Q3 2021 Deutsche Bank AG Earnings Call

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Ladies and gentlemen, thank you for standing by I'm Hailey Your chorus call operator, welcome and thank you for joining the Deutsche Bank Q3, 2021 analyst calls.

Throughout today's recorded presentation, all participants will be in a listen only mode.

The presentation will be followed by a question and answer session. If you would like to ask a question you May Press Star followed by one on your Touchtone telephone. Please press the star key followed by zero for operator assistance.

I would now like to turn the conference over to you Wanna patronage had to Investor Relations. Please go ahead.

Yeah.

Okay.

Thank you for joining us for our third quarter 2021 results call as usual, our Chief Executive Officer Christian saving will speak first followed by our Chief Financial Officer, James von Moltke.

The presentation as always is available to download any investor relations section of our website DB dot com before.

Before we get started let me just remind you that the presentation contains forward looking statements, which may not develop as we currently expect we therefore ask you to take notice of the precautionary warning at the end of our materials with that let me hand over to Christian.

Thank you Yana a warm welcome from me as well.

Sure to be discussing our third quarter 2021 results with you today.

We are now two thirds through our transformation journey.

We have continued to deliver against our milestones.

We see clear evidence of progress in our businesses.

The first phases of this progress is our disciplined execution we.

We continue to be absolutely focused on cost saving measures.

Adjusted costs, excluding transformation charges are once again down year on year.

These transformation charges will help drive reductions in our expenses in future quarters.

And we have now recognized 90% of our total anticipated transformation related effect of almost 8 billion euros. Since we began this journey.

This has resulted in significant progress in our transformation.

We promise to self finance this and we have delivered.

These efforts are being recognized by all stakeholders in the third quarter, both Moody's and Fitch upgraded our credit ratings and retained our positive outlook.

We have maintained a strong capital ratio.

<unk> balance sheet and solid liquidity, despite certain challenges such as regulatory inflation and the impact of a global pandemic.

Our capital release unit is outperforming against our 2022, goats, which we outlined at our last investor deep dive risk weighted assets are down.

230 billion euros, and the unit continues to reduce costs.

And finally, the result is profitability in all three quarters of this year, we have delivered significant year on year profit growth, while simultaneously keeping up the pace of transformation.

The refocusing on core business is paying off.

Revenues have grown as broad based business performance offsets the effect of normalizing capital markets.

And we saw that in the third quarter pre.

Pre tax profit of 554 million euros grew by 15%.

Despite transformation charges of nearly 600 million euros.

On an adjusted basis profit before tax would have been up by 39% to $1 2 billion.

Now let me take you through the highlights of what we have achieved in the nine months of this year on slide two.

Our performance over these past nine months shows that our 2022 targets.

<unk> ambitions are well within reach Rev.

Revenues of $19 5 billion for the first nine months of 2021 fully support our trajectory to our 2022 revenue growth.

We have reduced adjusted costs, excluding transformation charges by roughly 4% year on year to $14 4 billion euros, Despite 2021 being an investment year.

This means we delivered positive operating leverage at both the group and core bank level over the past nine months.

We reduced our cost income ratio from 87% to 82% year on year. Despite the additional transformation charges recognized in the third quarter.

Provisions for credit losses declined 83% year on year to 261 million euros or eight basis points of average loans.

Return on tangible equity for the core bank is seven 5% for the past nine months.

And about 9% on an adjusted basis already in line with net next year's target.

This sets us on a clear path to our group target of 8% return on tangible equity in 2022 now.

Now, let me turn to the progress we have made executing on our strategy across our core business on.

On slide three.

The corporate bank continues to execute on its growth strategies, as evidenced by increasing loans and new partnerships, including Mastercard, Pfizer and better payments.

94 billion euros of deposits within the scope of charging agreements and contributed 96 million euros in revenues to our third quarter results.

The investment bank is focused on front to back efficiency process improvements such as the FIC Reengineering program.

The results in this quarter again confirm our decision to refocus our investment bank on its core strengths and we delivered a strong performance despite normalization in the market.

We have now seen year on year revenue growth in origination and advisory for seven consecutive quarters, and our third quarter FIC results demonstrate our market share gains are sustainable.

Our private bank continued to grow net new business across assets under management and loans.

This year to date business grows substantially outperformed our full year target of 30 billion euros.

In the third quarter, we announced the sale of DB financial advisors in Italy, which supports our international private Bank division of strategy as well as our regional strategy.

In asset management assets under management that at a record level of 880 billion.

Driven by strong net inflows of 12 billion euros this quarter with more than 40% coming from ESG products, where we continue to work towards leadership in the field.

We continue to undertake investments in growth initiatives and platform transformation to support our performance in short the dynamics in all four core businesses showed that our clients are supportive of our business model and belief in our capabilities.

All four core businesses.

Grew return on tangible equity and improved the cost income ratio over the first nine months of 2021.

This relentless focus on transformation.

Its driven a steady improvement in underlying profitability.

Which can be seen on slide four.

And the core bank, we delivered a 17% year on year increase in our adjusted profit before tax in the last 12 months.

Once again, all four core businesses contributed and are either in line with or ahead of their plan so far.

In the capital release unit, we reduced losses by nearly half compared to a year ago.

As we reduce leverage exposure and risk weighted assets, we continue to remain committed to minimizing the P&L impact of the portfolio reduction.

As we steadily put transformation effects behind us and reduce the cost of deleveraging in the capital release unit more of the earnings power of our core business is reflected in the bottom line.

This supports our aim to deliver a stable and sustainable returns at the group level.

A key driver for this is our sustainable revenue performance, which I will now turn to on slide five.

Revenues, excluding specific items in the core bank.

For the third quarter stand at 6 billion euros up 1% year on year.

Business growth has offset the normalization of the capital markets environment, which impacted fixed income trading as expected.

This quarter still bears the impact of foregone revenues.

As a result of the <unk> ruling of 96 million similar to the second quarter.

We expect this impact to taper off considerably in the next quarter.

As we now have written contents in place for two thirds of the affected accounts.

Revenues in the investment bank at $2 2 billion euros down only 6% from a very strong third quarter in 2020.

Both our corporate bank and private bank continued to offset interest rate headwinds with continued deposit repricing and business growth, we see continuing underlying momentum in these businesses.

And we see strong underlying growth in lending the loan portfolio is currently at 456 billion up 5% from the same quarter last year.

With the period of post pandemic market normalization behind US we now expect the current growth rate to remain in the coming quarters.

Asset management delivered revenue growth for yet another quarter driven by strong management fees.

Is the sixth consecutive quarter of net inflows.

Core Bank revenues were 25 billion in the last 12 months and 11% increase from 2019, which is in line with our current 2020 to go.

This reflects the sustainability of our revenues as client engagement continues to improve particular following our recent rating upgrades.

Now, let me turn to costs on slide six.

On a 12 months basis, we reduced noninterest expenses by 14% to 21 billion euros from 2019.

This includes the higher than expected contributions to the single resolution fund and the German deposit protection scheme.

We continue to focus on managing our controllable cost base to offset volume driven expenses and investments in controls and have identified additional cost saving measures.

These measures come with around 700 million euros of incremental transformation related effects, including technology related charges that we recognized in the third quarter.

We are committed to putting almost all our anticipated transformation effects behind us by the end of 2021.

And with that in mind, we reaffirm our 2022 target for our cost income ratio of 70%.

Let me now update you on our progress on sustainability on slide seven.

After nine months.

We are already ahead of our full year 2021 target for total volumes of ESG financing and investment.

Our volume since the start of 2020 now stand at 125 billion euros.

Is this a full year ambition of 100 billion excluding dws.

This puts us well on track to meet or exceed our year end 2023 target of 200 billion.

In addition, we were a book runner on four of the six largest ESG related bond issues in the quarter.

This month, we call it the use inaugural Green bond raising 12 billion euros, the largest evergreen bond today.

We also completed our first ever Green repo agreement.

The first green for most of our bond and build out our offering and sustainability linked loans to German mittelstand companies.

ESG is the topic, which continues to drive client engagement, allowing us not only to innovate products, but to also provide advisory services underlying our clear client centric approach.

And the private bank, we rolled out the ESG advisory concept to more than 100 branches exceeding our 2021 ambitions and our international private bank is enhancing product offering by our new funds and growing green deposits and lending.

We are pleased to participate in the upcoming Cop 26 summit in Glasgow next week, and we're looking forward to meeting clients and other stakeholders striving for change.

Before I hand over to James Let me now summarize our progress this quarter on slide eight.

As we said at the Investor Deep dive in December our focus remains on executing our transformation agenda, while supporting our clients.

We have executed on the strategies within our refocused core businesses and we saw material improvements in core bank profitability and returns.

We are delivering resilient revenues as business growth offsets the normalization of markets, which we anticipated.

Our core businesses are performing in line with or ahead of our expectations and that positions us to deliver on our revenue ambition next year.

We intensified our transformation efforts and took further steps to drive efficiencies.

We aimed to book most of the remaining transformation related effects by the end of the year.

Which would help us to deliver on our 2022 cost income ratio target.

We are committed to technology and control investments and to maintain our momentum on resolving open regulatory and control matters.

The hierarchy of our 2022 priority remains unchanged and we are on track to meet our targets of an 8% post tax return on tangible equity and 70% cost income ratio.

We also remain committed to beginning the distribution of the 5 billion of capital from 'twenty to 'twenty two onwards.

We are setting up a firm foundation to not only meet our 2022 ambitions, but to also position Deutsche bank for future growth.

And we look forward to discussing this with you at our next Investor Deep dive in March with that let me now hand over to James.

Thank you Christian.

Let me start with a summary of our financial performance for the quarter compared to the prior year on slide nine.

We generated a profit before tax of 554 million euros or $1 2 billion euros on an adjusted basis.

Total revenues for the group were 6 billion euros up 2% versus the third quarter 2020.

Net interest income this quarter was roughly $2 8 billion euros up approximately 114 million euros on the second quarter.

The increase was driven by the growth in our loan book and higher revenues from our securities portfolio in the quarter, along with a decrease in the cost of our deposit funding.

Net interest margin remains broadly flat at around one 2% as progress on deposit charging and reduced surplus liquidity offset the ongoing pressure from interest rates.

As I've mentioned before we see these interest rate pressures abating with private bank headwind set to have next year and corporate bank headwinds being substantially eliminated.

Recent interest rate moves provided more favorable outlook for our businesses relative to the conservative baseline on which our previous plans were built.

For 2022, we now see a tailwind in the region of 150 million euros relative to our earlier planning.

As the moves are predominantly in the long end of the curve the impacts become cumulatively larger and later years, reaching well over 500 million euros by 2025 from the current observable forward curve expectations relative to our plan baseline in the fourth quarter last year.

Turning to costs noninterest expenses were up 4% year on year.

This quarter includes 583 million euros of transformation charges up from 104 million euros in the prior year.

Our provision for credit losses stood at 117 million euros, or 10 basis points of average loans for the quarter.

We said at our second quarter results and then again in September that we see a relatively benign credit environment.

These conditions have persisted and we now see scope for improvement from our previous guidance of 15 basis points of loans for the full year 2021.

In line with the guidance, we provided with our second quarter results.

We did see a reduction in our common equity tier one ratio to 13% in the quarter.

Tangible book value per share was <unk> 24 euros and 46.

Up 40, <unk> on the quarter or 5% in the year to date.

The tax rate for the quarter was 41%.

Let's now turn to page 10 to briefly look at our nine months performance.

Revenues for the first nine months were $19 5 billion euros up 5% year on year.

At the same time, we delivered a 4% reduction of our adjusted cost base, excluding transformation charges to $14 6 billion euros and reduced our cost income ratio from 87% to 82%.

The improved macroeconomic environment led to an 83% reduction in provision for credit losses, and our profit before tax of $3 3 billion euros increased nearly fourfold compared to 2020.

The tax rate for the first nine months was 34%.

Let's now turn to the core bank performance for the quarter and the first nine months of the year on slide 11.

Core bank revenues were $6 1 billion euros for the quarter up 2% on the prior year quarter.

Noninterest expenses were up 5% for the quarter, mainly driven by additional transformation charges, while adjusted clause costs. Excluding these charges were down 1%.

This takes our profit before tax to 898 million euros and the adjusted profit before tax to $1 5 billion euros up 23% on the prior year.

Our adjusted post tax return on tangible equity for the quarter slightly increased by 60 basis points from last year to seven 3%.

Looking at the results on a first nine month basis.

Our revenues in the core bank were $19 5 billion euros up 4% compared to the same period in 2020.

Noninterest expenses increased 2% year on year due to the additional transformation charges and adjusted costs, excluding transformation charges were flat.

Our cost income ratio was 76% for the first nine months or 70% excluding transformation charges.

And as Christian mentioned, our return on tangible equity for the core Bank was seven 5% for the past nine months and nine 4% on an adjusted basis in line with our target for 2022.

Let's now turn to costs on slide 12.

In the third quarter group adjusted costs, excluding transformation charges continued to decrease year on year by 3%.

We saw lower compensation and benefit costs year on year, reflecting workforce changes as well as movements in variable compensation compared to the prior year.

Costs were broadly flat as a decrease in hardware expenses was offset by higher software and service costs.

The decline in other costs was driven by lower operational losses occupancy costs and banking services.

Our third quarter adjusted costs, excluding transformation charges and reimbursements for Prime finance were $4 6 billion euros.

Transformation charges were 583 million euros, which I'll come back to in a moment.

As Christian mentioned earlier, we will continue to manage all the components. We can control as we remain committed to the cost income ratio target of 70% for 2022.

Let's now move to slide 13 to discuss transformation related effects.

As mentioned in our recent guidance further transformation measures will result in incremental effects of around 700 million euros, bringing the total expected impact of transformation related effects to $8 8 billion euros.

This quarter, we booked 583 million euros of transformation charges.

Roughly 450 million euros of these charges relate to a contract settlement and software impairments principally triggered by our migration to the cloud.

We have now booked a total of 90% of transformation related charges and we expect to booked most of the remaining charges by the end of this year.

Let's now turn to provision for credit losses on slide 14.

Our stage three provision at 199 million euros is down from 408 million euros in the previously ear.

Reflecting an overall benign credit environment.

On a quarterly basis, the stage III provision increase of 88 million euros was mainly driven by the implementation of EPA guidelines on definition of default leading to ECL model refinements for our first nine resulting in transfers to stage III predominantly in the private bank.

Stage three provisions remained stable across other businesses.

Overall stage III movements were offset by 82 million euros of net releases in our stage, one and two provisions, including an adjustment of existing management overlays due to the stabilizing macroeconomic environment.

As mentioned, we believe provisions will be below 15 basis points of average loans for 2021.

Let me now turn to capital on Slide 15.

Our core equity tier one ratio decreased by 17 basis points from 13, 2% to 13% over the quarter.

