Banks

www.fitchratings.com 14 August 2017

Germany

Deutsche Bank AG Full Rating Report

Key Rating Drivers

Strategic Reorientation Drives Ratings: Deutsche Bank AG’s (DB) Long-Term Issuer Default

Rating (IDR) and Viability Rating (VR) reflect our expectation that the strategic reorientation

towards a more balanced universal banking business model should, if executed successfully,

make earnings and capital less vulnerable to capital market volatility and market sentiment. But

reversing franchise damage experienced in 2016 and executing the new strategy will be

challenging, and the Negative Outlook reflects a high potential for delay or failure.

Weak Earnings: The bank’s earnings are likely to remain a weakness in comparison with most

global peers over the next one to two years. Any improvement depends on DB’s ability to

regain lost clients and market shares, in particular in the Corporate and Investment Bank (CIB).

We expect costs to remain high as additional restructuring expenses offset efficiency gains.

Further conduct provisions may be added, but we expect these to be less significant than in

2016 given progress with resolving major cases.

Rights Issue Boosts Capitalisation: The EUR8 billion capital raising completed in 2Q17 has

increased DB’s regulatory capital ratios and relieved the pressure from weak internal capital

generation. Management has committed to maintaining the common equity Tier 1 (CET1) ratio

above 13% and increasing the leverage ratio to 4.5%, broadly in line with European peers.

Retail Presence Maintained: Management has shelved plans to sell DB’s retail subsidiary

Deutsche Postbank AG (Postbank) and is planning to integrate it fully into its other domestic

retail and commercial banking business, which is likely to involve a merger of the legal entities.

The lack of a leading domestic franchise and failure to utilise Postbank’s deposits for more

lucrative lending is a weakness for the bank’s earnings compared with peers based in other

countries, and a successful repositioning will be challenging.

Diversified Funding Despite Setbacks: DB’s funding profile remains well-diversified and the

bank retains a large and high quality liquidity reserve. The bank experienced a notable

widening of spreads on unsecured market-based funding in 2016 and some institutional deposit

outflows, from which it subsequently recovered.

DCR and Structured Debt Uplift: Statutory subordination of plain vanilla senior bonds to other

senior liabilities in Germany applied retroactively since 1 January 2017 means the bank already

has sufficient loss absorbing liabilities to meet Total Loss Absorbing Capital (TLAC)

requirements when they are first due in 2019. Fitch believes the resulting buffer of junior debt is

sufficient to afford protection to derivative counterparties, depositors and preferred senior

debtholder in resolution.

Rating Sensitivities

Loss of Franchise: Ratings could be downgraded if we believe that the franchise weakening

in 2016 has not been reversed. This would be signalled, for example, by lower revenue or loss

of market share in DB’s core businesses.

Execution Risks: Notable setbacks to the execution of the new strategic plan could also lead

to a downgrade of DB’s ratings. These may include failure to fully integrate Postbank,

significant delays, unforeseen costs or failure to retain capitalisation on target for example due

to large litigation or conduct costs.

Upside Beyond Outlook Horizon: Successful transformation of the business model and

achievement of higher, more balanced and stable earnings could bring positive rating

momentum in the longer term. We do not envisage such a scenario within the next two years.

Ratings

Deutsche Bank AG

Long-Term IDR A-

Short-Term IDR F1 Viability Rating a- Derivative Counterparty Rating A(dcr)

Deutsche Bank Securities, Inc. Long-Term IDR A- Short-Term IDR F1

Deutsche Bank Trust Company Americas

Long-Term IDR A- Sovereign Long-Term IDR F1

Deutsche Bank Trust Corporation Long-Term IDR A- Short-Term IDR F1

Deutsche Postbank AG

Long-Term IDR A- Short-Term IDR F1

Sovereign Risk – Germany

Long-Term IDR AAA

Outlooks

Long-Term IDRs Negative Sovereign Long-Term IDR Stable

Financial Data

Deutsche Bank AG

30 Jun 17

31 Dec 16

Total assets (USDbn) 1,790.2 1,676.5 Total assets (EURbn) 1,568.7 1,590.5 Total equity (EURbn) 66.5 60.2 Operating profit/RWAs (%)

1.3 0.1

ROE (%) 3.4 -2.2 FCC ratio (%) 15.3 13.2 CET 1 ratio, FL (%)

14.1

a 11.8

CRD IV leverage, FL (%)

3.8a 3.5

NPL ratio (%) 1.7 1.8 NPL coverage 59.2 61.0 Loans/total deposits

69.3 75.2

LCR 144.0 128.0

a Pro-forma including capital increase

Related Research

Fitch Affirms Deutsche Bank at 'A-', Outlook Negative (March 2017)

