Q1 2025 Deutsche Bank AG Earnings Call

Good morning, ladies and gentlemen, and welcome to the Q1 2025, I know this conference call and life webcast I haven't used the chorus call operator.

I would like to remind you that all participants will be in a listen only mode and that this conference is being recorded presentation will be followed by a Q&A session. You can register for questions at any time by pressing star one on your telephone for operator assistance. Please press star and Zero. This conference must not be recorded for publication or broadcast at this time.

Speaker Change: It's my pleasure to hand over to you on a pretty niche head of Investor Relations. Please go ahead.

Speaker Change: Thank you for joining us for our first quarter 2025 results call as usual, our Chief Executive Officer Christian savings will speak first followed by Chief Financial Officer, James von Moltke. The presentation as always is available to download in the Investor Relations section of our website DB com before we get started let me just remind you that.

The presentation contains forward looking statements, which may not develop as it 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.

Speaker Change: Thank you your honour and a warm welcome from me before we turn to our performance.

Speaker Change: Want to offer my perspective on recent events.

Speaker Change: The geopolitical landscape is rapidly evolving.

Speaker Change: And uncertainty and volatility are likely to stay elevated for the time being.

Speaker Change: This will likely impact the world economy.

Speaker Change: We still believe globalization would persist, but we expect to see a substantial reordering of trade corridor and supply chain and this may accelerate some of the long term trends we have spoken about for some time.

Speaker Change: And we are particularly encouraged to see what is happening in our domestic market with regards to fiscal changes and structural reforms, leading to a much needed economic boost for Germany and Europe.

Speaker Change: All of this underscores why we believe our global House Bank business model and four strong businesses position us very well to support clients through these unsettled times.

Speaker Change: Already since the start of the second quarter, we are seeing clients increasingly seek our expertise and advice.

Speaker Change: Now, let me turn to our results.

Speaker Change: We are very pleased with a very strong first quarter performance. We delivered revenues of $8 5 billion euros up 10% a strong start towards our full year revenue objective of around 32 billion euros.

Speaker Change: Our cost to income ratio was 61% with adjusted costs of $5 1 billion euros in line with full year guidance.

Speaker Change: Our loan portfolio quality remained solid stage three provisions.

Speaker Change: Nearly 30% year on year normalizing as expected was stage, one and two provisions were higher and including overlays in this more uncertain environment.

Speaker Change: Our pre tax profit of $2 8 billion euros was up 13, 9% year on year.

Speaker Change: And with net profit of 2 billion euros, a return of tangible equity was 11, 9% in the first quarter.

Speaker Change: Our CET one ratio of 13, 8%.

Speaker Change: Sets us up well for the rest of the year, both to support our clients and reward shareholders.

Speaker Change: To summarize the start of the year was very strong.

Speaker Change: We believe that we have the right business model both to face uncertainties in the environment as well as to stay at the bank towards delivery of our 2025 targets.

Speaker Change: Beyond that we have a clear management agenda for further developing our global House bank offering for our clients.

Speaker Change: And sustainably increasing returns for shareholders beyond 2025, which I would talk about shortly.

Speaker Change: Let's now turn to our resilient operating performance on slide three.

We delivered pre provision profit of $3 3 billion euros up 34% year on year.

Speaker Change: Revenue momentum combined with cost discipline resulted in strong operating leverage of 11%.

Speaker Change: With each operating division delivering positive jaws.

Speaker Change: Revenue quality has strong 71% came from more predictable revenue streams in the corporate bank private bank asset management and FIC financing.

Speaker Change: Net commission and fee income increased by 5% year on year in line with our goals and reflecting our strategic investments.

Speaker Change: Net interest income in key banking book segments and other funding also remained resilient year on year.

Speaker Change: Non interest expenses declined 2% year on year to $5 2 billion euros as nonoperating costs normalized as expected.

Speaker Change: Our progress on operational efficiencies.

Speaker Change: Enabled us both to deliver adjusted costs in line with plan and continue to self finance investments.

Speaker Change: Turning to slide four let's now look at the progress with our 2025 delivery.

Speaker Change: Turning first to revenue growth since 2021, we have achieved a compound annual growth rate of six 1% within our target range of five five to six 5%.

Speaker Change: Double digit first quarter revenue growth contributed 700 million euros towards our target of 2 billion euros incremental revenues in 2025.

Speaker Change: Second.

Speaker Change: In respect of operational efficiencies, we have reached 85% of our $2 5 billion Euro target was $2 1 billion euros in cost efficiencies either delivered or expected from completed meshes.

Speaker Change: But.

Speaker Change: We have made further progress with our capital efficiency measures with 4 billion euros of <unk> reductions delivered this quarter through a combination of data and process improvement.

Speaker Change: And the secretary realization transaction.

Speaker Change: This brings us cumulative benefit 228 billion euros at.

At the high end of the bank's target range of 25 to 30 billion euros by the end of this year.

Speaker Change: We have announced capital distributions of $2 1 billion euros this year, including the 2024 dividend and our recently launched share buyback program.

Speaker Change: This would take cumulative capital returns to $5 4 billion euros since 2022, and we remain committed to surpassing our capital distribution target of 8 billion euros in respect of the years 2021 through 2025.

Speaker Change: Put simply.

Speaker Change: Our 2025 targets are in sight.

Speaker Change: Let me now turn to our long term management agenda on slide five.

Speaker Change: Our aim is to deliver a sustainable increase in returns through three levers.

Speaker Change: Increasing value generation for shareholders.

Speaker Change: Reengineering, our target operating model and reinforcing leadership.

Speaker Change: First we will deploy shareholder value at methodology in our planning process and decision, making to optimize resource allocation across the group.

Speaker Change: And progress is underway the private bank, we have reduced our everyday exposures and below her to mortgages and in the corporate and investment bank, we are undertaking client level reviews.

Speaker Change: We are also making progress in reengineering, our target operating model.

Speaker Change: The private bank, we continue to transform our personal banking operations by reducing branches and moving to digital channels, resulting in a planned reduction of almost 2000 FTE.

Speaker Change: We are transforming our corporate bank German platform and overhauling front to back processes in the investment bank, leading to improved client experience and efficiency.

Speaker Change: Finally, we are strengthening leadership by streamlining governance structures.

Speaker Change: We have already reduced our committees councils and internal policies by about half the speeds up decision, making and increased accountability, while maintaining a robust control environment.

Speaker Change: As promised.

Speaker Change: Few words on how we are well positioned to help navigate clients through the dynamic environment.

Speaker Change: Slide six.

Speaker Change: In Germany and across Europe, we see fresh commitment to support growth boost competitiveness and accelerate reform.

Speaker Change: We believe Germany's loosening of the debt break will unlock considerable investment opportunities at the proposed pension reforms I expect it to boost activity in the capital markets.

Speaker Change: At the European level, we see commitments to invest in defense and infrastructure and much needed embrace of structural reforms for example, the savings and investment Union and measures to boost securitization.

Speaker Change: Globally.

Speaker Change: Trading patterns are shifting supply chains are being re wired and new partnerships and alliances are emerging.

Speaker Change: All of this plays to our strengths.

Speaker Change: Clients need a partner with the expertise.

Speaker Change: Financial strength product breadth and global and local network to help them navigate this changing environment.

Speaker Change: And we aim to be that partner is our leading franchise and diversified businesses are best placed to advice clients at European and global level.

Speaker Change: Our corporate bank was voted the world's best Bank for corporates pipelines.

We combined global reach with local presence to support multinational clients as their supply chains evolve.

Speaker Change: We are already a partner of choice with around 40% of our revenues with multinationals come from cross regional corridors.

Speaker Change: With deep roots in Europe, and in Germany, Mittelstand, we are ideally positioned to help clients benefit fiscal stimulus feed through the real economy.

Speaker Change: Our investment Bank is also ideally placed to help institutional and corporate clients navigate this environment.

Speaker Change: We have the leading global non U S FIC franchise.

Speaker Change: We were the top ranked European banking global SSA issuance, and then EMEA cash rates, while in Germany, we have the leading <unk> franchise.

Speaker Change: And we are well positioned to support the broader German and European defense agenda, where we have the leading franchise in.

Speaker Change: In aerospace and defense in Germany.

Speaker Change: Providing clients with holistic global coverage.

Speaker Change: We also Germany's leading wealth manager in retail fund manager through our private banking asset management businesses.

Speaker Change: This positions us well to our clients capitalize on savings and investment reforms.

We have already rebalanced, our wealth management business mix, resulting in increased assets under management flows and we continue to scale up in our core growth markets.

Speaker Change: Dws with assets under management of over one trillion euros.