In line with our earlier guidance. This reduction includes around 20 basis points of burden from regulatory changes, notably the implementation of the EBA guideline on definition of default, partly offset by a reduction in our regulatory multiplier and market risk <unk>.

A slight offsetting improvement of the CET one ratio came from a reduction in operational risk <unk> and the net impact of Derisking in the capital release unit versus a small <unk> increase in credit and market risk reflecting client related activity.

With a 20 basis points <unk> impact this quarter, we've now absorbed almost all regulatory driven arguably way inflation until the expected implementation of the final framework of Basel III in 2025.

In upcoming quarters, we expect to see business as usual model updates that cumulatively are expected to be capital ratio neutral.

CET one capital was fairly stable in the quarter and now includes a deduction for common share dividends of 641 million euros to date.

We still expect to end the year with a CET one ratio of around 13% as always our capital outlook is subject to timing of pending regulatory decisions. However, the expected net effect of these decisions in the next quarter is now positive.

Our fully loaded leverage ratio was four 8% unchanged from the prior quarter less.

Leverage exposure, excluding FX effects decreased by 6 billion euros quarter on quarter, reflecting continued deleveraging and our capital release unit, partially offset by growth in net loans and commitments.

Our pro forma fully loaded leverage ratio, including certain ECB cash balances was four 4% and on track to meet our 2022 goal based on the original definition by year end.

With that let's now turn to performance in our businesses starting with the corporate bank on slide 17.

Revenues in the third quarter were just over one 5 billion euros, essentially flat year on year, but improved excluding episodic items.

In the current quarter the impact of episodic items was approximately 60 million euros lower than in the prior year.

Excluding these effects underlying corporate bank revenues grew slightly as business initiatives and deposit re pricing more than offset interest rate headwinds of approximately $40 million euros year on year.

At the end of the third quarter charging agreements were in place on approximately 94 billion euros of deposits, which produced revenues of nearly 100 million euros in the quarter.

The corporate bank grew loans by 5 billion euros year on year, mostly in trade finance within corporate Treasury services.

We continue to expect the combined effects of the moderation of interest rate headwinds based on current interest rate curves, the increasing quarterly contribution of deposit repricing as well as business momentum and growth initiatives to support our revenue outlook for subsequent quarters.

And as previously mentioned, we expect our 2021 revenues to remain essentially flat compared to the prior year.

Noninterest expenses decreased by 5%, mainly driven by lower restructuring and litigation charges, while adjusted costs, excluding transformation charges improved moderately.

Provision for credit losses was a $10 million or a release in the quarter driven by continued low impairments compared to provisions of 41 million euros in the prior year quarter.

Profit before tax in the corporate bank was 292 million euros, increasing by 57% year on year, while adjusted profit before tax rose by 33% to 317 million euros.

This equates to a seven 8% reported and an eight 6% adjusted post tax return on tangible equity and is the highest quarterly profit before tax since the launch of Deutsche Bank's transformation in 2019.

Turning to revenues by business segment in the third quarter on slide 18.

Corporate Treasury services revenues of 755 million euros grew by 1% year on year.

Charging agreements and other business initiatives more than offset interest rate headwinds and lower episodic items.

Institutional client services revenues of 326 million euros grew by 2% a solid underlying business growth was partly offset by lower episodic items.

Business banking revenues of 174 million euros were 6% lower year on year as business growth and expanded charging agreements were more than offset by interest rate headwinds.

We are continuing to progress the client by client process of entering into charging agreements for the predominantly euro denominated lower ticket size deposits in this area and expect further positive effects in the coming quarters.

I'll now turn to the investment bank on slide 19.

Revenues for the third quarter of 2021 decreased by 6% or 5% excluding specific items.

Favorable performance in our financing and origination and advisory businesses was more than offset by lower revenue in our trading businesses.

Compared to the third quarter of 2019 investment bank revenues are up 34% with both FIC and origination and advisory significantly higher.

Noninterest expenses were essentially flat year over year as were adjusted costs, excluding transformation charges, producing our cost income ratio of 60%.

The investment bank generated a pretax profit of $3 4 billion euros and a return on tangible equity of 13, 5% in the first nine months of the year both.

Both material increases on the prior year period.

Our loan balances increased both quarter on quarter and year on year, primarily driven by higher loan originations across the financing businesses.

Leverage exposure was higher reflecting increased loan origination and lending commitments.

The year on year increase in risk weighted assets predominantly reflects the impact of regulatory inflation.

Provision for credit losses of 37 million euros, or 19 basis points of average loans were down year on year to.

The continued low level of provisions benefited from recovery of COVID-19 related impairments.

Turning to revenues by business segment on slide 20.

Revenues in fixed sales and trading decreased by 12% year on year.

Strong performance in financing was offset by lower revenue in the trading businesses.

Credit trading core rates and FX revenues saw solid client activity, which was offset by a normalization of market conditions and low volatility.

Revenues in emerging markets were higher across all regions with continued year on year growth in both semi and Latin America.

Revenues in origination and advisory where significantly higher versus prior year with revenue growth across the franchise.

Debt origination revenues were higher.

Strong performance and leveraged debt capital markets continued more than offsetting a reduction in investment grade related revenues as issuance levels normalized.

ESG continues to be a focus area. We are top five on a fee basis and global ESG related debt products, a 60 basis point market share gain compared with the full year 2020 based on Dealogic data in a market which continues to grow.

Equity origination revenues were significantly higher year on year, predominantly driven by <unk> activity and market share gains in ipos, particularly in EMEA.

Significantly higher advisory revenues reflected continued growth in M&A activity.

Deutsche Bank advised on nearly twice the number of deals in the third quarter compared to the same period last year.

Turning to the private bank on slide 21.

Revenues, excluding specific items were just under 2 billion euros in the quarter down 4% year on year, but up 1% if adjusted for 94 million euros of foregone revenues from the Bgh ruling we mentioned earlier.

Continued revenue momentum and investment products and mortgages offset interest rate headwinds of approximately 98 million euros year on year.

As indicated we expect these headwinds to be substantially lower next year.

Adjusted costs, excluding transformation charges were flat year on year.

Cumulative savings of around 4% in the private bank direct cost base were partly offset by incremental costs for deposit protection schemes as well as increases in technology spend and internal service cost allocations.

Provisions for credit losses were 15 basis points of average loans were 92 million euros and reduced by 47% year on year benefiting from a release of a management overlay for uncertainties related to Moratoria in Italy, and Spain tight.

Tight risk discipline, and a high quality loan book.

The aforementioned implementation of definition of default model refinements impacted staging but was neutral to <unk> in aggregate.

With this the private bank reported a pretax profit of 158 million euros.

Adjusted for the aforementioned impact from the bgh ruling specific revenue items as well as transformation related effects of 64 million euros. The private bank would've achieved a profit before tax of 276 million euros in the quarter.

On this basis adjusted post tax return on tangible equity was 6% in the quarter and 7% in the first nine months of the year.

Business volumes grew 9 billion euros in the quarter with 6 billion euros of inflows in assets under management and 3 billion euros of net new client loans.

With this the private bank attracted 38 billion euros of net new business volumes after nine months exceeding our full year target of more than 30 billion euros.

Turning to revenues by segment on slide 22.

Revenues in the private bank, Germany would have been up 1% year on year, if adjusted for the temporary impact from the bgh ruling.

Continued headwinds from deposit margin compression were compensated by growth in loan revenues and fee income from investment products.

The business originated net new client loans of 3 billion euros, mainly in mortgages and net inflows in investment products of 2 billion euros in the quarter.

In the international private bank net revenues increased by 6% or 1% if adjusted for specific items.

The business attracted net inflows in investment products of 3 billion euros.

Both was especially pronounced in Germany and Italy.

Private banking and wealth management revenues increased by 9% or 2%, excluding specific items and FX translation as investment products and loans grew supported by previous hiring of relationship managers.

Personal banking revenues decreased by 2% year on year as business growth and investments only partly compensated for deposit margin compression.

As you will have seen in their results dws had another successful quarter as shown on slide 23.

To remind you the asset management segment on this slide includes certain items that are not part of the dws stand alone financials.

Revenues grew by 17% versus the prior year, primarily due to a strong increase in management fees of 85 million euros from improvements in equity markets and six consecutive quarters of net inflows.

Noninterest expenses increased by 58 million euros, or 16% with adjusted costs, excluding transformation charges up 17%.

This reflects higher compensation costs, including variable compensation higher asset servicing costs due to the increase in assets under management as well as investments in growth initiatives.

The divisional cost income ratio remained stable at 63%.

Profit before tax of 193 million euros in the quarter increased by 18% over the same period last year driven by record assets under management, resulting in higher revenues.

Adjusted for transformation charges and restructuring and severance expenses.

But before tax increased by 16% year on year to 198 million euros.

Assets under management of 880 billion euros have grown by 21 billion euros in the quarter driven by net inflows and the positive impact of FX translation.

Net flows in the quarter with 12 billion euros with inflows across all three product pillars active passive and alternatives.

The business attracted 5 billion euros of flows into ESG products during the quarter demonstrating continued momentum in this area.

Turning to corporate and other on slide 24.

Corporate and other reported a pretax loss of 605 million euros in the quarter versus a pretax loss of $393 million in the prior year quarter.

The greater loss was driven by higher transformation related charges of 495 million euros, which were not passed onto the divisions and are captured in the other line.

In aggregate these transformation charges should lower our group adjusted costs by around 150 million euros per year from 2022.

Funding and liquidity.

In the quarter compared to the prior year period.

Consistent with our prior guidance funding and liquidity charges are expected to remain at around 250 million euros in 2021.

The year on year improvement in valuation and timing differences was driven principally by a positive contribution from cross country currency funding structures and interest rate basis effects as well as nonrecurring one off events.

We can now turn to the capital release unit on Slide 25.

The capital release unit recorded a loss before tax of 344 million euros in the quarter, a significant improvement on the prior year quarter.

Negative revenues in the quarter were driven by funding risk management and Derisking impacts that were partly offset by power.

Positive revenues from Prime finance cost reimbursement.

Adjusted costs, excluding transformation charges declined by 27% versus the prior year quarter, reflecting lower service cost allocations and lower compensation and non compensation costs.

We continue to make great strides in portfolio reduction taking advantage of favorable market conditions to exit a number of aged or concentrated positions.

We also intensified the pace of the Prime finance transition in the quarter and transferred a number of large client relationships.

By the end of October we expect to have transferred about two thirds of client balances.

Taken together this led to a 10 billion reduction in leverage exposure in the quarter and a 2 billion euro reduction in risk weighted assets, including operational risk.

At the end of the third quarter, we recorded capital release unit <unk> of 30 billion euros, including 22 billion euros of operational risk <unk>.

Since the second quarter of 2019, the division has reduced leverage exposure by 76% or 188 billion euros, and RW way by 53% or 34 billion euros.

We have now achieved our 2022 target for <unk> and expect to be at or ahead of our 2022 target for leverage exposure by year end 2021.

This includes completing the transition of our Prime finance platform. We expect this transition to release over 20 billion euros of incremental leverage exposure in the fourth quarter of this year.

For the remainder of the year, we expect negative revenues in the capital release unit and we are on track to hit the cost reduction targets, we set out at the last investor deep dive.

Turning finally to the outlook on slide 26.

We see continued momentum towards our 2022 revenue ambitions, given the resilience and growth in our core businesses.

The credit environment remains supportive and we expect provisions of below 15 basis points of average loans for the full year based on our current views.

We expect macroeconomic growth to slow in 2022 from the exceptionally strong levels this year and CRP levels to partially normalize.

Our credit portfolio quality remained strong and we are well positioned to manage emerging risks, including supply chain disruptions and potential policy tightening.

We are focused on the cost measures, we have underway and by year end, we expect to book the majority of our transformation related effects and what has been an investment year supporting our 70% cost income ratio target for 2022.

As I've said before.

We expect to end the year with a CET one ratio of around 13%.

Above our target of 12, 5% despite booking almost all of our estimated $8 8 billion euros of transformation related effects and absorbing substantially all of the regulatory driven inflation prior to the Basel III final framework implementation.

On the leverage ratio, we feel confident we are on track to finish the year around four 5% based on the original definition of leverage exposure that is including all central bank balances.

The CET one capital calculation reflects the common share dividend deduction of over 600 million euros for possible future distributions from the nine months 2021 earnings under the standard ECB rules. This starts us on a clear path to return 5 billion euros of capital from 2022 overtime.

With that let me hand back to you on them and we look forward to your questions.

Thank you James operator, we're now ready to take questions.

Ladies and gentlemen at this time, we will begin the question and answer session.

One who wishes to ask a question May press star followed by one on the telephone.

If you wish to remove yourself from the question queue. You May press star followed by two.

Ladies and speaker equipment today, please at the handset before making your collections.

When you ask a question May press Star followed by one at this time.

And one moment for the first question. Please.

The first question is from the line of Danielle <unk> of UBS. Please go ahead.

Yes, good afternoon, and thank you.

Questions on revenues.

Deep dive last year, you gave quite some detailed guidance and the outlook for the group into various divisions and obviously since then a few things changed. So I was wondering whether you could firstly talk about revenues last 12 months I think that's quite relevant metric up nicely.

Do you think about that now backward looking and forward looking in terms of mix and.

Where you'll see the key drivers here just a bit of an update the view here and then secondly, there is the rate headwinds and tailings and if I recall correctly at the recent conference you quantified the headwinds this year, something like $400 million of which a bit more than half is in the corporate bank. If I recall correctly. This should go away this year.

And then just now you've talked about 150 and $500 million from the yield curve shift can you just sort of add this all up again for me how this will hit the P&L and in which divisions and how we should model that that would be super useful. Thank you.

Thank you Daniela and.

Good hearing you. Thank you for your question, let me take the first part on the General revenue also looking back at last year's Idd performance of this year and then.

Kind of where we see tracking to the target, which we have given in last year's Idd and James will then cover in particular the more specific.

Question to the interest rates and the headwinds.

Which we had and how this develops.

Now let.

Let me, let me say again, and let me really reiterate that that we are.

Very satisfied with the revenue picture, which we have seen since the idd in December 2020.

I think for the last 12 months. These 12 months have shown.

A very good picture and secondly, and most importantly to us they clearly indicate an underlying sustainability of the revenues and debt in each and every business, but in particular in the investment bank.

If I look back for the last three quarters <unk> be at March be a June or now September and then I take a 12 months look we've shown always.

Proximately $25 billion of revenues for the group, which.

On group level first of all clearly indicates that our view on guidance for 2022 from the lost Idd.

It's absolutely in reach and then all of you absolutely doable and let me explain that a little bit more in detail when I go through the individual business.

Let's start with asset management.

<unk>, a very robust story not only by the way in Q3, but to your question for the whole year asset management outperformed in Q1 and Q2 now also in Q3 on the back of the rising assets under management stable revenues and overall, we see now kind of a revenue outlook for this year of two five.