Deutsche Bank AG - Ratings Navigator (April 2017)

European GTUBs Quarterly Update (April 2017)

Analysts

Bridget Gandy +44 20 3530 1095 bridget.gandy@fitchratings.com Ioana Sima +44 20 3530 1736 ioana.sima@fitchratings.com

Banks

Deutsche Bank AG

August 2017 2

Operating Environment

DB is headquartered in Germany (AAA/Stable) and most of its corporate and retail operations

are based there, benefitting from the country’s stable economic environment. The bank

operates globally through its capital markets business, which has sizeable operations in the US

(AAA/Stable), and in the United Kingdom (AA/Negative), though business booked in its London

branch and local staff numbers are set to decrease following the UK’s decision to leave the

European Union. The bulk of DB’s business is undertaken in sophisticated and well-regulated

markets. The operating environment has a low importance for DB’s rating.

Company Profile

Reliant on Fixed-Income Franchise; Retail Presence Maintained

DB is Germany’s largest privately owned bank by total assets and one of the largest and most

complex banks worldwide, with businesses spanning across Europe, America and Asia Pacific.

The bank has a strong franchise in investment banking globally, especially in fixed income, a

modest presence in the highly fragmented German retail market, a leading position in corporate

and transaction banking, good domestic market share in asset management and a growing

wealth management business. The high weight of capital markets and in particular sales and

trading businesses, which we view as a more volatile source of earnings, negatively influences

our assessment its business model.

Management expects that the combination of DB’s sales and trading, corporate finance and

transaction banking businesses into one Corporate and Investment Bank (CIB) unit from end-

1H17 will facilitate a more integrated approach to client management and cross-selling

opportunities. DB’s franchise in CIB is geared towards fixed-income, credit and foreign

currency sales and trading, where the bank maintains top-three league table positions in EMEA

and APAC (Source: Coalition League Tables FY16). It also maintains a healthy franchise in

debt capital markets, ranking eighth in debt capital markets globally and sixth in EMEA in

7M17, according to Dealogic. DB is an active participant in the leveraged finance markets,

including trading leveraged loans and high-yield bonds. It has a meaningful presence in US

commercial real estate, including Commercial Mortgage-Backed Securities (CMBS) origination,

distribution and advisory.

Transaction banking including trade finance, cash management and securities services,

benefits from DB’s corporate customer base. DB ranked fifth in transaction banking worldwide

and within the top three in EMEA according to Coalition league tables published in April 2017,

and the division remains of key importance to the bank's strategy and an area of growth.

DB’s combined retail and wealth management presence through Postbank, Private and

Commercial Clients (PCC) and wealth management (WM), together managed as the segment

Private and Commercial Bank (PCB), serves over 20 million customers and accounted for 26%

of adjusted profit before tax in 1H17. Despite a strong national branch network and brand

recognition, Postbank’s market penetration and pricing power are limited. PCC typically targets

affluent customers to compete in a highly fragmented retail market where savings banks,

Landesbanken and cooperatives together capture leading market shares in deposits and loans.

The lack of a leading domestic franchise and failure to utilise Postbank’s strong deposit base

for more lucrative lending opportunities thus far, is a comparative weakness for the bank’s

earnings in relation to peers based in other countries.

DB’s asset management business is considered an attractive growth business. It currently

enjoys good market shares in Germany and to a lesser extent wider Europe. It is a leading

provider of retail funds in Germany and the second-largest ETF provider in Europe. Invested

assets mainly relate to Germany with the remainder well diversified across the rest of the world.

CIB59%

PCB26%

AM15%

Note: Ex. DVA, goodwill impairment, litigation, restructuring , and Consolidation& Adjustments segmentSource: DB, Fitch

Pre-Tax Profit Split(1H17)

CIB68%

PCB25%

DeAM3%

C&A4%

Source: DB, Fitch

RWA Split(End-1H17)

0 10 20 30 40 50

Targobank

Santander

ING-Diba

CBK

PoBa + DB

GFG

SFG

Source: Banks' data, Fitch's estimate

German Retail BanksNumber of retail clientsin Germany (m)

Related Criteria

Global Bank Rating Criteria (November 2016)

Global Non-Bank Financial Institutions Rating Criteria (March 2017)

Banks

Deutsche Bank AG

August 2017 3

DB’s organisational structure is complex as a result of the breadth of its operations which

results in a large number of subsidiaries, in line with other global trading and universal bank

(GTUB) peers. DB has a meaningful presence in the US, where it generated EUR6.6 billion in

revenue in 2016 through 10,500 employees (full time equivalent). It operates through its New

York branch (USD158 billion of assets at end-2016) and subsidiaries held via an intermediate

holding company, Deutsche Bank USA Corporation, which was created in 2016. Its main US

operating subsidiary is its broker-dealer, DB Securities Inc, and it has a bank insured by the

Federal Deposit Insurance Corporation, Deutsche Bank Trust Company Americas.

