Preliminary Q4 2021 Deutsche Bank AG Earnings Call

Ladies and gentlemen, thank you for standing by I'm Stuart Your chorus call operator, welcome and thank you for joining the Deutsche Bank Q4, 2021 analyst call.

Today's recorded presentation, all participants will be in a listen only mode presentation will be followed by a question and answer session.

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To turn the conference over to you Wanna patronage head of Investor Relations. Please go ahead.

Yeah.

Thank you for joining us for our preliminary fourth quarter 2021 results call as usual, our Chief Executive Officer Christian savings will speak first followed by our Chief Financial Officer, James von Moltke. The presentation as always is available to download in the Investor Relations section of our website <unk> Dot com.

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 your honor a warm welcome from me as well.

To be discussing our fourth quarter and full year 2021 results with year to date.

We are now almost three quarters of the way through the strategy, we launched in 2019.

The progress we have made shows 2021.

It's a pivotal year in this transformation journey.

And this is evident across the performance of all our businesses.

Firstly, we have demonstrated the strengths of our franchise.

Since the start of our transformation our franchise.

One more then prove its resilience in fact, it has grown beyond our original expectations.

And of course, the market environment was more supportive.

But it is a fundamental strength of our client relationships, which we have increased.

In light of our strategic focus on core businesses.

This is reflected in the market share gains we've made in key businesses over the past two years.

And we remain encouraged to see.

Client engagement continuing to grow.

We delivered revenues of $25 4 billion and the full year of 2021, an increase of 6% year on year, and we expect to grow from this space.

Secondly.

We continue to work intensively on transforming the bank.

In 2021, we accelerated our transformation and position the bank for the most important measurement year of our compete to win strategy.

Having booked transformation charges of 1 billion euros, and approximately 500 million of restructuring and severance in 2021.

We have now recognized 97% of our total anticipated transformation related effects.

Our transformational efforts and investments over the past years are paying off and will help drive reductions in our expenses in future quarters and years.

We continue to be absolutely focused on capturing these benefits through further cost saving measures.

So we remain confident we are on the right path to our 70% cost income ratio.

We also delivered on another important milestone within our capital release unit by completing the transition of Prime finance to BNP Paribas.

Deleveraging exceeded our plans and our leverage exposure in the Sia U is down to 39 billion euros from 72 billion euros at the end of 2020.

And down 84% since we launched our strategy in mid 2019.

And finally transformation delivered significantly improved profitability in 2021.

Our pre tax profit of $3 4 billion euros more than tripled compared to 2020, despite higher transformation charges.

We reported net profit of $2 5 billion euros.

More than four fold increase compared to 2020.

And Deutsche Bank's highest full year profit since 2011 once again, despite absorbing additional transformation charges.

As we announced yesterday evening.

This organic capital generation.

Along with our confidence about our future trajectory.

Allows us to distribute 700 million euros of capital to our shareholders.

The first step to our commitment of 5 billion.

Now let me take you through the financial highlights of what we have achieved in the 12 months of 2021.

<unk> 2019 on slide two.

We have grown revenues and reduced expenses each year since 2019.

While at the same time executing on our transformation.

We again delivered positive operating leverage at group level in 2021, and reduced our cost income ratio from 88% to 85% year on year.

2021 provision for credit losses declined 71% year on year to 12 basis points of average loans.

This reflects the benign credit environment.

Also the strengths of our conservative loan book and sound risk management.

Return on tangible equity for the core bank is 6% for the full year.

And 8.5% on an adjusted basis.

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

Our focus on transformation has driven steady improvement in underlying profitability, which can be seen on slide three.

In the core bank we.

We have more than doubled our adjusted profit before tax since 2019.

Including an increase of 46% in the last 12 months.

Our improved profitability was a major driver for the three rating upgrades. We received in 2021 the latest by S&P in November .

This is not only a recognition of our transformation success.

But it also further support our client engagement and revenue momentum.

The capital release unit delivered another year of significant portfolio reduction and we continue to be committed to minimizing the P&L impact on group profitability.

Including through future cost reductions.

A key driver of higher profitability as well.

Our sustainable revenue performance, which I will now turn to.

On slide four.

Revenues, excluding specific items in the core bank stood at $25 3 billion in 2021.

<unk>, 5% compared to 2020.

And 11% since 2019.

Revenues in the corporate bank were flat year on year as underlying business growth and continued deposit repricing offset interest rate headwinds.

And we are particularly encouraged to see growth accelerate this quarter.

And the investment bank revenues increased 4% year on year compared to a strong 2020.

On a higher contribution from origination and advisory while fixed income and currencies revenues were essentially flat.

The private bank strong business volume more than offset interest rate headwinds and the impact of foregone revenues from the bgh ruling in April .

As a result.

Revenues were stable year on year.

Overall, we saw strong underlying growth in client lending. Our total loan book is currently at 476 billion up 10% year on year with all these business contributing to this lending momentum.

Asset management delivered significant revenue growth of 21% year on year, driven by strong management and performance fees assets under management closed at a record 928 billion.

Group revenues excluding specific items.

Were $25 3 billion, a 9% increase from 2019.

While we certainly benefited from favorable market conditions and some business areas two.

2021 revenues also demonstrate our ability to offset headwinds in light of our business mix.

And thus 2021 revenue.

<unk> more than credible base to grow from here.

And this is confirmed by the momentum carried through the first weeks of 2022.

Now, let me turn to costs on slide five.

We have reduced our cost income ratio by 24 percentage points since 2019 with noninterest expenses declining by 14% to $21 5 billion euros over two years.

Year on year 2021 expenses were up 1%.

The increase reflects higher transformation related effects of $1 5 billion up 21% year on year.

Predominantly driven by transformation charges of 1 billion euros more than double the amount we booked in 2020.

At the same time, our adjusted costs declined by 1%, despite higher volume and performance related expenses, reflecting improved business performance.

2021 was an investment year, and we made significant improvements in technology.

These efforts have already delivered savings in 2021, However, we made a strategic decision to reinvest them to support lower costs in the future.

We have also worked to deliver on the commitment to invest in our control environment James.

James will provide further detail on how our efforts will help us to achieve lower costs by the first quarter of this year.

I would now like to highlight the progress made in our core businesses on slide six.

The corporate bank continues to execute on its growth strategies as evidenced by increasing loan and fee income growth in the fourth quarter.

About 100 billion of deposits within the scope of repricing agreements and this contributed 109 million euros in revenues to our fourth quarter results in more than $360 million.

For the full year.

The refocus of our investment bank on its core strengths has paid off.

We have delivered year on year revenue growth in origination and advisory for eight consecutive quarters as well as market share gains in FIC.

And demonstrating our joined our platform.

We are the leading bank for EMEA investment grade debt issuance and the leading market maker in European government bonds in the fourth quarter.

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

Business growth of 45 billion euros in 2021 outperformed our full year target of over 30 billion euros by half.

We have made significant progress in optimizing our distribution network, including the closure of more than 180 branches during the year.

In asset management assets under management reached a record level of 928 billion euros.

Driven by strong net inflows of 48 billion last year.

Accordingly, 40% came from ESG product, where we continue to work to cement our leadership position in this field.

The dynamics in.

All four core businesses showed that our refocused business model is paying off and that our clients are supportive and belief in our capabilities.

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

In 2021, our accumulative ESG financing and investment volumes stood at 157 billion euros.

This is an ambition of 100 billion excluding dws.

And this puts us well on track to meet or likely exceed our year end 2023 target of at least 200 billion euros.

We grew our market share in issuance of ESG products, which increased from two 2% in 2019 to four 6% in 2021.

Sustainability is a topic, which continues to drive client engagement.

Allowing us not only to innovate new products.

But to also provide advisory services validating our client centric approach.

Our commitment to sustainable financing as reflected in our actions.

We are a founding member of net zero banking Alliance and we joined the Forest Investor Club as a founding member and the United States.

Before I hand over to James.

Let me summarize our progress this year on slide eight.

The hierarchy of our 2022 priorities remains unchanged.

We are on track to meet our targets of an 8% post tax return on tangible equity supported by a 70% cost income ratio.

We are delivering resilient revenues and our business was stable to offset many of the headwinds we faced in 2021.

Our core businesses are performing in line with or ahead of our expectations.

That positions us to deliver on our revenue ambitions in 2022.

We continue to be absolutely focused on cost saving measures.

In 2021, we intensified our transformation efforts and took further steps to drive long term efficiencies.

We executed on a wide range of the transformation measures, we began to formulate three years ago and as you know we initiated additional measures in 2021.

Having put 97% of the expected transformation related effects behind us.

We have created a clear path to our 2022 cost income ratio target.

And importantly, the benefits of these efforts are not limited to 2022.

Our relentless focus on executing our transformation agenda means we navigated the bank to structurally lower costs.

But also positioned it to capture future revenues opportunities.

These strong foundations will drive steadily increasing profitability.

Which will lead to future improvements in shareholder returns.

Our intention to distribute $700 million for 2021 is the start of our commitment to distribute the 5 billion euros of capital we communicated previously.

And we look forward to discussing our future plans with you at our next Investor deep dive in March.

With that let me now hand over to James.

Thank you Christian let.

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

We generated a profit before tax of 82 million euros or 527 million euros on an adjusted basis.

Total revenues for the group were $5 9 billion euros up 8% versus the fourth quarter 2020.

Net interest income this quarter was roughly $2 9 billion euros up approximately 150 million euros on the third quarter.

The increase was driven by the continued growth in our loan book along with the reduction in our long term debt and deposit funding costs.

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

Turning to costs noninterest expenses were up 11% year on year. This quarter included 204 million euros of transformation charges broadly flat year on year, and 251 million euros of restructuring and severance up 46% compared to the prior year as well as a higher litigation charge.

Adjusted costs, excluding transformation charges were up by 6% driven performance related compensation expenses, which I will detail below.

Our provision for credit losses was 254 million euros, or 22 basis points of average loans for the quarter.

Tangible book value per share was <unk> 24 euros and 73.

Up 27 on the quarter and 7% for the full year.

In 2021, we generated a pretax profit of $3 4 billion euros or $4 8 billion, excluding transformation related effects and specific revenue items more than double the adjusted result in 2020.

Return on tangible equity for the group was three 8% for the full year.

Our full year effective tax rate in 2021 was 26%.

Excluding the positive deferred tax asset valuation adjustment of 274 million euros during the quarter, our full year tax rate would've been 34% in line with previous expectations.

Let's now turn to the core bank performance on slide 10.

Core bank revenues were $5 9 billion euros for the quarter up 7% on the prior year quarter.

Noninterest expenses were up 12% for the quarter. This.

This included a 51% rise in restructuring and severance expense and the aforementioned increase in litigation costs.

Adjusted costs, excluding transformation charges increased 8% year on year.

This takes our profit before tax to $434 million euros down 27% on the prior year and the adjusted profit before tax was 860 million euros, 13% down on prior year.

Our adjusted post tax return on tangible equity for the quarter was broadly flat year on year at 6%.

Looking at the results on a full year basis revenues in the core bank were $25 4 billion euros up 5% compared to 2020.

Noninterest expenses increased 4% year on year, mainly due to the additional transformation charges and adjusted costs, excluding transformation charges increased 2% on higher uncontrollable costs volume related costs and higher compensation, reflecting our business performance.

Cost income ratio was 79% for the full year.

And as Christian mentioned, our adjusted return on tangible equity for the core Bank was eight 5% for 2021.

Let me now give you some additional details on how the changing interest rate environment will impact our business on slide 11.

As we discussed last quarter, the interest rate environment negatively impacted our 2021 revenues by about 750 million euros in comparison to 2020, mainly in private bank and corporate bank.

Despite this drag these businesses were able to maintain a broadly stable revenue base as a result of lending growth fee income and deposit repricing.

We expect the interest rate impact along with the annualized <unk> of deposit pricing actions to swing to the positive in 2022 and to support revenue growth from this point on if current forward rates are realized assuming a constant balance sheet.

Cumulatively, we would expect this impact to reach $900 million euros per annum by 2025.

As short end rates rise, we will see a reduced drag from our remaining floor deposits and rises in long end rates will result in hedge portfolios on average being rolled at rates higher than the positions they are replacing.

We remain positively geared to rate rises above current forward levels from improving deposit margins.

This additional upside is not reflected in our plan and we have provided you with the estimated impact on our revenue base corresponding to a 25 basis point parallel shift of interest rates across our key currencies at the bottom left of the slide.

The sensitivity is likely conservative given the opportunities for margin expansion that will arise as rates rise, particularly as euro rates Cross zero.

Just to note both the expected tailwind from current forward curves and the sensitivity to additional moves in key rates reflect the impact on our interest rate sensitivity of deposit repricing actions.

That is these liabilities are treated as floating rate in our modeling.

Let's now turn to costs on slide 12.

In the fourth quarter adjusted costs, excluding transformation charges increased by 262 million euros or 6% year on year and 3% excluding FX effects.

FX variances represented approximately 100 million euros split roughly equally between compensation and non compensation costs.

Adjusted for FX compensation expenses increased by 150 million euros compared to the prior year.

This includes a 100 million euros of adverse one off effects as well as 150 million euros, driven by variable compensation, reflecting better performance in the current year competitive market pressures and a downward adjustment we took in the prior year recognizing the need for moderation in the pandemic environment.

Remaining compensation costs reduced by approximately 100 million euros or 4%.

Non compensation costs, excluding FX were flat.

It costs, resulting from the execution of our it and platform strategies were offset by lower professional service fees and occupancy costs.

Our fourth quarter adjusted costs, excluding transformation and reimbursements for Prime finance were $4 9 billion euros Tran.

Transformation charges were approximately 200 million euros, which I will come back to in a moment.

If we look at the full year costs on slide 13, adjusted costs, excluding transformation charges decreased by 2% year on year or $319 million euros FX did not have a material impact on a full year basis.

Compensation expenses decreased by approximately 60 million euros compared to the prior year, including a total of around 300 million euros of adverse one off items and net performance related adjustments and variable compensation, mostly reflected in the fourth quarter.

The remaining compensation costs reduced by approximately 350 million euros or 4% year on year.

Non compensation costs decreased by 260 million euros or 3%.

Lower costs, primarily in real estate professional services and operational losses more than offset increases in it spend and staff related non compensation costs.

Full year 2021, adjusted costs, excluding transformation charges and reimbursements for Prime finance were $19 3 billion euros and transformation charges were 1 billion euros.

And as Christian mentioned earlier, we will continue to manage our expenses towards our cost to income ratio target of 70% for 2022.

We will provide further detail on our expense development in 2022 on 10th of March.

Let me give you the main building blocks that will reduce our adjusted costs, excluding transformation charges and bank levies in the first quarter of 2022.

We aim to reduce costs by around 450 million euros quarter on quarter.

The reductions are expected to result from run rate effects and the absence of one off impacts in the following three categories all of which contribute roughly equally.

The first category is the run rate benefit of head count reductions in late 2021 with the full impact visible in the first quarter as well as normalized variable compensation accrual and the absence of one offs.

Then we will have run rate reductions from the completion of control.

Control and remediation projects.

And finally, the last category relates to savings in real estate staff related non compensation and various other non compensation costs.

Keep in mind that the bank levies are booked in the first quarter, which we currently estimate at around 600 million euros.

Let's now move to slide 14 to discuss transformation related effects.

This quarter, we booked 456 million euros of transformation related effects of these 204 million euros related to met transformation charges of which approximately 100 billion related to real estate actions and 100 million euros of impairments related to our migration to the cloud similar to the third quarter.

The 251 million euros in restructuring and severance expenses, we booked this quarter will support future reductions of our workforce.

All of these changes will enable us to progress transformation and drive savings in 2022 and beyond.

This brings the total of transformation related effects, we booked since 2019 to $8 4 billion euros or 97% of the total we anticipate through end 2022, and we expect to book the final charges in 2022.