$2 6 billion.

And that makes me highly confident that we can achieve our goal obviously of the idd of $2 3 billion, which was our goal in the idd.

In 2022 Q4 in our asset management again started well.

So in this regard I can see.

Kind of any downside to our numbers and therefore I see that we have a clear chance to outperform if I compare the next 12 months or 2022 towards the goal, which we have stated in the ITT.

Private bank also here in my view, a very solid story in particular, if you take down yet as three items into account number one the impact of the German court ruling we always said that this is impacting us next to reserves, which we built in Q2, but in the running revenues was approximately one.

100 million or $96 million a quarter in Q2 and in Q3.

We have achieved now a good degree of content, so that will fall away over the last over the next quarters. Secondly, James will outline that also with regard to your second question the headwind from interest rates will be materially lessor in the next year. So we always have.

To take this into account if we see the running numbers for 2021 in the in the PB and lastly, which is for me and for all of Us obviously.

The nicest story, the underlying business in particular in lending and in the investment business is higher than we expected is higher than we planned we over achieved our goal in this regard after nine months, which we had for 12 months. So if I take all these items into account.

It's almost self extra narrow Terry.

We get to the $8 3 billion number, which we indicated at the idd in 2020.

I E for the year 2022. So also there I do think that we are well on track and if we continue to do the business operating in terms of lending and investments I, even see further upside corporate bank also here.

Let me first start with the strong underlying business story, which we in particular have seen in Q3 I'm quite happy with that what we promised in Q2. We always said Q2 is the lowest quarter Q3 is clearly a recovery and that on the back in particular off a stronger financing and credit business in Q3 and looking at the.

German economy looking at the mood in the corporates and our clients I can see that demand will continue also in Q4 and also in 2022 now if I now add to this the interest rate headwinds for SCB, which almost fully fall away in 2022, and you take into account the quite successful story.

Which we have on the deposit repricing.

Which brings on an annual basis, almost $400 million of revenues.

I think also there is a clear story and a clear bridge to the IBD targets for 2022, a $5 5 billion.

So also here I am confident that we can achieve that and don't underestimate that two rating upgrades in particular, two rating upgrades of Fitch and Moody's obviously helped to business in particular that is the IV and I'm coming to that in a second but also the corporate bank. So also there is upside.

So all in all in the in the so-called three stable business. We have either hit the plan are in line with plan or we even overachieve and I can't see that changing for the next 12 to 15 months now let's come to the IV.

Also there.

Thank you.

You should have my impression and that is that Q3 is nothing more than clear evidence that our investment bank is clearly set up to our strengths at Deutsche Bank and that we have achieved one thing which was always questionable.

But that is sustainable growth.

And I can't see that actually stopping and now if we look at the last 12 months numbers for the investment bank and compare that to the Idd planned for 2022, then we targeted in the <unk> for 2020 to $8 6 billion for the last 12 months in Q1.

In Q2 and in Q3, we were.

In between $9 7 billion and $10 billion, even if we now say that was in particular, a high market volatility in Q1, and it was not normalized but we sold a normalization already in Q3 these numbers.

Obviously, telling us the story and if we then compare that to the $8 6 billion number which we target for 2022.

We simply believe that this number is achievable why because I look in today's <unk> pipeline at the same for financing looks very robust looks very healthy and therefore I have a view obviously on the fourth quarter and also on the start of 2022.

Obviously, the rating upgrades by Fitch and Moody's, helping enormously I already told you in the previous discussions that clients are coming back to Deutsche one based on our recovery, but obviously two rating upgrades from two agencies helps a lot and we see a further positive evolution. In this regard October activity is very robust.

<unk> the business in the IV.

And also the overall momentum with making good hires clearly tell me.

There is.

There is some momentum we need in order to achieve our $8 6 billion gold.

In 2022 this year, we will be well above 9 billion kind of in line with last year potentially even some upside.

So we have the right setup, we have the right people, we have the right momentum and therefore, if we cannot achieve the $8 6 billion next year in that business I would tell you I would be severely disappointed and I can't see that happening. So there is upside in this number so if you add this all together.

And then I.

Thank you.

<unk> a show sustainability of the revenue momentum and B that we are highly confident to achieve that what jameson I indicated over the last quarters.

It is a $25 billion or better number next year in revenues.

And then.

It's James on the interest rate side, we've talked a lot about the headwinds we've been fighting through at the group level. This year. It will have represented over $700 million.

The 400 million number you remember is for the private bank alone.

And there's about another 250 in the corporate bank and the rest is in capital investments in IP.

So it's a considerable headwind.

In the third quarter.

It is about ratable. So we had about $100 million year on year headwind in the private bank from interest rates deposit hedges, if you like and about 50 and corporate bank. So that's that's playing through our numbers, we talked about $150 million of upside.

In 'twenty, two and a lot more as time goes by over 525 in our prepared remarks that reflects the change between today's interest rate curve and the curve. We built our last year's plan on.

It splits about 50 50 based on the keys between between the private bank and corporate bank, but it of course underlies our statements that the interest rate headwind where more than half.

For the PV next year and be effectively neutralized for the corporate bank next year.

Thank you so it's not additive so the $150 million I Shouldnt adder to the 700 million.

I just kept us right now.

No.

It is it is that the $7 million to $700 million behind us.

Find us.

Think about the $150 million as part of the reason.

Christian went through in the businesses, we see support for our revenue outlook for next year.

Got it.

Thank you very much.

Thank you Daniel.

The next question is from the line of Andrew Lim Societe Generale. Please go ahead.

Hi, good afternoon, thanks for taking my questions.

It seems like.

The bulk of the 700 million transformation costs were taken in the <unk>.

I'm, just trying to marry that up with the transformation.

The guidance on slide 38, how should we think about.

The quantum of transformation costs in the fourth quarter.

And then subsequent quarters in 2022.

That's my first question.

And then.

Secondly.

That's been a lot of.

Speculation.

But how you might expand the DIY business.

By byproducts and also geographically.

Perhaps maybe.

Maybe Fred running well what happened in March and your depot I thought maybe you can give a bit of color about your thoughts the whether it be commodities trading oil.

A bigger footprint in the U S. For example, any segment.

Yeah.

Sure Andrew It's James I'll take the first one yes, you refer to slide 38, where we where we work to give you. The best view, we have on unexpected future transformation charges.

Just for the for Q4 purposes, I would build about 500 into your models split between transformation charges.

And restructuring and severance.

And that would leave as you see on the page here about 300 million still to be booked in 2022 of.

Of course, we're doing everything we can to minimize the 'twenty two burden and book what we can tell.

'twenty, one, but it depends on the visibility and the accounting treatment of those items, but if you just do the math on it.

Think about 97% of the total $8 8 billion is booked by the end of the year.

And Andrew.

So sorry just.

Just on that point, sorry about that.

300 million for 'twenty two.

The more front ended.

In the year rather than spaced out.

Sort of ratable based on what's going on and still in the books next year I wouldn't think of it as front ended but.

But again, we're trying to minimize it I would think of it as you can nearly disregard it next year.

We look forward and not really talking about it but on consistent.

Accounting definitions, we trace it all through next year and the full program.

Great. Thanks.

And Andrew to your second question on on <unk> and the speculation let me be very clear.

We want to grow there, where we have decided to be in I think for the last two and a half years. We have clearly shown that these are the strengths of Deutsche bank be it in those areas. We are in the origination advisory business the financing and the trading business now within that obviously, we are doing further.

<unk> for instance, in the further franchise built and call rates and our flow credit development.

Obviously, we are investing quite heavily in our workflow solutions in particular in the FX business. We are as I said in my in my first answer that we have a very good momentum and hiring bankers in those industries, where we think we have the expertise and our clients are concentrated so that.

We can obviously generate more more mandates in the origination and advisory business and again, we see the evidence and then obviously we are trying to grow in the whole field of ESG and also there we have seen good momentum everything else is not.

Not in a in our view at least at this point in time, because we believe we have found our spot we grow there we take market share there we defend it even a normalized market and thats, what we are all about to do.

Thanks Christian.

Yeah.

The next question is from the line of Nicholas pain of catalyst Deborah. Please go ahead, yes.

Yes. Good afternoon, thanks for taking my question.

First one would be on the cost and looking at your 70% cost income ratio target for 2022, and your current run rate of $19 billion adjusted costs ex transformation charges.

Where do you see the biggest improvement drivers to reach your targets and how much was this already baked into your current cost run rate.

And the second question on distribution because you.

<unk> 5 billion for distributions starting in 2022.

Just whats the timeframe for this to happen should we think about 2025 and the Finalization of Basel III the good proxy.

Thank you very much.

Sure Nicholas James.

Look we're very focused I have to stay laser focused on.

<unk>, capturing a run rate in Q4, and then through 2022 that supports our targets.

We've been working on that as you can imagine for quite some time.

And putting in place the measures as we've described both last quarter and this quarter that can help to drive that I think if you.

If you look specifically at areas that drive the run rate from now down.

By Q1.

It'll be particularly in the technology area in part, reflecting the charges we took this quarter.

But also reflecting the benefits of some of the investments and if you like the roll off of things we've been working on for some time.

We're also close to crystallizing.

Some expense saves in our infrastructure areas again, as we've completed projects and move to.

You know to a <unk> type of state and some of the areas, where we've been focused on remediation for for the past several years.

Then there is the real estate, we've talked a fair amount about real estate, which contributes next year.

Significantly.

And and as you've seen we will have spent altogether about $600 million of.

Of transformation charges in the real estate area.

We're really pleased with what that's delivered in terms of the footprint we operate within.

Our sort of future proofed portfolio from here.

And there's some benefits flowing through already in the first quarter from that including incidentally ending the double rent period in New York. So so lots of things that were sort of tracking through.

In the run rate as we drive towards our 22 views.

On distributions.

It's frankly too early to say, we're working through that as we finalize our planning finalize that.

The results for 'twenty one.

I think we are confident about our ability to move to meaningful distributions next year, which has been our plan really since we embarked on this program back in <unk> back in 2019.

And I think that the.

The deduction from CET, one of $640 million that we have today.

Is clear evidence of the of our wherewithal our ability to to support distributions next year. It's just too early to say, how much and what form it will take.

Alright, thank you.

The next question is from the line of Jeremy <unk> of Exane BNP Paribas. Please go ahead.

Thank you just a couple of questions. Please following up on things that you touched on.

So the first one was just coming back on the bgh.

I was a little surprised that it's unchanged quarter on quarter I thought we would be seeing some benefit already because it sounded like you already implementing new contracts with customers a quarter ago. So I thought we might be seeing some benefit come through.

I Wonder if you could sort of talk about the timing in particular.

Whether we expect that to be back to normal and for Q.

Or how much longer you think it might take to get those revenues back on stream.

And then the second question just circling back to the Investor Deep dive you scheduled in March next year I was just wondering how you see the balance of that in terms of starting to talk about plans beyond 2022.

Versus still focusing on how you achieve the 2022 targets.

Sure Jeremy I'm happy to go into that so first of all on the on the bgh ruling.

The client consent that we send out all had October 1st has an effective date.

And thats for both legal and operational reasons. So the two thirds of responses that we've gotten allows us to switch those on from the beginning of this month and the additional responses we get in Q4 equally we'll be in that case backdated.

To October one.

So if you assume that we will be at let's say, an 80% response rate.

In round numbers $80 million of the lost $100 million will be back in the run rate this quarter.

And we are and we would work to then close out the rest.

As time goes on some of that may be moving accounts out of the bank. Some of it may be restructuring our relationships with clients in other ways, but.

But we have a I think a pretty high degree of confidence at this point that 80 of the 100 will be back.

The delay as I say was was intended from the very start when we first gave guidance on this in June reflected the effective date.

On the Idd Christian may want to add to this but we want to talk about the <unk>.

Things, we've done the trajectory that remains to be achieved to 'twenty two.

Certainly that's part of our agenda, but I think the larger part of the agenda will be how we have positioned the company through this transformation.

For strategic and financial performance.

From 'twenty two onwards.

Theres nothing to it.

Okay I look forward to it thank you.

The next question is from the line of Magdalena Stoklosa of Morgan Stanley. Please go ahead.

Thanks, very much Scott.

I've got three questions if I may so all of them.

Through them quite I'm quite quickly.

The cost reductions for next year, the planned cost reductions for Nexgen broadly imply your adjusted cost being down by one point.

Yes.

And of course, you've mentioned some of the things that are kind of falling off the IP project.

Real estate savings and so forth.

We look at it slightly differently.

The biggest delta year on year between 'twenty, one and 'twenty two it effectively into place.

And the private bank.

Talk to you.

Yes.

Only about the private bank.

What's that.

There are a couple of things, which are still which are still ongoing particularly in Germany. How should we think about that cost base next year, but of course also rolling rolling forward they aware.

And useful of course about bank closures, you've got some Mega project effective Av.

Putting postbank.

Hey.

The Deutsche Bank.

Together that has been kind of calling on them for a good CEO.

Should we think about that cost base.

Further out than 'twenty to my second question is really about your AUM rotation, because youre showing very well.

Very different numbers in terms of inflows into your wealth investment products literally quarter on quarter.

Just curious how much of it is FX.

The deposit flow versus just an investment flow.

No.

Are you actually see that that people rotation into into investment products and my last one is really about ESG because it's a huge thing for you you've talked about it within the context of the growth you've talked about that within the context.

Be well.

You see the biggest opportunity because of course at the moment the biggest market issuance of course, it's happening in Europe, but how does your footprint in Asia and U S. Responding to that thank you.

Sure. Thank you for the questions back and ideally a lot to get into there.

Youre right that on a segment disclosure perspective that there are big moves in CRE. You also PB also elsewhere by the way as the as the infrastructure cost base, which can capture rates not just <unk>, but other support functions as we continue to harvest cost savings there it's invisible.

And all of the functions all of the segments CRE.

<unk> you.

It would be moving down from about $1 2 billion. This year based on our idd numbers last year to 800 million. We think we'll beat that at this point when we when we talk to you again in March will be better than that that target when we get there.

PV, Germany as you say is a big part of where our efforts are focused at the moment.

You will have seen us announce and by the way taken relatively significant restructuring and severance charges in the <unk> area.

But announced a series of <unk>.

Workers' Council agreements.

Balance of interests and also actions whether its head office restructuring operations restructurings branch reductions and alike.

And they are all.

Being executed as we as we speak it is a gradual decline. It takes time you do it sort of one by one in terms of both employees, leaving the platform branches beings being shot and other actions being taken but we do think we're on a we're on a good glide path there.

And to the earlier question.

From Andrew.

Transformation costs will be will be almost entirely behind us to support that going forward.

The technology piece in PBC, Germany will still be a burden next year.

And that's what we updated you on last December relative to our earlier plans there we're engaged in a significant.

Exercise of our core bank conversion to put the postbank onto the business onto the same systems as the existing Deutsche Bank systems that investment is ongoing next year and the benefits from that then are visible in only in 'twenty three but.