In the UK, where the group had more than 8,500 employees (full time equivalent) and

generated EUR5 billion of revenue in 2016, it operates mainly through Deutsche Bank AG

London branch. We understand that the UK presence could be reduced significantly in

preparation for Brexit and depending on the conditions agreed between the UK and EU.

Management and Strategy

Strategic Rethink is Creditor Friendly but Execution Risks Remain

Revenue weakness in 2016 and unfavourable conditions for achieving a sale of Postbank

meant that the bank had to turn to shareholders for fresh capital and rethink some of the

“Strategy 2020” targets in early 2017. Fitch views the decisions to retain a retail presence and

increase the focus on corporate customers positively. But execution risks relating to restoring

DB’s reputation with its stakeholders, including its workforce and prime customer base, turning

around a barely profitable mass retail operation and resolving legacy misconduct cases remain

substantial, in our view.

Management decided to shelve plans to sell Postbank, opting instead for a medium-term plan

to integrate it into its existing private and commercial clients business. Low return on tangible

equity (RoTE) from Postbank had been a key reason for previous plans to sell. But

expectations of a return to a “normalised” interest rate environment, potential cost synergies

from integrating IT platforms, simplifying product offering, increasing digitalisation, as well as

the regulatory rein-back on leverage requirements for European banks swayed the decision.

At the same time, DB’s management is planning to increase the importance of the bank’s

corporate client-led franchises, by continuing to run-down legacy exposures and recycling

released capital into corporates-focused origination, advisory, transaction banking and

financing businesses.

Progress with other targets set out in the “Strategy 2020” appears on track. These include the

disposal of smaller non-strategic businesses, exiting its onshore presence from earmarked

countries, reducing the domestic branch network and simplifying the complexity of DB’s IT

systems. However we expect it will take many years until the impact of such measures, in

particular of strengthened risk culture and more robust IT systems, is tested and translates into

financial performance.

Management Turnover Consistent with Strategy

Nearly all of the current management board members, including the chief executive officer,

have been appointed during the past two years, reflecting the previous management team’s

difficulties in meeting financial objectives. We view further top management changes

announced in 2Q17 as consistent with the strategy and succession planning. Changes include

creating two deputy CEO positions by promoting internally the previous chief financial officer

and the head of PWCC, replacing the CFO with a strong external hire and appointing co-

business heads for the two new main divisions – CIB and PCB.

DB’s Financial Targets

Post-tax RoTE of about 10% in a normalised operating environment

Adjusted costs of EUR 22 billion by 2018 and EUR21 billion by 2021

CET1 ratio comfortably above 13%

Leverage ratio 4.5%

DB’s Business Targets

Origination and advisory: regain market leadership position in Europe, strong franchises in US and APAC

Transaction banking: improve profitability and cross sell

Financing: leading credit financing and solutions

Fixed income and FX trading: top five globally, top three in Europe and selected businesses

Equities sales and trading: regain prime brokerage market share

Banks

Deutsche Bank AG

August 2017 4

Risk Appetite

Sound Underwriting Standards

DB is exposed to complex financial instruments, mainly because of its sales and trading

operations. The bank’s moderate risk appetite in domestic retail banking comprises mortgage

loans typically extended at low loan-to-value ratios, and a low share of short-term

uncollateralised consumer finance loans. We do not expect DB’s targeted growth in corporates-

driven businesses to result in weaker underwriting standards. But we expect the importance of

credit risk to increase, and large exposures will need to be closely monitored.

Weaknesses in Risk Controls Being Addressed

Our assessment of the bank’s risk controls factors in weaknesses uncovered in past years,

which the bank is addressing. It is investing in digitalisation, streamlining systems and

processes and exiting some countries (such as from Russia where controls weaknesses have

been the root of lengthy and expensive regulatory investigations). Management is also seeking

to improve the risk culture within the organisation. In the US, the establishment of an

intermediate holding company subject to tight regulatory supervision and stress tests should

over time also contribute to improved risk controls.

Conduct Costs Significant Burden

Conduct and litigation costs have been a high burden to earnings in recent years. They have

translated into higher capital requirements for operational risk. The bank has reached costly

settlements in 2016 and early 2017, notably with the US Department of Justice (DoJ)

investigation into DB’s past residential mortgage backed security dealings, which resulted in a fine

of USD3.1 billion, and the obligation to engage in USD4.1 billion worth of consumer relief actions.