Speaker Change: Record net inflows of 20 billion euros in the first quarter and our market share of 11% and European ETF is ideally placed not only to serve German and European investors, but also to act as a gateway to Europe for investors globally.

Speaker Change: To sum up across all our businesses. We believe we are very well positioned to self German European and global clients in a fast changing environment with that let me hand over to James.

James: Thank you Christian and good morning.

James: As you can see on slide eight we saw strong delivery this quarter against all the broader objectives and targets, we set ourselves for 2025.

James: More importantly, we have done so without compromising on our investments to support operating performance or our controls.

James: Our capital position is robust after absorbing deductions for dividends share buybacks and 81 coupons and see our our three impact.

James: Equally our liquidity metrics are sound the.

James: The liquidity coverage ratio was 134% in line with our target and the net stable funding ratio was 119% at the upper end of our target range.

James: And while we recognize that the last few weeks have been turbulent and resulted in a significant amount of volatility and uncertainty reflecting on the path ahead, our balance sheet remains strong.

James: As shown on slide 28 in the appendix asset quality is sound the bank's liquidity profile is strong and together with our robust capital position and strong earnings momentum. We believe that we are well equipped to continue to support our clients globally and to provide advice and solutions as they navigate this time of uncertainty.

James: Our prudent approach to managing our trading book also paid off in April.

James: Our trading P&L has stood up well throughout the market volatility and developed in line with the bank's risk appetite.

With that let me now turn to the first quarter highlights on slide nine.

James: We've demonstrated strong franchise momentum across the bank investments across businesses continue to pay off which drove a significant increase in revenues, both sequentially and 18% and year on year at 10%.

James: And the balanced portfolio mix also enables us to weather times of uncertainty.

James: Our cost income ratio of 61, 2% benefited both from our continued cost discipline and a normalization of nonoperating costs.

James: Noninterest expenses in the first quarter are in line with our guidance for 2025.

James: Profit generation was strong and our post tax return on tangible equity of 11, 9% underpins the bank's ambition to deliver sustainable returns of greater than 10% in 2025 and beyond.

James: Our tax rate in the first quarter came in at 29%.

James: In the first quarter diluted earnings per share was <unk> 99.

James: And tangible book value per share increased to 30 euros in 43.

James: Up 4% year on year.

James: Before I go on let me add a few remarks on corporate and other where you can now find further information in the appendix on slide 39 with respect.

James: The developments this quarter. So you know generated a pre tax loss of 34 million euros, mainly from shareholder expenses and other essentially retained items, partially offset by positive revenues and valuation and timing.

James: But let me now turn to some of the drivers of these results and start with net interest income on slide 10.

James: NII across key banking book segments, and other funding was $3 3 billion euros broadly stable quarter on quarter as in prior quarters Private bank continues to deliver strong NII supported by our structural hedge portfolio, while fixed financing continues to grow lending.

James: The corporate bank is slightly down compared to the prior quarter, principally due to accounting reclassification effects in loan NII, which are offset in our remaining income.

James: Deposit NII was broadly flat as hedge benefits offset a reduction in policy rates and portfolio growth remains strong.

James: With respect to the full year in line with prior guidance, we continue to expect a material NII tailwind for the key banking book businesses and other funding versus 2024, which is principally driven by hedge rollover and deposit growth.

James: Compared to our disclosure a quarter ago higher long term rate expectations, specifically in euros increased the expected benefit of our hedge portfolio in the outer years.

James: In the appendix on slide 26, we illustrate the dynamics of the interest rate hedge in more detail.

James: Turning to slide 11, adjusted costs were $5 1 billion euros for the quarter in line with our expectations.

James: Cost discipline across the franchise remained high and materially offset an increase in compensation costs. This was driven by a higher performance related cash accruals and increased equity compensation costs. As a result of a rising Deutsche bank and dws share prices during the first quarter.

James: With that let me turn to provision for credit losses on slide 12.

James: Stage three provision for credit losses materially reduced in the first quarter to 341 million euros in line with expectations stage, one and two provisions were elevated at 130 million euros and included around 70 million euros of provisions related to the impact of weaker macroeconomic forecasts on forward looking information.

James: As well as overlays, including for direct tariff driven impacts on select higher risk names.

James: The remainder was driven by model and portfolio related effects.

James: We feel comfortable with our underlying portfolio performance and the development of provisions that we recognize the ongoing uncertainty around the macroeconomic environment and monitoring these develops developments closely.

James: With that let me turn to capital on Slide 13.

James: Our first quarter common equity tier one ratio remains strong at 13, 8%.

James: The CR or three go live impact was one basis points since the reduction in credit risk at the way it was largely offset by reductions in capital supply and an increase in operational risk <unk>.

James: Aside from the CR or three go live impact risk weighted assets increased principally reflecting a normalization of market risk <unk> as previously guided.

James: This increase was partly offset by a reduction in credit risk at up anyway is higher business growth was more than offset by capital efficiency measures, including a securitization transaction during the quarter.

James: CET one capital increased as the strong first quarter net income net of 81 and dividend deductions was offset by equity compensation. The FX impact of on account of the 81 call and other capital charges.

James: At the end of the first quarter, our leverage ratio was four 6% up by one basis point as higher trading inventory and high quality liquid assets were offset by higher tier one capital alongside beneficial FX NCR, our three effects.

James: With regard to bail and ratios, we continue to operate with a significant buffer over all requirements.

James: In short our capital position remains strong.

James: And with that let us turn to performance in our businesses starting with the corporate bank on slide 15.

James: In the first quarter, the corporate bank delivered a post tax return on tangible equity of 14, 4% and a cost income ratio of 62%, despite an uncertain geopolitical and macroeconomic environment and lower interest rates.

James: Revenues were $1 9 billion euros, essentially flat sequentially and year on year supported by interest rate hedging higher deposit balances and growth in net commission and fee income.

James: Mostly offsetting ongoing deposit margin normalization.

James: We continue to make good progress by further accelerating noninterest revenue development with 6% growth in net commission and fee income and benefiting from a particularly strong contribution from our institutional client services business.

James: The deposit base remains strong adjusted for FX movements deposits were up by 13 billion euros year on year and by 6 billion euros sequentially.

James: Provision for credit losses was contained at 77 million euros, including 50 million euros of stage, one and two provisions of which 29 million euros related to net management overlays.

James: Noninterest expenses were lower year on year, driven by the non recurrence of a litigation item in the prior year and continued tight cost management.

Looking ahead, we believe that our international presence strength in all trade car doors and strong footprint in Germany positioning the corporate bank well to support our clients on changes in trade flows and supply chains.

James: I will now turn to the investment bank on slide 16.

James: Revenues for the first quarter were 10% higher year on year with strength in FIC driving improvement to the division's return on tangible equity and cost income ratios.

James: <unk> revenues increased by 17% with both rates and foreign exchange significantly higher year on year, reflecting heightened market activity and increased client engagement.

James: We continue to support our institutional and corporate clients through volatile markets and saw activity increase across both groups in the first quarter, including our priority clients.

James: Meanwhile, we continue to advance the business strategy of developing existing and adjacent businesses.

James: Financing revenues were also higher reflecting strong fee income across the business combined with an increased carry profile following target.

James: <unk> balance sheet deployment in line with our strategy.

James: The targeted deployment in the business is also reflected in the increased loan balances compared to the prior year.

Moving to origination and advisory revenues were lower year on year due to a loss on the partial sale and markdown of a specific loan and leveraged debt capital markets as guided.

Excluding this item revenues increased 5% on a like for like basis compared to the prior year quarter and a fee pool that was broadly flat.

James: Advisory revenues were significantly higher than a static industry fee pool with a business maintaining the momentum of a strong 2024.

James: Noninterest expenses were essentially flat with higher adjusted costs, which were impacted by FX translation, offset by lower litigation and reduced severance and restructuring costs.

James: Provision for credit losses were 163 million euros with a year on year increase driven by stage, one and two provisions which includes tariff related overlays model changes and portfolio effects, largely offset by a material reduction in stage three impairments, including CRE.

James: Let me now turn to private bank on slide 17.

James: The private bank achieved a 43% increase in pre tax profit, reflecting 7% operating leverage driven by revenue growth and further cost benefits from progress made in our transformation initiatives.

James: Good business momentum continued with net inflows of 6 billion euros and higher revenues driven by 5% growth in net commission and fee income from investment product revenues in line with our strategy, while net interest income grew by 2%.

James: Revenues in wealth management, and private banking grew 8%, reflecting double digit growth for investment products, mainly driven by discretionary portfolio mandates.

James: Revenues in personal banking reflect our decision to reduce capital intensive loan products, such as mortgages, while revenues from deposit and investment products were up 4% mainly from discretionary portfolio mandates.