But we think we have that sort of <unk>.

<unk> in our in our plans and we're executing on that and as you'll recall the Postbank systems sale was one of the actions we took to ensure that we were well prepared.

On the AUM rotation, it's interesting we've been looking at that disclosure, what you see as increases in AUM and new inflows in in PB, but relatively static levels of deposit balances that are in accounts that support investment activity, which in a sense.

As bullish because it means that the available.

Deposit funding that our clients have to put to work in investment products is still there is sort of unchanged.

We are finding that discussion to be a very positive discussion today as we go through for example, repricing discussions talk about again the.

The need to put in positive consent in those businesses. It creates if you like a sales opening to have a dialogue with our clients about moving more into investment products. So we see it as a.

You know I don't want to say, it's a limitless opportunity, but it is it is it is a significant opportunity as the the German saver continues to react to better return opportunities outside of the deposit products and frankly, the banking industry as a whole re prices the deposit product to make it to make it.

Harder to harder to hold.

And to your second question.

Look ESG is is overall.

All of you a material opportunity for us.

And first of all because that is one of the few areas, where Europe as a region is overall, a leading and ultimately that place then into our car because the whole transformation.

Into a green economy needs to be financed and obviously then European banks have a big chance and should tap into the opportunity to get a big part of this so I would I would actually describe it in kind of four areas, where we can succeed and where we do see actually a progress.

Number one it's in the issuances in particular in the capital markets business Youre right Europe is leading there I mean, we have one of the leading market positions in issuance. This not only in terms of green bonds, but in particular also bonds, which are attached to a social housing.

Just the mandates we also and where we are public with which we have shown in October so what the market position of Deutsche Bank is but with the knowledge. We have now accumulated with the global approach in which we are driving that at each and every business, but with the central function kind of overlooking and coordinating.

We have great success now also in the U S and in Asia. So I think that what we see in Europe, we can repeat and we see that in the numbers.

That we actually have for good progress also.

In the other two regions.

Secondly, we are not talking a lot about this but we should talk more about this the demand of our wealth management and private banking clients in ESG investments is simply huge and you'll see it in the dws numbers, but also in the west management numbers.

Ask and when our assets under management are rising the share of ESG bonds and sustainability bonds is baked. If you then have on the other hand also the origination in house on the investment banking side, obviously again, a big opportunity for us.

It.

The discussions with each and every corporate client be it in Germany or in Europe is always centered around sustainability and how we as a bank can finance the transformation of the corporate XD into a green economy.

And that is that also includes not only the financing in terms of traditional parts and how we can help you with the clients.

But also we are offering new products as it as a service we discussed it in some of the previous calls, but actually a service from us that corporates and clients are only paying extra for what they really used.

Oh, what they use in their day to day business is actually a big contributor also in terms of sustainable economy, and what we can offer from a bank so new products are rising.

And last but not least don't under estimate actually the mandates we have on the advisory side because a lot in particular, if you look at the goals we have set ourselves for the economy, but also here in particular for Europe, a lot of corporates are thinking in terms of M&A, what they can dispose what they can buy how would they can reset up.

The group and that is again.

Something where we as a bank want to be close to or close to so a lot of mandates, which we are winning are actually on the back of ESG mindset and ESG thinking of sustainability, you're thinking of our corporate clients and therefore I do think it's not a surprise that at the end of the third quarter. We are spending I think at 127 billion or 126 Bill.

In terms of the finance and investment on our go to 200 billion by the end of 2023, we have on average we have seen $25 billion of net new financing and investments in the business. So one of the key themes, which we are following up and which will also shape the future.

And also our business strategy going forward.

Thank you very much.

The next question is from the line of Stuart Graham of Autonomous Research LLP. Please go ahead.

Thank you for taking my questions I had two first can you tell us what the impact was in FIC revenues in Q3. Please and then second you've talked about the 500 million revenue uplift from rates, which I guess Linkedin deal rate sensitivity slide on slide 41.

My question is how does not take account of the deposit charging fees on slide 39, I guess, if interest rates actually go up one day, you get the higher NII from slide 41, but you lose the fee income on slide 39. So is that assumption correct and is the $500 million you talked about is that gross or net of loss deposit charging fees in due course. Thank you.

Thanks Stuart.

Interest rate question is a really interesting one.

Let me start with them it was about $100 million in the quarter of revenues recognized.

It's brand therefore at relatively similar rates to the.

The first couple of quarters of the year in terms of the incremental call it 5% to revenues.

Actually in this quarter there were some offsetting items in the credit trading businesses that that.

<unk> went the other direction. So I wouldn't think of this quarter's credit performance as necessarily being out of line with what we've what we'd see in a typical quarter in normalized market environment, but that's that's the answer on zim.

In terms of the rates.

So, yes, we were showing the interest rate sensitivity.

In the first and second years to 100 basis point parallel shift.

The effect of deposit repricing in a sense is to make those liabilities floating rate.

So a significant part of the rate sensitivity that you've seen come out of our disclosures over the past couple of years has been the impact on that interest rate risk of taking a large portion of our liabilities and making them floating.

What isn't reflected in our models at this point is behavioral change. So the really interesting question is.

As we potentially.

Lock in rates with with zero being the cap in the same way it was for far too long with a floor.

Our rate sensitivity ultimately would be much higher than we're showing on the page.

And so while we would lose some revenue it's baked into this between minus 50 and zero, we think the upside leverage above zero is in fact, much higher than you'd be showing on the page.

I hope that gets to your to your question.

This slide is in the interest income slides, so how do you capture that.

The element and it's essentially captured in it and at this point the fee piece on the PBC side is relatively is a relatively small portion of it. So this is the net interest income impact I think you can for practical purpose disregard any any fee income impact at this point, okay alright.

My pleasure.

The next question is from the line of Tom <unk> of <unk>. Please go ahead.

Hey, guys a couple of questions from me please.

Dws has had some recent travels around ESG disclosures I was just wondering if that could be any playback on Deutsche <unk>.

The business has.

Regulate to Threep stout.

And what is their reaction amongst clients.

And then on your corporate lending growth, which seems to be picking up.

Margins I will say certainly in Germany between the front and back book is mainly converged.

Does that mainly the fact, we found a floor in revenues.

The upside is really just a function of volume price rates the ongoing repricing efforts and just on that do you think there is an opportunity to improve the spread on corporate loans or does that.

That environment to stop that from happening and maybe just sneak my follow ups.

So to your point around then you said there was some offsetting items in the trading.

What sort of things well day. Thank you.

Yes.

Look on the Dws, you will understand that.

We will.

And not respond to that we can only refer to the clear statement dws has given them public and rejected the allegations I think the numbers in Q3 for the DB group and which I just repeat it the 127 billion shows.

That there is no negative impact on our business again, I think the dws business performance in Q3 also speaks for itself.

But obviously, we make sure and we have made sure motto for Deutsche Bank that we have a clear governance and reporting structure about our ESG reporting.

And how we are doing the validation of transaction. So we feel comfortable with that and there is no more to say.

So on the corporate lending we've been looking at this and actually as you say the spreads have held up.

Quite well.

Perhaps surprisingly well in recent quarters. So we're encouraged by that.

I'm not sure I would I would bet on an expanding spreads and margins.

On that lending at this point.

But we do see some stability and of course lending opportunities.

In the CB area also good at good opportunities in IV for what it's worth in our financing business at least in the very near term, we see opportunity to deploy the balance sheet at attractive spreads.

And spreads have also had held up in the in the PB books in Germany.

So all in all I'd say encouraging spread development and for corporate Bank I don't see any difference and we're encouraged as I as we've said by the loan growth.

On the Zim offsets I don't want to grow go into.

Each transaction and physician.

It was a handful of smaller positions, which I think collectively.

We'd see is.

Offsetting in terms of markets and market events to the Zim and gets you to a relatively normalized performance in credit.

Okay. Thank you.

The next question is from the line of Adam <unk> lack of media, but yes.

Go ahead.

Thanks for the question.

Following up on NII and corporate bank.

500 million you referenced on the Delta on the forward curve can you break out how much of that is kind of long end.

So that's the short end.

And the ECB rate.

And then in the corporate bank.

I wanted a bit more color on the episodic items clearly.

A volatile line item.

Down quite materially year over year.

Could you kind of saw it this quarter cynical and idea of modeling it going forwards and what does that look.

Walk into next year.

And then finally at some corporate bank you are talking about.

Slot revenues year over year, that's a big uptick in the fourth quarter revenues when normally able to seasonality would that be down to these episodic items.

Yeah. Thank you Adam for the question so.

It's been predominantly long end movements.

If I compare the rate curve snap last year to this year. So so relatively little has as we say is fed into the 'twenty two some.

But it increases markedly in the years thereafter, we like I think many banks are more sensitive to the front end, but the long end has helped us and will do so increasingly in the years to come.

On the CPE side with respect to episodic revenues.

We've talked in the past that they they would tend to to vary between say $50 million to $100 million.

There's the occasional quarter, where it will be zero or close to zero and the occasional quarter, where it exceeds 100 million, but by and large it comes in in that range.

This quarter year on year. It represented about $60 million of headwinds the types of activity you see there. Some of it is we call it portfolio rebalancing actions. So when there is a shift that we do and from a risk management perspective, and treasury produces revenues or goes the other way that that can flow through.

Recoveries on credit on collateralized loan obligations go in it so credit insurance those are the types of events or sometimes one off larger inception fees on transactions, we would we would treat as episodic so it's.

It's all matters that are in that are inherent in the business, but create a little bit of volatility if you like waves on top of the tide.

And can help or hurt in a given quarter.

Both in absolute and in various terms.

On the follow up.

Yes $500 million.

Yes, its obviously youre talking about the whole with Covid and the shift in the fall as.

As much of that benefit.

Short term rates by 2025.

No no as I say not all by 2025, yeah. It is it moves a little bit I think that it crosses the zero bound by sometime in 'twenty. Four I think early 24 was the latest snap, but I'd have to look look at it again and it's something that we update obviously frequently.

So it is helping to the conversation I had with Stuart is it are we at the point, where the you know the.

The greater leverage kicks in based on on the on the current curves by 25, not even yet at that point.

But.

But it is it is significant upside leverage you see it captured in the 100 basis points parallel shift analysis.

In the in the detailed interest rate risk management numbers, we do I mean, the accumulative effect of these interest rate curves go go easily into the billions over over a five year horizon well into the billions. So we see a lot of operating leverage.

Leverage to come for ourselves and of course other banks as the yield curve if you like normalizes.

And in CB with respect to the balance of the year, it's not a big bet on episodic.

There'll be within a range.

But we're seeing the momentum we've been calling for for a while.

Other its loan growth, whether it's more deposit repricing underlying transactions increasing benefits from some of the investments we've been making we're sort of looking at it.

In a very focused way on how we are building the run rate in that business.

Other treasury improvements that flow through to corporate bank all of those things are what we're looking forward to to move that run rate.

Closer to the delivery of the five five that Christian talked about earlier.

Alright, thank you.

The next question is from the line of anchor Rangan of RBC. Please go ahead.

Yeah. Thank you very much for my question.

Thanks.

Hum.

You can see that.

Shannon of a headwind to us.

And especially considering that they love question points about.

Yes.

Client requests increased maintenance in January.

And then secondly, just on.

The.

The full impact your previously guided at the analyst day.

And then just not just one that can come from that thank you very much.

Sure. Thanks for the questions again, both meaty topics and I'll try to be as brief as I can hard to say at this point how much inflation impacts are our cost base. For example next year. It's one of the things we're watching we need to work to offset.

We the one item you cite is an important one the conclusion of negotiations.

The tariffs staff in Germany as you know.

It's a relatively important assumption as we look to the one year forward.

The rest of the cost base is is very varied and how it performs one of I think the positives of having pursued our transformation at the time that we did we've actually locked in certain of our of our expenses at a time when that inflation wasn't present so.

When I say future proof for example on the real estate portfolio some of our contracts for.

Some of our longer term contracts that we've been re cutting.

That provides a little bit of stability in.

And our cost base that hopefully will shield us to some extent in the.

The early years of course further out.

These inflationary pressures.

If they persist we'll have a bigger impact.

Banking business model should be.

To a significant perspective.

Respect protected from that.

As rates shift and that operating leverage arises.

But labor costs as an example is something that we're looking at very carefully not just in Germany, but all around the world.

On the Basel III final framework, that's obviously something we've been following very carefully.

We've been also very engaged in advocacy and dialogue with the official sector.

We've been looking at the Legislative proposal that was published earlier today and.

And obviously had worked hard on what we learned prior to the official publication.

I guess the the early snapshot for us as it is it confirms.

Some of the earlier guidance that we provided to you. So we thought that the first <unk>.

Round of impact was about 25 billion as we sized it for the most part that's come in as we'd expected.

And at this point I would probably say that 25 billion number. We gave you before is a good number it does move out a year, though relative to our earlier assumptions, which is which is helpful for us in terms of the glide path to get there.

And then as we look further out to the to the impact of the output floor.

I think it would confirm at this point the sort of more optimistic end of our range of our range that we provided.

So we'd like to think of only about 10%.

Further inflation relative to the current level of risk weighted assets.

As that output floor begins to bite.

Does move back based on the proposal as we read it the the.

The point in time at which the output floor begins to bite for us.

So it means the transition time in terms of balance sheet mix business model and obviously the capital build to two to offset that increase.

In capital requirements. This is all I think quite helpful.

We welcome the legislative proposal the clarity of that it provides.

The extent to which we think of the European Commission has taken onboard some of the feedback.

And helping them.

The banking sector to balance.

The goals of the Basel III final framework with the the nature of the European banking and the need for the banking sector to support economic growth.

So there are a number of features whether it's operational risk the treatment of rated corporates the multipliers.

Applied to soccer.

And on and on where we think Theres some theres some.

Some very good proposals in that legislation and we look forward to continuing to work with the official sector on the legislation as it goes from from the initial draft.

Thank you very much.

The next question is from the line of Kian <unk> of Jpmorgan. Please go ahead.

Yes, thanks for taking my questions two of them.

One is on the corporate and other division you mentioned in your prepared remarks, I think on page 18 about 115 million euros per year.

Just the cost savings.

From 2020.

'twenty two onwards, and just wondering if this is coming on existing Clos program. So is that the growth or is that a net number.

And then the second question is skewed really speak very comfortably and this confidence that you will reach your fixed income guidance of $6 7 billion next year.

I just wonder what assumptions do you take in terms of credit environment in particular, so high yield levels.

Spread volatility.

Issuance levels.

Of refi can you share with us a little bit input data to make that assumption considering it's clearly very credit heavy number two to achieve so that's what I'm interested in the credit inputs.

Sure. Thank you Ken so it looks $150 million was incremental when we talked in the summer about we've been working on incremental actions to offset some of the volume.