Let me now turn to provision for credit losses on slide 15.

Provision for credit losses for the full year of 2021 was 12 basis points of average loans or 515 million euros in line with previous guidance of less than 15 basis points.

The low level of provisions in 2021 was supported by a strong economic recovery, particularly following the easing of various pandemic related restrictions during the year.

But importantly, it is also a reflection of our conservative balance sheet and strong risk management.

Stage, three provision improved while stage, one and two provisions normalized compared to the prior year.

Smaller stage, one and two provision releases reflect the stabilized macroeconomic environment and the reduction of management overlays.

We expect credit loss provisions to be around 20 basis points of average loans for next year.

This reflects the expectations of a slowdown in macroeconomic growth in 2022 from the exceptionally strong levels last year.

Let me now turn to capital on Slide 16.

We finished the year with a common equity tier one ratio of 13, 2% in line with our guidance and up 22 basis points compared to the prior quarter.

CET, one capital increased in the quarter, adding 17 basis points to our CET one ratio as improvements in our valuation controls framework led to a release of regulatory capital deduction.

Fourth quarter earnings were principally offset by the deductions for dividend and 81 coupons.

Higher risk weighted assets driven by core bank business growth, mainly in credit risk were more than offset by lower market and operational risk weighted assets.

CET one capital now includes a deduction for common share dividends of 689 million euros for the full year, meaning that the distribution plans, we announced yesterday will be neutral to the capital ratio by the second quarter.

For 2022, we expect to keep a CET one ratio around 13% and in any case above our target of 12, 5%.

That said, we expect our CET one ratio to decline in the first quarter of this year with some variability during the year for example from pending regulatory decisions on our IWA models.

We expect to finish the year with a CET one ratio of 13% or higher.

Our fully loaded leverage ratio was four 9% an increase of 18 basis points over the quarter.

Of the 18 basis points quarterly ratio increased 17 basis points came from tier one capital.

Within that six basis points came from core tier one capital and our successful additional tier one capital issuance in November 2021 contributed a further 11 basis points.

Leverage exposure, excluding FX effects decreased by 8 billion euros quarter on quarter, a strong loan growth in the core bank was more than offset by the transfer of the prime finance balances are.

Our pro forma fully loaded leverage ratio, including certain ECB cash amount was four 5% in line with our 2022 target.

With that let's now turn to performance in our businesses starting with the corporate bank on slide 18.

Full year revenues for the corporate bank were $5 2 billion euros flat year on year.

Repricing and underlying business growth, particularly in institutional client services offset interest rate headwinds of approximately 230 million euros, which were almost fully reflected in the first nine months.

Momentum was strong in the fourth quarter with revenues, increasing by 10% year on year with further progress on deposit repricing and solid underlying business performance supported by 8% fee income and 7% loan growth.

This was the highest quarterly revenue as well as the highest year on year revenue growth since the formation of the corporate bank and the launch of the transformation program in 2000 and the mid 2019.

At the end of the fourth quarter repricing agreements were in place for accounts with 101 billion of deposits, which produced 109 million euros of revenues in the quarter.

Loans stood at 122 billion euros up 3 billion euros compared to the end of the third quarter and 8 billion euros higher than at the end of 2020, mainly driven by corporate Treasury services.

The increase of 14% in risk weighted assets year on year reflects loan growth of 7% and regulatory inflation related to the Ecb's targeted review of internal models.

Noninterest expenses of $4 2 billion euros for the full year declined by 2% driven by prior year litigation and a favorable FX impact, partly offset by higher restructuring and severance.

Adjusted costs, excluding transformation charges were down 1% as platform efficiencies were partly offset by non repeating items and higher variable compensation, which together with technology costs also drove the 3% increase in the final quarter.

Provision for credit losses for the full year was a net release of 3 million euros, reflecting an overall low level of impairments and stage, one and two releases.

For the full year profit before tax in the corporate bank was $1 billion euros, increasing by 86% year on year adjusted.

Adjusted profit before tax also rose significantly by 70% to $1 2 billion euros with good momentum in the second half, including a contribution of 312 million euros in the fourth quarter.

This equates to a six 7% reported in an 8% adjusted post tax return on tangible equity for the full year of <unk>.

<unk> improvement on the prior year.

We're pleased with the progress and the performance of the corporate bank in the fourth quarter, which sets us up well to deliver on our targets for 2022.

Turning to revenues by business segment in the third quarter on slide 19.

Corporate bank revenues in the fourth quarter grew materially by 10% to $1 4 billion euros with further progress on deposit repricing and accelerated business growth is.

Interest rate headwinds, we're starting to ease in the quarter as improvements in the rate environment in the U S and Asia, largely offset ongoing euro headwinds.

Corporate Treasury services revenues of 828 million euros grew by 12% year on year, driven by further progress on deposit repricing business initiatives, including loan growth as well as episodic items, such as recoveries related to credit protection.

Institutional client services revenues of 343 billion euros also rose 12%.

With solid underlying growth across all businesses as we saw strong client activity, especially in trust and agency and security services.

Business banking revenues of 181 million euros decreased by 5% year on year, excluding specific items as progress on deposit re pricing was more than offset by ongoing interest rate headwinds.

I'll now turn to the investment bank on slide 20.

For the full year revenues were 4% higher compared to what was a very strong 2020.

Noninterest expenses were higher driven by increased compensation costs, as well as higher bank Levy and infrastructure cost allocations.

The investment bank generated a pretax profit of $3 7 billion euros and a return on tangible equity of 10, 7% for the full year both materially increases on 2020.

Our loan balances increased both quarter on quarter and year on year, primarily driven by higher loan originations across the financing businesses combined with a short term debt increase increase in debt origination to facilitate a client transaction, which will roll off in the first quarter.

Leverage exposure was higher reflecting increased lending commitments and deployment and our FIC trading businesses to support the franchise.

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

Provision for credit losses of 104 million euros, or 14 basis points of average loans decreased year on year due to COVID-19 related impairments in the prior year.

Turning to revenues by segment on slide 21.

Revenues for the fourth quarter were essentially flat on both a reported basis and excluding specific items.

Revenues in fixed sales and trading decreased by 14% in the fourth quarter when compared to the prior year.

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

Financing revenues were significantly higher driven by increased net interest income with solid performance across all businesses.

Credit in macro trading revenues declined when compared to a strong prior year quarter and the business also faced challenging market conditions.

The net impact of episodic items had a slightly positive impact year on year in the quarter.

The FIC franchise continues to see bought positive business momentum with underlying client activity up year on year and loan growth increasing for the fourth consecutive quarter.

Revenues in origination and advisory where significantly higher versus prior year.

Debt origination revenues were higher strong performance and leveraged debt capital markets continued specifically within the leveraged loan market with investment grade related revenues broadly flat.

We are the leading European bank for investment grade bond issuance during the quarter.

Within ESG, we were ranked top five for the full year on a fee basis for global ESG debt related products. According to Dealogic.

Equity origination revenues were lower.

Market share gains in Ipos and follow ons were more than offset by reduced primary spec activity year on year.

Revenues in advisory were significantly higher driven by market share gains and a record market.

Our share in pending transactions was also materially higher which positions us well moving into 2022.

In addition, we finished the full year ranked number one in origination and advisory in our home market.

Turning to the private bank on slide 22.

Revenues were $8 2 billion euros, and the full year up 1% year on year, reflecting continued revenue momentum in both businesses and higher benefits from <unk>, which offset interest rate headwinds of approximately 400 million euros.

We expect these headwinds to decline by well over half of this year, excluding the impact of deposit repricing.

Revenues would have been up 2% if adjusted for 154 million euros of foregone revenues from the bgh ruling in the year and the non recurrence of a negative impact of 88 million euros from the Postbank system sale in the prior year.

In 2021, we made progress on strategy execution and streamlined our branch network by closing more than 180 branches and reduced head count by up to about 28000 Ftes at year end.

Notwithstanding this adjusted costs, excluding transformation charges were up 1% year on year.

Incremental savings from transformation initiatives were offset by higher technology spend and internal service cost allocations as well as higher costs for deposit protection schemes and variable compensation.

The year on year increase also reflected a onetime benefit in the prior year associated with pension obligations.

Provision for credit losses were 18 basis points of average loans or 446 million euros and reduced by 37% year on year benefiting from the improved economic environment as well as tight risk discipline and a high quality loan book.

With this the private bank reported a pretax profit of 366 million euros in 2021.

Adjusted for transformation related effects of 458 million euros negative impacts from the bgh ruling of 284 million euros and specific revenue items pretax profit would have been above 1 billion euros in 2021.

On this basis adjusted post tax return on tangible equity would have been five 5%.

Risk weighted assets increased by 11% predominantly due to regulatory changes.

For the full year business volumes grew by 45 billion euros with 30 billion euros of inflows in assets under management and 15 billion euros of net new client months.

Turning to revenues by segment on slide 23.

Revenues in the private bank, Germany were up 8% on a reported basis were up 1% if adjusted for the negative impact of the aforementioned sale of Postbank systems in the prior year quarter.

The current quarter benefited from a net positive true up effect of 34 million euros related to the bgh ruling as the final reimbursement of fees was lower than we originally expected.

By year end 2021, 86% of customer accounts affected by the bgh ruling had the necessary consent agreements in place.

Revenues, excluding specific items in the bgh impact declined by 2% with continued headwinds from deposit margin compression, partially mitigate mitigated by continued business growth and investment and mortgage products.

Net new client loans of 2 billion euros, mainly in mortgages and net inflows in investment products of 2 billion euros in the quarter contributed to our full year business growth of 21 billion euros in the private bank Germany.

And the international private bank net revenues increased 6% in the quarter adjusted for lower gains from Sal Oppenheim workout activities.

Private banking and wealth management revenues declined by 5% on a reported basis, but increased by 7% excluding specific items, reflecting growth and investment products and loans supported by previous hirings of relationship managers.

Personal banking revenues increased by 3% year on year with business growth and investment products and lower funding costs, partially offset by deposit margin compression.

The business reported 1 billion euros of net outflows in investment products, reflecting portfolio repositioning and deleveraging in volatile markets and attracted net new client loans of 2 billion euros in the quarter.

And the full year, the international private bank achieve business growth of 24 billion euros.

As you will have seen in their results and from their AD hoc release Dws had a very successful year.

To remind you the asset management segment shown on slide 24 includes certain items that are not part of the dws stand alone financials.

Revenues grew by 21% versus the prior year with growth across all revenue streams.

Improvements in equity market levels, and seven consecutive quarters of net inflows resulted in an increase of management fees by 233 million euros.

Higher performance and transaction fees include an exceptional multi asset performance fee as well as an increase in transaction fees other.

Other revenues include a favorable impact from fair value of guarantees a higher contribution from our harvest investment and gains from higher investment valuations.

Noninterest expenses increased by 138 million euros, or 9% with adjusted costs, excluding transformation charges up 10%.

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

On a reported basis the cost income ratio improved to 61%.

Profit before tax of 816 million euros in the year increased by 50% over the previous year, reflecting strong revenues from record assets under management and remarkably strong net inflows supported by higher performance fees and other revenues.

Adjusted for transformation related effects profit before tax increased 43% to 840 million euros for the full year.

Assets under management of 928 billion euros have grown by 135 billion euros in the year driven by record net inflows and the positive impact from market performance and FX translation effects.

Record net inflows were <unk> 48 billion euros in the year with inflows across all three product pillars active passive and alternatives.

The business also attracted 19 billion euros of net inflows into ESG products during the year.

Turning to corporate and other on slide 25.

Corporate and other reported a pretax loss of 320 million euros in the quarter, including 59 million euros of transformation charges, which were not passed onto divisions and are captured in the other line.

Shareholder expenses as defined in the OECD transfer pricing guidelines were 142 million euros in the quarter.

Full year 2021, corporate and other reported a loss a pre tax loss of $1 1 billion euros, including 603 million euros of transformation related charges.

For 2022, we expect corporate and other to generate a pre tax loss of around 700 million euros.

The lower loss, mainly reflects lower expected transformation related charges.

The reduction in transformation related expenses will be partly offset by higher transitional costs relating to changes in our internal trends funds transfer pricing framework cost linked to legacy activities relating to the merger of DB Pavan on film Couldnt Bank <unk>.

And to Deutsche Bank AG as well as incremental group right investments, mainly in our I T and anti financial crime areas.

Shareholder expenses should revert to the level of about 400 million euros again in 2022.

We can now turn to the capital release unit on Slide 26.

For the full year the capital release unit reduced its loss before tax of $1 4 billion euros. This was 836 million euros better than the prior year driven by significant improvements in both costs and revenues.

We recorded positive full year revenues in 2021 as income from the Prime finance cost recovery and from our loan portfolio was only partially offset by funding risk management and derisking impacts.

This compares to the negative 225 million euros in revenues, we reported in the prior year, primarily driven by lower Derisking impacts.

Adjusted costs, excluding transformation charges declined by over a third reflecting lower internal service charges and bank Levy allocations as well as lower direct costs.

This quarter marked a significant milestone for the <unk> and the bank's transformation as we completed the transition of our prime finance and electronic equities platforms to BNP Powerbar.

The final stages of the transition were executed smoothly and we are pleased that we have provided continuity for our clients and staff, while delivering a substantially superior economic outcome to shareholders.

Since the fourth quarter of 2020, the division has reduced leverage exposure by 33 billion euros and risk weighted assets by 6 billion euros. This brings both leverage and <unk> below the 2022 targets, we shared with you at the Investor Deep dive in December 2020.

Looking through to the remainder of 2022, we are confident of.

Cheating or exceeding the target for adjusted costs, excluding transformation charges of $800 million euros that we set out at the Investor day in 2020.

We will also aim to drive risk weighted assets and leverage down further and we expect to record a modest negative revenue number for the year.

Turning finally to the group outlook for 2022 on slide 27.

2021 confirm the resilience and growth potential of our core businesses and this reinforces our confidence in continued business momentum significantly exceeding our previous 2022 revenue ambitions.

We remain highly focused on cost discipline and delivery of the initiatives, we have underway and as noted we recognize substantially all of our expected transformation related effects by year end.

Crystallizing, the expected savings and a reduction in investments are the key elements of the cost trajectory towards the 70% cost income ratio target for 2022.

As we guided earlier credit loss provision will be around 20 basis points in 2022.

Our credit portfolio quality remains strong and we are well positioned to manage emerging risks, including geopolitical uncertainties supply chain disruptions and expected policy tightening.

As noted we expect to maintain a CET one ratio of around 13% and in any case above 12, 5% consistent with our target.

Our leverage ratio target for the end of 2022 remains approximately four 5% fully loaded.

Christian mentioned, our intention to return capital to shareholders.

As announced yesterday evening, we will propose a cash dividend of <unk> 20 euro cents per share in relation to the 2021 financial year. In addition, having received the required regulatory approval. We intend to begin a share buyback program of 300 million euros to be completed in the first half of 2022.

These capital distributions represent the first installment of our commitment to return 5 billion euros of capital from 2022 over time, and we will outline our plans beyond 2022 at our Investor deep dive in March 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 you May press star followed by one Touchtone telephone if you wish to remove yourself from the question queue. You May press star followed by two.

We're using speaker equipment today, please lift the handset before making your selections.

One who has a question press star followed by one at this time one moment for the first question. Please.

First question is from the line of Adam <unk> from Medio Banca <unk>. Please go ahead.

Thank you for your questions wanting or the price on the new guidance on NII and costs.

On costs, you've given us the meeting so the Q1 run rate.

So the underlying cost base through 2022, how should we think about that developing quarterly how far does that come down.

Right.

The main drivers.

On NII.

And your disclosure is very helpful. Clearly I'd love to be a little bit more color on the moving parts.

What kind of a heightened slightly it seems and can you split the forward guidance. So about 900 million title between what is the hype cycle.

