloud capability. So as Christian just outlined, the the the New Year's transition was very large and complex. And not only did we move the back end systems to the Deutsche Bank system, those accounts, but also introduce the new online mobile banking capability. We are the great thing about the cloud is we're now in a position to add features very, very rapidly in an agile fashion over the coming months. So we think we'll see dramatic improvements as features are added to our capabilities.

There are some limitations that the current setup. So while we're in the middle of the remaining transition of accounts over the next several months, there are some limitations of the features we can offer, seamlessly to clients in that mobile world. That will also resolve itself. So we're quite confident that the path we're on in terms of that mobile app and the cloud environment that we've got it in is the right direction, and and the clients, customers will see very rapid improvements in in our capabilities in in in that area.

Speaker 4

Okay. Great.

Speaker 1

Short answer. You well, we might have a go at the short answer for the next question. Okay. From Andreas Kroner from Handelsblatt. Hello.

An additional question on M and A. You always said that you want to have done your homework by the 2022 before you might look into any larger mergers and acquisitions. You now said that this will remain the case till 2025. So does this mean that asking for bigger consolidation Europe is only lip service and there's nothing that you seriously have on your agenda for the next two years? Also, you posted a you said that there will be a higher pretax income for 2025.

Will this also apply for after tax? And have you set up any provisions when it comes to the Postbank litigation? And or is this still the contingencies? And also you said you cannot exclude further headcount reductions. Are there any concrete plans, for example, as you publish them in 2019?

Speaker 2

Clearly, look, with a 1,400,000,000.0 DTA adjustment, it's gonna be hard to beat, we wouldn't expect necessarily adjustments of that order of magnitude. So the the post tax, you know, impacts may be may be more muted than the than the pretax. And as it relates to Postbank, I think we've been reasonably clear that, that we see that as a contingent liability. We think, although it's gone back to a lower court, you know, the facts and the and the and the legal situation have developed by and large in a positive sense, and so it remains a contingent liability.

Speaker 3

On

Speaker 1

the first question, mister Gruenard, I asked for the capital market union and the banking union, and I still expect a banking consolidation, but I'm not asking for it. I believe it will happen. But the prerequisite for that would be a banking unit and a union and a capital market union because otherwise, a consolidation doesn't make sense if we don't have the necessary prerequisites on a regulatory basis. And this is why for years, I've been asking for Capital Market and Banking Union, and I believe that we will not be able to do the green deal without a Capital Market Union in Europe. It's the most essential point.

So I remain I maintain what I said. There will be banking consolidation, but we have to have the prerequisites. Reducing headcount reduction, plan concrete plans for further headcount reduction. Oh, as I said, we have 65.2% is our cost income ratio target, which is said that we take out €2,000,000,000 in terms of cost in 2025 and we'll take incremental measures over and above this. Some junctures, this will lead or might lead to a situation where we will be reducing headcount.

I mean, the path of the private bank alone will mean that further branches will be closed and thus headcount will be reduced. In other areas, we increase our headcount. So we take the cost income ratio as a point of guidance, but also internally everybody knows that we cannot absolutely exclude any further headcount reduction. This would be a lie. We can't say that.

And at the end, an additional question by Olaf Straubach, Financial Times.

Speaker 0

Thanks. I've got two questions, I fear. But one is a follow-up to what you just discussed. This incremental cost program, which you've mentioned once or twice. Now maybe I didn't pay close attention before, but what exactly does this mean?

Has that been approved by the Management Board now? And what is its magnitude? Does this mean that there's another a new cost cutting program at the bank? I'd be grateful to you if you could elaborate on this. And then question number two, now I've understood that you don't want to give us any details on litigation costs.

Now I have noted then one third of it has been attributed to capital release unit. Now this is a unit which you said does not generate any revenues, hardly any RWAs left. So how can it be that these unexpected litigation costs are have been allocated to the CRU? That looks a bit arbitrary from the outside.

Speaker 2

On the second point, there, I think I'm more comfortable speaking to the fact pattern because many banks have it, and that is we have a Polish mortgage, an FX mortgage book that was one of the asset groups, that went into the CRU. And like other banks, we've been building legal provisions there, and and particularly in 2022. Around the cost environment, perhaps I'll start. Look. We're we're always sort of trying to peel the onion and look for additional areas where we can achieve efficiencies.

So when we have specific measures that we can attach, future gains to. We often refer to them as key deliverables. There's a program. There's often an investment attached to that, and there's management accountability associated with delivering those future benefits. And then as we go through time, we see more opportunities, and we can speak about more measures that we can take.

In this case, I think an important thing to realize is we see more inflation in the outlook than we today than we would have done, say, a year ago. And and I think where where Christian's comments are really headed is we therefore need to do more to offset that inflation, and those additional measures will help us do that. So in the net, it it wouldn't change, really the the the overall picture of the future forecast that we talked about in March. But with it with higher inflation, we're gonna have to work harder to offset it.

Speaker 0

Now when it comes to measures, Mr. Storbeck, and I think you've seen this if you look at your own newspaper, the longer you work there, the more areas you find where you can better and where processes can be made more efficient. Let me give you three examples. Infrastructure. Now here in individual areas, we still have duplication, which means there are two units doing similar work.

And that's what we want to combine or merge. And then in Corporate Bank and Investment Bank, thanks to the good front to end processes, we have just seen that further savings are possible if these front to end processes are rolled out to other areas. And if it just comes for booking a loan that was granted. Then we're also looking at our geographical or location setup, how we can streamline there. And then there's another area, and here I'm looking at Berd Leikert, because again and again, he's shown us what is possible in terms of technology.

The whole world is currently talking about a new chat system. So if you look at the changes brought about for our processes and automation, that's a major lever. And if you turn the blind eye to this, this would be a severe mistake. So in our daily doing, we always learn new things. And of course, we also here need to think about machine learning and AI, where we have to and can make the bank better.

And these are the incremental measures that we take to achieve what James has mentioned, maybe to counter increasing inflation. All right then. Thanks a lot. So this marks the end of our list of questions and also marks the end of our annual media conference. Thanks to all of you for joining us either here in Frankfurt personally or in front of your TVs or of your screens.

If you've got any further questions or comments, then as usual, you can contact us in the communications department. Apart from that, have a nice day and thank you and bye bye.