It has also settled with the UK Financial Conduct Authority, the New York Department of Financial

Services and the Federal Reserve over anti money laundering deficiencies related to equity

trades booked in Moscow and London, resulting in USD629 million fines.

The bank booked litigation costs of EUR7.6 billion (including loan processing fees but likely

excluding any impact of consumer relief) between 2015 and 1H17. At end-1H17 DB had

EUR2.5bn reserves against future penalties arising from civil litigation cases and regulatory

enforcement on balance sheet. Its numerous outstanding investigations and court cases,

including the DoJ’s investigation into London/Moscow trades, could result in further fines, the

amount of which is difficult to predict.

Material Traded and Non-Traded Market Risk

Traded market risk, which uses 11% of DB’s 1H17 economic capital, arises through market-

making in debt and equity securities, derivatives and foreign-exchange products. The bank

uses a variety of measures to monitor traded market risk, including value-at-risk (VaR),

stressed VaR, incremental risk charge and comprehensive risk measures using historical data

and Monte Carlo simulation. Economic capital and VaR utilisation under the bank’s internal

stress-testing scenarios are subject to board-approved limits.

Average VaR utilisation declined to EUR31.8 million in 1H17. However, the undiversified sum

of asset class maximum VaRs incurred in 2016, scaled up by a factor of five (Fitch Stressed

VaR) as a percentage of the latest Fitch Core Capital (FCC) of 4% remains one of the higher of

the European GTUBs, reflecting the relatively high allocation of capital to sales and trading.

Trading unit revenues were positive in 87% of the trading days in 2016 and in 97% of trading

days in 1H17. In 2016 the bank had one back-testing exception when the buy-and-hold loss

exceeded the value-at-risk during the market volatility seen in February 2016. Back testing

exceptions occurred in 2015 following removal of the euro-Swiss franc floor and in the non-core

unit, which have been run-down to target.

Interest Rate Risk (EURbn) -200bp +200bp

Economic Value -0.4 -0.3 Net Interest Income 0.6 2.1

Note: Impact on banking book across all currencies; decline floored at zero. Source: DB’s 2016 annual report

Banks

Deutsche Bank AG

August 2017 5

Non-traded market risk represents a substantial 22% of DB’s economic capital usage before

diversification at end-1H17. Within this, interest rate risk in the banking book is related to

mismatches in the maturities and repricing of assets and liabilities; the majority of this risk is

managed by DB through maturity transformation and internal risk transfers to the trading book,

while Postbank and PWCC manage interest rate risk separately. The remaining net interest

rate risk position in the banking book is a manageable 4% (end-2016) of economic capital

usage before diversification.

Foreign exchange risk is largely transferred to Global Markets or mitigated through match

funding. Structural foreign exchange exposure arises from local capital (including retained

earnings) with different currencies. The exposure to core currencies US dollar and sterling

remains unhedged so that fluctuations in risk-weighted assets (RWA) broadly offset those in

CET1 capital, while exposures in non-core currencies are fully hedged.

Other non-traded market risks relate to credit spread risk in the banking book, equity risk from

strategic and non-strategic investments, market risk related to asset management products as

well as risks not related to client business such as pension and equity compensation risks.

Financial Profile

Asset Quality Strong Loan Quality in German Retail and Corporate Lending

DB’s strong asset quality benefits from its focus on investment-grade corporate exposures and

German retail loans, which together accounted for about 71% of its EUR403 billion gross loans

at end-1H17. Exposure to more volatile sectors such as shipping, metals and mining, oil and

gas, leveraged finance and commercial real estate have driven loan impairment charges in

recent years and could pose a risk in future, but their impact is mitigated by a well-diversified

and mostly high quality loan-book.

DB’s impaired loans/gross loans ratio continued to improve to 1.66% at end-1H17 and the

volume of impaired loans fell to a low EUR6.7 billion, 10% below end-2016. Structurally the

decline was supported by write-offs and disposals in the non-core unit and by write-offs related

to portfolio sales in Spain. The deterioration of the shipping loan book seen in 2016 seemed to

stabilise in 1H17, though the sector continues to face challenges. Reserve coverage decreased

slightly to 59% of impaired loans at end-1H17.

The retail loan book benefits from well performing German mortgages and SME loans, which

together accounted for 80% of gross retail loans at 1H17. Loans outside Germany are

extended mainly in Italy, Spain, Belgium, Portugal, Poland and India, and have weaker asset

quality (3.75% are more than 90 days past due) in particular in the EUR14.7 billion SME and

small business loan book. The quality of the Spanish and Italian portfolios improved due to NPL

sales in 1H17.