The rollout of longer and rates and then finally I just want to let me say together if you're thinking.

Thinking about 2023 trailing youll, you're pointing about NII upside into next year.

Our cost run rate to be coming down in 2022 as well.

Positive jaws in 2023, how should we think about the development of cost income against 70% cost income ratio for this year into 'twenty three and beyond.

Thank you Adam it's James I'll I'll jump into all of that there is a lot to go through and your questions and Theyre all great questions.

So let me start with with cost.

We've obviously, we've got ambitious plans for 2022, we've been preparing for that for some time in terms of initiatives measures that we're taking putting the transformation costs associated with those behind us and really teeing up for what we call our measurement year.

In 'twenty two.

If I go to run rate, which was part of your question.

It's a little bit away from the cost income ratio basis that we've been talking about it for a while so there's always some variability, but but we do need to recapture our run rate in Q1, that's consistent with with our 70% target and hence the guidance. We gave in our prepared remarks about at about a 450 call it sequential.

Decline in expenses.

So that sort of gives you a level that we need to achieve in Q1.

It's actually consistent with where we were in Q2 last year that is 21, so while we've seen some expenses. Some some control expenses some inflation come into the cost base in the last couple of quarters, it's about recapturing that glide path in Q1, and then building on that in the subsequent quarters next year.

<unk>.

And as you've heard from US we're laser focused on that.

In terms of drivers, there's a number of things that we've been preparing as we've talked about I think the the two biggest that I would call out.

On the technology side.

We're both in the if you like the cost of the built in a state.

As well as run off of investments, we would expect to see a relatively sizable improvement year on year. It could be in the ballpark of $500 million in technology costs.

Obviously, not the end of our investment program, but it's a moderation of that.

There is another category that we look at which is more front office if you like.

Where their considerable additional efficiencies that we are ready to implement and execute on the biggest of that would be in the private bank. As you can see branches head count are all coming down and as we capture the run rate.

Value of that.

We see significant improvements coming there also to some degree in the other front office areas, partially offset by investments in dws, but but we see some contributions again $5 million to $600 million.

From front office.

In the rest of infrastructure away from from it costs, we'd sort of see that netting there are some efficiencies we see in infrastructure that we need to achieve there also some control investments that we've been talking about.

Speaker 1: infrastructure that we need to achieve. There are also some control investments that we've been talking about and that we need to... there are some control investments rolling off, some rolling on, but those are, if you like, the major levers that we're talking about.

We need to.

Some control investments rolling off some rolling on but those are if you like the major levers that we're talking about.

Speaker 1: Now, that's all on top of the falling away of the transformation costs. Obviously, almost entirely the transformation related effects fall away.

Now that's all on top of the falling away of the transformation costs, obviously almost entirely the transformation related effects fall away.

Speaker 1: And so, the cost-income ratio bridge that we're looking at, you know, has a, I'd say a relatively equal contribution between transformation-related effects and the adjusted cost base, so if you like more operating costs.

And so the cost income ratio bridge that we're looking at.

I'd say, a relatively equal contribution between transformation related effects.

And the the adjusted cost base. So if you like more operating costs.

Speaker 1: So lots of work to do, we're very sort of cognizant of the effort that lies ahead, but as I say, we've sort of prepared the ground for that.

So lots of work to do we're very.

Cognizant of the of the effort that lies ahead, but as I say, we've sort of prepared prepared the ground for that.

Speaker 1: Now, I'll skip to your third question because it builds on the cost dialogue, and that is, is there jaws ahead of us after 22? And our view is absolutely yes.

Now I'll skip to your third question because it builds on the dialogue and that is is their jaws ahead of us after 'twenty two in our view is absolutely yes.

Speaker 1: Now, some of the work we've been doing on cost, you know, doesn't end in 22. In fact, we're sort of still making investments that will drive cost benefits in 23 and beyond. I'd point again to technology first and foremost, and in particular, the combination of the technology platforms in our German retail bank.

Some of the work we've been doing on cost doesn't end in 'twenty. Two in fact, we're still making investments that will drive cost benefits in 'twenty, three and beyond I would point again to technology first and foremost and in particular.

The.

The combination of the technology platforms, and our German retail banks.

Once we finish that transformation and there's a significant drop off as we have expenses, but that's just one example of where we think there's still room to go after structural costs and improved the run rates. After 'twenty two and as you say on revenues. We think there is there is considerable upside again momentum support.

By interest rates of course, but then also momentum in the businesses.

Speaker 1: And so then if I turn to the net interest income, you know, I would say the one-year versus four-year, or if you think about the old 100 basis point parallel disclosure, the one-year versus second year gives you some sense of how much is repricing the short end. You know, the rollover effect.

And so then if I turn to the net interest income.

I would say the the one year versus four year or if the if you think about the old 100 basis point parallel disclosure.

One year versus second year gives you some sense of how much is repricing the short and the rollover effect takes time to two two.

Speaker 1: takes time to to to you know flow through and to a significant extent that's based on the long term so if you look to page eleven of our disclosure just to take as an example the euro you can see that uh... that the short term rates

Flow through and to a significant extent that's based on the long term. So if you looked at page 11 of our disclosure just to take as an example, the euro you can see that the short term rates are far more powerful than the in the early year. The first year, but by year four the main driver becomes the long term rates. So it's.

Speaker 1: far more powerful in the early year, the first year, but by year four, the main driver becomes the long-term rate. So it's a question of time and an increasing impact of the rollover over time, capturing the steeper long end of the yield curve. Hopefully that gets all of your questions, Adam.

It's a question of time and an increasing impact of the rollover overtime, capturing the steeper long end of the yield curve hopefully that gets all of your of your questions Adam.

Brian Thanks for that.

Speaker 2: Next question is from the line of Daniel Brubacher from UBS. Please go ahead.

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

Good afternoon, and thank you.

Speaker 3: Can I just build on the revenues in general? And I mean, obviously I see that the loan book going into this year is 10% higher. I see assets under management being 12% higher in private bank and 17 in DWS. So that's all positive, I guess. But then on the other hand, I see IEB revenue expectations probably down 10%, which is sort of in line with industry expectations. So could you just talk us through

Can I just build on the revenues in general I mean, obviously I see that the loan book going into this year is 10% higher Ics, it's under management being 12% higher private bank in 17 and dws. So that's all positive I guess then on the other hand, I see IEP revenue expectation probably down.

10%, which is sort of in line with industry expectations. So could you just talk us through.

Speaker 3: bit of an update on your divisional revenue expectations probably compared to the investor day last December or December 2020 and how that probably looks like at this point in time and probably linked to this and if for whatever reason revenues turn out to be less strong this year let's assume it's more like the 24 billion level would you still be committed and comfortable to be able to achieve a 70 percent cost income ratio

A bit of an update on <unk>.

Your divisional revenue expectations, probably comparable to the Investor Day last December to December 2020, and how that probably looks like at this point in time and probably linked to the east.

For whatever reason revenues turn out to be less strong this year lets assume its more like the 24 billion level would you still be committed and comfortable to be able to achieve a 70% cost income ratio. Thank you.

Hi, Danielle it's cushion.

Speaker 4: Hi, Daniel, it's Christian. Thank you for your question. And let me give you my revenue, our revenue outlook, and our view on this one. And as you wish, obviously, happy to go through also the different components and compare it a little bit to the IDD indications which we have given you in December 20.

Thank you for your question and let me give you.

My revenue our revenue outlook.

And our view on this one and then as you as you wish obviously happy to go through also the different components and compared to a little bit to the IBD indications, which we have given you in December 'twenty.

Speaker 4: Look, let me start with 2021 again for two reasons. A, I think in 2021 we have shown, where in particular in the second half of 2021, we have already seen a normalization in the markets.

Look let me start with the 'twenty one again for two reasons, a I think in 'twenty. One we have shown where in particular in the second in the second half of 'twenty. One we have already seen a normalization in the in the markets.

Speaker 4: that with $25.4 billion of revenues, we were 6% up year on year. And if I go through all the last four quarters with the last 12-month revenues, we always showed revenues of about $25 billion at least in these last four quarters for the last 12 months. And that gives you an initial indication, I think, about the resilience of our revenue.

That was $25 4 billion of revenues, we were 6% up year on year, and and and if I go through all the last four quarters with the last 12 months revenues.

We already we always showed revenues of about $25 billion at least in these last two full quarters for the last 12 months and that gives you an initial indication.

About the resilience of our revenues and I do believe that the 2021 number.

Speaker 4: And I do believe that the 2021 number, hands off 25.4 billion, is actually a good starting point for our revenue assumption for 2022.

Hands of $25 4 billion is actually a good starting point for our revenue assumption for 2022.

Speaker 4: If you now add a modest single-digit growth rate of our underlying franchise, in particular in the corporate bank, but also in the private bank, and which I will talk about in a second.

If you'll now at a modest single digit growth rates of our underlying franchise in particular in the corporate bank, but also in the private bank and which I will talk about in a second.

Speaker 4: And you bear in mind the kind of material changes in interest rates that James just laid out, but also did in his prepared remarks.

And you bear in mind, the kind of material changes in interest rates. It James just laid out but also did in his prepared remarks.

Speaker 4: we clearly as a management see a revenue forecast for 2022 in the range of 25.5 to even 26 billion. So let me go through the component piece.

Clearly as the management see a revenue forecast for 2022 in the range of 25, 5% to even 26 billion. So let me go through the component pieces let.

Speaker 4: Let me start with the corporate bank and here we are actually looking at a very strong underlying business and before I quote the Q4 numbers.

Let me start with the corporate bank and here, we are actually looking at a very strong underlying business and before I close the Q.

Q4 numbers.

Speaker 4: I wanted to give you an indication of the underlying growth in that business.

I wanted to give you.

An indication of the underlying growth in that business over the last three years, because we always talking about underlying growth and potentially it gives you further confidence if I give you the real underlying growth in those businesses in the private bank and corporate bank for the last three years, we have seen 1% in 2019, we have seen.

Speaker 4: We have seen 3% in 2020, and we have seen 6% in 2021. Obviously, all kind of washed by the interest rate headwinds, but the real underlying growth from client business was that strong.

<unk>, 3% in 2020, and we have seen 6% in 2021, obviously, all kind of washed by the interest rate headwinds, but the real underlying growth from client business wasn't that strong.

Speaker 4: Now then the corporate bank was kind of going having not the headwinds of the interest rates anymore. We saw in the fourth quarter 1.4 billion or almost 1.4 billion of revenues which is approximately a 10 percent increase versus prior year, eight percent uplist versus prior quarter in Q3.

Now then the corporate bank with kind of going having not the headwinds of the interest rates anymore. We saw in the fourth quarter $1 4 billion almost $1 4 billion of revenues, which is approximately a 10% increase versus prior year, 8% uplift versus prior quarter in Q3.

Speaker 4: And in our view, and also looking at the start and at the pipeline, that is a very solid and good indicator for our 2022 plan.

And in all of you and also looking at the start and that the pipeline that has a very solid and good indicators for our 2022 plan.

Speaker 4: Further, we look obviously at the recovery, in particular in the corporate bank of the international, global, but also German recovery. We see what the demands are from our corporate clients.

Rather we look obviously at the recovery in particularly in the corporate bank of the international Global but also Germany recovery, we see what the demands from our corporate clients and hence we believe with the step up we have seen in Q4, the underlying gross numbers all of the items, we have done on the deposit repricing.

Speaker 4: And hence, we believe with the step-off we have seen in Q4, the underlying growth numbers

Speaker 4: all the items we have done on the depository pricing, we think that we are able to achieve revenues of 5.5 billion in 2022. And again, the indication which we have from Q4 is again a good indicator for Q1 and the following quarters. So I think a very solid story.

We think that we are able to achieve revenues of $5 5 billion in 2022 and again the indication, which we have from Q4 is again a good indicator for Q1 and the following quarters. So I think a very solid story.

Speaker 4: Same solid story, actually, Daniel, for the private bank. We have achieved revenues of $8.2 billion in 2021.

Same solid story actually Danielle for the private bank, we have achieved revenues of $8 2 billion in 2021.

Speaker 4: And if we here take into account the foregone revenues from the BGH ruling, which was approximately €150 million.

And if we take into account the foregone revenues from the Bgh ruling which was approximately 150 million euros.

Speaker 4: The expected reduction of negative impacts from the interest rate environment to well below half of the minus 400 million which we recorded in 2021.

The expected reduction of negative of negative impacts from the interest rate environment to well below half of the minus 400 million, which we recorded in 2021.

Speaker 4: and the continued growth, I'm more than confident that they will actually achieve $8.6 billion of revenues in 2022. And also for the private bank, as I just said, for the corporate bank.

And the continued growth I am more than confident that they will actually achieve eight 6 billion of revenues in 2022 and also for the private bank is that just said for the corporate bank.

Speaker 4: Let me give you the underlying, actually, gross numbers for this business. We had 4 percent in 2019, 6 percent in 2020, and in 2021, we even achieved 7 percent. And that shows you the dynamic and the resilience of that business. And again, with the interest headwinds going away, it's far more visible. And therefore, we do believe that the $8.6 billion is absolutely feasible.

Let me give you the underlying actually gross numbers for this business, we had 4% in 2019, 6% in 2020 and in 2021, we even achieved 7% and that shows you the dynamic and the resilience of that business and again with the interest headwinds going away far more visible and therefore.

We do believe that the $8 6 billion, absolutely feasible asset management, a shorter story $2 7 billion in 2021.

Speaker 4: Asset management a shorter story 2.7 billion in 2021.

Speaker 4: I think which compares well against the IDD target of I think we said 2.3 billion in December 2020 as a goal for 2022.

I think which compares well against the IGD target off I think we said $2 3 billion in December 2020, as it goes for 2022.

Speaker 4: Daniel, if asset values more or less hold and inflows continue, and also there we had a very good start in January , we could see a flat performance against 2021 at least. If you now want to deduct the performance fees in relation to the multi-asset fund, you would still end up with more than 2.6 billion euros in 2022.

Danielle if asset values more or less hold and inflows continue and also there we had a very good start in January we could see a flat performance against 2021 at least if youll now want to deduct the performance fees in relation to the multi asset fund you would still end up with more than $2 6 billion euros in 2000.

'twenty two.

Speaker 4: So that is the number which we see for the asset management and that brings me to the IB.

So that is the number which we see for the asset management and that brings me to the IV.

Speaker 4: Obviously and James and I and the old management team are very happy with the performance of the investment banks throughout 2021. I think the focus which we have given ourselves on the FIC business, financing business and origination and advisory really pays off.

Obviously, and James and I and the old management team are very happy with the performance of the investment bank throughout 2021, I think the focus which we have given our sales on the FIC business financing business and origination and advisory really pays off.

Speaker 4: And with the 9.6 billion of revenues in 2021, we actually even topped the good result of 2020.

And with.

With the $9 6 billion of revenues and 22021, we actually even topped the good result of 2020 now.

We take into account that there will be a further normalization in that business.

Speaker 4: We take into account that there will be a further normalization in that business.

Speaker 4: and happy, obviously, to adjust those numbers.

And happy obviously to adjust those numbers, but I would also always remind everybody on the call that the full year impact of the rating upgrades, which we achieved the corresponding return of clients, which by the way we still see in these days. So as a result of all the three actions, which we have seen in <unk>.

Speaker 4: But I would also always remind everybody on the call that the full year impact of the rating upgrades, which we achieved the corresponding return of clients, which, by the way, we still see in these days. So, as a result of all the three actions, which we have seen in August , September and in October , we still see that coming in. We do believe that we also need to take that into account.

<unk> September and in October , we still see that coming in.

We do believe that we also need to take that into account.

Speaker 4: If I now look at the pipeline across the major business line in the investment bank, the stability of the financing business

Now look at the pipeline across the major business line in the investment bank the stability of the financing business client flow specifically in the trading business is also in January .