James: The private bank has continued its transformation with an additional 60 branch closures and reductions of approximately 400 FTE in the quarter on track to achieve almost 2000 FTE reductions as part of further restructuring efforts in Germany.

James: Benefits from these measures coupled with normalized investment spend including from the Postbank migration and lower regulatory costs drove adjusted costs down by 4% year on year.

James: Provision for credit losses in the private bank was impacted by the deteriorating macroeconomic environment, while underlying underlying portfolio performance improved.

The prior year quarter was impacted by elevated provisions in wealth management and transitory effects from the operational backlog.

James: We expect the private bank to continue benefiting from a combination of efficiency programs underway in Germany, Italy, and Spain, where benefits are yet to be realized revenue growth initiatives and optimization of capital usage by Recalibrating, the lending book and higher focus on capital light solutions, which in turn will lead to some.

James: Stable profitability and annual mid teens <unk> in the near term.

James: Turning to slide 18, My usual reminder, the asset management segment includes certain items that are not part of the dws stand alone financials.

James: Asset management delivered materially improved profitability with a 67% increase in profit before tax.

James: This was driven by higher revenues across all streams, resulting in a materially lower cost income ratio and an improved return on tangible equity of 22, 1%.

James: The 730 million euros in revenues were primarily driven by higher management fees from both active and passive products benefiting from growth in average assets under management.

James: The increase in performance fees was driven by the ongoing recognition of performance fees on one infrastructure fund while other revenues benefited from a more favorable outcome a fair value of guarantees.

James: Slightly higher costs were driven by business growth and increased equity compensation costs as a result of a rising dws share price during the first quarter.

James: Assets under management remained over one trillion euros with record net inflows of almost 20 billion euros, driven by passive products of 13 billion euros offset by negative FX and market impacts.

James: Cash <unk> and fixed income also contributed with combined further net inflows of 11 billion euros.

James: Overcompensating for net outflows of 3 billion euros, and active equity alternatives and multi asset products.

James: In the quarter, a new private credit partnership with the investment Bank was launched to enhance the alternatives franchise aiming to provide prospective investors with access to this highly sought after asset class.

James: Finally, let me turn to the group outlook on slide 19.

James: In short our outlook remains largely unchanged and we are on course to deliver our full year targets for 2025, we are steadfast in our aim to deliver improved profitability and shareholder returns.

James: Our strong revenue performance in the first quarter provides the step off to deliver this year's revenue goal of around 32 billion euros with our complementary businesses all performing well.

James: We remain committed to rigorous cost management, while not making any compromises on controls and investments as we continue to benefit from ongoing delivery of our cost efficiency initiatives.

James: Our asset quality remains solid and we continue to expect stage three provisions to normalize. This year, we are maintaining our full year guidance for provision for credit losses, but the macroeconomic and geopolitical environment may continue to impact model based stage, one and two provisions.

James: Yes uncertainty has increased and we need to remain vigilant, but considering our strong financial performance and levels of client activity, we remain comfortable with our trajectory to deliver an <unk> of above 10% and a cost income ratio of below 65% in 2025 with strong operating leverage.

James: And balance sheet efficiency supporting further improve profitability beyond 2025.

James: Our strong capital position and first quarter results also give us a solid step off for our distribution objectives with.

James: 750 million share buyback, we announced in January is already underway and we have proposed a dividend of <unk> 68 per share, which brings us to $2 1 billion euros of capital distributions. So far this year.

Speaker Change: We will assess the scope for additional distributions in 2025 and remain comfortable on outperforming our 8 billion Euro distribution target with that let me hand back to your honor and we look forward to your questions.

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

Speaker Change: Ladies and gentlemen, we will now begin the question answer session anyone who wishes to ask a question May press star and one under telephone you would have had told them to confirm that you have entered the queue.

Honor: You wish to remove yourself from the question queue, you May press star into.

Honor: So on the phone are requested this April the loudspeaker mode, and eventually turn up the volume from the webcast about asking your question and you want to ask a question May Press Star and one at this time.

Speaker Change: The first question comes from Chris <unk> from Goldman Sachs. Please go ahead.

Chris: Yes, good morning, everybody and thank you for taking my questions I have two both on revenues. So first for this year clearly Q1 was strong runway run rating what out of the 32 billion guide, but obviously a lot has changed in terms of the operating environments in the past few weeks.

Speaker Change: And some of the businesses I suppose that supported higher activity levels, but in other parts of the group client activity would have cooled meaningfully. So how does that picture look for you across the group and where are the I guess substitution opportunities for you for example, let's say a <unk>.

Chris: Capex related loan is delayed but now the client needs additional short term working capital finance.

Speaker Change: And then second more medium term.

Speaker Change: Slide six you outline these kind of big emerging trends, which which looks set to determine the competitive landscape over the coming years.

I guess simply what gives you the confidence that following the transformation of the business Deutsche Bank, because the right footprint and the right risk and control setup to succeed against this backdrop I'd to take market share and capitalize on those growth opportunities. Thank you.

Speaker Change: Yeah.

Speaker Change: Thank you Chris.

Speaker Change: And good morning, everybody, let me take your question first and James.

Speaker Change: Should add of course.

Speaker Change: Look like we said in the prepared remarks with regard to the full year revenue picture and our goal and our confidence in the 32 billion.

Speaker Change: Obviously first quarter helps a lot we outperformed not only the consensus we to be honest also are ahead of our own plan in the first quarter, which gives us all the confidence that we can keep the momentum and that we will see the 32 billion also at year end. So first quarter helps a lot.

Chris: Currently Chris.

Chris: I'm really happy with the diversification in our business and if you really tear. It. Apart then you can see that many of our businesses.

Chris: We'll actually be unaffected by that what we have seen in early April or are even benefiting from that overtime.

Chris: We can see a very stable and continuous development in the private bank very positive stable delivery path.

Chris: Supported by an ongoing growth in assets under management.

Chris: I would say also.

Chris: With having the monthly performance review meetings with Claudio that this is a continuous path, which which we enjoy both in personal banking also with additional deposit campaigns.

Chris: But in particular in the wealth management business with our investments with our investment business.

Chris: Similar good momentum in asset management, very happy with the first quarter results, we always forgot to mention also that.

Chris: I really have to congratulate Stefan also for re emerging into the Amdocs with dws. It really shows that there is momentum behind the business is very positive on the outlook also here I would say with that what we have seen in April also with the way they have managed the performance for our clients.

It's actually a very good and convincing picture and therefore, you know we stay the course on asset management and there is.

Chris: In our view no concern that we will miss our full year results.

Chris: In the corporate bank, we had a little bit of a weaker start in Q1, Fortunately, we offset that with.

Chris: The over delivery in all the other businesses and therefore, I'm, saying, we are even stronger in Q1 than our own internal plan, but the nice thing is actually that the corporate bank will accelerate from here. So the sequential performance. We believe that we will see slight increases in revenues quarter over quarter from where we are.

Chris: And right now we can already see also a little bit more of demand in the credit business in the financing business in the in the corporate bank. We saw it already at the end of the first quarter. Now obviously this did not or was not fully reflected then in the P&L for the first quarter, but you could see.

Chris: An increase in demand at the end of the first quarter, which also gives us the confidence goes.

Chris: Forward and.

Chris: Linked to your second question I will get back to that.

Chris: Look in particular, what is happening also in Germany is a huge opportunity for our corporate bank and I will talk about that positioning in a bit on the investment bank.

Chris: To be honest.

Chris: Super Happy with our FIC business I think again, we have shown that not only we performed very well in Q1, but also that we took market share if I compare that with the.

Chris: The numbers, which we have seen from our Q1 was another example that Deutsche Bank took market share in the Fig business.

Chris: If we go deeper into fake.

Chris: To be honest, yes, we have seen some weaker days in the first half of April.

Chris: But to be honest, we are back to normal so to say in the in the second half and the outperformance in Q1 will carry us through the year end and will also carry us through this.

Chris: The somewhat weaker days in the first half of April so.

Chris: Im honestly very happy with that business and don't forget that in that business in the Fig business.

Chris: We have a very stable financing business, where I would even say that the opportunities, which the market now presented the financing business also in areas like distressed and credit trading are actually really good and from our capital position. The power we have to invest there.

Chris: Actually optimistic so in this regard there are pockets also in Fig, where we can benefit from this situation and again in the second half of April we are absolutely back to normal flow flow business.

Chris: And then actually remains with the question <unk>.

Chris: I'm actually satisfied with Q1 and <unk> you know that we had the one markdown, which we already mentioned also to the market mid of March.

Chris: Outside that O&M actually behaved very very strong if I now look forward with very robust pipeline stronger pipeline than before.

Chris: And there is no deal canceled yes, we see some delayed deals but no deal is canceled and I do believe actually that.