And control investment pressures that were sitting seeing.

That is one of those one of those actions we are working on more.

And hence.

When I updated the guidance back in September was $700 million. So there are additional measures that we've been working on.

And intend to implement but the 150 was was part of that increment.

We started talking about in the summer.

Okay.

The overall fixed income number and our confidence in that and potentially even with some upside to that number first of all derives from the foundation, which we have now built for the last two years I think what one shall not under estimate the platform. We have now built in in terms of setup in terms of having the right people.

A clear focused strategy and most importantly.

Clients coming back to Deutsche Bank, and trading with us that was a different three years ago that was the difference two years ago, and we see an ongoing momentum in this regard and therefore, we are very positive.

That Oh. This is obviously continuing into 2022 from an overall a credit point of view.

I think we still see and we expect resilient markets into 2022.

Of course, you will always have.

The risk score certain event risk like we have seen now.

In China.

Certain sectors, but this is exactly where our strength is and where we have an expertise on the first line of defense in second line of defense in terms of.

Having the skill set in dealing with that that we think there are even opportunities for us. So you know.

It's not only the normal credit business are bigger on a secured basis, but also in distressed debt and there are a lot of opportunities. We can look into and they fly there again look at the pipeline we have against an overall resilient picture, which I can see over the next 15 months with the underlying underwriting experience and skill set we have.

We believe that there are good opportunities for us to be very active and again, if I look at the pipeline. It makes me very confident.

Thank you.

The next question is from the line of Andrew Coombs of Citi. Please go ahead.

Good afternoon to you.

<unk>.

One looking out to Q4.

Looking out.

Q1.

Okay.

So we think by your outlook commentary on H 'twenty one.

Or you still talked about full year 'twenty, one revenue being essentially flat full.

Full year 2000, and yet when you look at your nine months revenues are up 5% year on year in semi and the work Kristine Guy that is very confident on that great.

2002.

The other business lines.

I'm just trying to tally whether you can we do see revenues down year on year in Q4.

Or whether that's just a prudent outlook comment that you can create it.

Im.

Second question.

Q1 net.

Understood.

And your commentary about the path.

This suggests that you need to reach a new cost run rate.

Q4, and then Q1 is the technology cost dropped away.

Is that to say that your.

Income target for full year 2000.

Okay.

Thank you.

Seven.

In Q1 as well.

Sure. Thanks for the questions look I would interpret it more is prudent and the outlook there is obviously.

Still uncertainties ahead of us as we as we look to the end of the year.

And there's also sort of the.

Sum total of the businesses and their outlook and then the group's view.

But I think that I think Christians commentary about the forward end 'twenty two is critical and obviously, we look to Q4 to be to be setting up to achieve that.

In terms of the cost run rate as I said earlier, it's we're laser focused on managing it down.

And so this is what we'll call underlying run rate, we've talked for a while about adjusted costs, Excluding Prime finance and also bank levies.

That is that as a run rate that we've been working down now to a range of around 4546.

It's something that needs to step down.

In Q1.

Have have reestablished a glide path that we whether we want to be on and we will continue to work from there remember from a cost income ratio perspective, Q1 is where we have to recognize the bank levy so it's a little bit distorted.

But then if you if you if you remove the bank Levy you can see then the underlying revenue to cost relationship that we need to establish.

As part of the earlier question, what's one of the things that brings our cost down one is the completion of that prime finance transition of the remaining technology and staff to BNP Powerbar.

So while that's been excluded from the from the walks. We've shown you of course on a total expense base. It's part of the run rate improvements, we see going into 'twenty, one into 'twenty, two I'm, sorry first quarter of 'twenty two.

Thank you.

The next question is from the line of Chemo Gems of days at Bank. Please go ahead.

Hello, Thank you for taking my questions.

Got two questions. Please.

Vacation.

Starting with the clarification.

In respect to the.

Dividend accrual or roughly $640 million could you please remind us.

How much or how does this split between the three quarters this year.

This would be to clarification.

The first question is on payrolls.

Could you provide some more color on the strategic rationale to support our <unk> initiative.

And also its strategic importance.

What are your partnership that you have.

Last call for instance, what's the pace of and also with the acquisition of better payloads.

And last question.

Just on your capital return plans.

I understand that you cannot.

Yes.

Confirmed and whatnot.

The exact mix, but what would be the trigger those two to basically.

Yeah.

Hum confirmed entered.

The mix between dividends and share buybacks and also is there a store.

And timing that you have in mind for instance.

Did you plan for launch thank you.

Thank you CMO for the question. So look I'll take the two dividend related ones together and then and then FTP Christian may want to add on the on the IP front. So.

First of all my Accountants would tell me I should not refer to it as an accrual it's an exclusion of certain.

Earned income from our common equity tier one capital.

So the numerator and the ratio calculation and it reflects a an ECB guidelines around.

Sort of profit recognition in pillar one during the year.

That that sort of disregards, a unintended payout going forward or.

No.

That number was $300 million in the first quarter and 275 in the second so we've built rebuilt a significant amount in the first half obviously, a little less in the third quarter, reflecting the impact of the of those transformation charges and that's something you would expect to sort of roll through to Q4 as well for both seasonal and <unk>.

The larger transformation charges in Q4, but as I said earlier it positions us well for a distribution next year and one that would be neutral to the ratio based on that on it being disregarded.

Already in the under the profit recognition guidelines.

As to the.

The amount and form as I said earlier too early to tell.

We're going to spend a lot of time I think in the next few months going through that question internally with our supervisory board and ultimately with the regulators.

We're obviously very keen to restart our dividend we know that the shareholders have contributed on their part.

Financing this transformation and it's time to restart a dividend and start one that is that is.

It reflects management's confidence about the future both in its amount and in our expectations for future growth, what that'll be and what the resulting payout ratios and mix will be it's too early to tell.

On the European payments initiative.

We're constructive on that initiative among European banks and we are.

A key partner in that initiative, we think it's important to create capabilities.

It's part of ultimately strategic sovereignty for for the European landscape financial landscape.

And we think it can help our position strategically in the payments market. We don't think that it goes that is inconsistent with our partnerships with with a number of our important partners around the world. We as you know we work closely with Mastercard is one example.

But we think that the b product or capabilities can be enhancing for our business and for for our customers.

As to whether what the impact will be ultimately strategically or financially it's too early to tell.

Okay. Thank you.

The next question is from the line of Amit go with Barclays. Please go ahead.

Alright, thank you.

So I've got two questions.

Maybe just first on <unk>.

One of the other question is sustained.

In terms of that guidance and the outlook for.

For 2021 group revenues.

I was also just curious.

Obviously, that's essentially a bit conservative if you add up the individual business as you can get a bit more.

There was a delta there of about $1 billion to 2022.

And I'm just wondering is that another way to think about it incentive.

What have you achieved in 2021.

And you could achieve about $1 billion more revenue in 2022.

First question.

The second question is just coming back on costs.

And I just wanted to understand a bit better the incremental $700 million kind of transformation cost.

And it doesn't seem like the broader targets have changed say, just curious which kind of.

Incremental costs.

You've seen relative to original kind of planning.

And.

What are those kind of pressure point of sale looking to address.

Sure. Thanks, Amit so look.

I don't want to get into the two early into what we ultimately will see four for 'twenty. One I think Christian was earlier is the right way to think about it or our last 12 month performance over the past several quarters, which supports kind of a 25 billion run rate is a good way to think of.

<unk>.

Where we need to go next year.

In that $25 billion, you would expect to see some normalization of IV some improvement in the in the other business areas and what that net will be.

Remains to be seen we we hope and expect that it will be an improvement on that $25 billion level.

<unk> the performance of the businesses as Christian described.

Ultimately it will be whatever it is in terms of the growth rate off of off of 'twenty. One when all is said and done.

In terms of the incremental costs just to take you back to the first quarter.

We started talking about the uncontrollable items that came into the cost base at that time, which were higher S. RF than we'd hoped for and higher deposit insurance fees, reflecting the greensville insolvency.

And that represented 400, we said that we are not willing or to try to offset that $400 million in the cost base. So that we could support investments going forward.

Then as you go into Q2, we started to see.

And have an expectation of more volume related costs coming into the cost base as well as as incremental investments in controls that we needed to make.

So that's where we started to talk about the need to undertake further cost measures in order to offset those additional costs.

And so and that's where the measures are that we talked about and Kian asked about so we're working on that what the what the run rate in the next several quarters will reflect it.

Is the push and pull of of how quickly we are able to implement measures that can offset.

The volume related and additional control costs.

How quickly the previous measures are flowing through to the run rate.

And any.

Any other changes that take place between now and then but but that's sort of how you can think about the the the modeling on which we've built our expectations for next year.

Got it thank you.

And there are no more questions at this time I hand back to you on the patronage for closing comments.

Thank you for joining us for our third quarter 2021 results call and for your questions. Please don't hesitate to reach out to the Investor relations team with any follow up queries and with that we look forward to speak to hit our fourth quarter call in January Thank you.

Ladies and gentlemen, the conference has now concluded and you may disconnect your telephone thank.

For joining and have a pleasant day goodbye.

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The presentation as always is available to download any investor relations section of our website DB dot com before.

Before we get started let me just remind you that the presentation contains forward looking statements, which may not develop as we currently expect we therefore ask you to take notice of the precautionary warning at the end of our materials with that let me hand over to Christian.

Thank you Yana a warm welcome from me as well.

Asia to be discussing our third quarter 2021 results with you today.

We are now two thirds through our transformation journey.

We have continued to deliver against our milestones.

We see clear evidence of progress in our businesses.

The first basis of this progress is our disciplined execution we.

We continue to be absolutely focused on cost saving measures.

Adjusted costs, excluding transformation charges are once again down year on year.

These transformation charges will help drive reductions in our expenses in future quarters.

And we have now recognized 90% of our total anticipated transformation related effect of almost 8 billion euros. Since we began this journey.

This has resulted in significant progress in our transformation.

We promise to self finance this and we have delivered.

These efforts are being recognized by our stakeholders in the third quarter, both Moody's and Fitch upgraded our credit ratings and retained our positive outlook.

We have maintained a strong capital ratio.

<unk> balance sheet and solid liquidity, despite certain challenges such as regulatory inflation and the impact of a global pandemic.

Our capital release unit is outperforming against our 2022 goals, which we outlined at our last investor deep dive risk weighted assets are down to 30 billion euros and the unit continues to reduce costs.

And finally, the result is profitability in all three quarters of this year, we have delivered significant year on year profit growth, while simultaneously keeping up the pace of transformation.

The refocusing on core business is paying off.

Revenues have grown as broad base business performance offsets the effect of normalizing capital markets.

And we saw that in the third quarter.

Pre tax profit of 554 million euros grew by 15%.

Despite transformation charges of nearly 600 million euros.

And on an adjusted basis profit before tax would have been up by 39% to $1 2 billion.

Now let me take you through the highlights of what we have achieved in the nine months of this year on slide two.

Our performance over these past nine months shows that our 2022 targets.

And ambitions are well within reach.

Revenues of $19 5 billion for the first nine months of 2021 fully support our trajectory to our 2022 revenue growth.

We have reduced adjusted costs, excluding transformation charges by roughly 4% year on year to $14 4 billion euros, Despite 2021 being an investment year.

This means we delivered positive operating leverage at both the group and core bank level over the past nine months.

We reduced our cost income ratio from 87% to 82% year on year. Despite the additional transformation charges recognized in the third quarter.

Provisions for credit losses declined 83% year on year to 261 million euros or eight basis points of average loans.

Return on tangible equity for the call Bank is seven 5% for the past nine months and.

And about 9% on an adjusted basis already in line with net next year's target.

This sets us on a clear path to our group target of 8% return on tangible equity in 2022.

Now, let me turn to the progress we have made executing on our strategy across our core business on.

On slide three.

The corporate bank continues to execute on its growth strategies, as evidenced by increasing loan and new partnerships, including Mastercard, Pfizer and better payments.

94 billion euros of deposits are within the scope of charging agreements and contributed 96 million euros in revenues to our third quarter results.

The investment bank is focused on front to back efficiency process improvements such as the FIC Reengineering program.

The results in this quarter again confirm our decision to refocus our investment bank on its core strengths and we delivered a strong performance despite normalization in the market.

We have now seen year on year revenue growth in origination and advisory for seven consecutive quarters, and our third quarter FIC results demonstrate our market share gains are sustainable.

The private bank continued to grow net new business across assets under management and loans.

This year to date business grows substantially outperformed our full year target of 30 billion euros.

In the third quarter, we announced the sale of DB financial advisors in Italy, which supports our international private Bank division of strategy as well as our regional strategy.

In asset management assets under management at the <unk>.

Level of 880 billion euros.

Driven by strong net inflows of 12 billion euros this quarter with more than 40% coming from ESG products, where we continue to work towards leadership in the field.

We continue to undertake investments in growth initiatives and platform transformation to support our performance in short the dynamics in all four core businesses showed that our clients are supportive of our business model and belief in our capabilities.

All four core businesses.

Grew return on tangible equity at improved the cost income ratio over the first nine months of 2021.

This relentless focus on transformation.

Its driven a steady improvement in underlying profitability.

Which can be seen on slide four.

And the call Bank, we delivered a 17% year on year increase in our adjusted profit before tax in the last 12 months.

Once again, all four core businesses contributed and are either in line with or ahead of their plan so far.

In the capital release unit, we reduced losses by nearly half compared to a year ago.

As we reduce leverage exposure and risk weighted assets, we continue to remain committed to minimizing the P&L impact of the portfolio reduction.

As we steadily put transformation effects behind us and reduce the cost of deleveraging in the capital release unit more of the earnings power of our core business is reflected in the bottom line.

This supports our aim to deliver stable and sustainable returns at the group level.

A key driver for this is our sustainable revenue performance, which I will now turn to on slide five.

Revenues, excluding specific items in the core bank.

For the third quarter stand at 6 billion euros up 1% year on year.

Business growth has offset the normalization of the capital markets environment, which impacted fixed income trading as expected.

This quarter still bears the impact of foregone revenues.

As a result of the <unk> ruling of 96 million similar to the second quarter.

We expect this impact to taper off considerably in the next quarter.

As we now have written contents in place for two thirds of the affected accounts.

Revenues in the investment bank at $2 2 billion euros down only 6% from a very strong third quarter in 2020.

Both our corporate bank and private bank continued to offset interest rate headwinds with continued deposit repricing and business growth, we see continuing underlying momentum in these businesses.

And we see strong underlying growth in lending the loan portfolio is currently at 456 billion euros up 5% from the same quarter last year.

With the period of post pandemic market normalization behind US we now expect the current growth rate to remain in the coming quarters.

Asset management delivered revenue growth for yet another quarter driven by strong management fees.

Is the sixth consecutive quarter of net inflows.

Core Bank revenues were 25 billion in the last 12 months and 11% increase from 2019, which is in line with our current 2020 to go.