Speaker 4: Client flow specifically in the trading businesses also in January .

Speaker 4: I have all the confidence that we achieve a number of 9 billion this year, which I think compares with the 8.6 billion which we set in the IDD in December 20.

Have all the confidence that we achieve a number of $9 billion. This year, which I think compares with the $8 6 billion, which we said in the Idd in December 'twenty.

December 'twenty and again, let me reiterate that what James said this morning already generates that more than supports this view.

Speaker 4: And again, let me reiterate that what James said this morning already, the January start more than supports this view. Actually, in the IBE, we are ahead of last year's numbers for the first three and a half years.

Actually in the IV. We are ahead of last year's numbers for the first three and half years. So taking all that together the revenue momentum not only healthy and sustainable we actually see a revenue number of around $25 7 billion. If you add everything together and that is a very solid base case for us from which we want.

Speaker 4: Taking all that together the revenue momentum is not only healthy and sustainable. We actually see a revenue number of around twenty five point seven billion if you add everything together. And that is a very solid base case for us from which we want to continue to grow and everything which comes on top in terms of incremental interest is obviously not captured in this in this number. But hopefully it gives you.

To continue to grow and everything which comes on top in terms of incremented interest is obviously not captured in this in this number but hopefully it gives you.

Speaker 4: a better planning base because we absolutely believe in that. I can see the pipeline, I can see the momentum and in this regard this number is our confidence.

A better planning base because we.

We absolutely believe that I can see the pipeline I can see the momentum and in this regard this number is.

Our confidence.

And Daniela on the cost income ratio and the variability look I think your hypothetical represents a pretty dramatic decline in revenues given all that Christian just said about the businesses away from the investment bank.

Speaker 1: And Daniela, on the cost-income ratio and the variability, look, I think your hypothetical represents a pretty dramatic decline in revenues, given all that Christian just said about the businesses away from the investment banks.

Call it 6% decline in revenues for the full firm.

No.

A driven just by investment banking would be it would be a pretty sort of severe scenario.

So look as the as the expense base as variables, we'd like it to be no.

But there are actions, we would we would obviously taken have to take in a scenario where revenues fell short.

So could we delay some investments in I T could.

Could we throttle marketing could we slow down hiring obviously variable compensation would would be adjusted asset servicing costs would go down essentially automatically. So there's there's absolutely parts of the expense base that would vary with the lower revenue base.

Speaker 1: vary with the lower revenue base. There are some that are not flexible. You know, we, as we've said before, we will not give up the regulatory remediation spend. We absolutely have to do it. It's part of our license to operate.

Some that are not flexible we as we've said before we will not give up the regulatory remediation spend we absolutely have to do it as part of our license to operate and there are some elements like fixed pay in real estate and you can go on that are that are fixed I.

Speaker 1: And there's some elements like fixed pay and real estate, and you can go on, that are fixed.

Speaker 1: I think as we look to the future, and going a little bit to Adam's question about JAWS after 22.

I think as we we look to the future and going a little bit to Adam's question about jaws. After 'twenty two I think.

Speaker 1: I think we do get into a place where the unmovable fixed-cost base of the company starts to look much more manageable against the revenue base and a growing revenue base, especially when you take into account all of what Christian just said about the business's performance as well as interest rates.

We do get into a place where the.

The unmovable fixed cost base of the company starts to look.

Much more manageable against the revenue base and a growing revenue base, especially when you take into account all of what Christian just said about the business as performance as well as interest rates and you start to get into I think a much more favorable marginal.

Speaker 1: And you start to get into, I think, a much more favorable marginal world than we've been in in the past several years. So short version, some variability, not as much as we'd like, but the variability now to the upside could actually be quite powerful.

World than we've been in the past several years. So short version some variability not as much as we'd like but the variability now to the upside is could actually be quite powerful.

That's great. Thank you very much.

Speaker 5: Next question is from the line of Kian Abu Hossain from JP Morgan. Please go ahead. Yes. Thanks for taking my question.

Next question is from the line of Kian Abbas Hussain from J P. Morgan. Please go ahead.

Yes, thanks for taking my question.

My question relates to just coming back to the cost income clearly this higher revenues.

Speaker 5: My question relates to just coming back to the cost income. Clearly, with higher revenues...

We're looking at <unk> marginal cost income ratio that you're using to make those revenues. So to say so there must be an investment plan included in here. So.

Speaker 5: you're looking at really a marginal cost income ratio that you're using to make those revenues, so to say. So there must be an investment plan included in here. So, you know, normally I would use a 30 to 40% marginal cost income to generate those revenues. Would it be fair to say that the variability on your cost?

Normally I would use the 30% to 40% marginal cost income to generate those revenues would it be fair to say that the variability on your cost.

Speaker 5: increase, so to say, relative to the historic revenue guidance of 25 billion plus is variable. Is that a fair comment? And in that context...

Increase so to say relative to the historic revenue guidance itself 25 billion plus.

If it is variable is that a fair comment and in that context.

Speaker 5: the way I understood the future cost savings that could come through, there are equal to transformation costs, which I think there's another 300 million outstanding, is that also a fair comment? I run rate would be roughly 300 million lower.

The way I understood the future cost savings that could come through there.

<unk> transformation costs, which I think there's another $300 million outstanding is that also a fair comment I run rate would be.

Roughly $300 million lower.

Speaker 5: The second question is related to capital, your capital return that you're giving to shareholders, is that related to 2021 earnings purely? And as a result, we should get an update for 2022 earnings in terms of buybacks and dividends?

The second question is related to capital.

Your capital return.

You are giving to shareholders is that related to 2021 earnings purely and as a result, we should get an update for 2022 earnings in terms of buybacks and dividends.

Speaker 5: And is there any thought about mix? Thanks.

And is there any thought about mix. Thanks.

Sure Ken. Thank you a lot to work on there as well and Christian may want to add some comments.

Speaker 1: Sure, Kian, thank you. A lot to work on there as well, and Christian may want to add some comments.

Speaker 1: So the cost-income ratio and the variability, absolutely. So building on the answer to Daniela's question,

So the cost income ratio and the variability absolutely. So building on the answers of Daniela <unk> question.

Speaker 1: You know, we we do think there's operating leverage, you know, from here, especially obviously in a rising revenue environment.

We do think there is operating leverage from here, especially obviously in a rising revenue environment and to your point, we do think the marginal cost income ratio ratio the marginal shareholder value added of of new business improves further and further.

Speaker 1: And to your point, we do think the marginal cost income ratio, the marginal shareholder value added of new business improves further and further from here. We know we're looking at some of the investment decisions, you know, that we'll talk to you more about on March 10th. And some of the marginal cost income ratios are really very, very powerful in terms of investment we could make. So so yes, we think there's that dynamic. So

From here, we know we're looking at some of the investment decisions.

We'll talk to you more about on March 10th and some of the marginal cost income ratio is a really very very powerful.

In terms of investment we could make so so yes, we think there is that dynamic.

So.

Speaker 1: We're at an inflection point, in a sense, where we, as I mentioned, we need to leave behind the fixed cost base and be able to deliver more and more in terms of marginal benefits to the bottom line and the cost-income ratio. And that'll be, I think, part of the future after 22.

We're at an inflection point in a sense, where we as I mentioned, we need to leave behind.

The fixed cost base and be able to deliver more and more in terms of marginal benefits to the bottom line and the cost income ratio and that'll be I think part of the future after 'twenty two.

Speaker 1: Your comments on the run rate are pretty spot on, you know, getting to call it a 4.4, 4.5 range in Q1 doesn't get us all the way home on our cost income ratio targeting, even with some help on the revenue base, so there's more to do on expenses after Q1.

Your comments on the run rate.

Pretty pretty spot on.

Getting to.

Call It a four for $4 five range in Q1.

It doesn't get us all the way home on our cost income ratio targeting even with some help on the revenue base. So theres more to do on expenses after Q1.

Speaker 1: And of course there's always some uncertainty and variability in things like the non-operating costs, litigation as an example. So is everything in our control? No. But we have a path and we have, as Christian described it, the laser focus on executing and delivering against our plan.

And of course, Theres, some theres always some uncertainty and variability in things like the nonoperating costs litigation as an example, so you know as everything in our control no.

But we have a path and we have as Christian described with a laser focus on executing and delivering against our plans.

Speaker 1: You asked about, you know, is there some element of structural cost being borne by higher than we expected revenues. I think there's some truth to that, Kian. You know, we've talked about over the summer, we have had additional costs come through, for example, in reg remediation, some technology spending that we envisaged either not doing or rolling off more quickly that's carrying through. So there were absolutely some pressures coming into the cost base.

You asked about.

There are some.

Some element of structural cost being borne by higher than we expected revenues I think theres some truth to that Ken.

We've talked about over the summer.

We have had additional costs come through for example in Reg remediation some technology spending that we we'd envisaged either not doing a rolling off more quickly that's carrying through so there were absolutely some pressures coming into the cost base and then we've talked over the summer about additional actions we identified we put in place.

Speaker 1: And then we talked over the summer about additional actions we identified, we put in place, we bore some additional restructuring costs in order to execute. So we've done what we can to offset it, but there is of course a dynamic of inflation and then efforts on management's part to offset those items.

We bore some additional.

Restructuring costs in order to execute so we've done what we can to offset it but there is of course, a dynamic of inflation and then efforts on management's part to offset those items.

Speaker 1: on capital and again we'll talk more about this in in march uh...

On capital and again, we'll talk more about this in March.

Speaker 1: You know, you can think about the buybacks as, you know, relating to one year or the other. I think that's an academic question, but yes, the dividend absolutely is in respect of 2021 payable in May 22, subject to the AGM's approval of that. The buyback is an action that is separate, but one can certainly think of it as something we think we've been able to afford based on the operating performance in 21.

You can you can think about the buybacks as you know relating to one year or the other I think that's it.

As an academic question, but but but yes. The dividend absolutely is in respect of 2021 payable in May 22 subject to the AGM approval of that the buyback is an action that is separate but one can certainly think of it as is.

Something we think we've been able to afford based on the operating performance in 'twenty one.

Speaker 1: Ironically, given the way that the interim profit recognition works for us, you know, we've actually set aside in the ratio almost as much as the $700 million. I mean, I think we're off by maybe $25 million in terms of capital disregarded in the ratio today that we intend to pay out in 2022.

Ironically, given the way that the interim profit recognition works for US we've actually set aside in the ratio.

Almost as much as the $700 million I think we're off by maybe $25 million in terms of capital disregarded in the ratio today that.

We intend to pay out in 'twenty two.

Speaker 1: Going forward, the decisions on additional distributions, we'll make at the appropriate times. We'll talk a little bit with you in March about our thinking about the capital plan and the resulting distribution path from here. But we wanted to get a good and clear start, as we announced yesterday.

Going forward the decisions on additional distributions, we'll we'll make at the appropriate times, we'll talk a little bit with you in March about our thinking about the capital plan and the resulting distribution path from here, but but we wanted to get a good and clear start.

We announced yesterday.

Speaker 4: Yeah, let me just add, because actually James said everything only with, and that is what we now finally see as the management of this bank, and where we obviously go through in order to provide you details on March 10th, but given all the investments we have done in all

Yeah, Let me just add because actually James said.

Everything only with and that is what we now finally see as the management of this bank and where we obviously go through in order to provide you details on March 10th but given all the investments we have done in all the four businesses be it the stable business the investment bank on frontier and more technology you can.

Speaker 4: be it the stable business, the investment bank, on front-to-end, more technology, you can actually see that this incremental cost-income ratio, which we were talking about, 30 percent, 40 percent, of new businesses.

Actually see that this incremental.

Cost income ratio, which you were talking about 30%, 40% of new business is actually coming down dramatically and that's the nice thing that we focused on those business, where we believe we have relevant we have market share. There we focused all our technology costs and investments in and that obviously pays off.

Speaker 4: is actually coming down dramatically. And that's the nice thing, that we focus on those business where we believe we are relevant. We have market share, there we focus our technology costs and investments in, and that obviously pays off in a better cost-income ratio, in particular if we add business. So I think also in this regard.

In a better cost income ratio in particular, if we add business. So I think also in this regard the investments and the focus of this company has given itself is finally paying off.

Speaker 4: the investment and the focus this company has given itself is finally paying off. Thank you very much.

Thank you very much very helpful.

Thank you again.

Speaker 2: Next question is from the line of Jeremy Segee from BNP Paribas Exane, please go ahead.

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

Speaker 6: Hello, thank you very much. I've just got a couple of follow ups on topics that have already been discussed. Firstly, on the NII uplift on slide 11, which is very useful, does that include any expected benefit from changes in the ECB deposit tiering arrangements, which might happen later this year?

Hello, Thank you very much.

Couple of follow ups on topics that have already been discussed firstly on the NII uplift on slide 11, which is very useful.

Does that include any expected benefit from changes in the ECB deposit tearing arrangements, which might happen later this year.

That's my first question and my second question is you mentioned bank levies and your expectations for 2022 could you comment on your expectations for <unk> in theory, the EU resolution fund contributions ending in 2023 and potentially a major saving on that in 2024 could you talk about what you expect.

Whether that will materialize or whether there could be other contra.

Contributions or levies that are taking its place. Thank you.

Sure. Thanks, Jeremy I'll take the first one I think Christian would like to comment on the second one.

No no no benefit from tearing in fairness. The <unk> is also disregarded in the in that top left chart. So so there's a little bit of of headwind. If you like in 'twenty, two and then a little bit more in the out years.

Speaker 1: two, and then a little bit more in the out years from TLTRO, if there were a tiering adjustment that were made, it would be partially or fully offsetting, and we haven't made a sort of an assumption about that.

From <unk>, if there were adhering adjustment that were made it would be it would be partially or fully offsetting and.

And we haven't made it.

Sort of an assumption about that.

Speaker 1: TLTRO doesn't sort of, in a sense, entirely fall away.

<unk> doesn't sort of in a sense entirely fall away.

The.

Speaker 1: the special premium or inducement that we earn does fall away, the rest runs off over time and then is replaced with relatively inexpensive covered bond funding. So it's a modest headwind in the years going all the way out to 2025.

The special premium or inducement that we earn does fall away. The rest runs off over time, and then is replaced with relatively inexpensive covered covered bond funding. So.

It's a modest headwind in the years going all the way out to 2025.

Speaker 4: Jeremy, regarding your second question, obviously always hard to think about what a next text could look like. But I can tell you from all the discussions which we as the German banks, but also the European banks had with the SRF and also in the political arena.

Jeremy regarding your second question, obviously, you always have to think about what.

Our next takes could look like but I can tell you from all the discussions which we as the German banks, but also the European banks had to.

With the <unk> and also in the political arena.

Speaker 4: I didn't get any hint and any sign that after the SRF is now completely filled, that there would be an additional tax after 23. So, in this regard, I think we will see the relief.

I didn't get any hidden any sign that after the Srs is now completely filled that there would be an additional <unk> <unk>.

After 'twenty three so in this regard I think we will see the relief actually also there and you've heard my story I.

Speaker 4: Actually, also there, you have heard my story, I do believe the increase now to 75 billion approximately is, in my view, from an economic point of view, not only for the banks but for the European economy, the wrong signal.

I do believe the increase now 275 billion approximately is in my view from an economic point of view not only for the banks, but for the European economy. The wrong signal. We are actually actively lobbying that we will make more use of the IPC.

Speaker 4: We are actually actively lobbying that we will make more use of the IPCs. In this regard, you know that for the time being under the SRF.

In this regard you know that for the time being under the SRA.

Speaker 4: We could do contributions to the SRF up to 30% in IPCs, for the time being it's limited at 15%.

We could do contributions to the USF up to 30% in <unk> for the time being it's limited at 15%.