Chris: With where the markets are right now where I do believe we move that I can I can see that actually Q2 Q3 with net robust pipeline is actually enjoying quite healthy numbers in the <unk> business. So all in all looking at the outperformance in Q1.

Chris: Looking at the chances and opportunities we see in the private bank and part of the FIC business continues into an asset management and now with the acceleration of the corporate Bank makes me absolutely comfortable with our 32 billion revenue goal.

Chris: With regard to your second question.

Chris: Okay.

Chris: I really do see for the time being three trends and and and and and this is where Jameson I try to focus the bank on in terms of delivery and client delivery.

Chris: Number one and let me start with that.

Chris: In my view is the global volatility.

Chris: Certainty clearly also with with our clients.

Chris: But the concept of the global husband is working and we said it in the previous quarters and again in Q1, but also in particular in April we can see that the demand for advice the demand of our global bank with a global network is higher than.

Chris: Never before.

Chris: And I also see actually that a lot of clients and we even if tangible examples in the <unk> business is in the corporate bank business, where clients want to actually see the European alternative to the U S banks in particularly in a world, which is more fragmented than before so the set up at the <unk>.

Chris: As the global Health Bank with strong roots here in our home market.

Chris: <unk> helps us secondly.

Chris: I've been on the record with with supporting statements of that what we will see from the new coalition.

Chris: Do think that Germany can digest actually the additional debt would you intend to take on in order to do investments there are huge opportunities to leverage that with private debt to leverage that with.

Chris: Financings.

Chris: And that's actually what we started to see at the end of March and therefore, we're thing we see in the corporate bank debt. There is that there is a trend.

Chris: With regard to financing, which goes into into into the right direction and I do believe if.

Chris: If the government is taking the right decisions over the next three months and you have heard actually clearly met that he is intending.

Chris: To take some accelerated decisions before the summer break that will be actually very good for the atmosphere for the psychology in the country for the consumption in the country and obviously, we would benefit from that in the various business lines.

Chris: Thirdly, we should not forget all the acceleration also when it comes to capital markets Union or benefit savings and investment Union in in Europe.

Chris: Again, the focus is on banks with the capital markets business, we have seen the reallocation of funds already to Europe over the last weeks, we have clearly seen that also in our flows and to be honest with that what is happening in Brussels together with that what is happening in Germany. I think we are rightly placed to benefit from that.

Chris: All of that with the outperformance in Q1. It makes me really confident that we can achieve our goals and that we will achieve our growth on the revenue side, but also on the profitability side.

Speaker Change: Thanks very much.

Kian: The next question comes from Kian.

Speaker Change: Hussain from J P. Morgan. Please go ahead.

Kian Hussain: Yes, Hi, Christian Jane Thanks for taking my questions.

Kian Hussain: First question is regarding the comment around SMIC slowdown can you just put that in context. In April you mentioned that I think on Bloomberg and Christian you just mentioned that as well could you just.

Kian Hussain: Put it in context of what timeframe, you're comparing and secondly in that context, just tell me what sub segments of FDI fee or <unk> credit is it right.

Kian Hussain: Maybe even by geography, if possible so we get an idea and if this is Jeff.

Kian Hussain: An immediate reaction of what happened in the market post Paris or is this an ongoing issue that we should think about in our modeling.

Kian Hussain: And then the second question is regarding your outlook GDP U S assumption of $1 seven.

Kian Hussain: China, four and a half.

Kian Hussain: Just wondering if these numbers.

Kian Hussain: What would happen if there would be significantly lower because they look a bit on the higher end of what market consensus expectation or forward curves I, assuming if you could discuss that relative to your 10% rote.

Kian Hussain: Plus target and.

Kian Hussain: And issues around that.

Kian Hussain: You'd think about.

Kian Hussain: If it could have a negative impact so to say.

Kian Hussain: Sure. Thanks, Kian I'll start on the FIC.

Kian Hussain: The guidance that we've given of our commentary about the market look I think one important thing is to say is that the second half of April and it isn't precisely and haps, but I think the easiest way to think about it in the second half of April resumed a pattern that looked very much like what you see in the disclosure on daily.

Kian Hussain: Trading results in the business.

Kian Hussain: For much of the first quarter.

Kian Hussain: So to your question about ongoing it isn't a concern.

Kian Hussain: For us at the moment at all in fact, I think we are well positioned to recapture the foregone revenues from the first half of April as you know in.

Kian Hussain: The balance of the quarter and fairness, we're actually up year on year still in April. So we look at this with with sort of a relaxed view.

Kian Hussain: Naturally in markets that are is as turbulent as the ones that we experienced in the first couple of weeks of April you're going to see.

Kian Hussain: Some correlations breakdown some impact on the books.

Kian Hussain: But we were reasonably happy so there was of course, a slowdown a few week days, but we were happy with how the desks performed in that environment. The way, we were able to stand in to provide liquidity for clients pricing. What have you in terms of the product was a little sort of varied around the world.

Kian Hussain: But to your point credit struggled more and there were elements of in the rates and FX complexes, where again correlations moving.

Kian Hussain: Created some some disturbance what's interesting is how quickly and almost fully the markets have recovered over the course of April again going to your question about is it an ongoing concern as we sit here today really its not end.

Kian Hussain: And actually I've been positively impressed by the way in which investors have continued to be engaged.

Kian Hussain: In the.

Kian Hussain: <unk> that we have which is reasonably fast moving.

Kian Hussain: In terms of the outlook.

Kian Hussain: Lots of our of our assumptions.

Kian Hussain: Assumptions are driven by macroeconomic variables and I'll focus on revenues and expenses and naturally we look at downside scenarios and that was the principal driver of course of the overlay that we took in provisions.

Kian Hussain: In Q1, we think that overlay was was prudent and appropriate and actually reflects how the how the macroeconomic consensus has moved since the end of March.

So we feel quite comfortable with.

Kian Hussain: With how if you like first quarter of <unk>.

Kian Hussain: Reporting reflects our outlook as well as the consensus environment.

Kian Hussain: Today.

Kian Hussain: The other thing just more broadly to the the question you asked and really question Christians response to Chris's question, we see a lot of what I'll call sort of portfolio effects in our businesses. So businesses that are maybe negatively affected by certain elements of the macro environment will be offset by others.

Kian Hussain: That are benefited.

Kian Hussain: And so.

Speaker Change: It isn't at all linear and we feel like the balance of risks and opportunities that we see in the market really underscores our outlook as Christian just mentioned.

Speaker Change: And hence we're feeling pretty good about the overall macro environment, even as it's changed since since the beginning of the year when we last spoke.

Speaker Change: Great. Thank you.

Speaker Change: The next question comes from Nicholas Coppola Shandra. Please go ahead.

Speaker Change: Yes. Good morning, two questions. Please one on distribution and one follow up until.

Speaker Change: The first one on distribution you mentioned that you were continuing to assess the scope for additional share buybacks. So I wanted to ask you whether you have started discussions with regulatory regarding a second tranche of buybacks and if we could have a need to catch in regarding to the potential size of the second tranche and is there any particular indicator of that.

Speaker Change: <unk> I think that you are looking at to be able to launch that second tranche.

Speaker Change: C. L. P. So you just mentioned overlays on tariff. So is it possible to know what was the size of this overlay and what are the underlying assumption assumptions that you were taking a regarding you know the tariff impact into the whole tariff situation and.

Speaker Change: The development the development situation that we see on the CIP fronts, how does it impact your full year guidance is it are we still on track for the 350 to 400 million per quarter that you mentioned earlier. Thank you.

Speaker Change: Yes.

Speaker Change: Thank you Nick.

Speaker Change: Look on the distributions.

Speaker Change: I stay to that what I said and what we said end of January because.

Speaker Change: That was clear.

Speaker Change: Leah outlook statement that obviously, we have the approval for the 750 million euros.

Speaker Change: Which started to where we started the program early April and then we clearly said that we want to deliver two quarters, where we show that we are on track for a 10% <unk> now.

Speaker Change: Now we are very happy with that what we have seen in Q1, you have heard from our kind of outlook statements, which we just reiterate it.

Speaker Change: That we remain comfortable on the 10% and then we will reassess during the second quarter, obviously, the possibility of a second buyback and then start the discussions but I would find it.

Speaker Change: Not fear actually if on the one hand, I am doing a clear statement in January and saying I'm, Michelle myself, and we measure ourselves against the first two quarters and then I'll change Trek.

Speaker Change: Obviously the outlook in the overall economy changed we have shown that we can deal with that we have shown that we have laid a very solid foundation. We are at 13, 8%.

Speaker Change: And therefore I feel overall.