This reflects the sustainability of our revenues as client engagement continues to improve particular following our recent rating upgrades.

Now, let me turn to costs on slide six.

On a 12 months basis, we reduced noninterest expenses by 14% to 21 billion euros from 2019.

This includes the higher than expected contributions to the single resolution fund and the German deposit protection scheme.

We continue to focus on managing our controllable cost base to offset volume driven expenses and investments in controls and have identified additional cost saving measures.

These measures come with around 700 million euros of incremental transformation related effects, including technology related charges that we recognized in the third quarter.

We are committed to putting almost all our anticipated transformation effects behind us by the end of 2021.

And with that in mind, we reaffirm our 2022 target for our cost income ratio of 70%.

Let me now update you on our progress on sustainability on slide seven.

After nine months.

We are already ahead of our full year 2021 target for total volumes of ESG financing and investment.

Our volume since the start of 2020 now stand at 125 billion euros.

Is this a full year ambition of 100 billion excluding dws.

This puts us well on track to meet or exceed our year end 2023 target of 200 billion.

In addition, we were a book runner on four of the sixth largest ESG related bond issues in the quarter.

This month, we call it the use inaugural Green bond raising 12 billion euros, the largest evergreen bond today.

We also completed our first ever Green repo agreement.

The first green for most of our bond and build out our offering and sustainability linked loans to German mittelstand companies.

ESG is the topic, which continues to drive client engagement, allowing us not only to innovate products, but to also provide advisory services underlying our clear client centric approach.

And the private bank, we rolled out the ESG advisory concept to more than 100 branches exceeding our 2021 ambitions and our international private bank is enhancing product offering by our new funds and growing green deposits and lending.

We are pleased to participate in the upcoming Cop 26 summit in Glasgow next week, and we're looking forward to meeting clients and other stakeholders striving for change.

Before I hand over to James Let me now summarize our progress this quarter on slide eight.

As we said at the Investor Deep dive in December our focus remains on executing our transformation agenda, while supporting our clients.

We have executed on our strategies within our refocused core businesses and we saw material improvements in core bank profitability and returns.

We are delivering resilient revenues as business growth offsets the normalization of market, which we anticipated.

Our core businesses are performing in line with or ahead of our expectations and that positions us to deliver on our revenue ambition next year.

We intensified our transformation efforts and took further steps to drive efficiencies.

We aimed to book most of the remaining transformation related effects by the end of the year.

Which will help us to deliver on our 2022 cost income ratio target.

We are committed to technology and control investments and to maintain our momentum on resolving open regulatory and control matters.

The hierarchy of our 2022 priority remains unchanged and we are on track to meet our targets of an 8% post tax return on tangible equity and 70% cost income ratio.

We also remain committed to beginning the distribution of the 5 billion euros of capital from 2022 onwards.

We are setting up a firm foundation to not only meet our 2022 ambitions, but to also position Deutsche bank for future growth.

And we look forward to discussing this with you at our next Investor Deep dive in March with that let me now hand over to James.

Thank you Christian.

Let me start with a summary of our financial performance for the quarter compared to the prior year on slide nine.

We generated a profit before tax of 554 million euros or $1 2 billion euros on an adjusted basis.

Total revenues for the group were 6 billion euros up 2% versus the third quarter 2020.

Net interest income this quarter was roughly $2 8 billion euros up approximately 114 million euros on the second quarter.

The increase was driven by the growth in our loan book and higher revenues from our securities portfolio in the quarter, along with a decrease in the cost of our deposit funding.

Net interest margin remains broadly flat at around one 2% as progress on deposit charging and reduced surplus liquidity offset the ongoing pressure from interest rates.

As I've mentioned before we see these interest rate pressures abating with private bank headwind set to have next year and corporate bank headwinds being substantially eliminated.

Recent interest rate moves provided more favorable outlook for our businesses relative to the conservative baseline on which our previous plans were built.

For 2022, we now see a tailwind in the region of 150 million euros relative to our earlier planning.

As the moves are predominantly in the long end of the curve the impacts become cumulatively larger and later years, reaching well over 500 million euros by 2025 from the current observable forward curve expectations relative to our plan baseline in the fourth quarter last year.

Turning to costs noninterest expenses were up 4% year on year.

This quarter includes 583 million euros of transformation charges up from 104 million euros in the prior year.

Our provision for credit losses stood at 117 million euros, or 10 basis points of average loans for the quarter.

We said at our second quarter results and then again in September that we see a relatively benign credit environment.

These conditions have persisted and we now see scope for improvement from our previous guidance of 15 basis points of loans for the full year 2021.

In line with the guidance, we provided with our second quarter results.

We did see a reduction in our common equity tier one ratio to 13% in the quarter.

Tangible book value per share was <unk> 24 euros and 46.

Up 40, <unk> on the quarter or 5% in the year to date.

The tax rate for the quarter was 41%.

Let's now turn to page 10 to briefly look at our nine month performance.

Revenues for the first nine months were $19 5 billion euros up 5% year on year.

At the same time, we delivered a 4% reduction of our adjusted cost base, excluding transformation charges to $14 6 billion euros and reduced our cost income ratio from 87% to 82%.

The improved macroeconomic environment led to an 83% reduction in provision for credit losses, and our profit before tax of $3 3 billion euros increased nearly fourfold compared to 2020.

The tax rate for the first nine months was 34%.

Let's now turn to the core bank performance for the quarter and the first nine months of the year on slide 11.

Core bank revenues were $6 1 billion euros for the quarter up 2% on the prior year quarter.

Noninterest expenses were up 5% for the quarter, mainly driven by additional transformation charges, while adjusted cost costs. Excluding these charges were down 1%.

This takes our profit before tax to 898 million euros and the adjusted profit before tax to $1 5 billion euros up 23% on the prior year.

Our adjusted post tax return on tangible equity for the quarter slightly increased by 60 basis points from last year to seven 3%.

Looking at the results on our first nine month basis.

Our revenues in the core bank were $19 5 billion euros up 4% compared to the same period in 2020.

Noninterest expenses increased 2% year on year due to the additional transformation charges and adjusted costs, excluding transformation charges were flat.

Our cost income ratio was 76% for the first nine months or 70% excluding transformation charges.

And as Christian mentioned, our return on tangible equity for the core Bank was seven 5% for the past nine months and nine 4% on an adjusted basis in line with our target for 2022.

Let's now turn to costs on slide 12.

In the third quarter group adjusted costs, excluding transformation charges continued to decrease year on year by 3%.

We saw lower compensation and benefit costs year on year, reflecting workforce changes as well as movements in variable compensation compared to the prior year.

Costs were broadly flat as a decrease in hardware expenses was offset by higher software and service costs.

The decline in other costs was driven by lower operational losses occupancy costs and banking services.

Our third quarter adjusted costs, excluding transformation charges and reimbursements for Prime finance were $4 6 billion euros.

Transformation charges were 583 million euros, which I'll come back to in a moment.

As Christian mentioned earlier, we will continue to manage all of the components. We can control as we remain committed to the cost income ratio target of 70% for 2022.

Let's now move to slide 13 to discuss transformation related effects.

As mentioned in our recent guidance further transformation measures will result in incremental effects of around 700 million euros, bringing the total expected impact of transformation related effects to $8 8 billion euros.

This quarter, we booked 583 million euros of transformation charges.

Roughly 450 million euros of these charges relate to a contract settlement and software impairments principally triggered by our migration to the cloud.

We have now booked a total of 90% of transformation related charges and we expect to booked most of the remaining charges by the end of this year.

Let's now turn to provision for credit losses on slide 14.

Our stage three provision at 199 million euros is down from 408 million euros in the previously ear.

Reflecting an overall benign credit environment.

On a quarterly basis, the stage III provision increase of 88 million euros was mainly driven by the implementation of EPA guidelines on definition of default leading to ECL model refinements for ifr nine resulting in transfers to stage III predominantly in the private bank.

Stage three provisions remained stable across other businesses.

Overall stage III movements were offset by 82 million euros of net releases in our stage, one and two provisions, including an adjustment of existing management overlays due to the stabilizing macroeconomic environment.

As mentioned, we believe provisions will be below 15 basis points of average loans for 2021.

Let me now turn to capital on Slide 15.

Our core equity tier one ratio decreased by 17 basis points from 13, 2% to 13% over the quarter.

In line with our earlier guidance. This reduction includes around 20 basis points of burden from regulatory changes, notably the implementation of the EBA guideline on definition of default, partly offset by a reduction in our regulatory multiplier and market risk <unk>.

A slight offsetting improvement of the CET one ratio came from a reduction in operational risk <unk> and the net impact of Derisking in the capital release unit versus a small <unk> increase in credit and market risk reflecting client related activity.

With a 20 basis points arent <unk> impact this quarter, we've now absorbed almost all regulatory driven arguably way inflation until the expected implementation of the final framework of Basel III in 2025.

In upcoming quarters, we expect to see business as usual model updates that cumulatively are expected to be capital ratio neutral.

CET one capital was fairly stable in the quarter and now includes a deduction for common share dividends of 641 million euros to date.

We still expect to end the year with a CET one ratio of around 13% as always our capital outlook is subject to timing of pending regulatory decisions.

Over the expected net effect of these decisions in the next quarter is now positive.

Our fully loaded leverage ratio was four 8% unchanged from the prior quarter.

Leverage exposure, excluding FX effects decreased by 6 billion quarter on quarter, reflecting continued deleveraging and our capital release unit, partially offset by growth in net loans and commitments.

Our pro forma fully loaded leverage ratio, including certain ECB cash balances was four 4% and on track to meet our 2022 goal based on the original definition by year end.

With that let's now turn to performance in our businesses starting with the corporate bank on slide 17.

Revenues in the third quarter were just over 125 billion euros, essentially flat year on year, but improved excluding episodic items.

In the current quarter the impact of episodic items was approximately 60 million euros lower than in the prior year.

Excluding these effects underlying corporate bank revenues grew slightly as business initiatives and deposit re pricing more than offset interest rate headwinds of approximately $40 million euros year on year.

At the end of the third quarter charging agreements were in place on approximately 94 billion euros of deposits, which produced revenues of nearly 100 million euros in the quarter.

The corporate bank grew loans by 5 billion euros year on year, mostly in trade finance within corporate Treasury services.

We continue to expect the combined effects of the moderation of interest rate headwinds based on current interest rate curves, the increasing quarterly contribution of deposit repricing as well as business momentum and growth initiatives to support our revenue outlook for subsequent quarters.

And as previously mentioned, we expect our 2021 revenues to remain essentially flat compared to the prior year.

Noninterest expenses decreased by 5%, mainly driven by lower restructuring litigation charges, while adjusted costs, excluding transformation charges improved moderately.

Provision for credit losses was a $10 million or a release in the quarter driven by continued low impairments compared to provisions of 41 million euros in the prior year quarter.

Profit before tax in the corporate bank was 292 million euros, increasing by 57% year on year, while adjusted profit before tax rose by 33% to 317 million euros.

This equates to a seven 8% reported and an eight 6% adjusted post tax return on tangible equity and is the highest quarterly profit before tax since the launch of Deutsche Bank's transformation in 2019.

Turning to revenues by business segment in the third quarter on slide 18.

Corporate Treasury services revenues of 755 million euros grew by 1% year on year.

Charging agreements and other business initiatives more than offset interest rate headwinds and lower episodic items.

Institutional client services revenues of 326 million euros grew by 2% a solid underlying business growth was partly offset by lower episodic items.

Business banking revenues of 174 million euros were 6% lower year on year as business growth and expanded charging agreements were more than offset by interest rate headwinds.

We are continuing to progress the client by client process of entering into charging agreements for the predominantly euro denominated lower ticket size deposits in this area and expect further positive effects in the coming quarters.

I'll now turn to the investment bank on slide 19.

Revenues for the third quarter of 2021 decreased by 6% or 5% excluding specific items.

Favorable performance in our financing and origination and advisory businesses was more than offset by lower revenue in our trading businesses.

Compared to the third quarter of 2019 investment bank revenues are up 34% with both FIC and origination and advisory significantly higher.

Noninterest expenses were essentially flat year over year as were adjusted costs, excluding transformation charges, producing our cost income ratio of 60%.

The investment bank generated a pretax profit of $3 4 billion euros and a return on tangible equity of 13, 5% in the first nine months of the year.

Both material increases on the prior year period.

Our loan balances increased both quarter on quarter and year on year, primarily driven by higher loan originations across the financing businesses.

Leverage exposure was higher reflecting increased loan origination and lending commitments.

The year on year increase in risk weighted assets predominantly reflects the impact of regulatory inflation.

Provision for credit losses of 37 million euros, or 19 basis points of average loans were down year on year to.

The continued low level of provisions benefited from recovery of COVID-19 related impairments.

Turning to revenues by business segment on Trust Slide 20.

Revenues in fixed sales and trading decreased by 12% year on year.

Strong performance in financing was offset by lower revenue in the trading businesses.

Credit trading core rates and FX revenues saw solid client activity, which was offset by a normalization of market conditions and low volatility.

Revenues in emerging markets were higher across all regions with continued year on year growth in both EMEA and Latin America.

Revenues in origination and advisory where significantly higher versus prior year with revenue growth across the franchise.

Debt origination revenues were higher.

Strong performance and leveraged debt capital markets continued more than offsetting a reduction in investment grade related revenues as issuance levels normalized.

ESG continues to be a focus area. We are top five on a fee basis and global ESG related debt products, a 60 basis point market share gain compared with the full year 2020 based on Dealogic data in a market which continues to grow.

Equity origination revenues were significantly higher year on year predominantly driven by piece back activity and market share gains in ipos, particularly in EMEA.

Significantly higher advisory revenues reflected continued growth in M&A activity.

Deutsche Bank advised on nearly twice the number of deals in the third quarter compared to the same period last year.

Turning to the private bank on slide 21.

Revenues, excluding specific items were just under 2 billion euros in the quarter down 4% year on year, but up 1% if adjusted for 94 million euros of foregone revenues from the Bgh ruling we mentioned earlier.

Continued revenue momentum and investment products and mortgages offset interest rate headwinds of approximately 98 million euros year on year.

As indicated we expect these headwinds to be substantially lower next year.

Adjusted costs, excluding transformation charges were flat year on year.

Cumulative savings of around 4% and the private bank direct cost base were partly offset by incremental costs for deposit protection schemes as well as increases in technology spend and internal service cost allocations.

Provisions for credit losses were 15 basis points of average loans were 92 million euros and reduced by 47% year on year benefiting from a release of a management overlay for uncertainties related to Moratoria in Italy, and Spain tight.

Tight risk discipline, and a high quality loan book.

The aforementioned implementation of definition of default model refinements impacted staging but was neutral to <unk> in aggregate.

With this the private bank reported a pretax profit of 158 million euros.