Despite its small size (EUR5 billion), the shipping portfolio accounted for the bulk of loan

impairment charges (LIC) in 2016 (EUR346 million). Lower LICs associated to the CIB

(EUR113 million, 63% yoy decline) suggested some stabilisation in 1H17, although additional

losses are possible later in the year if the market does not recover sustainably and collateral

values weaken again. Impaired loan coverage of 43% in the shipping segment at end-2016

was below some German peers. The sectors most affected by weak market dynamics and

supply overhang, the container and bulker segment, accounted for nearly half of Deutsche

Bank’s portfolio while non-recourse financing to German “KG” structures accounted for just

below 10%.

Although the bank reversed some provisions to oil, gas, metals and mining in 1H17, these

sectors continue to pose a risk due to high share of non-investment grade borrowers and

vulnerability to macro developments. About 25% of loan exposure to the oil and gas industry

Sound Loan Quality (%) 1H17 2016

NPLs/gross loans 1.66 1.80 NPL reserves/NPLs 59.15 61.04 LICs/av. gross loans 0.10 0.32 Net charge-offs/avg. gross loans

0.34 0.41

Gross loans growth -2.61 -4.46

Source: DB, Fitch

37%

37%

2%10%5%

9%

45%

15%

12%

7%

7%

6%4% 4%

Households OtherFIs ManufacturingCRE Fund mgtTrade Public sector

Source: DB, Fitch

Loan Quality by SectorOuter ring: End-2016 gross loansInner ring: End-1H17 impaired loans

Source: DB, Fitch

Impaired Loans by Region(End-1H17)

Western Europe

49%

Germany36%

North America

7%

APAC4%

Eastern Europe

3%

Other1%

Banks

Deutsche Bank AG

August 2017 6

(EUR8 billion at end-2016) was to non-investment-grade exploration and production and

services and equipment segments. The bank is targeting reduction of its EUR6 billion metals,

mining and steel portfolio, which is largely non-investment grade and to emerging market

counterparties.

DB is also significantly active in leveraged finance markets and has in the past incurred

valuation losses. Deal inflows are sensitive to lower M&A activity and competition from financial

institutions not subject to regulatory leverage restrictions. Fewer, less granular deals can

expose the bank’s asset quality to idiosyncratic industry shocks.

DB’s EUR37 billion credit exposure to commercial real estate (CRE) included a small residual

non-core share (3%) at end-2016. Exposure is typically more concentrated in the US where the

bank is a leader in CMBS. Postbank’s CRE exposure is predominantly to German real estate

and includes a small amount of junior tranches. CRE loans are generally secured by first

mortgages and are subject to LTV limits of less than 75%.

Sizeable Non-Loan Exposures

The bank’s non-loan corporate credit exposures are sizeable, reflective of its business model.

Corporate exposures include irrevocable lending commitments and contingent liabilities

(together EUR210 billion) of which 70% extended to investment grade counterparties; EUR35

billion OTC derivative counterparties, net of collateral and netting agreements, of which 83% to

investment grade counterparties and EUR53 billion debt securities, 99% investment-grade

(according to the bank’s internal classification system) at end 1H17.

Level 3 fair-valued assets totalled EUR22.4 billion at end-1H17 (15% lower compared to end-

2016) and include derivative instruments, trading securities (illiquid emerging market corporate

bonds and highly structured corporate bonds, notes issued by securitisation entities) and other

illiquid instruments such as leveraged loans and residential and commercial mortgage loans.

The bank’s sensitivity analysis reveals a possible fair value loss of EUR0.93 billion if the bank

were using more conservative but reasonable alternative valuation inputs for these assets.

Earnings and Profitability

Earnings to Remain Weak

DB’s earnings are likely to remain weak compared to most other large global banking groups

over the next one to two years. We believe that the downside within this horizon has reduced

as a consequence of progress with resolving major conduct cases in 2016. Our expectation of

meagre earnings assumes operating cost reductions will to a large extent be offset by further

restructuring and litigation costs and that the revenue will not decline further from its 2016 level

of around EUR29 billion (excluding completed disposals). Failure to contain the revenue

decline could lead to a rating downgrade if we believe that it signals franchise weakness and

will derail the bank from reaching longer term profitability goals.