Speaker Change: Pretty good about all of this but now we are focusing on delivery of our strong Q2, and then I'm sure we will reassess and have the discussion with our regulators.

Speaker Change: Nikola on the <unk> side.

Speaker Change: It's very nuance, but the easiest way to think about it is that the overlay represents about $70 million broken into two parts. One is as I just.

Speaker Change: Part of the answer to Ken's question is we we put it we assumed a set of macro economic variables that were more pessimistic than the than what were present in the market in March.

Speaker Change: And that represented about 50 of the of the $70 million.

Speaker Change: And essentially the consensus has caught up with that level. So we feel good that that was that was appropriately calibrated. So 50 on macroeconomic variables reflected in the forward looking indicator overlay and about 20, reflecting what I'd call collective staging so we've been looking.

Speaker Change: Not just recently, but for the past couple of quarters.

Speaker Change: Either it's sectors or individual obligor is particularly exposed to tariffs and that can be based on their own export activity their supply chain.

Speaker Change: What we think the competitive environment for their for their business might be and how it will be affected by tariffs and so on.

Speaker Change: And so we took some actions around collective staging and that represents really the other 20 to.

Speaker Change: To be fair, there's probably some amount in what I would think of as the baseline. So the rest of it is about 400 theres. Some of that 400 actually would also reflect tariff related impacts that have been sort of bleeding in his individual credit decisions for obligor is a reflected but the but the easiest way to think about it is 400 run.

Speaker Change: <unk>, which is in line with our guidance and we always expected the first quarter to be a little higher than the rest of the year and $70 million of overlay broken out as I described.

Speaker Change: As to the guidance look.

Speaker Change: The wide and would have been about $1 6 billion. We note. The consensus is a little higher than that already.

We think based on how stage three is has developed and we now see the evidence of that normalization that we called for we think that that's entirely reasonable.

Speaker Change: That would kind of imply about $375 million per quarter from here.

Speaker Change: Which absent a deterioration of macroeconomic variables would be would be entirely achievable and to be expected, hence sticking with the guidance.

Speaker Change: Thank you very much.

Niccolo: Thank you Niccolo.

Speaker Change: The next question comes from Matthew Clark from Mediobanca. Please go ahead.

Speaker Change: Uh huh.

Speaker Change: So a few questions. Firstly, thanks for the commentary on April from a P&L perspective in FIC I'm just wondering.

Speaker Change: Should we be worried about a risk weighted asset impact from.

Speaker Change: Finally got risk reaches or counterparty risk or liquidity drawdowns by customers or anything.

Speaker Change: Like that would you expect a material impact in the second quarter that could possibly affect your.

Speaker Change: Second buyback decision. That's the first question second question is on the U S commercial real estate outlook Kristina I think you guys. Some exciting constructive comments at a conference.

Speaker Change: In the middle of.

Speaker Change: March.

Speaker Change: Sorry, a higher rate trajectory didn't effect.

Speaker Change: Your expectations that I was just wondering if you could give us an update whether that's been a significant change since then what you've reassessed your half billion stress loss with a commercial real estate portfolio.

Speaker Change: And then final question is just on when we can expect some more concrete targets for future years, rather than simply.

Speaker Change: Yeah.

Speaker Change: Improvement do we need to wait till next year when the CFO succession process has played out for that can come or can you give us something more.

Speaker Change: <unk> can we expect something more concrete before then thank you.

Speaker Change: Thanks Matthew.

Speaker Change: Market risk <unk> interesting question.

Speaker Change: There is of course, a risk, but we think we've managed that down.

Speaker Change: So the var outliers, we haven't triggered at this point.

Speaker Change: Over the threshold at which far outliers would produce an increase in market risk <unk>.

Speaker Change: And you've.

Speaker Change: Our S var did.

Speaker Change: Did tick up at the beginning of the of the month and we've managed that down through hedging and portfolio actions.

Speaker Change: So those risks are there in a if the if the market were to become disrupted later in the quarter, but we think that the impact of of what was present in the market in the first half of April has been managed and at the moment, we don't see that presenting itself.

Speaker Change:

On the CRE side, it's interesting.

Speaker Change: The the market indicators are a little bit mixed so office in the in the index is slightly down I'll call it flat <unk>.

Speaker Change: Leasing activity has actually picked up which is good and of course rates and sponsor behavior.

Speaker Change: While they've moved around largely unchanged. So our outlook for CRE continues to be where where it was beginning of the year.

Speaker Change: We would see.

Speaker Change: A steady improvement from the levels that we've that we show you in Q1 in fact, there was only one new default in CRE in office in the U S. This quarter. So so what's your what you have is essentially 100% of the provision associated with valuation adjustments on existing defaulted.

<unk> and hence I think we get closer to the point, where where you see a more.

Speaker Change: More dramatic decline in the provision levels as you say, we're tracking a little bit closer sort of every quarter to the to the severe stress, but we don't see anything there.

Speaker Change: That would suggest a.

Speaker Change: Another leg down in CRE, we are still in line with our earlier expectations.

Speaker Change: And meta.

Speaker Change: From a numbers point of view for the full for the outer years and.

Speaker Change: Our plan going forward of course, you would get something during this year, but.

Speaker Change: As I said it before I think it's important for us that we deliver a very solid numbers for the first half year and obviously James and his successor will then work together with me on those numbers because I want to have an absolutely smooth handover I want to make sure.

Speaker Change: That there is a fully aligned process I think that is what management is all about and I'm really happy with how we have set it up but you can be rest assured that our numbers will be given to you in the second half of 2025. Thank.

Speaker Change: Thank you.

Speaker Change: Implication does that mean with third quarter results.

Speaker Change: Did you guys joining in September.

Speaker Change: Look.

Speaker Change: I said in the second half of 2025 and <unk>.

Speaker Change: We have lots of things to do now and.

Speaker Change: I'm not yet decided on the exact date, but you will receive in the second half of 2025.

Speaker Change: A good set of outlook numbers for the oncoming years from us. Thank.

Speaker Change: Thank you very much.

Speaker Change: The next question comes from Stefan <unk> from Autonomous. Please go ahead.

Speaker Change: Yes, good morning, and thank you very much for taking my questions I wanted to clarify one of your comments. Please change you mentioned that.

Speaker Change: Fixed income trading was still up year on year in April does that literally mean April year on year or does it mean year to date.

Speaker Change: Up.

In fixed income for the full for loans.

Speaker Change: And the second question is about the increase in compensation expenses that you flagged that is coming partly from the.

Speaker Change: The rise in your share price.

Speaker Change: Yes, <expletive> mentioned that hedging this.

Speaker Change: To some degree are you also doing this at Deutsche Bank level.

Speaker Change: If so what's the any positive benefit from this in one of the revenue items and if so when.

Speaker Change: And the final question I wanted to ask is on the.

Speaker Change: <unk> ratio and in particular on the dollar based and the default ratio, which received a bit of attention recently with the TBA reports.

Speaker Change: You give us a rough indication of where your dollar.

Speaker Change: Our ratio of seats.

Speaker Change: The EPA set the German banks on average we were at 76% can you give us an indication of where you are please thank you.

Stefan: Thanks Stefan.

Stefan: So the answer is both on FIC revenues. So we are obviously up big year on year in the first quarter.

Stefan: We're up slightly in April in the month of April and therefore, we remain up significantly year on year year to date in Fig and fixed.

Stefan: And that's encouraging to see how the franchise strength the investments that we've talked about client engagement all of those things that are playing out as we.

Stefan: We'd hoped and have been ROM and his team will be working to for.

Stefan: For such a long time, so it's encouraging development and to the earlier question.

If the market tone stays as it has been now in the second half of April and in the first quarter, we'd certainly recapture.

Stefan: The the.

Stefan: The weakness in the early days of <unk> of April.

Stefan: On the compensation expenses at the end of the day it falls through to the expense line on a consolidated basis essentially the group offers dws some benefit of hedging that risk.

Stefan: It transfers and creates.

Stefan: A revenue item for Dws, that's then.

Stefan: Eliminated on consolidation at the group level, but the comp.

Stefan: Compensation cost impact shows up at the group on a consolidated basis.

Stefan: And actually it represents you know year on year.

Stefan: A decent size of the increase if I break the compensation numbers up it's basically for parts all about equal between 30% and $40 million.

Foreign exchange translation, the stock impact variable compensation and then the net impact of <unk>.

Stefan: Of fixed pay coming through.

Stefan: Which we think is a good outcome, especially as a lot of that was then offset in non comp expenses.

Stefan: On the NSF or we wanted to tip our hat to the question that was raised in the EPA report. So on page 28, we show you a number.

Stefan: Of more than 90% of our U S dollar asset side being funded by native U S dollar liabilities.