Adjusted for the aforementioned impact from the bgh ruling specific revenue items as well as transformation related effects of 64 million euros. The private bank would've achieved a profit before tax of 276 million euros in the quarter.

On this basis adjusted post tax return on tangible equity was 6% in the quarter and 7% in the first nine months of the year.

Business volumes grew 9 billion euros in the quarter with 6 billion euros of inflows in assets under management and 3 billion euros of net new client loans.

With this the private bank attracted 38 billion euros of net new business volumes after nine months exceeding our full year target of more than 30 billion euros.

Turning to revenues by segment on slide 22.

Revenues in the private bank, Germany would have been up 1% year on year, if adjusted for the temporary impact from the bgh ruling.

Continued headwinds from deposit margin compression were compensated by growth in loan revenues and fee income from investment products.

The business originated net new client loans of 3 billion euros, mainly in mortgages and net inflows in investment products of 2 billion euros in the quarter.

In the international private bank net revenues increased by 6% or 1% if adjusted for specific items.

The business attracted net inflows in investment products of 3 billion euros.

<unk> was especially pronounced in Germany and Italy.

Private banking and wealth management revenues increased by 9% or 2%, excluding specific items and FX translation as investment products and loans grew supported by previous hiring of relationship managers.

Personal banking revenues decreased by 2% year on year as business growth and investments only partly compensated for deposit margin compression.

As you will have seen in their results dws had another successful quarter as shown on slide 23.

To remind you the asset management segment on this slide includes certain items that are not part of the dws stand alone financials.

Revenues grew by 17% versus the prior year, primarily due to a strong increase in management fees of 85 million euros from improvements in equity markets and six consecutive quarters of net inflows.

Noninterest expenses increased by 58 million euros, or 16% with adjusted costs, excluding transformation charges up 17%.

This reflects higher compensation costs, including variable compensation higher asset servicing costs due to the increase in assets under management as well as investments in growth initiatives.

The divisional cost income ratio remained stable at 63%.

Profit before tax of 193 million euros in the quarter increased by 18% over the same period last year driven by record assets under management, resulting in higher revenues.

Adjusted for transformation charges, and restructuring and severance expenses profit before tax increased by 16% year on year to 198 million euros.

Assets under management of 880 billion euros have grown by 21 billion in the quarter driven by net inflows and the positive impact of FX translation.

Net flows in the quarter were 12 billion euros with inflows across all three product pillars active passive and alternatives.

The business attracted 5 billion euros of flows into ESG products during the quarter demonstrating continued momentum in this area.

Turning to corporate and other on slide 24.

Corporate and other reported a pretax loss of 605 million euros in the quarter versus a pretax loss of $393 million in the prior year quarter.

The greater loss was driven by higher transformation related charges of 495 million euros, which were not passed onto the divisions and are captured in the other line.

In aggregate these transformation charges should lower our group adjusted costs by around 150 million euros per year from 2022.

Funding and liquidity.

In the quarter compared to the prior year period.

Consistent with our prior guidance funding and liquidity charges are expected to remain at around 250 million euros in 2021.

The year on year improvement in valuation and timing differences was driven principally by a positive contribution from cross country currency funding structures and interest rate basis effects as well as nonrecurring one off events.

We can now turn to the capital release unit on Slide 25.

The capital release unit recorded a loss before tax of 344 million euros in the quarter, a significant improvement on the prior year quarter.

Negative revenues in the quarter were driven by funding risk management and Derisking impacts that were partly offset by positive revenues from prime finance cost reimbursement.

Adjusted costs, excluding transformation charges declined by 27% versus the prior year quarter, reflecting lower service cost allocations and lower compensation and non compensation costs.

We continue to make great strides in portfolio reduction taking advantage of favorable market conditions to exit a number of aged or concentrated positions.

We also intensified the pace of the Prime finance transition in the quarter and transferred a number of large client relationships.

By the end of October we expect to have transferred about two thirds of client balances.

Taken together this led to a 10 billion reduction in leverage exposure in the quarter and a 2 billion euro reduction in risk weighted assets, including operational risk.

At the end of the third quarter, we recorded capital release unit <unk> of 30 billion euros, including 22 billion euros of operational risk <unk>.

Since the second quarter of 2019, the division has reduced leverage exposure by 76% or 188 billion euros, and <unk> by 53% or 34 billion euros.

We have now achieved our 2022 target for <unk> and expect to be at or ahead of our 2022 target for leverage exposure by year end 2021.

This includes completing the transition of our Prime finance platform. We expect this transition to release over 20 billion euros of incremental leverage exposure in the fourth quarter of this year.

For the remainder of the year, we expect negative revenues in the capital release unit and we are on track to hit the cost reduction targets, we set out at the last investor deep dive.

Turning finally to the outlook on slide 26.

We see continued momentum towards our 2022 revenue ambitions, given the resilience and growth in our core businesses.

Credit risk environment remains supportive and we expect provisions of below 15 basis points of average loans for the full year based on our current views.

We expect macroeconomic growth to slow in 2022 from the exceptionally strong levels this year and CRP levels to partially normalize.

Our credit portfolio quality remained strong and we are well positioned to manage emerging risks, including supply chain disruptions and potential policy tightening.

We're focused on the cost measures, we have underway and by year end, we expect to have booked the majority of our transformation related effects and what has been an investment year supporting our 70% cost income ratio target for 2022.

As I have said before.

We expect to end the year with a CET one ratio of around 13%.

Above our target of 12, 5% despite booking almost all of our estimated $8 8 billion euros of transformation related effects and absorbing substantially all of the regulatory driven inflation prior to the Basel III final framework implementation.

On the leverage ratio, we feel confident we are on track to finish the year around four 5% based on the original definition of leverage exposure that is including all central bank balances.

The CET one capital calculation reflects our common share dividend deduction of over 600 million euros for possible future distributions from the nine months 2021 earnings under the standard ECB rules. This starts us on a clear path to return 5 billion euros of capital from 2022 overtime.

With that let me hand back to you on them and we look forward to your questions.

Thank you James operator, we're now ready to take questions.

Ladies and gentlemen at this time, we will begin the question and answer session.

Anyone who wishes to ask a question May press star followed by one on the telephone.

If you wish to remove yourself from the question queue. You May press star followed by two.

Thank you ladies must be current equipment today. Please state the handset before making your selection anyone you ask a question May Press star followed by one at this time.

And one moment for the first question. Please.

The first question is from the line of Danielle <unk> of UBS. Please go ahead.

Yes, good afternoon, and thank you.

I had questions on revenues.

Deep dive last year, you gave quite some detailed guidance on the outlook for the group and the various divisions and obviously since then a few things changed.

I was wondering whether you could firstly talk about revenues last 12 months I think that's quite relevant metric up nicely. How do you think about that now backward looking and forward looking in terms of mix and.

Where you'll see the key drivers here just a bit of an update the view here and then secondly.

There is a rate headwinds and tailings and if I recall correctly at the recent conference you quantified the headwinds this year, something like $400 million of which more than half is in the corporate bank. If I recall correctly. This should go away this year and then.

Just now you talked about the 150 and $500 million from the yield curve shift can you just sort of add this all up again for me how this will hit the P&L and in which divisions and how we should model that that would be super useful. Thank you.

Thank you Danielle and.

Good hearing you. Thank you for your question, let me take the first part on the General revenue also looking back at last year's Idd performance of this year and then cut.

Where we see tracking to the target, which we have given in last year's Idd and James will then cover in particular the more specific.

<unk> to the interest rates and the headwinds.

Which we had and how this develops.

No.

Let me, let me say again, and let me really reiterate that that we are <unk>.

Very satisfied with the revenue picture, which we have seen since the idd in December 2020.

I think for the last 12 months.

These 12 months have shown.

A very good picture and secondly, and most importantly to us they clearly indicate an underlying sustainability of the revenues and debt in each and every business, but in particular in the investment bank.

If I look back for the last three quarters <unk> be at March be a June or now September and then I take a 12 months look we have shown always.

<unk> $25 billion of revenues for the group, which.

On group level first of all clearly indicates that our view and guidance for 2022 from the lost idd.

Absolutely in reach and then all of you absolutely doable and let me explain that a little bit more in detail when I go through the individual business.

Let's start with asset management.

<unk>, a very robust story not only by the way in Q3, but to your question for the whole year asset management outperformed in Q1 and Q2 now also in Q3 on the back of the rising assets under management stable revenues and overall, we see now kind of a revenue outlook for this year of 2.5.

To $2 6 billion.

That makes me highly confident that we can achieve our goal obviously of the idd of $2 3 billion, which was our goal in the idd.

In 2022 Q4 in our asset management again started well.

So in this regard I can see.

Kind of any downside to our numbers and therefore I see that we have a clear chance to outperform if I compare the next 12 months or 2022 towards the goal, which we have stated in the IBD.

Private bank also here in my view, a very solid story in particular, if you take down your three items into account number one the impact of the German court ruling.

We always said that this is impacting us next to reserves, which we built in Q2, but in the running revenues was approximately $100 million of $96 million a quarter in Q2 and in Q3.

We have achieved now a good degree of content, so that will fall away.

Over the last over the next quarters Secondly, James will outline that also with regard to your second question the headwind from interest rates will be materially lessor in the next year. So we always have to take this into account if we see the running numbers for 2021 in the in the PB.

And lastly, which is for me and for all of Us obviously.

The nice story, the underlying business in particular and in lending and in the investment business is higher than we expected is higher than we planned we over achieved our goal in this regard after nine months, which we had for 12 months. So if I take all these items into account.

It's almost self extraordinary that we get to the $8 3 billion number which we indicated at the idd in 2020.

I E for the year 2022. So also there I do think that we are well on track and if we continue to do the business operating in terms of lending and investments I, even see further upside corporate bank also here.

My first thought was the strong underlying business story, which we in particular I have seen in Q3 I'm quite happy with that what we promised in Q2. We always said Q2 is the lowest quarter Q3 is clearly a recovery and that on the back in particular off a stronger financing and credit business in Q3 and looking at the <unk>.

German economy looking at the mood in the corporate and our clients I can see that demand will continue also in Q4 and also in 2022 now if I now add to this the interest rate headwinds for SCB, which almost fully fall away in 2022, and you take into account the quite successful story.

We have on the deposit repricing.

Which brings on an annual basis, almost $400 million of revenues.

I think also there is a clear story and a clear bridge to the IBD targets for 2022, a $5 5 billion.

So also here I am confident that we can achieve that and don't underestimate that two rating upgrades in particular, two rating upgrades of Fitch and Moody's obviously helped to business in particular that is the IV and I'm coming to that in a second but also the corporate bank. So also there is upside.

So all in all in the in the so-called three stable business. We have either hit the plan are in line with plan or we even overachieve and I can't see that changing for the next 12 to 15 months now let's come to the IV.

Also there.

Thank.

You should have my impression and that is that Q3 is nothing more than clear evidence that our investment bank is clearly set up to our strengths at Deutsche Bank and that we have achieved one thing which was always questionable.

But that is sustainable growth.

And I can't see that actually stopping and now if we look at the last 12 months numbers for the investment bank and compare that to the Idd planned for 2022, then we targeted in the <unk> for 2020 to $8 6 billion for the last 12 months in Q1.

In Q2 and in Q3, we were.

In between $9 7 billion and $10 billion, even if we now say that was in particular, a high market volatility in Q1, and it was not normalize but we saw the normalization already in Q3.

These numbers also.

Firstly, telling us the story and if we then compare that to the $8 6 billion number which we target for 2022.

We simply believe that this number is achievable why because I look in today's <unk> pipeline at the same four financing looks very robust looks very healthy and therefore I have a view obviously on the fourth quarter and also on the start of 2022.

The slate the rating upgrades by Fitch and Moody's, helping enormously I already told you in the previous discussions that clients are coming back to Deutsche Bank based on our recovery, but obviously two rating upgrades from two agencies helps a lot and we see.

Other positive evolution in this regard October activity is very robust across the business in the IV.

And also the overall momentum with making good hires clearly tell me.

There is.

There is some momentum we need in order to achieve our $8 6 billion goal.

In 2022 this year, we will be well above 9 billion kind of in line with last year potentially even some upside. So we have the right setup. We have the right people, we have the right momentum and therefore, if we cannot achieve the $8 6 billion next year in that business I would tell you I would be severely disappointed and I.

I can't see that happening. So there is upside in this number so if you add this all together.

I think we a show sustainability of the revenue momentum and B that we are highly confident to achieve that what jameson I indicated over the last quarters and that is a $25 billion or better number next year in revenues.

And then <unk>.

James on the interest rate side, we've talked a lot about the the headwinds we've been fighting through at the group level. This year. It will have represented over $700 million.

The 400 million number you remember is for the private bank alone.

And Theres about another 250 in the corporate bank and the rest is in capital investments in IP.

So it's a considerable headwind.

In the third quarter.

It's about ratable, so we had about $100 million year on year headwind in the private bank from interest rates deposit hedges, if you like and about 50 and corporate bank. So that's playing through our numbers, we talked about $150 million of upside.

In 'twenty, two and a lot more as time goes by over 525 in our prepared remarks that reflect the change between today's interest rate curve.

And the curve, we built our last year's plan on.

It splits about 50 50 based on the keys between between the private bank and corporate bank, but it of course underlies our statements that the <unk>.

Interest rate headwinds will more than half.

For the PV next year and be effectively neutralized for the corporate bank next year.

Thank you so it's not additive so the $150 million I shouldnt adder to the $700 million.

Just kept us right now.

No it is.

It is $7 million to $700 million behind us.

Behind us.

Think about the $150 million as part of the reason.

Christian went through in the businesses, we see support for our revenue outlook for next year.

Yes.

Yes.

Thank you very much.

Thank you Daniel.

The next question is from the line of Andrew Lim Societe Generale. Please go ahead.

Hi, good afternoon, thanks for taking my questions.

It seems like the bulk of the 700 million transformation costs were taken in the <unk>.

I was just trying to marry that up with the transformation.

Guidance on slide 38, how should we think about.

The quantum of transformation costs in the fourth quarter.

And then subsequent quarters in 2022.

That's my first question.

And then.

Secondly.

That's been a lot of.

Speculation.

About how you might expand the DIY business.

By byproducts and also geographically.

Perhaps maybe.

It may be front running what happened in March and your depot I thought maybe you can give a bit of color about your thoughts there whether it be commodities trading oil.

A bigger footprint in the U S. For example, any segment.

Sure Andrew It's James I'll take the first one yes, you refer to slide 38, where we where we work to give you. The best view, we have an unexpected future transformation charges.

Just for Q4 purposes, I would build about 500 into your models split between transformation charges.

And restructuring and severance.

And that would leave as you see on the page here about 300 million still to be booked in 2022 of.

Of course, we're doing everything we can to minimize the 'twenty two burden and book what we can.

'twenty, one, but it depends on the visibility and the accounting treatment of those items, but if you just do the math on it.

Think about 97% of the total $8 8 billion is booked by the end of the year.