-1

3

7

11

15

1H17 1H16

(EURbn)

Th

ou

san

ds

Equity S&T FIC S&T (1H17)

Debt S&T (1H16) Financing (1H17)

Loan products (1H16) Origination, advisory

GTB PCC

PoBa WM

DeAm NCOU, C&A, other

Note: As reported, ex.HuaXia, Abbey LifeSource: DB, Fitch

Net Revenue Split

0 2 4 6 8 10

1H17

2016

1H17

2016

1H17

2016

CIB

PC

BD

eA

M

Note: Based on pre-tax profit excl. DVA and impairment of goodwill; 1H17 annualisedSource: DB, Fitch

Operating Profit/RWA

(%)

-30

-20

-10

0

10

20

2014 2015 2016 1H17

Other non-core Restructuring

Impairment Litigation

"Underlying" RoTE Pre-tax RoTE

Note: Excluding CVA/DVA/FVA; 1H17 annualised and including impact of residual non-coreSource: DB, Fitch

Pre-Tax RoTE Breakdown

(%)

Banks

Deutsche Bank AG

August 2017 7

In the longer term, the bank expects that the implementation of its revised strategy and a more

supportive interest rate environment should enable it to achieve a long term return on tangible

equity of 10%. Among the new segments only Deutsche Asset Management’s returns met the

group’s overall 10% target in 1H17, helped by a balance-sheet light business model. Further

profitability improvement is needed from the CIB division (3.9% RoTE in 1H17) especially

concerning the capital intensive sales and trading businesses and the reintegrated non-core

businesses. In PCB (6.5% RoTE in 1H17), a high cost base and the low-risk/low-return

German retail banking business models of Postbank and PCC also cause it to fall short of

profitability targets.

The profitability ambition is lower than previous targets. Fitch believes that lower earnings can

be sufficient at its rating level given management’s commitment to maintain a higher capital

buffer and our expectation that the reshaped business model will improve earnings stability.

Cost Reductions Remain in Focus

Reaching the new profitability targets assumes the bank will achieve a leaner “adjusted” cost

base (which DB defines as excluding litigation, restructuring and severance, impairments of

goodwill and intangibles and policyholder claims and benefits) of approximately EUR22 billion

by 2018 and EUR 21 billion by 2021. In 2016, “adjusted” costs declined to EUR24.7 billion, but

benefited from unsustainably lower variable compensation costs.

The EUR2.7 billion cost reduction targeted in 2017-21 should result from planned and

completed business disposals (EUR1.5 billion), infrastructure streamlining (EUR1.7 billion) and

further cost cuts in the core businesses, including from staff cuts (EUR1.6 billion), which will in

part be offset by investments in front office, compliance and controls. While not unrealistic, we

believe the target is subject to substantial risk of delays and overruns, especially with respect to

timing of staff reductions and amount and timing of IT savings net of required investments.

Management has indicated that progress with IT and systems simplification is on track and that

the bank had achieved about one third of its 2018 targeted actions by July 2017.

On top of adjusted costs, the integration of Postbank and continued effort to close branches

and reduce headcount will add substantial restructuring costs, which are set to rise to around

EUR2 billion by end-2021, most of which frontloaded over the next two years. Restructuring

and severance costs amounted to EUR0.7 billion in 2016 and a low EUR 0.1billion in 1H17.

Revenue Growth Uncertain; Franchise Resilience Is Key

Sustainable revenue improvement is contingent on DB’s ability to regain lost clients and market

share. This is particularly true for the CIB division where revenue generation was affected by

outflows following concerns over DB’s creditworthiness in late 2016 and by strategic business

exits.

-0.5

0.5

1.5

2.5

3.5

4.5

5.5

1Q

2Q

3Q

4Q

1Q

2Q

3Q

4Q

1Q

2Q

3Q

4Q

1Q

2Q

2014 2015 2016 2017

(EURbn)

Equity sales and trading Fixed income sales and trading Financing

Debt underwriting Equity underwriting Advisory

Other

Note: Financing is reported separately from sales and trading businesses as of end-2Q17; prior quarters' restatements are not reflected in the chartSource: DB, Fitch

Revenue From Capital Markets Businesses

Banks

Deutsche Bank AG

August 2017 8

Revenue development in 1H17 was weighed down by low volatility and client engagement,

which particularly affected the CIB in 2Q17, interest margin pressure in retail and transaction

banking and in a yoy comparison by the impact of business reductions. In FIC, performance of

sales and trading was weighed down by low volatility in the second quarter. Foreign exchange

trading also performed poorly compared to 1H16 when Brexit-related volatility boosted

volumes.

Management has indicated that revenue lost from negative sentiment in 2016 was “a good

EUR1 billion” for the bank as a whole. Although some clients returned in 1H17, the associated

revenue has not recovered to the same extent. Equity sales and trading revenue, for instance,

declined 18% yoy in 1H17, due to lower and less lucrative prime finance balances and higher

funding costs.