Speaker 4: So that is clearly something where we are looking for and lobbying for, but I cannot see at this point in time.

So that is clearly something where we are looking for and lobbying for but I cannot see at this point in time.

Speaker 4: after all the discussions that I had, any kind of further tax burden in this regard from 24 on.

After all the discussions that I hit any kind of further textbook and in this regard from 24.

That's very helpful. Thank you.

Speaker 2: Next question is from the line of Tom Hallett from KBW, please go ahead.

Next question is from the line of Tom Hallett from K B W. Please go ahead.

Speaker 7: Yeah, hi guys. Thanks for taking my questions.

Yeah, Hi, guys. Thanks for taking my questions.

Firstly.

Speaker 8: How will the raising of the counter cyclical buffer and the supplementary buffer on the residential mortgages impact you and how you manage the 12.5% minimum capital ratio you set yourself? And then maybe within that, what's your criteria on the choice between what you allocate towards the cash component of the dividend and what you allocate towards buyback?

How will the raising of the counter cyclical buffer in the supplementary buffer on the residential mortgages impact you and how you manage the 12.5%.

Minimum capital ratios you set yourself.

Not what's your criteria on the choice between what you allocate towards the cash component.

And what you allocate towards buybacks and then secondly could you just elaborate on your comments on the performance in IV. So far this year because it seems to me that the volatility that hit in <unk> is pretty similar to what we've been seeing so far this year, which wasn't as impressive taken.

Speaker 8: And then secondly, could you just elaborate on a comment on the performance in IB so far this year? Because it seems to me that the volatility that hit in 4Q is pretty similar to what we've been seeing so far this year, which wasn't overly impressive, particularly towards FIC. So which products have started well, and is there any particular region that sticks out? Thank you.

Taking towards finished which products and started well.

And is there any particular region that sticks out thank you.

So Tom just so I'll answer and if I've missed part of your question just let me know.

Speaker 1: So, Tom, just so I'll answer and if I've missed part of your question, just let me know.

Speaker 1: So first of all, the countercyclical buffer, as it's being proposed now, has been incorporated into our plans. We'd made assumptions about that prior to the announcement, and in the fullness of time, we were kind of accurate, I think, in our assumptions. So it doesn't really change our capital path, at the margin a little bit on timing, but not a material change to our capital planning.

So first of all the countercyclical buffer as it's been proposed now has been incorporated into our plans.

We've made assumptions about that prior to the announcement and in the fullness of time that where we were kind of accurate I think in our assumptions. So so it doesn't really change our capital Plaza at the margin a little bit on timing, but but not a material change to our to our capital planning.

Speaker 1: Within that, of course, the mortgage, call it surcharge, you know, is something that we're going to have to digest and potentially take action on. To begin with, I think it's important that the banking system, you know, essentially reflect the higher required capitalization in its pricing.

Within that of course the mortgage.

Call it surcharge.

It's something that we're going to have to digest and potentially take action on to begin with I think it's important that the banking system.

Essentially reflect the higher required capitalization in its pricing at.

Speaker 1: You know, at that point, again, the SVA, you know, characteristics of that product would be neutral. And that would not, therefore, you know, change our approach really to that asset class. If it were different from that, we'd need to think harder about the future there. But short answer, all built in, and we got to think about how to implement and the impacts of the mortgage item.

At that point again the SBA.

Characteristics of that product would be would be neutral.

And that would not therefore change our approach really to that asset class. If it were different from that we need to to think harder about about the future there, but short answer all built in and we got to think about how how to implement and the impacts of the <unk>.

The mortgage item.

Speaker 1: On FIC, I'll start, and Christian may want to add some commentary.

On FIC I'll start and Christian may want to add some commentary look.

Speaker 1: We have a portfolio of businesses in FIC, so part of the perception of volatility, obviously, it's at least partly warranted, you know, that we do.

We have a portfolio of businesses and so part of the perception of volatility obviously.

At least partly warranted that we do.

Speaker 1: some of the businesses will clearly perform based on volatility in the marketplace. You know, FX is actually an example.

Some of the businesses will clearly perform based on volatility in the marketplace. You know FX is actually as an example tends to be the most tied to the volatility as reflected in the civics measure for example, but there are other businesses in our in our group like the financing business like credit trading that can perform.

Speaker 1: tends to be the most tied to the volatility as reflected in the CVIX measure, for example.

Speaker 1: but there are other businesses in our in our group like the financing business like credit trading that can perform quite differently from what i call the macro products of rates and and affects

<unk> quite differently from what I'd call, the macro products of rates and FX.

Speaker 1: We like that portfolio mix within our FIC franchise, and so, you know, it's quite hard to really tell you the level of volatility that attaches to any market conditions.

We like that portfolio mix within our within our FIC franchise.

So it's.

It's quite hard to really tell you the level of volatility that attaches to any market conditions, but what we've seen over the last several years is just an improvement in that mix.

Speaker 1: But what we've seen over the last several years is just an improvement in that mix, a steadying of the performance, ongoing client engagement, funding costs have come down. So the value of the investments that we've been making have been proving themselves out. So all of the elements that Ram went through at the Investor Day back in December 2020, you know, are really showing through. And to us, they changed the.

<unk> of the performance ongoing client and get engagement funding cost have come down so.

The value of the investments that we've been making have been proving themselves out. So all of the elements that Rob went through at the Investor Day back in December 2020.

Really showing through.

And to us they changed the.

Speaker 1: you know, the reliability, the volatility of just that revenue line quite substantially. It's something we want to build on as we go forward.

The.

The reliability of the volatility of just that revenue line.

Quite substantially and something we want to build on.

As we go forward.

Speaker 1: Thanks, James. Just a quick follow-up within one of the questions that we did get out there, was the criteria that you have on the choice between what you allocate towards the cash component and what you allocate towards buybacks? Well reminded, Tom.

Yes.

Thanks, James just just a quick follow up.

But then one of the questions that have been taken out.

The criteria that you have on the choice between what you allocate towards the cash component and what you allocate towards buybacks.

Yes.

Yes, sorry, well reminded huh.

Yes.

Speaker 1: Again, we'll go into some detail in March, not to always go mañana, mañana, but look, we think the dividend isn't, maybe it's old-fashioned, we think a dividend should be a reliable income stream for investors and should represent management's views. The growth in the dividend should reflect management views about, you know, its confidence in the future. We think we've started with quite a prudent level of payout ratio, a little above 20 percent.

But again, we will go into some detail.

In March not to not to always go in Montana, Montana, but.

Look we think the dividend isn't maybe its old fashion, we think a dividend is should be a reliable income stream for investors and should represent management's views the growth in the dividend should should reflect management views about confidence in the future. We think we've started with a quite a prudent level of payout ratio.

A little above 20%.

Speaker 1: against earnings in the rearview mirror that were still burdened by some of the transformation costs that we had. So we think there's room for growth in the dividend.

Against a.

Earnings in the rearview mirror that we are still burdened by some of the transformation.

Costs that we had so we think theres room for growth in the dividend.

Speaker 1: But when I think about also the impact of repurchases, you know, it's a powerful tool.

But when I think about also the impact of repurchases.

<unk> tool.

Speaker 1: in terms of corporate finance impact, buying back stock at relatively low multiples of book value, but also providing flexibility in the total payout to account for, you know, variability in the earnings profile. So we think we've started at a really good place, but one from which we can build while providing a degree of flexibility in terms of total return.

Terms of corporate finance impact buying back stock at relatively low multiples of book value.

But also providing flexibility in the total payout.

To account for.

Variability in the earnings profile. So we think we've started at a really good place, but one from which we can build while providing a degree of flexibility in terms of total total return.

Speaker 1: The guiding light here for us is the $5 billion and making sure that we get the $5 billion in distributions over a reasonable timeframe, and that's something, again, we'll pick up with you in March.

The the guiding light here for US is the 5 billion and making sure that we get the 5 billion in distributions over a reasonable timeframe frame and that's something again, we will pick up with you in March.

That's great. Thank you.

Yeah.

Speaker 2: Next question is from the line of Nicholas Payan from Kepler-Chevro. Please go ahead.

Next question is from the line of Nicholas plan from Kepler. Several please go ahead.

Speaker 9: Yes, good afternoon. Thanks for taking my question. I have two please. The first one will be on the IDD in March. You say this morning in your press conference that the strategy will be just an evolution of the current strategy. And I wanted to know what part of the strategy can we expect to evolve at the IDD in March? And what are your focus areas?

Yes. Good afternoon. Thanks for taking my question I have two please the first one will be LNG idd.

In March you said this morning in a press conference that the strategy will be just an evolution of the current strategy and I want you to know what part of the strategy.

Can we expect to evolve the idd in March and where are your focus areas.

Speaker 9: And the second question is about your target, your headcount target back in 2019 where you targeted a 74,000 headcount target. And I wanted to know if it still holds or was it more direction of travels. Thank you very much.

And the second question is about your target headcount targets back in 2019, where you target to 74000 in core target I don't want you to know if it still holds or was it more direction of travel. So thank you very much.

Speaker 4: Thank you, Nicola, and let me start, and James potentially wants to add.

Thank you Nick Laurent.

Let me start and James potential.

Potentially wants to add so look I do believe that over the last two enough years, we have shown that the general direction, which we have decided for Deutsche Bank.

Speaker 4: So, look, I do believe that over the last two and a half years we have shown that the general direction which we have decided for Deutsche Bank is the right one. So that means, overall, without talking too much already about the IDD in March.

Is the right one so that means the overall without talking too much already about the idd in March it will be an evolution of our current strategy.

Speaker 4: it will be an evolution of our current strategy. We do believe that we have really big chances to further grow in all the four businesses, in particular also in the three stable businesses. We have achieved now a foundation there, in particular also when you take the interest rate and the underlying growth into account, where we think we have a great starting point to further excel.

We do believe that we have.

Really.

Big chances to further grow in all four businesses in particular also in the three stable business. We have achieved now a foundation. There in particular also when you take the interest rate and the underlying growth into account, where we think we have a great starting point to further excel.

Speaker 4: Of course, this kind of strategy, because for further growth you need to invest, that also means that we will think about further efficiencies.

Of course this this kind of strategy because we for further growth you need to invest that also means that we will think about further efficiencies.

Speaker 4: All that what we started to do on front to back, all that what we started to do in the private bank, not only by bringing with the project Unity, PostBank and Deutsche Bank on the IT side together, but if you look at the kind of branch reduction, all that would obviously will go further and that will bring further efficiencies.

All of that what we started to do on front to back all that what we started to do in the private bank not only by bringing with the project unity Postbank and Deutsche Bank on the it side together, but if you look at the kind of branch reduction or that would obviously.

Go further and that is that will bring further efficiencies.

Speaker 4: We do believe that our investments, heavy investments, which we also did in our control functions will pay off and that over time we can take costs out there.

We do believe that our investments heavy investments, which we also did in our control functions will pay off and that overtime. We can take costs out there and hence we believe that there will be a good amount of gross savings, which we can reinvest into those businesses into the full business now the real issue is.

Speaker 4: And hence, we believe that there will be a good amount of gross savings which we can reinvest into those businesses, into the four businesses. Now, the real issue is, over the next years, to find out within the four businesses where our key growth paths, what is the incremental growth we have with the incremental costs attached. And I think we have a transparency achieved there which gives us a nice portfolio composition and shows a credible path for the next three to four years.

Over the next two years to find out within the four businesses, where our key gross parts. What is the incremental growth we have with the incremental cost attached and I think we have a transparency achieved there which gives us a nice portfolio composition and chose a credible path for the next three to four years.

Speaker 4: I do believe that we have now turned to be a normal bank. That also means we will have a kind of a purpose and a vision which goes beyond 2025.

I do believe that we have now turned to be a normal bank that also means we will have a kind of a purpose and division which goes beyond 2025. This bank is clearly an international player we want to be one of the leading European banks, and we will make that very clear in the March in the March.

Speaker 4: this bank is clearly an international player. We want to be one of the leading European banks, and we will make that very clear in the March IDD. And last but not least, if you become a normal bank, as James just alluded to, that also means we need to talk about adequate shareholder returns. So everything, what we started to do, will be now further detailed out, and I think in a very positive way. Thank you.

And last but not least if you could kind of a normal bank as James just eluded to that also means we need to talk about adequate shareholder returns. So everything what we started to do would be now further detail it out and I think in a very positive way.

The next question you had on sorry.

Head Count look I do believe James is always saying that theyre in and absolutely right way and again he may want to add to that we have a hierarchy of growth and the hierarchy of cold starts was the Iot of 8%, where we are confident based on that what we have told you that we will achieve that obviously then linked to the 70% cost income ratio.

Speaker 4: Look, I do believe James is always saying that in an absolutely right way and again he may want to add to that. We have a hierarchy of goals and the hierarchy of goals starts with the RTE of 8% where we are confident based on that what we have told you that we will achieve that.

Speaker 4: obviously then linked to the 70% cost income ratio. That means that we need to further reduce also headcount unfortunately, but that is something which will come and James was alluding to those kind of components of cost reductions in 2022 and a good part of that also is linked to a headcount reduction. Now over a time of two and a

That means that we need to further reduce also head count Unfortunately, but that is something which will come and James was alluding to those kind of components of cost reductions in 2022 and a good part of that also is linked to a head count reduction now over time of two and a half years.

Speaker 4: Nicholas, you also then find in the detailed planning out that, for instance, in technology, it may make sense to further internalize and not to rely so much on external employees.

Nicolas you also then find in the detailed planning out that for instance in technology. It may make sense to further internalize and not rely so much on external employees that is obviously now adding into the plant. So that I would say and we have said that the real goal is 8% and 70%.

Speaker 4: That is obviously now adding into the plan so that I would say, and we have said that, the real goal is 8% and 70%. That will mean further reduction, but the 74,000 is, as such, not a hard goal. It is staff reduction is one part of our cost reduction to achieve the cost-income ratio of 70%.

That will mean further reduction, but the 74000 is as such not a hot gold. It is staff reduction is one part of our cost reduction to achieve the cost income ratio of 70%.

That's great. Thank you very much.

Speaker 2: Next question is from the line of Stuart Graham from Autonomous. Please go ahead.

Next question is from the line of Stuart Graham from Autonomous. Please go ahead.

Speaker 7: Oh, hi, thanks for taking my question. I had two please. First on buyback, the approval of the ECB for your shared buyback program is obviously very welcome, well done, but my question is, was there any quid pro quo in terms of you having to adjust your levered loan underwriting activities in order to comply with the ECB's underwriting policies in 22 or beyond? That's the first question. Then the second question was on costs again. In the past Deutsche used to suffer Q4 cost disappointments. I think under your leadership that stopped.

Hello, Hi, Thanks for taking my questions I had two please.

So there are some like that.

The approval of the ECB, if you have a share buyback program until somebody will come well done but my question is was there any quid pro quo in terms of you having to adjust your levered loan underwriting activities in order to comply with the Ecb's underwriting policies and 'twenty will be on the first question and the second question was on costs again.

In the past you used to suffer Q4 cost disappointment I think under your leadership.

So now we have a keyhole cost disappointment. So my question is where are you on target to hit the $18 9 billion full year cost hug. It until you sold U S Bank Splurging on bonuses does that swing factor and.

Speaker 10: Now we had a Q4 cost disappointment. So my question is, were you on target to hit the $18.9 billion all-year cost target until you saw the US banks splurging on bonuses? Was that the swing factor? And given all the transformation charges you took, why were you unable to find a few hundred million of other cost saves to make sure you hit that target of $18.9? Thank you.

Given all the translation charges you took why were you unable to find a few hundred a few hundred million of KOL sites to make sure you hit that target.

$18 nine thank you.

Sure, Stuart. Thank you for the questions. Look, no quid pro quo. I mean, look, there's a lot that we work through with the ECB and our other regulators all the time, but we sort of see them as isolated, you know, engagements. At least that's our perspective. I can't speak for the ECBs. So, no, we don't see there to be a quid pro quo. We do think...