And Andrew.

So sorry.

That point, sorry about that but the two 300 million for 'twenty two.

The more front ended.

The year rather than spaced out.

That's sort of ratable based on what's what's going on and still in the books next year I wouldn't think of it as front ended but.

But again, we're trying to minimize it I would think of it as you can nearly disregard it next year.

We look forward to not really talking about it but on consistent.

Accounting definitions, we trace it all through next year and the full program.

Great. Thanks.

And Andrew to your second question on on <unk> and the speculation let me be very clear.

We want to grow there, where we have decided to be in I think for the last two and a half years. We have clearly shown that these are the strengths of Deutsche bank be it in those areas. We are in the origination advisory business the financing and the trading business now within that obviously, we are doing further <unk>.

<unk> for instance, in the further franchise built and call rates and our flow credit development.

Obviously, we are investing quite heavily in our workflow solutions in particular in the FX business. We are as I said in my in my first answer that we have a very good momentum and hiring bankers in those industries, where we think we have the expertise and our clients are concentrated so that.

We can obviously generate more more mandates in the origination and advisory business and again, we see the evidence and then obviously we are trying to grow in the whole field of ESG and also there we have seen good momentum everything else is.

Not in a in our view at least at this point in time, because we believe we have found our spot we grow there we take market share there we defend it even a normalized market and thats what.

What we are all about to do.

Thanks Christian.

The next question is from a line of Nicholas pain of catalyst Deborah. Please go ahead.

Yes. Good afternoon, thanks for taking my question.

First one would be on the cost and looking at your 70% cost income ratio target for 2022, and your current run rate of $19 billion adjusted cost ex transformation charges.

Where do you see the biggest improvement drivers to reach your target and how much of that is already baked into your current cost run rate.

And the second question on distribution, because Youre remarks $5 billion for distribution are talking 2022.

I just want to know what the timeframe for this to happen should we think about 2025 and the Finalization of Basel III the good proxy.

Thank you very much.

Sure Nick a lot James.

Look we are very focused I have to stay laser focused on.

Capturing a run rate in Q4, and then through 2022 that supports our targets.

We've been working on that as you can imagine for quite some time.

And putting in place the measures as we've described both last quarter and this quarter that can help to drive that.

I think if you if you if you look specifically at areas that drive the run rate from now down by by Q1.

It'll be particularly in the technology area in part, reflecting the charges we took this quarter.

But also reflecting the benefits of some of the investments and if you like the roll off of things we've been working on for some time.

We're also close to crystallizing.

Some expense saves in our infrastructure areas again, as we've completed projects and move to.

You know too.

You type of state and some of the areas, where we've been focused on remediation for for the past several years.

Then there is the real estate, we've talked a fair amount about real estate, which contributes next year.

Significantly.

And and as you've seen we will have spent altogether about $600 million of.

Transformation charges in the real estate area.

We're really pleased with what that's delivered in terms of the footprint we operate within.

<unk> future proofed portfolio from here and there are some benefits flowing through already in the first quarter from that including incidentally ending the double rent period in New York. So so lots of things that were sort of tracking through in the run rate as we drive towards our 22 views.

On distributions.

It's frankly too early to say.

We're working through that as we finalize our planning finalize that.

Results for 'twenty one.

I think we are confident about our ability to move to meaningful distributions next year, which has been our plan really since we embarked on this program back in <unk> back in 2019.

And I think that the deduction from CET, one of $640 million that we have today.

Is clear evidence of the of our wherewithal our ability to support distributions next year. It's just too early to say, how much and what form it will take.

Alright, thank you.

The next question is from the line of Jeremy <unk> of Exane BNP Paribas. Please go ahead.

Thank you just a couple of questions. Please following up on things that you touched on.

So the first one was just coming back on the bgh.

It was a little surprised that it's unchanged quarter on quarter I thought we would be seeing some benefit already because it sounded like you were already implementing new contracts with customers a quarter ago. So I thought we might be seeing some benefit come through.

Wonder if you could sort of talk about the timing in particular.

Whether we expect that to be back to normal and for Q1.

Or how much longer you think it might take to get those revenues back on stream.

And then the second question just circling back to the Investor Deep dive you scheduled in March next year I was just wondering how you see the balance of that in terms of starting to talk about plans beyond 2022.

Still focusing on how you achieve the 2022 targets.

Sure Jeremy I'm happy to go into that so first of all on the on the bgh ruling.

The client consent that we send out all had October 1st has an effective date.

And that's for both legal and operational reasons. So they the two thirds of responses that we've gotten allows us to switch those on from the beginning of this month and the additional responses we get in Q4 equally will be in that case backdated.

To October one.

So if you assume that will be a let's say an 80% response rate then in round numbers $80 million of the lost $100 million will be back in the run rate this quarter.

And we are and we would work to then close out the rest.

Time goes on some of that may be moving accounts out of the bank. Some of it may be restructuring our relationships with clients in other ways.

But we have I think a pretty high degree of confidence at this point that 80 of the 100 will be back.

The delay as I say was was intended from the very start when we first gave guidance on this in June reflected the effective date.

On the Idd Christian may want to add to this but we want to talk about the things we've done the trajectory that remains to be achieved to 'twenty two.

Certainly that's part of our agenda, but I think the larger part of the agenda will be how we have positioned the company through this transformation.

For strategic and financial performance.

From 'twenty two onwards.

Theres nothing to it.

Okay I look forward. Thank you.

The next question is from the line of Magdalena Stoklosa of Morgan Stanley. Please go ahead.

Thanks, very much Scott.

I've got three questions if I may.

I'll run through them quite I'm quite quickly.

The cost reductions for next Gen core.

Reductions for next year broadly imply youre right Jeff.

Cost being down by one point.

And of course, you've mentioned some of the things that are kind of falling off the IP project real estate savings and so forth.

If you look at it slightly differently.

The biggest delta year on year between 'twenty, one 'twenty two is effectively into place.

And the private bank.

Top two.

Particularly about the private bank.

What's that.

There are a couple of things, which are still which are still undergoing particularly Germany. How should we think about that cost base next year, but of course also rolling rolling forward. They aware and useful of course about bank closures, you've got some mega project effective Av.

Putting postbank.

The Deutsche Bank.

Together that has been kind of going on for a good CEO, how should we think about that cost base.

Forward.

Further out than 2002.

Second question is really about your AUM rotation, because youre showing very.

Very different numbers in terms of inflows into your wealth investments product can actually quarter on quarter and I'm just curious how much of it is.

Activity, a deposit flow versus just an investment flow.

No.

Are you actually see that that.

That deepa rotation into into investment products and my last one is really about <unk> because it is a huge thing for you you've talked about this within the context of the group just talked about that within the context.

I E.

Can you see the biggest opportunity because of course at the moment the biggest market issuance of course, it's happening in Europe, but how does your footprint in Asia and U S responding to that too.

Sure. Thank you for the questions mathematically a lot to get into there.

Youre right that on a segment disclosure perspective that there are big moves in CRE. You also PB also elsewhere by the way as the as the infrastructure cost base, which can capsulate not just <unk>, but other support functions as we continue to harvest cost savings there.

It's invisible and all of the functions all of the segments.

<unk> you.

We'd be moving down from about $1 2 billion. This year based on our idd numbers last year to $800 million. We think we will beat that at this point when we when we talk to you again in March will be better than that that target when we get there.

PV, Germany as you say is a big part of where our efforts are focused at the moment.

You'll have seen us announce and by the way taken relatively significant restructuring and severance charges in the PV area, but announced a series of Workers' Council agreements.

Balance of interests and also actions whether its head office restructuring operations restructurings branch reductions and alike and Theyre all.

Being executed as we as we speak it is a gradual decline. It takes time you do it sort of one by one in terms of both employees, leaving the platform branches beings being shot and other actions being taken but we do think we're on a we're on a good glide path there.

And to the earlier question.

From Andrew.

The transformation costs will be will be almost entirely behind us to support that going forward.

The technology piece in PBC, Germany will still be a burden next year.

And Thats, what we updated you on last December relative to our earlier plans there we're engaged in a significant.

Exercise of our core bank conversion to put the postbank onto the business onto the same systems as the existing Deutsche Bank systems that investment is ongoing next year and the benefits from that then are visible and only in 'twenty three but.

But we think we have that sort of <unk>.

Funding in our in our plans and we're executing on that and as you'll recall the Postbank systems sale was one of the actions we took to ensure that we were well prepared.

On the AUM rotation, it's interesting we've been looking at that disclosure, what you see as increases in AUM and new inflows in in PB, but relatively static levels of deposit balances that are in accounts that support investment activity, which in a sense.

As bullish because it means that the available.

Deposit funding that our clients have to put to work in investment products is still there is sort of unchanged.

We're finding that discussion to be a very positive discussion today as we go through for example, repricing discussions talk about again the.

The need to put in positive consent in those businesses. It creates if you like a sales opening to have a dialogue with our clients about moving more into investment products. So we see it as a.

You know I don't want to say, it's a limitless opportunity, but it is it is it is a significant opportunity as the German saver continues to react to better return opportunities outside of the deposit products and frankly, the banking industry as a whole re prices the deposit product to make it to make it.

Harder to harder to hold.

And to your second question.

Look ESG is is overall.

And all of you a material opportunity for us.

And first of all because that is one of the few areas, where Europe as a region is overall, a leading and obviously that place then into our card because the whole transformation.

Into a green economy needs to be finance, and obviously, then European banks have a big chance and should tap into the opportunity to get a big part of this so I would I would actually describe it in kind of four areas, where we can succeed and where we do see actually a progress.

Number one it's in the issuances and particularly on the capital markets business Youre right. Europe is leading there I mean, we have one of the leading market positions in the issuance. This not only in terms of green bonds, but in particular also bonds, which are attached to a social housing.

Just the mandates we also and where we are public with which we have shown in October show, what the market position of Deutsche Bank is but with the knowledge. We have now accumulated with the global approach in which we are driving that at each and every business, but with the central function kind of overlooking and coordinating.

We have great success now also in the U S and in Asia. So I think that what we see in Europe, we can repeat and we see that in the numbers.

That we actually have good progress also.

In the other two regions.

Secondly, we are not talking a lot about this but we should talk more about this the demand of our wealth management and private banking clients in ESG investments is simply huge and you'll see it in the dws numbers, but also in the west management numbers.

Ask and when our assets under management are rising the share of ESG bonds and sustainability bonds is baked. If you then have on the other hand also the origination in house on the investment banking side, obviously again, a big opportunity for us.

The discussions with each and every corporate side be it in Germany or in Europe is always centered around sustainability and how we as a bank can finance the transformation of the corporate XD into a green economy.

And that is that also includes not only the financing in terms of traditional parts and how we can help you declines.

But also we are offering new products asset as a service we discussed it in some of the previous calls, but actually a service from us that corporates and clients are only paying extra for what they really used.

Oh, what they use in their day to day business is actually a big contributor also in terms of the sustainable economy and what we can offer from a bank so new products are rising.

And last but not least don't under estimate actually the mandates we have on the advisory side because a lot in particular, if you look at the goats.

Set ourselves for the economy, but also here in particular for Europe, a lot of corporates are thinking in terms of M&A, what they can dispose what they can buy how would they can reset up the group and that is again.

Something where we as a bank want to be close to or close to so a lot of mandates, which we are winning are actually on the back of ESG mindset and ESG thinking of sustainable if you're thinking of our corporate clients and therefore I do think it's not a surprise that at the end of the third quarter. We are spending I think at 127 billion or 126.

In terms of the finance and investments on our go to 200 billion by the end of 2023, we have on average we have seen 25 billion of net new financing and investment in that business. So one of the key themes, which we are following up and which will also shape the future.

And also our business strategy going forward.

Thank you very much.

The next question is from the line of Stuart Graham of Autonomous Research LLP. Please go ahead.

Hi, Thank you for taking my questions I had two first can you tell us what the zim impacts was in FIC revenues in Q3. Please and then second you've talked about the 500 million revenue uplift from rates, which I guess links in deal rate sensitivity slide on slide 41.

My question is how does that take account of the deposit charging fees on slide 39, I guess, if interest rates actually go up one day, you get the higher NII from slide 41, but you lose the fee income on slide 39. So is that assumption correct and is the $500 million you talked about is that gross or net of loss deposit charging fees in due course. Thank you.

Thanks Stuart.

Interest rate question is a really interesting one.

Let me start with them it was about $100 million in the quarter of revenues recognized.

It's brand therefore at relatively similar rates to the.

The first couple of quarters of the year in terms of the incremental call it 5% to revenues.

Actually in this quarter there were some offsetting items in the credit trading businesses that that.

<unk> went the other direction. So I wouldn't think of this quarter's credit performance as necessarily being out of line with what we've what we'd see in a typical quarter in normalized market environment, but that's that's the answer on zim.

Yes.

So, yes, we were showing the interest rate sensitivity.

In the first and second years to 100 basis point parallel shift.

The effect of deposit repricing in a sense is to make those liabilities floating rate.

So a significant part of the rate sensitivity that you've seen come out of our disclosures over the past couple of years has been the impact on that interest rate risk.

<unk> of taking a large portion of the liabilities and making them floating.

What isn't reflected in our models at this point is behavioral change so.

Really interesting question is.

As we potentially.

Lock in rates with zero being the cap in the same way it was for far too long with a floor.

Our rate sensitivity ultimately would be much higher than we're showing on the page.

And so while we would lose some revenue it's baked into this between minus 50 and zero.

We think the upside leverage above zero is in fact, much higher than you'd be showing on the page.

I hope that gets to your to your question.

This slide is the net interest income slides, so how do you capture that.

The element and it's essentially captured in it and at this point the fee piece on the PV side is relatively is a relatively small portion of it. So this is the net interest income impact I think you can for practical purpose disregard any any fee income impact at this point, okay alright. Thanks.

My pleasure.

The next question is from the line of Tom <unk> of <unk>. Please go ahead.

Hey, guys a couple questions for me please.

Dws has had some recent travels around ESG disclosures I was just wondering if that could be any playback.

And their wider business.

The regulators reached out.

What is the reaction amongst clients aim and then on your corporate lending growth, which you've been picking up.

Margins also certainly dominated between the front and back book is mainly converged.

Is that mainly the fact, we found a slower than revenues.

So I, just really just a function of volume price rates.

Repricing efforts and just on that do you think there is an opportunity to improve the spread on corporate loans or does that competitive environment to stop that from happening and maybe just sneakily follow up to that.

So to your point around then you said there was some offsetting items in the trading.

What sort of things well day. Thank you.

Okay.

Look on the Dws, you will understand that we.

And we will.

Not respond to that we can only refer to the clear statement dws has given in public and rejected the allegations I think the numbers in Q3 for the DB group and to which I just repeat it the 127 billion shows that there.

There is no negative impact on our business again, I think the dws business performance in Q3 also speaks for itself.