Stefan: Now NSF or by its definition doesn't include cross currency funding, which is.

Stefan: Just a quick or a feature of it.

Stefan: Including cross currency funding, we'd be above safely.

Stefan: Safely above 100%.

Stefan: And we think our dollar liquidity position is extremely strong.

Stefan: Because essentially the liabilities fund the balance sheet that is.

Stefan: I'll call it 80% loan to <unk>.

Stefan: Loan to deposit and.

Stefan: And a significant amount of cash and.

Stefan: And high quality liquid assets in dollars.

Stefan: If anything our dollar funding is more robust than other currencies. So.

Stefan: So we saw that and I think hopefully we've provided with that with that one data point.

Stefan: A good response, I will say and maybe come up to this tomorrow in the fixed income call. There's a lot of I'll say technology limits controls maturity ladders, and what have you that we apply to managing currency risks.

Stefan: And the funding implications of currency risks on the balance sheet. So we think we've got a very very strong robust set of capabilities there.

Speaker Change: Thank you very much thanks James.

Florida book: The next question comes from Florida book out from Barclays. Please go ahead.

Florida: Yes, good morning.

Florida: The first question I wanted to ask is on the cost guidance you, obviously started whether here in Q1 on your cost base.

Florida: And you'll have I think 18% actual cause the U S dollar.

Florida: Assuming the Euro dollar remains where it currently is around 114 piece should have I think around a 1% positive impact on your cost base year on year. So I'm just asking is there would you say is positive risk to your cost guidance for this year.

Florida: Not really eat because despite good Q1, despite the FX tailwind here.

Speaker Change: Are you seeing this could be offset somewhat.

Florida: Jim.

Speaker Change: And the second question is on the O&M Reading news I see you've dropped the guidance of the play.

Speaker Change: 600 million euros, you expected for this year I think its clear you know what you've explained already on his call. Maybe just to ask do you still think nevertheless that you could expect an increase year on year or it could be flat or down just to help us frame the range of outcomes here considering.

Speaker Change: Current market conditions, but also your pipeline. Thank you.

Speaker Change: Thanks, Laura.

Speaker Change: So on reported expenses, yes, the current FX rate would represent if you like however, you think about it.

Speaker Change: Put downward pressure on our reported expenses you have seen that year on year in the first quarter kind of the average was $52 million upward movement in reported expenses that would flip around next next quarter to some degree depending on the path of.

Speaker Change: Of the of the exchange rate remember, though that because we have U S. Dollar revenues, it neutralizes more or less in pre tax profit.

Speaker Change: And in the ratios theres, a little bit of I'll call, it tracking error, but but by and large the U S. Dollar nets out when you get to two cost income ratio of pre tax profit and.

Speaker Change: And <unk>.

Speaker Change: Flora and to your second question on on <unk> revenues.

Speaker Change: Yes, we do believe that year.

Speaker Change: If we compare 2025 was 2024 that we will see an increase in <unk>. Despite of that what are we.

Speaker Change: We see in the market right now.

Speaker Change: Therefore, again I think it's really important to look at the probability weighted pipeline, which is still very robust also at the comment I made before that we haven't seen any canceled deals that we actually have seen.

Speaker Change: A very nice development on the mandates, which which we received and.

Speaker Change: And therefore, if I take now Q1, if I if I look at the pipeline and the work we're doing on Q2 two.

Speaker Change: To be honest.

Speaker Change: I am very confident that we will see Owen a revenue numbers, which are ahead of last year.

Speaker Change: And again, given the diversification we have in the in the business is also the compensating business areas.

Speaker Change: Even if we have the weakness in <unk> versus our initial plan.

Speaker Change: We believe that this would be offset by other businesses and we have.

Speaker Change: The really good cushion, which we have already established in Q1.

Speaker Change: Just one thing to add floor on that is that the the guidance is of course, an update with Q1 behind us and hence.

Marc: The guidance reflects also that LDC M Marc in it.

Marc: And so I think it is an encouraging thing to to see <unk> up.

Marc: And more more than overcoming what was a relatively significant one off item in the first quarter.

Marc: Alright, thank you.

Ryan Hagan: The next question comes from Ryan Hagan from RBC. Please go ahead.

Ryan Hagan: Yeah. Thank you for taking my question.

Ryan Hagan: Hum.

Ryan Hagan: I had one diesel in the quarter from the runoff of the capital.

Ryan Hagan: Loan products.

Ryan Hagan: But to continue on.

Ryan Hagan: There will be a complete set I'm with Q1.

Ryan Hagan: And then on the costs.

Ryan Hagan: And then you say five.

Ryan Hagan: 5%.

Ryan Hagan: Just wonder about the noncore.

Ryan Hagan: C implies a quite good performance in the quarter.

Ryan Hagan: Q1, the run rate here or is it really quite low it should pick up in the course of the year, but then.

Ryan Hagan: And the uptick.

Ryan Hagan: And as I touched by lower.

Speaker Change: Compensation expenses I think Kevin please comment thank you very much.

Ryan Hagan: Okay.

Ryan Hagan: Thank you.

Speaker Change: So just to make sure we heard your comments early but question. One so we had about a $2 billion run off in mortgages in the quarter.

Speaker Change: Which was relatively significant and given kind of our strategic view as well as the decision to close the DSL channel I think you'd expect to see some of that also persists in the year now.

Speaker Change: Again, our outlook statements about private bank R. R.

Speaker Change: I would say bullish that we still see continued growth in the coming quarters, and so that would incorporate additional run off of what we think of as capital intensive portfolios.

Speaker Change: On the cost side, there was nothing special necessarily in the in the non comp in in private bank in the first quarter, we did have restructuring and severance as you saw most of the restructuring and severance charge that we took at the group level in the first quarter was in PB.

Speaker Change: We would expect that to lessen as the year goes by maybe some more in Q2, but less in the second half of the year.

Speaker Change: There can be some seasonality in things like marketing expense and what have you, but by and large what we would what we'd expect to see is the continued impact over the coming quarters and into the subsequent years of the benefits of the sort of cumulative restructuring steps that we've taken around particularly branches personnel, but also.

The impact now of more fully the benefits of the technology investments we've made in the past.

Speaker Change: I just wanted to support that uncle, because I'm I'm.

Speaker Change: I'm really happy with what I'm seeing now and the private bank I think.

Speaker Change: We are really seeing the fruits of all the transformation and restructuring also by the way of all the work we have done on unity and you know how painful that also and also with the pain. We in particular took in the year 2023, it's paying off now it's really paying off on the cost side, it's paying off in the way the clients are reacting.

Speaker Change: And I have to say that.

Speaker Change: Also one of the reasons why we are so confident to achieve the 32 billion and 10% of our T is now that all the hard work is flowing through.

Speaker Change: Is going through the P&L of the private bank. So I would say there is a continuous improvement.

Speaker Change: Also the decision by the way because you talk about loans and mortgages Korea decision of.

Speaker Change: One item, which we summarized on the Deutsche Bank three zero in this SBA was the clear decision by the Finance Department and cloudy with Department.

Speaker Change: <unk> reduced mortgage lending under one Brent the DSL Brent that is SBA positive. This is exactly what we want to achieve and it's just one little evidence that we are working hard actually to further improve on the profitability of the bank and optimize our capital allocation.

Thank you.

Speaker Change: The next question comes from Martin Amis UBS. Please go ahead.

Martin Amis: Yes, good morning, and thank you for taking my questions.

Speaker Change: All three of them. The first one is for <unk>.

Speaker Change: Continuing the SBA question, you mentioned that.

Martin Amis: With what you did in the personal bank.

Martin Amis: Volunteer example of that can you share perhaps.

Martin Amis: There are few opportunities for DSP to increase resource allocation in certain areas and also conversion either you expect to see perhaps clear restrictions.

Martin Amis: So how this aligns the demand side.

Martin Amis: There are good.

Martin Amis: <unk> disease.

Martin Amis: Yeah and look at more capital.

Martin Amis: Perspective, that's the first one the second one is the question.

Speaker Change: James are you still expecting about 300 million pick up the banking book.

Martin Amis: 2025.

Martin Amis: Is this also improved slightly.

Martin Amis: Added to 2016 to 27.

Martin Amis: Yeah.

Martin Amis: Due to the hedge.

Martin Amis: And the last question would be on <unk>, you can hear me now.

Martin Amis: Achieve now.

Martin Amis: Accumulative $28 billion in order to be a reduction arguably optimization is ongoing could you point to the opportunity you see in the remainder of the year.

Martin Amis: What can you achieve that.

Martin Amis: The next three quarters. Thank you.

Martin Amis: Yes, let me start.

Martin Amis: On your SBA question so.