Sure Stuart. Thank you for the questions look no no quid pro quo, I mean look theres a lot that we worked through with with the ECB and our other regulators all the time, but we sort of see them as isolated.

No engagements at least that's our perspective I can't speak for the for the <unk>.

So no we don't see there to be a quid pro quo, we do think that we have obligations.

that we have obligations uh... you know the interestingly the threat process

Interestingly the threat process is sort of designed that way.

is sort of designed that way, that we get feedback from the ECB every year, and in that, and then they set expectations as to what they'd like to see us improve over time, and then the process is repeated. I think it's a very healthy dialogue, but no, we don't see there as being a quid pro quo and not on leverage lending, to your specific example.

We get feedback from from the ECB every year and in that and then they set expectations as to what.

What they like to see us improve overtime and then.

The process is repeated I think it's a very healthy dialog, but but no. We don't see there is b being a quid pro quo and not on leveraged lending to your specific example.

On the cost side, look, a couple of things I'd say is that we have, as we said, seen some unexpected items creep in, whether regulatory remediation, higher variable compensation, and what have you. We've been doing our work to offset it. And as you say, we didn't entirely succeed at the end of the year. I will say, though, that

On the cost side.

Look a couple of things I'd say is we have as we said seen some some unexpected items creep in where the regulatory remediation higher variable compensation and what have you we've been doing our work to offset it.

And as you say, we didn't we didn't entirely succeed and at the end of the year I will say, though that.

You know, we missed in the end on our cost target by about one and a half percent.

You know we missed in the end on our cost target by about one 5%.

which set against the significant revenue outperformance, I think is a pretty creditable result.

Which set against the significant revenue outperformance I think is a pretty creditable result.

You know, how do I get to one and a half percent? As you say, 18.9 is the reset sort of plan number we gave you a year ago, December of 18, five reset for the, uh, the uncontrollable items, SRF and deposit insurance.

How do I get to one 5% as you say $18 nine as the reset sort of plan number we gave you a year ago December .

Of 18, five reset for the <unk>.

Uncontrollable items S RF and deposit insurance actually on a while FX wasn't a factor year on year in our reported numbers. It actually was in our plan assumption for FX. So there's about call it $150 million of FX difference. So you get to a really a 19 billion starting point and we.

Actually, while FX wasn't a factor year on year in our reported numbers, it actually was in our plan assumption for FX. So there's about, call it 150 million of FX difference. So you get to really a 19 billion starting point, and we reported 19.3.

Ported 19 three.

So, what's in the $100 million? It really boils down to three factors. One was performance-driven compensation that we talked about. The other is volume-driven increases, in particular, sort of asset servicing, and then the control investments, and then finally, the one-off items. Each of that represented about $100 million.

So what's in the in the in the $100 million it really boils down to three factors one was performance driven compensation that we talked about.

The other is volume driven increases in particular sort of asset servicing.

And then the control investments and then finally, the one off items each of that represented about $100 million.

And to your point, all of that pretty much showed up at the end of the year. So your opportunity to offset it when it's really become a reality very late in the year is pretty limited. But I think the overall performance, again, this, you know, 1.5% is a pretty creditable expense performance, in our opinion, given all that was going on last year, and especially the better revenue performance.

And to your point all of that pretty much showed up at the end of the year. So your opportunity to offset it when it's when it's really become a reality very late in the year is pretty limited, but I think the overall performance again this one 5%.

Is it pretty creditable expense performance in our opinion, given given all that was going on last year, and especially the better revenue performance.

Obviously, it means that we need to redouble our efforts into 22. You know, it's the nature of the beast, and so we will go after it. We talked about what the sequential needs to look like, broadly speaking. You know, we can see where that's coming from. We need to execute and deliver on that.

Obviously, it means that we need to redouble our efforts into 'twenty two.

It's.

The nature of the Beast and so we will go after it.

We talked about what the sequential needs to look like broadly speaking.

We can see where thats coming from we need to execute and deliver on that.

But on that basis, I think we would be kind of resetting back to a glide path that supports.

But on that basis, I think we would be kind of resetting back to a glide path that supports where we need to go.

where we need to go, and obviously, you know, revenue help is certainly welcome. In a sense, and Christian alluded to this, we

And obviously.

Revenue help us certainly welcome in a sense and Christian alluded to this we were.

We are running a bigger company than we expected to run at this point in time, given the revenue uplift that we had, much of which we think is sustainable, given the investment opportunities we see, and also, to some degree, given the need to continue our investments in remediation of controls. So we're pretty comfortable with our performance, albeit, as you say, a late-in-the-year increase, not all of which was expected.

We are running a bigger company than we when we expected to run at this point in time, given given the revenue uplift that we had much of which we think is sustainable.

Given the investment opportunities we see.

And also to some degree given the need to continue our investments in remediation of controls. So we're pretty comfortable with our performance, albeit as you say of late in the year increase not all of which was expected.

Stuart.

Again, James said it all, but simply, as you said, it is a disappointment in Q4. I simply want you to understand that the level of scrutiny, and in particular as a response to what we have seen, and James just described, the way we discussed it in the management board and with the leadership team.

Again, James said, it all but simply if you said it is a disappointment in Q4.

I simply want you to understand that the level of scrutiny and in particular as a response to what we have seen in James just described.

The way, we discuss it in the management board and with the leadership team.

is really up to the last million in particular now for the next quarter and 2022 and the level of details and transparency we have of the underlying cost driver and how we tackle it on a weekly basis.

He is really up to the last million in particular now for the next quarter and 2022.

And the level of detail and transparency, we have of the underlying cost driver in how we tackled it on a weekly basis is exactly the same how we started to restructure this company to enough years ago, and we will not let go I would tell you. We are all over it I think it is justified by that what we have seen as a total performance.

is exactly the same how we started to restructure this company two and a half years ago and we will not let go. I tell you, we are all over it. I think it is justified by that what we have seen as a total performance.

But I simply want to make sure, while not adding new content to that, what James is saying, the management focus on this topic is exactly the same, and I would even say, if not even more, than over the last 12 months, because we know that this is part of our credibility, and we will deliver on that, what James just outlined. Thank you for that.

But I simply wanted to make sure we're not adding new content to that what James Cig. The management. The management focus on this topic is exactly the same and I would even say if not even more than over the last 12 months because we knew that this is part of all our credibility and we will deliver.

Beyond that what James just outlined.

Thank you for taking my questions. Thank you.

Next question is from the line of Anka Reingan from RBC. Please go ahead.

Next question is from the line of <unk> <unk> from RBC. Please go ahead.

Yeah, thank you very much for taking my questions. Two questions, please. The first is on the dividend, where you so far have mainly been talking about absolute, and I just mentioned a payout ratio for the first time on the call. Is that sort of like the right observation, that it's like an absolute amount you basically presented us rather than a payout ratio?

Hi, Thank you very much for taking my question two questions. Please.

On the dividend.

Ladies and gentlemen, talking about absolute just mentioned.

Our payout ratio.

On the call.

Does that observation that a second absolute amount.

I think we presented that as Robert payout ratio.

And then in terms of the cost and the 70% payout ratio, in the one area I probably struggle a bit is in the investment bank. And do you think that the comp ratio you reported for 2021 is like a structural guide, or should I assume there's pressures in the next year for the comp ratio to go up in terms of the modeling? Thank you very much. Sure, Anca, thank you.

And then in terms of the cost in the 70% payout ratio and the one area I'd talk a little bit isn't in the investment bank and do you think that the combination of your reported.

'twenty one is like a structural got it.

That question is in the next year.

They seem to go up in terms of the modeling. Thank you very much.

Sure. Thank you.

Look.

There, the payout ratio and the dividend rate are obviously not divorced, but.

The payout ratio and the dividend rate are obviously not divorced.

But but we think of it in terms of dividend growth.

but we think of it in terms of dividend growth at a prudent payout ratio. I think that's how I'd describe it. So, and again, we'll go into more detail on how we think about that and our capital plan in March, but if I, yeah, I think that covers that. On the costs and the costing of ratio for IB,

At a at a prudent payout ratio I think that's how I'd describe it.

So and again, we will go into more detail on how we think about that in our capital plan in March but.

But at five yeah, I think that covers that.

On the cost and the cost income ratio for I B.

Look, first of all, there's a lot of complexity in the compensation cost that is that is recognized each year on the accruals, deferred compensation, obviously, the fixed pay and and a dynamic inside that that that expense base.

Look.

First of all there's a lot of complexity in the compensation costs that is that is recognized each year on the accruals deferred compensation, obviously, the fixed pay and a dynamic inside that that that expense base.

So it doesn't perfectly vary with the performance-driven assumptions or decisions in any given year.

So it doesn't perfectly vary with the performance driven assumptions or decisions in any given year.

But look, having established a cost-income ratio of 60-odd percent in the investment bank, we're obviously very pleased with that.

But look having established a cost income ratio of 60 odd percent in the investment bank. We're obviously very pleased with that do.

Do we think that that's sort of inevitable for the investment bank? Of course not. There can be years with a weaker revenue performance, sometimes better. Sometimes it takes the compensation costs a little time to catch up, given the impact of the deferral. But we're very pleased, frankly, with the baseline that we've set over the last two years.

Do we think that that's sort of.

Inevitable for them for the investment bank of course, not there can be there can be years with some of weaker revenue performance sometimes better.

Times It takes the compensation cost little time due to catch up given the impact of the deferral.

But we're very pleased frankly with the baseline that we've set over the last two years and as you've heard us comment in various places.

And as you've heard us comment in various places, we think we've remained competitive in terms of our ability to compensate the revenue generating staff in a competitive way.

We think we've remained.

Competitive in terms of our ability to compensate.

The revenue generating staff in AR.

In a competitive way.

Okay.

Sure.

Next question is from the line of Pierce Brown from HSBC. Please go ahead.

Next question is from the line of Pearce Brown from HSBC. Please go ahead.

Yeah, good afternoon, gentlemen. A lot of my questions have been asked already, but I've just maybe got a couple of follow-ups. One is on KORS. So you've mentioned in the past the importance for fixed compensation of negotiations in Germany with tariff staff.

Yes, good afternoon gentlemen.

My questions have been asked already but I just wanted to get a couple of follow ups. One is on course so.

You've mentioned in the past the importance for fixed compensation of negotiations in Germany with <unk> staff.

and I'm just wondering are there any key dates we should be looking at this year on that topic and what sort of rates of tariffs, wage inflation have you baked into the plans you've given us?

And I was just wondering are there any key dates we should be looking out this year on that topic.

What sort of rates of <unk>.

<unk> <unk> wage inflation have you baked into the.

The plans you've given us.

And then the second question, just circling back on the investment bank revenue guidance, you've given a very robust defence of the £9 billion sort of target level for this year. Within that, should we still think about £6.7 billion as being the right normalised level for the trading business? And I'm just asking that, obviously.

The second question just circling back on the investment bank revenue guidance given a very.

Robust defense of the $9 billion.

Sort of target level for this year.

Within that should we still think about $6 7 billion has been the right normalized level for the trading business.

Just ask not obviously endy.

just in the light of the second half run rate, which looks probably about a billion shy of that number. Thanks very much.

Just in the light of the second half.

Run rate, which looks probably about 1 billion shy of that number thanks very much.

Well, thank you. Look, hard to actually anticipate the outcomes on the tariff negotiations with the unions, but obviously we have put something into our plan for 2022 in particular for the German business.

Well thank you.

How to how to actually anticipate the outcome of the tariff negotiations with the unions, but obviously.

We have put something into our plan for 2022 in particular for the German business and.

And looking at that, what we discuss, hopefully, we will make it happen that this is within that number, but I'm actually quite confident. Obviously, this needs to be monitored, and therefore, again, it is so important for us that also going forward, we make sure that all the attempts we take on further efficiencies

And looking at that what we discuss.

Hopefully we will make it happen that this is within that number but I'm I'm I'm actually quite confident obviously this needs to be monitored and.

And therefore again it is so important for us that also going forward, we make sure that all the attempts we take on further efficiencies.

are really implemented also beyond 2022 because obviously there is a higher amount of inflation which we also need to cover and therefore James and I are convinced that also the next strategy must consist of meaningful efficiency gains also in order to pay up for that. But I'm not concerned actually on a high level with regard to this year's tariff negotiations. The second part on the investment bank.

Oh really implemented also beyond 2022.

Because obviously.

There is a higher amount of inflation, which we also need to cover and therefore Jameson I am convinced that also the next strategy must consists of meaningful efficiency gains also in order to pay up for that so, but I'm I'm not concerned actually.

And.

On a high level with regard to this year's.

Tariff negotiations.

The second part on the investment Bank again, we gave you the guidance of $9 billion I would say looking again at that.

I would say looking again at that, even in a normalization of markets, and you said rightly so, that we have seen a normalization in the second half.

Even in a normalization of market then you said rightly so that we have seen a normalization in the in the second half.

Don't underestimate actually the stability of our financing platform which we have.

Don't under estimate actually the.

Stability of all of our financing platform, which we have.

The market share gains which we did in the and gained in the trading business Clearly we we we gained market share in the first nine months We haven't had yet the numbers for the fourth quarter But we do believe that we can defend that based on everything we can see

The market share gains, which we did in the <unk> gained in the trading business.

Clearly we gained market share in the first nine months, we haven't had yet the numbers for the fourth quarter, but we do believe that we can defend that based on everything we can see.

And also, again, the rating upgrades clearly help us.

And also again the rating upgrades clearly help us in order to capture more flow into more growth than we invested into our flow business. There. So I would say that that the number the $6 seven.

in order to capture more flow and more growth. Then we invested into our flow business there.

So I would say that that number, the 6.7, is more than a solid foundation. I even believe that there is a certain upside, but James, you may want to add to that. Yeah, I'll just add briefly, you know, last year we began to talk about a range of quarterly revenues in the investment bank in total, you know, of between two and two and a half billion.

It's more than a solid foundation I, even belief that there is certain upside, but James you may want to add to that yes, I'll. Just add briefly you know last year, we began to talk about a range of quarterly revenues in the investment bank in total.

Between two and $2 5 billion.

And so the midpoint of that range, if you assume no seasonality, would get you to the $9 billion.

And so the midpoint of that range. If you assume no seasonality would get you to the $9 billion.

In fairness, of course, there is seasonality, so you're dependent on a better Q1 performance, and it's usually...

In fairness there of course, there is seasonality. So you are dependent on a better Q1 performance and it's usually steps down each quarter. So Q2 tends to be the second invest in then it tails off towards the end of the year I think it's notable that even in the fourth quarter, we achieved for the second year in a row at $1 $9 billion of.

steps down each quarter so cute you tend to be the second best and then it it pales off towards the end of the year

I think it's notable that even in the fourth quarter, we achieved for the second year in a row $1.9 billion of revenues in the investment bank in the quarter just passed. So nearly at that $2 billion level, even in what was a relatively difficult quarter, to be honest, if market conditions had been a little bit better and one or two things had gone our way.

Revenues in the investment bank in the quarter, just past so nearly at that $2 billion level, even in what was a relatively difficult quarter.

To be honest, if market conditions had been a little bit better than one or two things have gone our way.

we would actually have surpassed the two billion in the fourth quarter. So this idea that there's a reasonably sustainable level of performance we've increasingly seen and we're getting increasingly confident about in

Actually have surpassed the $2 billion in the fourth quarter. So this idea that there is a reasonably sustainable level of performance, we've increasingly seen and we're getting increasingly confident about.

In.

in sometimes, you know, mixed market environment. And by the way, last year, it wasn't just the fourth quarter. There was also some pretty mixed market environments that we navigated through, for example, in July of last year. So we're seeing more sustainability in that range that I described. And as we've said, a decent start into the year, which is absolutely critical.