We view underlying revenue in transaction banking and PCB as more stable, but pressure from

low interest rates and business reductions are taking a toll. Revenue stands to benefit from a

moderately higher and steepened euro yield curve. This would improve the earnings potential

from DB’s large deposit base, especially in its corporate transaction banking business and

Postbank. However Fitch does not expect the ECB to increase the policy rate in 2H17 or 2018,

and the benefit to DB’s earnings, if any, would fall beyond the ratings outlook horizon.

Capitalisation and Leverage

Rights Issue Improves Capitalisation

Fitch’s assessment of DB’s capitalisation is based on the expectation that its CET1 ratio will

remain in excess of 13%, as guided by DB’s management. The bank completed a EUR8 billion

rights issue in April. This increased its pro-forma fully loaded CET1 ratio as at end-1H17 to a

solid 14.1% from 11.8% at end-2016. From this level, we expect some downward pressure to

reflect RWA growth from increasing business activity and risk density. At the same time, zero

interim profit retention assumed for regulatory capital calculation will prevent internal capital

generation until the dividend pay-out from the 2017 result is decided.

The announced intention to sell a minority stake in the asset management division through an

initial public offering and selected business disposals add flexibility to generate EUR2 billion

CET1 capital, or 56bp of end-1H17 fully loaded RWAs, which can help mitigate pressure from

low earnings. These measures are set to take place over the next couple of years, but the IPO

of the asset management division is unlikely to take place in 2017, according to management.

At end-1H17 RWAs of EUR355 billion were broadly stable compared with year-end balancing

the impact of a weaker dollar against RWA growth from model updates and the incorporation of

operational risk loss data associated with the last conduct settlements into DB’s operational risk

advanced measurement approach model.

The bank still benefits from low risk density compared to peers, but in the longer term, credit

RWA floors and market risk RWA reforms could have a substantial impact on risk weighted

capitalisation. The bank had quantified the potential impact of increasing risk-weights due to

changing regulation at around EUR100 billion RWA by 2020 in 4Q15. The actual impact may

differ from this initial estimate subject to softer agreements being reached and because the

bank’s balance sheet is likely to be different at the time of implementation compared to what

was assumed at the time. For instance the retention of Postbank may expose it to higher

impact from mortgage floors while the run-down of legacy derivatives could potentially ease the

impact on counterparty credit risk RWA.

DB’s phased-in CET1 ratio is well in excess the CET1 regulatory requirements applicable in

2017, which stand at 9.52%, combining CET1 Pillar 1, Pillar 2 add-on resulting from the ECB's

Supervisory Review and Evaluation Process (SREP) and buffer requirements. DB has not

disclosed the Pillar 2 Guidance add-on the ECB expects it to maintain in addition to the

combined CET1 requirement.

Capitalisation (%) 1H17 2016

FCC/RWA 15.2 13.2 CET1 ratio (fully-loaded)

14.1 11.8

CET1 ratio (phased-in)

14.9 13.4

CRDIV leverage 3.8 4.3 TCE/TA 3.5 3

Note: Regulatory capital ratios are pro-forma including the capital increase Source: Bank, Fitch

RWA-Based Requirements

(%) 2017 F/La

CET1 (pillar 1) 4.50 4.50 AT1 1.50 1.50 Tier 2 2.00 2.00 P2R 2.75 2.75 CET1 buffers 2.27 4.52

o/w CCB 1.25 2.50

o/w CcyB 0.02 0.02

o/w GSIB 1.00 2.00

Total CET1 requirement 9.52 11.77 Total capital requirement 13.02 15.27 a Requirements as of 2017 excluding

transitional arrangements Source: Bank, Fitch

0.79

1.97 2.02

0.23 0.51

0.79

0.76 0.85

0.860.72

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

2012 2013 2014 2015 2016

ADIs Interest expense on AT1

Source: DB, Fitch

AT1 Coupon Payment Capacity

(EURbn)

Banks

Deutsche Bank AG

August 2017 9

Leverage Ratio Weaker than Peers

The decision to retain and integrate the low-risk-density Postbank assets means that DB’s

leverage ratio will continue to be a relative weakness. DB targets a fully-loaded CRD IV

leverage ratio of 4.5% in the medium term, which is broadly in line with European peers, but at

end-1H17 the pro-forma ratio stood at 3.8%, which is fairly low.

We expect the leverage ratio to be steered primarily through the denominator and to a lesser

extent through Tier 1 capital accretion or issuance. Restrictive rules for calculating Available

Distributable Items (ADIs) from which coupons on additional Tier 1 (AT1) securities can be paid

make this instrument unattractive for DB as long as uncertainty over internal capital generation

persists. ADIs are calculated annually under German GAAP for the parent bank and reference

primarily cumulative retained earnings.