Martin Amis: First of all I'm I'm I'm delighted that.

Martin Amis: This topic of S E a focus and day to day SBA management is now fully incorporated in the bank and you can see that in our monthly performance revenue meetings.

Martin Amis: We are really driving the businesses and as such the whole bank based on SBA.

Martin Amis: Now I'll just give you. One example in the private bank and to be honest.

Martin Amis: This is one example, where we executed.

Martin Amis: And rest assured that obviously, we are going through portfolio by portfolio and in particular in those portfolios, where so to say we are SBA negative we are looking what what can we do.

Martin Amis: Now one item is where we are starting and you have seen that also in the private bank as repricing and repricing will play a role in the private bank repricing will partially pay a road and in the corporate Bank. If you think about our trade finance book and our lending book.

Martin Amis: There is the chance actually to reprice and based on all the data we have the methodologies. We have in hand, we will do this secondly, if you think about SBA.

Martin Amis: It's not only about XD, whether we allocated capital in the wrong way, it's actually about the underlying cost and process cost of running the business and.

Martin Amis: And hence we are very much in the detailed work to think about more efficient frontier and processes in particular in <unk>.

Martin Amis: Credit related processes again.

Martin Amis: For instance, the German.

Martin Amis: The German lending book, the trade Finance book, David Lynn.

Martin Amis: And the credit Department are looking into.

Martin Amis: More efficient credit process end to end that will lower the running cost of that business and actually I think it will we think will make the trick to bring it into a clear SCA positive business.

Martin Amis: But we are looking as we also from a regional point of view, whether there are regional portfolios, where we potentially do not have the significant market share where we can restructure all from a Brent and point of view like we did it for DSL mortgaging in Germany. So SBA is actually a campaign, it's a combination of.

Martin Amis: Repricing.

Martin Amis:

Martin Amis: Client by client revenue, which Fabrizio is doing in the investment bank and the corporate bank looking at the five to 10 year history of clients, whether we have.

Martin Amis: So to say continues.

Martin Amis: <unk> SV, a negative clients, where we want to go and we'll go now into the debate with the discussion with the client what else. We can do in order to make that relationship and more profitable one but it also goes over processes and at the end of the day, we wouldn't mind to take decisions to also exit certain sub portfolio is.

Martin Amis: We are not convinced that we can turn it into positive and therefore I think it will be one of the most significant lever we have to really raise our return on equity.

Martin Amis: Beyond the 10% return.

Martin Amis: Two to a higher number and the progress, which we have seen over the last three months since we introduced it to you end of January is quite significant.

Speaker Change: It actually feeds nicely into your third question, which is R. W. A and so one of the levers beyond what Christian you just talked about is looking at more capital relief transactions through securitization.

Speaker Change: To help various businesses and obviously the market is is broader and deeper than a few years ago and so we're we're sort of going if you like more deeply into the portfolio to look for securitization opportunities now that takes some time, so I don't want to sort of over go go out over our skis in terms of how much more is achievable this year.

Speaker Change: But I would certainly see us.

Speaker Change: <unk> the $30 billion target may be slightly more than that in 'twenty, five, but but at that point, we move into the future and we will continue looking at capital optimization.

Speaker Change: In the years to come.

Speaker Change: Opening up a securitization markets with the savings and investment Union initiatives will obviously help in that regard and and the measurement of businesses by SBA It makes them less.

Speaker Change: Inclined to hold onto revenues.

Speaker Change: If they're being measured at the.

Speaker Change: If you like the very bottom line.

Speaker Change: And banking book camera NII, our guidance is basically consistent with where we were at the beginning of the year. There are obviously moving moving parts in that ocean.

Speaker Change: Rates have moved but as you see our hedging has protected us and we don't see an impact from the rate environment.

Speaker Change: We do see a benefit as we mentioned in the in the years beyond 2025 as the long term rate curve has steepened and obviously are are are hedging the rollover hedging benefits us.

Speaker Change: And theres been a little bit of movement in FX and in volumes, but basically we're still where we were before about $13 6 billion.

Speaker Change: A lot of that the year on year benefit is in private bank and in financing you will have seen there've been some movements in corporate bank.

Speaker Change: Some of that's just reallocation or reclassification of revenues sort of group neutral or even within the CB neutral as it reclassified some revenues into into remaining income.

Speaker Change: But again with all of that said we are our guidance is in line with where we started the year on on banking book, NII, which is which is encouraging.

Speaker Change: Yes.

Speaker Change: Perfect. Thank you.

Speaker Change: Thank you.

Speaker Change: It comes from Giuliano.

Speaker Change: Morgan Stanley. Please go ahead.

Speaker Change: Hi, Good morning, two questions from me.

Speaker Change: The first one is on the Mark.

Speaker Change: Seen in Miami.

Speaker Change: Leverage finance book.

Speaker Change: Could I ask you please to shed more light on this book so how big is it.

I don't know performance pro time sector across international.

Speaker Change: Sean warehousing risk.

Anything that you can give us would be useful.

Speaker Change: And then secondly, just on the SSD market and have you witnessed any change in demand.

Speaker Change: For.

Speaker Change: Some investors given the heightened macro uncertainty or do you expect any change in demand. Thank you.

Speaker Change: So Julia I actually don't have the the size of the book in front of me, we talked about that a lot last year, but it is the.

Speaker Change: On balance sheet book is relatively modest as you know there's there's also a revolver piece of it there is the underwriting pipeline that then gets distributed but we're actually at a relatively lower point in the cycle given the slowdown of activity. So far this year.

Speaker Change: The individual position that we were talking about.

Speaker Change: Is actually our last remaining sort of position from the pre war period. So prior to March of our February of 2022.

Speaker Change: One that actually we've had a reasonably sort of.

Speaker Change: Positive view on we participated in a recapitalization last year.

Speaker Change: And the Mark reflects really sales activity away from us.

Speaker Change: And partially we participated in the sales activity in order to to free up capital, but the.

Speaker Change: There is certainly a possibility that the that the on balance sheet position recovers over time.

But in terms of orders of magnitude it larger in terms of an impact in the quarter. Then we would we would typically see.

Speaker Change: And the funded book is Theres nothing like that in that remains in the funded book.

Speaker Change: Yeah.

Speaker Change: Okay.

Ryan Hagan: I think you had one one more question Julia on any change in in SRT demand.

Ryan Hagan: To be honest no. We even concluded a transaction I think James in mid of April.

Ryan Hagan: And we are actually very happy with the demand. It was the transaction, which was focusing also on German mid caps and the mid cap portfolio.

Ryan Hagan: There was also.

Ryan Hagan: No noticeable repricing are required so actually there is a lot of demand we haven't seen any change in behavior, which also makes us believe that to the prior question.

Ryan Hagan: On the 30 billion goal or 25% to 30 billion Golar and <unk> reduction that are obviously with that what we have achieved so far with that which is in the pipeline.

Ryan Hagan: That we will achieve that if not overachieve it.

Speaker Change: Perfect. Thank you very much.

Speaker Change: The next question comes from Jeremy <unk> from BNP Paribas. Please go ahead.

Jeremy: Thank you I will just keep it to one question and it's a slightly broader one you mentioned savings and investment Union as a lot of other banks have as well.

Jeremy: Just how material is that on a three year planning horizon, I mean is that something that could make a percentage point or two of our Ot difference in your next three year plan or is it still a bit margin a little bit blue Sky how material is it for you.

Jeremy: Yeah.

But let me let me start and end James should add I think yes, it is material and it's clearly not yet.

Jeremy: In our detailed plan for the next years and why do I think it is material for the for two reasons.

Jeremy: Number one.

Jeremy: We will see with the savings and investment Union a lot of more investments actually into Europe also in certain asset classes like defense like infrastructure.

Jeremy: And in this regard.

Jeremy: There are not a lot of banks actually who can handle that and who can bring investors together.

Jeremy: You have the excess the network to the investors around the world and that's what we are already seeing right now you cannot imagine XD.

Jeremy: The the kind of the interest which was which was created not only by the savings investment Union, but also by the German.

Jeremy: The German decision to invest more into defense and infrastructure and how many investors are now so to say contacting us in order to be so to say part of this initiative and hence I would say that in this regard the capital markets.

Jeremy: Initiatives, the leverage which we can provide from a banking point of view in order to support. These programs is actually quite significant and and again, we saw it in particular after the announcement of photos to early March.

Jeremy: The second part where I do believe we.

We have a huge opportunity is actually.

Jeremy: Based on the savings and investment Union, but also based on the coalition agreement in Germany, because if you read it in detail.

Jeremy: There is a clear intention to look at the pension schemes in Germany, and the way the people will actually provide for their retirement plans.