And sometimes you know mixed market environment by the way they late last year. It wasn't just the fourth quarter. There was also some pretty mixed market environments that we navigated through for example in July of last year. So so we're seeing more sustainability in that range that I described and as we've said.

<unk> start into the year, which is which is absolutely critical.

Yeah.

That's very clear thanks very much.

Next question is from the line of Amit Goel from Barclays. Please go ahead.

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

Hi, thank you. I've just got a couple of, I guess, smaller points left. One was just, and maybe slightly different from the other questions, but on the OPRISC RWAs and CRU, I was just kind of curious how discussions, etc., have progressed, if that is an area where we could see.

Alright, thank you.

Couple of Us got.

Smaller points left.

Almost just.

And maybe some different to any other questions.

On the op risk <unk>.

I was just kind of curious.

How kind of discussions et cetera progress just if that is an area, where we could see.

again some improvement and then just some small follow-ups. There's this episodic financing item highlighted I think on slide 45, just curious which it says will reverse, just curious if there's any kind of earnings contribution from that and also within the corporate treasury services, what was the contribution of the credit protection recoveries and could there be some more? Thank you.

Again some improvement.

And then.

Just one small follow ups and does this episodic financing items highlighted I think on slide 45, and just curious which it says just curious if there's any kind of earnings contribution.

Matt.

Andrew Let's say within the corporate Treasury services.

What was the contribution of the credit protection recoveries and could that be symbol. Thank you.

Sure, I'm just trying to catch up with you, Amit, on all of those things. Oh, okay, so on the episodic item, that was a client financing that was sort of unusual in its size, but it's also temporary, so it runs off.

Sure I'm, just trying to catch up with you on all of those things Oh, Okay. So on the on the the episodic items that was a client financing that was sort of unusual in size, but it's also temporary so it runs off by the end of the first quarter very likely did it have a revenue contribution.

by the end of the first quarter, very likely. Did it have a revenue contribution? Sure, we wouldn't have done it otherwise, but we felt good about supporting our client in a highly strategic transaction. But it's, so it had a benefit, but that benefit doesn't, you know, doesn't persist.

<unk> sure we wouldn't have done it otherwise, but we felt good about supporting our client in a highly strategic transaction.

But it's so it had a benefit but that benefit doesn't.

It doesn't persist.

I think on OpRisk RWA, look, we've surprised ourselves, I have to say, to the upside over the past several years. It was a feature of our capital plan back in 19.

I think on op risk RW, a look we've we've surprised ourselves I have to say to the upside over the past several years. It was a feature of our capital plan back in 19.

And as you've seen in our numbers, including the CRU, we've outperformed that. We continue to work on opportunities in OPRSC RWA. We have to, you know, do the analysis, understand the advanced models approach, and then get regulatory approval.

And as you've seen in our numbers, including the CRE you. We've outperformed that we continue to work on opportunities and offers RW way, we have to do the analysis understand the advanced models approach and then get regulatory approval.

So is there still potentially a little bit to come in the CRU?

So is there still potentially a little bit to come in the CRE you, yes, perhaps but but also the opportunities begin to to run out and you get to a just a model driven in other words.

Yes, perhaps, but but also the opportunities begin to.

to run out and you get to a just a model driven, in other words, you know, incidences either coming into or being removed from the model.

Incidence is either coming into or being removed from the model.

until we move to the new Basel III approach, which happens in 2025.

Until we move to the new Basel, Basel, III approach, which happens in 'twenty five.

And Amit, I apologize, there was a third element to your question that I haven't answered yet.

And Amit I apologize there was a third element to your question I haven't answered yet the last one.

The last one was just on the corporate treasury services revenue, how much is the contribution from the credit protection recovery? We don't normally give that, but we talk about episodic. In this instance, it was, I'll call it about $30 million in the quarter that was recorded on one item. That's not, again, unprecedented. You know, we've talked for a while about this, the contribution of episodic.

Just on the corporate Treasury services revenue.

How much is contributed.

From the credit protection recoveries, we don't normally give that but we talk about episodic in this instance, it was call it about $30 million in the quarter that that was recorded on one one item. That's not again unprecedented you know we've talked for a while about the contribution of episodic.

that usually represent about 100 million.

Usually represent about $100 million.

in each quarter but it can vary it can be 50 or less and it can be at rare occasions above 150. So there was some help in the quarter on that item and and it's hard we don't get visibility into whether something similar would recur in the in the first quarter.

In each quarter, but it can vary it can be 50 or less and it can be rare.

Rare occasions above 150, so there was some help in the quarter on that item and it's hard because we don't get visibility into whether something similar would recur in the first quarter.

Got it thank you.

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

Next question is from the line of Andrew Lim from Societasian Herald. Please go ahead.

Alright, thanks for taking my questions.

Hi, thanks for taking my questions. So, can I press you a bit more on the exit run rate on costs for this year and the implications for 2023, because the costs...

It kind of proceed a bit more on the exit run rate on cost for this year and the implications for 'twenty three.

Because the cost reductions are quite back ended this year I think the conclusion is that 23 costs should be materially lower than the <unk> 22.

reductions are quite back-ended this year. I think the conclusion is that 23 costs should be materially lower than they are in 22.

I think when I've asked this question before, you said James, it could be below $17 billion, although I can see that the shape of the bank is a bit bigger and we have had a bit of cost inflation. In terms of direction, should we still be thinking about 23 costs being quite a bit?

I think I have asked this question before you said change that it could be below 17 billion or the like.

Let's see.

The shape of the bank.

And we have had a bit of cost inflation.

In terms of direction should we still be thinking about 2003 costs being quite a bit lower than 2022 costs.

And then the second question, it's just a point of clarification, really, when you talk about 450 million euros of costs being reduced sequentially, are you talking about reported costs here or adjusted costs? Thank you. Sure. Andrew, thanks for the question. So on the last item, it's adjusted costs that we talk about in terms of that run rate. And

And then the second question is just a point of clarification really.

You talked about 450 million euros of costs being reduced sequentially are you talking about reported cross sale adjusted costs.

Okay.

Sure Andrew Thanks for the question so on the last item.

It's adjusted costs that we that we talk about in terms of that run rate.

And.

And in a sense, it goes to the first part of your question about exit rate. You know, is Q4 an exit rate that is representative of where we need to be in 22? No, absolutely not. And hence the, you know, the guidance I gave earlier that we need to be in the mid to lower fours going into 22 to be on a path towards our cost income ratio target, again, with some variability in that given revenues.

And in a sense. It goes to the first part of your question about exit rate as Q4 exit rate that is representative of where we need to be in 'twenty, two no absolutely not and hence the.

The guidance I gave earlier that we need to be in the mid to lower fours going into 'twenty two to be on a path towards our cost income ratio target again with some variability in that given given revenues.

So there's still work to do. But as we've talked about, there's some items that won't repeat that are, you know, whether they're accounting-related adjustments, the, you know, the variable compensation accrual would normalize some other items that came in that don't repeat. So if I put that all together, that we see the path to the 450 and therefore, you know, reestablishing a run rate, a glide path that is more in line with where we need to be.

So so theres still work to do but as we've talked about there are some items that won't repeat that or you know.

Whether they are accounting related adjustments.

<unk>.

The variable compensation accrual would normalize.

Some other items that came in that don't repeat so if I put that all together that we see the path to the $4 50 and therefore.

Reestablishing a run rate a glide path that is that's more in line with where we need to be.

Great, sorry, and on that adjusted cost definition, are you including or excluding litigation? Sorry to press you on this, but you've got a few different... So in it, it was a little... And we're looking forward to the day where we don't have adjustments and don't have to give you the definitions as clearly. On the cost side, adjusted costs exclude litigation.

Great Alright.

That's our adjusted cost definition.

Included in this case so let's proceed.

Just looking through different so and it was a little and we're looking forward to the day, where we don't have adjustments and don't have to give you. The definitions is clearly on the on the cost side adjusted costs exclude the litigation.

Again, it's not in our control, so we try to give you a sense of the sort of the operating run rate in the adjusted cost measure.

Again, it's not in our control. So we try to give you a sense of the sort of the operating run rate in the adjusted cost measure.

In adjusted pre-tax profit, we actually do include litigation on the basis that, you know, it's part of the business and while variable, you know, it would be inappropriate to adjust it out. So we're a little inconsistent with the treatment, but adjusted costs excludes litigation.

In adjusted pre tax profit, we actually do include litigation.

On the basis that it's part of the business and while variable it would be inappropriate to adjusted out. So so we're a little inconsistent with the treatment, but adjusted cost excludes litigation I guess.

I guess the other thing, Andrew, just so you, for your, you know, make sure we don't talk past each other.

The other thing Andrew just so for your <unk>.

Sure we don't talk past each other we've given you an adjustment for the prime finance costs in the past again to give you a sense of are targeting relative to the to where we were in the days immediately before our announcement.

We've given you an adjustment for the prime finance costs in the past.

again, to give you a sense of our targeting relative to where we were, you know, in the days immediately before our announcement in July 19. But with the prime finance transaction that we were able to put together with BNP Paribas, you know, there were some costs that we were being reimbursed for that would have run off more quickly, and hence the reason we've given you that

In July 19.

But with the Prime finance transaction that we were able to put together with BNP part of AR.

There were some costs that we were being reimbursed for that would that would have run off more quickly and hence the reason we've given you that adjustment that now needs to be part of the.

That now needs to be part of the, you know, we won't provide that adjustment going forward. We need to have taken all of the related cost out in Q1, given that we're no longer benefiting from that, from the cost recovery. So at least there, the adjustments that we're providing to you will start to fall away, and hopefully more to come after that.

No we won't provide that adjustment going forward, we need to have taken all of the related cost out in Q1, given that we're no longer benefiting from that from the cost recovery. So at least there the adjustments that we're providing to you will start to fall away and hopefully more to come after that.

Great. Okay. That's clear thank you very much James.

Next question is from the line of Andrew Coombs from City. Please go ahead.

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

Afternoon. Three from me, please, on TLTRO, the cost messaging, and the upcoming investor day. Just first on TLTRO, you touched upon it, but perhaps you can provide us with the total TLTRO contribution in 2021, and then where you expect that to go in 2022 as the year progresses. Thank you.

Afternoon, three for me please on payout Youre right the cost messaging and the upcoming Investor day.

Stefan <unk> you touched upon it but perhaps you can provide us with the Tyco <unk> contribution.

2021, and then where do you expect that to go in 'twenty two.

as the catch-ups drop away, as the bonus rate drops away from the half-year, and then in 23 years, you start to see some maturities play through. Second question on the cost messaging, I'm just trying to triangulate this a couple of ways. If I take your base case revenue, you mentioned 25.7.

The catch up of strip away the bonus rate drops away from the half year.

And then in 'twenty three.

Cherokee Thanks, Greg.

So first question second question on the cost messaging I'm, just trying to triangulate a couple of ways.

If I take your base case revenue you mentioned 25 seven.

Put 70% on that, you get to about an $18 billion cost base.

You get to about an 18 billion cost base.

On the flip side, if I take your 19.3 starting position, add the 0.2 of transformation that you're guiding to for 2022, and then annualize the 450 of cost savings, I get a bit lower, about 17.7. I'm just trying to work out if you're guiding for cost to actually increase as the year progresses, ex-levy, or if you're saying you'll beat the 70% cost income if you hit that 25.7 number.

On the flip side, if I take your $19 three starting position at the point to a transformation that you're guiding to 2022, and then annualize the full cost saves.

About $17 seven.

I'm just trying to work out what youre guiding for cost to actually increase.

Progressive ex the levy or if youre, saying youll be 70% cost to income at $25 seven number.

And then the final one on the Investor Day, just to clear this up, is the Investor Day going to be focused on how you hit your 2022 targets, or is it going to be forward-looking and you're planning to put new three-year targets out there in the market, for example? Thank you.

And then the final one on the Investor Day, just just to clear this up.

So they're going to be focused on how you hit your 2022 targets or is it going to be forward looking and Youre planning to put new three year targets out there in the market for example.

Yes.

And let me let me stop because I have the easier part. We talk about both in the investor day. Of course we give you an update on 2022. But the main item and the main goal for you is and that's what we owe you is the next trajectory of Deutsche Bank. And therefore we talk about the future with an update on 2022 of course.

Andrew Let me let me okay, because that's the easier part we talk about both in the Investor Day of course will give you an update on 2022, but the main item in the main goal for us and that's what we owe you is the next trajectory of Deutsche Bank and therefore, we talk about the future with an update on 2022 of course.

Yeah, and the other thing I would just add, you know, I do think we owe our investors, I think I've said this before, you know, we've invested 8.4 billion, going to 8.6 billion of our investors' money in the repositioning, the transformation of this bank, and so part of the discussion will be, you know, what did that, what did that achieve? And that, I think, is an important element as well, but as Christian says, we want to be as forward-looking as possible when we get to March 10th.

Yes, and the other thing I would just add I do think we owe our investors I think I've said this before we've invested $8 4 billion going to $8 6 billion of our investors' money in the repositioning the transformation of this bank and so part of the discussion will be you know what does that what does that achieve and that I think is an important.

Element as well, but as Christian says, we want to be as forward looking as possible when we get to March 10th on.

On the TLTRO, I'll speak under Dixit Joshi's control, who's with us in the room here. But TLTRO, basically, we've borrowed $40 billion. It's at 100 basis points at the moment, so $400 million.

On the <unk>.

I'll speak under under Dixit Joshi as control, who is with us in the room here, but but <unk> basically we've borrowed 40 billion. It's a 100 basis points at the moment, so $400 million.

That additional 50 basis point inducement falls away at the midyear, so that falls therefore to $300 million for the full year in 2022. And then we're on a path of simply refinancing and maturities of TLTRO. So you could assume maybe another $100 million of headwind, if you like, going into 2023. I think that would more or less be the TLTRO forward.

That additional 50 basis point inducement falls away at the mid year, So that falls, therefore to 300 million for the full year in 'twenty two and then we're on a path of simply refinancing and maturities of <unk>. So you could assume maybe another $100 million of.

Of a headwind if you like going into 'twenty three.

I think that would more or less be the TRT Arturo.

Again, that's, as I answered earlier, that's assuming there's no offset from tiering, which could happen, and certainly we would encourage because as long as the depot rate is negative or even at very low rates, you know, the interest rate environment makes it burdensome to carry deposits or excess deposits.

A word.

Again.

Answered earlier, that's assuming there's no offset from hearing.

Which could happen and certainly we would encourage because.

As long as the depot ready rate is negative or even at very low rates.

The interest rate environment makes it burdensome to kari deposits or excess deposits.

So now on costs, I think I followed your math, but.

So now on costs.

I think I followed your math.

But.

And I think if I followed your math correctly, the short answer is we need to continue to drive savings as the year goes by in 22 rather than that Q1 is our end point. You know, we have a cost-income ratio target that includes all of our expenses, whether adjusted costs.

I think if I followed your math correctly. The short answer is we need to continue to drive savings as the year goes by in 2002, rather than that Q1 is our endpoint. We we have a cost income ratio target that includes all of our expenses, whether adjusted costs or nonoperating costs like litigation or.

or non-operating costs like litigation or the remainder of the transformation-related effect. So, whichever number you use for revenues times 0.7, you need to then subtract, call it $600 million for SRF.

The remainder of the transformation related effect. So whichever number you use for four revenues times <unk> seven.

You need to then subtract.

Call It 600 million for S. RF.

And then some amount, you know, between, I don't know, 200 and say 500 million for non-operating costs, and after that would fall, and transformation charges, and after that would fall out the adjusted cost number. So, you know, it's.

And then some amount between I don't know 200, and say 500 million for nonoperating costs and after that would fall fall and transformation charges and after that would fall out the adjusted cost number so.