Jeremy: And in this regard I'm I'm I'm convinced that we will see changes in this regard also in Germany.

Jeremy: And I do believe that this is a huge opportunity in particular for a bank like Deutsche Bank not only because we have the 19 million and clients in Germany. The retail side, but also as we have so to say the product factories be it in dws or in the investment bank, which can provide for that and the level of discussions we have with <unk>.

Jeremy: And but also with Brussels on how we can facilitate that how we can make sure that we have a change in the pension scheme is on a very very good level and hence I do believe on both sides I E. The investment bank.

Jeremy: Corporate bank supporting actually the culprit in the investments, but also on the private banking side, there is a lot of upside and hence.

Jeremy: Very positive in particular for the outer years.

Jeremy: Yeah.

Jeremy: Thank you.

Andrew Coombs: The next question comes from Andrew Coombs from Citi. Please go ahead.

Andrew Coombs: Good morning, if I kind of a couple of box plays on the market.

Speaker Change: The bathroom Hello, a question on FX I think you made the point that anybody maxing out.

Speaker Change: When you get the PBT level I think when you gave that guidance.

Speaker Change: Guidance.

Speaker Change: Yeah.

Speaker Change: Talked about it being an 800 million Halloween Matthews.

Speaker Change: Is it 400 million headwind costs.

Speaker Change: And I still think that that is largely moved back down.

Speaker Change: Yeah.

Speaker Change: <unk> and 'twenty eight.

Speaker Change: Guidance full year marked today's FX rate that would be useful.

Speaker Change: And then secondly, just coming back to the <unk> alright.

Speaker Change: I was looking at <unk> 98.

Speaker Change: Page 41 and 42.

Speaker Change: And you will be presenting any differently as you talk about one percentage point of GDP being a $77 million adjustment on <unk>.

The other banks have kind of provided you had downsides.

Speaker Change: Adjusted the Whiting, given where the assumption the downside scenario.

Speaker Change: Anything you can do just to help me calibrate how you determine that 70 million yeah.

Speaker Change: $50 million on the macroeconomic scenario would be would be just if you can compare and contrast, what you've done with others. Thank.

Speaker Change: Thank you.

Andrew Coombs: Andrew sort of so both while the first one is it is it relatively easy question to answer.

Andrew Coombs: But I don't really want to get into sort of mark to market.

Andrew Coombs: Of the plan each quarter, obviously, you'll see it in our results with the variances.

Andrew Coombs: But what I'd tell you is maybe to help is our plan as I think we said it.

Andrew Coombs: At the end of.

Andrew Coombs: January was done kind of with a rate of about about 110 on the euro to the U S dollars Youll remember that December it had gone all the way to kind of 103.5.

Andrew Coombs: And if we if we do it on March it would be back to 108 and.

Andrew Coombs: Currently $1 14, so so it's been moving around a lot I think it's fair to say that it's a it's a downward.

Andrew Coombs: So today it would be a downward pressure on the on the ex FX numbers. We showed you in January both for revenues and expenses netting out.

Andrew Coombs: Pre tax profit.

Andrew Coombs: On the tariffs item in the first nine sort of view, you're right and then one of the I don't want say, a challenge, but but but the positive and the negative of the way. We show. The disclosure is that your you are seeing this.

Andrew Coombs: Sensitivity of each of the variables and what we.

Andrew Coombs: Sort of implemented was a was an overlay that that played with a number of the variances of variables. So U S. GDP U S unemployment rate the level of the S&P the level of the of the credit metrics. So I couldn't give you one metric to really sort of quantify what it is we sometimes look at it.

Andrew Coombs: In terms of standard deviations of all of the metrics.

And hence it's hard to give you an apples to apples comparison with what with what other other people do.

Andrew Coombs: Okay.

Speaker Change: The next question comes from Tom Hallett K P. W. Please go ahead.

Speaker Change: Hi, Thanks for taking my question I guess, firstly on NII.

Speaker Change: I'm kind of just following up.

Speaker Change: Okay.

Speaker Change: I need to grow key banking NII $400 million at the next nine months to keep in line with your 2025 guidance.

Speaker Change: How should we see that and I work in the.

Speaker Change: The private bank corporate bank over the next couple of quarters and how much is it related to non hedged related benefit.

Speaker Change: And then secondly could you provide us with any capsule moving parts over the next couple of quarters and what will need to consider.

Speaker Change: For modeling purposes.

Speaker Change: And then finally on Dws E.

Speaker Change: He.

Speaker Change: No.

Speaker Change: A few weeks back.

Speaker Change: To acquire a competitor I'm just wondering why it's taking seven years since the IPO. So.

Speaker Change: All I can say to that.

Speaker Change: And with a large acquisition ultra Deutsche Bank Capsular time anyway.

Speaker Change: Thank you.

Speaker Change: Okay.

Speaker Change: Thanks, Tom So look I think you'll see.

Speaker Change: Improvement from here as I mentioned, there was some some internal.

Speaker Change: Sort of Reclassifications that we made in corporate bank, but I think a steady but modest improvement from Q1 in corporate bank and private bank, it's more pronounced and more related to the hedge rollover than any other factor.

Speaker Change: And in financing.

Speaker Change: It's.

Speaker Change: Call it $100 million of the of the full year benefit more volume driven now I will say with all three businesses volumes will play a part Christian noted that in the corporate bank.

Speaker Change: Loan growth was a little bit more sluggish in the quarter than we might have expected, but then spiked up at the end of the quarter. So if we do see loan growth sort of.

Speaker Change: On average in the quarters that lie ahead that exceed our current estimation of where deposit growth then than we could have some some volume related lift on all of those numbers.

Speaker Change: But as I say, so most of the of the hedge rollover benefit you'll see in.

Speaker Change: And the and the private bank I think your second question was movements in capital.

Speaker Change: With the first quarter behind us.

Speaker Change: It comes a little bit more simple.

Speaker Change: Because we don't have really remaining model related changes or sort of acceleration of <unk>.

Speaker Change: The impact of of equity comp is really concentrated in the first quarter. So it is at this point, it's really earnings net of.

Speaker Change: Of accruals for future distributions or profit recognition for future distributions net of of balance sheet growth of our business growth.

Speaker Change: Question about the dws and M&A.

Speaker Change: I think Stephane comment was more that that we are better positioned today to think about and potentially pursue transactions for dws than in the recent past.

Speaker Change: In part because dws was also working through some some internal issues.

Speaker Change: And but I don't want the implication to be that we haven't considered it at all over the over the now seven years since the since the IPO.

Speaker Change: I want to just emphasize I mean, we recognize the strategic environment within which dws is operating and we haven't been sitting on our hands, but also appropriately we havent pursued transactions that aren't beneficial to dws's shareholders or the group. So theres been some some disciplined attached to it.

Speaker Change: But Stefan is right to say that the company is better positioned and of course the market environment around Dws has has changed you've seen a number of transactions in the industry. In recent days I do want to emphasize dws is well positioned with its existing business and you can see it executing and performing well on its strategic.

Speaker Change: Intent.

Speaker Change: With both inflows and the distribution of its of its assets under management as well as the performance. All are are good indicators about about dws is.

Speaker Change: Trajectory from here.

Speaker Change: Okay.

Speaker Change: Thanks for that I mean, just just a quick follow up this one old pet Deutsche Bank capital return plan in anyway.

Speaker Change: Potentially.

Speaker Change: No I mean look we've set we set targets for our distribution.

Speaker Change: Where we are.

Speaker Change: We're bound and determined to deliver on all of that.

Obviously, there is a resource envelope within which we manage all of the businesses.

Christian Savings: And and allocate capital as Christian referred to based on SBA.

Christian Savings: We certainly look at it asset management of the dws businesses with a similar similar view.

And.

Christian Savings: Yes, we've got.

Christian Savings: A year left to deliver on the targets that we set out and we are determined to.

Christian Savings: To follow through on our plans and deliver on the distributions that we promised to our shareholders.

Christian Savings: Okay.

Okay.

Christian Savings: Yeah.

Speaker Change: Ladies and gentlemen that was the last question I would now like to turn the conference back over to you on opportunities for any closing remarks.

Christian Savings: Yes.

Speaker Change: Thank you for joining us and for your questions for any follow up please come through to the Investor Relations team and we look forward to speaking to you at our second quarter call.

Christian Savings: Yeah.

Speaker Change: Ladies and gentlemen, the conference is now over thank you for choosing chorus call and thank you for participating in the conference you May now disconnect your lines Goodbye.

Christian Savings: Okay.

Christian Savings: [music].

Christian Savings: Yeah.

Christian Savings: Yeah.

Christian Savings: Yeah.

Christian Savings: Okay.

Christian Savings: [music].

Christian Savings: Okay.