It's it's it's math that we're working towards.

It's math that we're working towards, and a huge number of, as Christian described, sort of measures, detailed management that is helping to drive us to that. But ultimately, when we sit here a year from today, it'll be math on how that ratio worked out for the full year.

A huge number of as Christian described sort of measures detailed management.

That is helping to drive us to that but ultimately when we sit here a year from today it'll be math on how that ratio worked out for the full year.

That's helpful. Just coming back on the TLTRO, I just want to make sure that in 2021, you mentioned the $400 million number based off 100 basis points. There was no additional catch-up in 2021 because I know you had to do a clarity test once you hit official loan growth. Was it $400 million or was there anything incremental on top of that $400 million? There was a little bit, I think you're right, in Q1 that was incremental because our accounting had us catching up for the inducement.

That's helpful just coming back on the tariffs all right I just wanted to make sure that in 2021, you mentioned the 400 million number based upon the basis points.

Additional catch up in 2021, because I know you have clarity test yes.

As for loan growth.

400 or was there anything incremental on top of that for one there was a little bit I think you're right in Q1 that was incremental because our accounting hedges how does catching up for the inducement.

And when we had the confidence in Q1, I think that was maybe another 30, 40 million of revenue in Q1. We can go back and tidy that up with you, with the IR guys, or tomorrow in the fixed income call.

And when we had the confidence in Q1, I think that was maybe another 30 or $40 million of revenue in Q1, we can go back and tidy that up with you with the IR guys or tomorrow in the fixed income call.

Great. Thank you.

Next call is from a line of Magdalena Stoklosa from Morgan Stanley , please go ahead.

Fixed costs from the line of Magdalena Stoklosa from Morgan Stanley . Please go ahead.

Thank you very much and good afternoon. I've got two questions. One is on cost and another one is on capital requirements. I think on cost, you know, we've talked at length today about savings, but I think that's kind of what interests me, kind of post-transformation.

Alright, Thank you very much and good afternoon.

I've got two questions one is on cost and another one is capital requirements.

I think on costs.

We've talked at length today about savings, but I think that's kind of what what interests me.

The transformation.

is what incremental investments from here do you think you need to do to compete for growth as a transformed bank from next year onwards? What areas of the business do you think you're going to still have to invest in?

And kind of what the incremental investment from here do you think you need to do to kind of to compete for growth.

A transformed back from next year onwards, it's kind of what what areas of the business do you think youre going to still have to invest in.

So that's question number one and question number two really is the follow-up on the capital requirements. You've talked about counter-cyclical buffer being included in your capital planning but I'm just curious, can I ask do you think your transformation effect is kind of fully reflected in your pillar to R?

So that's question number one and question number two is the follow up on the capital requirements.

Talked about the counter cyclical buffer being included in your capital.

But I'm just curious.

Can I ask do you think your transformation effect is kind of fully reflected in your pillar two are.

Thanks, Mike.

Let me start on your first question, i.e. the kind of future investments. First of all, as we want to grow and be successful and stay relevant and even more competitive in all four businesses, we will invest in all four businesses going forward.

And a cleanup question, let me start.

On your first question Ied kind of future future investments first of all as we want to grow and be successful and stay relevant and even more competitive in all four businesses, we will invest in all four businesses going forward.

Again, there will be a detailed story on March 10th, but if I can just give you some examples. I mean, in the corporate bank, obviously some of the growth themes we have is all around our payments. So the investments we do into payment systems.

Again, there would be a detailed story in on March 10th, but if I can just give you. Some examples so I mean in the corporate bank.

Obviously some of the growth themes, we have is all around to our payments. So the investments we do into payment systems.

in order to be competitive, but even also to offer new payment systems, quicker payment systems to our clients, very, very important.

In order to be.

Competitive, but even also to offer new payment systems quicker payment assistance to our clients are very very important.

asset-as-a-service we will invest in to offer our corporate clients a different way of financing, i.e. like pay-per-use, we will do that for our corporate clients.

S S. It as a service.

We will invest in two a M.

We offer our corporate clients in a different way of financing I eat like a pay per use we will do that for our corporate clients in the private bank.

In the private bank, it's all about, obviously, further investments into our digital offerings, and that goes for all kinds of business there. This is the day-to-day banking that has a lot to do with the way of further how the clients are doing their investments.

All about obviously.

Further investments into our digital offerings.

That goes for all kinds of business. There. This is the day to day banking.

That has a lot to do with the way of further.

Lines are doing their investments, but also the kind of front to back process. When it comes to consumer finance a mortgaging. So also there we want to invest in order to be efficient in the process, but also to make these kind of products, we have more attractive to our clients and if you would talk to Fabrizio, Rob and Mark.

but also the kind of front-to-back process when it comes to consumer finance and mortgaging. So also there we want to invest in order to be efficient in the process, but also to make these kind of products we have more attractive to our clients.

And if you talk to Fabrizio, Ram and Mark, a lot of investment in the investment bank in front to end, i.e. really that it starts from capturing the trade actually on the client screen until up to the way into our operations department.

A lot of investments in the investment bank in front to end.

He really that it starts.

From capturing the trade.

Actually on the Cline screen.

Until it all.

Up to the way into our operations Department so.

There are really fantastic ideas, how we also there make the client's life even easier and at the same time we take efficiencies out and increase the flow. So again, in those businesses where we are right now, where we have a relevant market share, we will invest for both efficiencies but also revenue items.

There are really fantastic ideas, how we also there make the client's life, even easier and at the same time, we take efficiencies and increase the flow so.

Again in those businesses, where we are right now where we have a relevant market share we would invest for both efficiencies, but also revenue revenue items.

And Magdalena, on the capital requirement, you know, we've sort of gotten to a world where capital sufficiency is treated as a buffer to MDA as a shorthand. Where we stand, depending on the bucket, sort of 250 or a little bit more of a buffer.

And Magdalena on the capital requirement.

We've sort of gotten to a world, where where capital sufficiency is treated as a buffer to MDA as a shorthand where we stand depending on the bucket instead of 250 or little bit more.

Of a buffer.

To your question, so yes, it's built into our path going forward, you know, and that we would maintain something like that buffer, but do we think that MDA may overstate, frankly, the capital requirements in our business? We think it might.

To your question. So so yes, it is built into our path going forward.

And that we would maintain something like that buffer, but do we think that MDA may may overstate frankly, the capital requirements in our business, we think it might.

Now, it's absolutely in the ECB's discretion to set what the PQR is.

Now it's absolutely in the Ecb's discretion to set what the Pizza you are is.

And we're sort of a taker there, but, you know, in their methodology, the P2R reflects their assessment of the company, its business model, its control environment, its risk.

And and we're sort of a taker there.

But in their methodology there the PTR reflects their assessment of the company its business model its control environment its risk profile its financial performance in a number of other considerations, we would hope that over time.

profile, its financial performance, and a number of other considerations. And we would hope that over time, as the company continues to transform, there may be room to improve there. The countercyclical buffer, of course, is kind of a new piece of information. That varies depending on the market environment and the stress, something we have to consider in our own internal management buffer setting.

As the company continues to transform there may be room.

Two to improve their the countercyclical buffer of course is kind of a new piece of information.

That varies depending.

Depending on the market environment and the stress something we have to consider in our in our in our own internal management buffer setting and then the other item that's out there we've drawn attention to is the is the domestics iffy buffer we are capitalized at 2%.

And then the other item that's out there we've drawn attention to is the is the domestic SIFI buffer, where we are capitalized at 2 percent. Our international, our G-SIFI buffer is one and a half percent.

Our international G. SIFI buffer is one 5% and again you can debate, which of the two numbers as appropriate some of our peers are are well below that.

And again, you can debate which of the two numbers is appropriate. Some of our peers are well below that. But when you think about MDA as the threshold to compare with, you need to really look at those elements that are within that MDA number as you think about capital requirements going forward. Thank you.

But when you think about MDA is the threshold to compare with you need to to really look at those elements that are that are within that MDA number.

As you think about capital requirements going forward.

Well thanks, so much thank you.

Okay.

Next question is from the line of Timo Doms from DZ Bank. Please go ahead.

Next question is from the line of Chemo Dooms from DZ Bank. Please go ahead.

Yes. Thank you good afternoon.

questions, please. One is on the weighting upgrades and the other question refers to the competitive landscape.

Got two questions. Please one is on the rating upgrade.

The other question, we spoke to the competitive landscape so underwriting upgrade.

Could you please quantify the tailwind that has been provided by the most recent rating upgrade from S&P in November ?

Could you please quantify the tailwind that's.

<unk> provided by the most recent rating upgrade from S&P in November .

So in the middle of the quarter, that is reflected in the Q4 revenues.

The middle of the quarter.

At the end of Q4 revenues and also looking forward, especially in light of the positive outlooks.

and also looking forward, especially in light of the positive outlooks by the two other rating agencies, could you please provide some color on the timing and also on how much of the potential upgrades that has been reflected in your planning?

Other rating agencies.

Can you just provide some color on the timing and also on how much of the potential upgrades.

That has been reflected in your planning.

My second question relates to the push by new competitors.

My second question relates to the <unk>.

<unk> per new competitors.

Into the market.

into the market here with the big Wall Street banks, but also competition by FinTech. So, what are your plans to defend your market position as well as your expectations also maybe in looking at potential role for tenants and how this may affect your cost target? Thank you.

Big Wall Street banks.

Also.

Competition Fintech. So what are your plans to defend your market position as well as your expectations also maybe in.

Looking at potential bolt ons and how this may affect your cost target. Thank you.

Sure. Thank you, Timo, for the questions. Look, it's very hard to parse out, you know, analytically the revenue uplift from the rating actions. We can see certain of them very clearly. You know, collateral that was handed back the next day after the S&P upgrade that we no longer have to fund over a year provides, you know, a very clear amount.

Sure. Thank you team up for the questions.

Look it's very hard to parse out.

Analytically the revenue uplift from the rating actions, we can see certain of them very clearly.

Collateral that was handed back the next day after the S&P upgrade that we no longer have to have to fund over a year provides very clear amount, but then the other is sort of creeps into the revenue basis clients come back as they do more business with us hard to hard to really define what that is what we have talked about in the past is that.

But then the other is sort of creeps into the revenue bases. Clients come back as they do more business with us. Hard to really define what that is. What we have talked about in the past is that there was a triple-digit amount of revenue that left us when the downgrades happened. And so, analytically, we'd expect all of that to come back. That's an annual number that gives you, you know, some sense of the uplift potential from that. You know, call it 100, 150 million.

There was a triple digit amount of revenue that left us when the downgrades happened and so analytically.

We would expect all of that to come back that's an annual number but it gives you some sense of of the uplift potential from from that you know call. It 100 $150 million.

And that was particularly concentrated in the markets business, so that is creeping back in. I don't think, you know, if you wanted a run rate guess, it's by no means fully reflected in the fourth quarter.

And that was particularly concentrated in the markets business. So.

That is creeping back in I don't think you know if you wanted to run rate gas. It's by no means fully reflected in the fourth quarter.

In terms of actions from here, we don't speculate on rating actions, but we work hard and we have an intense dialogue with the rating agencies to try to continue the journey that we're on and make sure that they...

In terms of actions from here, we don't speculate on rating actions.

But we work hard and we have an intense dialogue with the rating agencies.

To try to continue that.

The journey that we're on.

And make sure that they.

understand the story, understand the risks in our company and where we're headed. Look, in the P&L, we've already seen some benefits from the rating actions come through, either in the businesses with more to come or in our funding costs. But in fairness, I think there's still some more, or there is still more to come, because today our unsecured funding costs on a weighted average basis

Understand the story understand the risks and our company and where we're headed.

Look in the P&L, we've already seen some benefits from from the rating actions come through either in the businesses with more to come or in our funding costs, but but in fairness I think theres still some more or there is still more to come because our art today, our unsecured funding costs on a weighted average.

still reflect spreads higher than our current refinancing costs. So there's still momentum to be had even from the status quo, let alone from future upgrades.

<unk> still reflect spreads higher than our current refinancing costs. So so there is still momentum to be had from even from the status quo, let alone from from future upgrades.

Thank you, Timo. And on your competition question, obviously, this is a wide area which we could cover here and would go beyond this call, but.

Thank you T Mo and on your competition question. Obviously this is a wide area, which we could cover a year and would go beyond this call but I.

I think the strategy which we have given ourselves was, in particular, also to tackle exactly that question. We know we are in competition with not only the big Wall Street banks, but also with strong European banks in the home market. You know the home market as good as we know it with the cooperative banks, with the saving banks.

I think the strategy, which we have given our sales force in particular also particularly exactly that question. We know we are in competition with not only the big Wall Street banks, but also with strong European banks.

And the whole market and you know the.

The whole market are as good as as we know it with the cooperative banks with the saving banks.

And therefore, we always said that in each of the four businesses we are, we need to focus on those businesses where we have a relevant market share, where we know that the clients are actually looking for our expertise and exactly there we are not only focusing, but we are investing and that is paying off.

And therefore, we always said that in each of the four businesses. We are we need to focus on those businesses, where we have a rather than market share where we know that the clients are actually looking for our expertise and exactly there. We are not only focusing but we are investing and that is paying off our investments into the fixed income base.

our investments into the fixed income business, into the financing business.

Into the financing business and the parts of the origination and advisory reasons is paying off because we said that is there where we can win this is there where our compete to win story really be as fruit and they had the investments go in and in those businesses, where we focus is on we can also compete with the wall Street banks.

and the parts of the origination and advisory reasons is paying off because we said that is there where we can win. This is there where our compete to win story really bears fruit and there the investments go in. And in those businesses where we focus on, we can also compete with the Wall Street banks. Now, in when you come to fintech, that is all about our focus when we think about digitization of our private banking business on our corporate bank. When I talked about the payment initiatives, we are taking our investments into payment, into merchant banking, into asset as a service, because we believe that we have a chance with the technology which we have invested so far and that we have a real good chance not only to compete, but also to win. Because at the end of the day, with the uncertainties which are out, one thing we can clearly see.

Now in when you come to a fintech that is all about our focus when we think about digitization of our private banking business on our corporate bank when I talked about the payment initiatives, we are taking our investments into payment into merchant banking into asset as a service because we believe that we have a chance with the technology.

<unk>, which we have invested so far and that we have a real good chance not only to compete but also to win because at the end of the day with the uncertainties, which all but one thing we can clearly see and that is the demand of all clients across all four segments to us for advice and the advice cannot be given.

And that is the demand of all clients across all four segments to ask for.

And the advice cannot be given by fintech banks. The advice is given by banks with a long tradition, with expertise, with experience. And in my view, in this regard, through the pandemic, but also with the uncertainties and volatilities we see in the world, this advice is more seeked than ever before. And here we can clearly compete.

Fintech banks the advice is given by banks with a long tradition with expertise with experience and in my view in this regard.

The pandemic, but also with the uncertainties and Volatilities, we see in the World. This is advisors more seats than ever before and here, we can clearly compete.

Yeah.

Very clear thank you.

There are no further questions at this time, and I would like to hand back to Ioana Patronis for closing comments. Please go ahead.

There are no further questions at this time I would like to hand back to you on a Petro news for closing comments. Please go ahead.

Thank you for joining us for our preliminary fourth quarter 2021 results call. Please don't hesitate to reach out to the investor relations team with any follow-up questions. And with that, we look forward to speaking to you in April . Thank you.

Thank you for joining us for our preliminary fourth quarter 2021 results call. Please don't hesitate to reach out to Investor relations team with any follow up questions and with that we look forward to speaking to you in April thank you.

Ladies and gentlemen, the conference is now concluded and you may disconnect your telephone. Thank you for joining and have a pleasant day. Goodbye.

Ladies and gentlemen, the conference has now concluded and you may disconnect. Your telephone. Thank you for joining and have a pleasant day goodbye.

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