Full Pay-out Assumed in Regulatory Capital

The bank is not including interim profits in regulatory capital, applying an assumed 100%

common equity dividend pay-out ratio. This is required by the ECB because the bank has paid

common share dividends from the positive German GAAP result for 2016. The pay-out was

imposed by a court despite the bank having posted an IFRS loss, and despite management’s

prior intentions to not pay out any dividends.

For 2017, management’s guidance is that dividends of at least EUR 0.11 per share will be paid

out. However, it indicated that the requirement to pay out the notional dividends may no longer

apply. The bank aims to return to paying a “competitive” dividend in 2018, which we expect will

be subject to an improvement in earnings.

Funding and Liquidity

Diversified Funding Profile

We view DB’s funding profile as well diversified. At end-1H17, total external funding (excluding

derivatives and settlement balances, margin and prime brokerage balances and other non-

funding liabilities) amounted to EUR1.033 trillion, around half of which consists of deposits from

retail, wealth management and transaction banking clients. Sources of wholesale funding

include unsecured, secured funding and short trading positions, and funding from fiduciary

deposits, prime brokerage cash balances. The group’s loan book was funded by 75% of

customer deposits (mainly retail and transaction banking) at end-1H17.

DB’s wholesale funding plan of EUR25 billion for 2017 includes EUR13 billion senior non-

preferred unsecured senior debt and a relatively high amount of senior structured (EUR10

billion) debt, which is preferred in Germany in insolvency and resolution. The bank had

completed 53% of its funding plan by end-1H17.

Although deposit-rich, Postbank does not make material funding contributions to the wider

group, given regulatory constraints. The merger of Postbank with DB’s private and commercial

clients business could lead to improved fungibility of funding and liquidity within the group.

Postbank’s total deposits were EUR119 billion at end-2016, 86% of which funded loans on

Postbank’s balance sheet.

Market Sensitive Outflows and Funding Cost Increase in 2016

The negative market perception of DB since the announcement of the initial settlement offer by

the US Department of Justice led to outflows across both stable and less stable funding

sources. We understand that negative publicity played a role in the EUR19.6 billion decline in

retail deposits, reflecting a loss of wealth management balances, and EUR20 billion reductions

in prime brokerage payables at end-2016 though at the peak the reductions were likely larger.

Excluding derivatives and settlement balances, margin and prime brokerage balances and other non-funding liabilitiesSource: DB

Funding Mix

Retail deposits

30%

Transaction bk deposits

22%Capital markets,

equity20%

Secured funding and

shorts17%

Other customers

6%

Unsecured wholesale

5%

0

5

10

15

20

25

30

2017 2018 2019 2020

Capital instruments

CB

Senior structured

Senior non-preferred

Source: DB, Fitch

(EURbn)

Wholesale Debt Maturity

DB’s DCR, long-term deposit rating,

senior market-linked notes and

senior preferred debt are rated one

notch above its Long-Term IDR

The uplift reflects the benefit

conferred by the bank's large buffer

of qualifying junior debt and non-

referred senior debt

Banks

Deutsche Bank AG

August 2017 10

The bank’s wholesale funding costs increased substantially in 2016, due to a combination of

market concern about its creditworthiness and a change in the insolvency hierarchy in

Germany, which rendered its plain vanilla senior debt subordinated to other senior liabilities.

The bank paid an average spread of 95bp above Euribor for an average tenor of 6.5 years on

its wholesale funding raised in 1H17, which remains high compared to historical levels (in 2015

the bank raised EUR39 billion at an average spread of 57bp and a tenor of 6.3 years).

Well Positioned to Meet TLAC Requirements

The new German statutory resolution regime in force since January 2017 subordinates banks’

outstanding vanilla senior unsecured debt to deposits, derivatives and structured liabilities. The

new regime’s retroactive application limits DB’s need to issue unsecured debt to meet TLAC

requirements. The eligible volume of vanilla senior debt (EUR54.1 billion) with a maturity of

over one year, together with subordinated debt and capital amounted to 34% of the bank’s

RWAs and 8.4% of leverage exposure at end-1H17, well in excess of the FSB’s requirement of

18% of RWAs/6.75% of leverage exposure plus CET1 buffers by 2022.

Ample Liquidity

DB’s available liquidity is ample as reflected by its large EUR285 billion reserve consisting 80%

of cash and cash equivalents and a liquidity coverage ratio of 144% at end-1H17 (128% at end-

2016). A high 81% of the liquidity reserve is held by the parent bank and its branches. This

mitigates the risk that liquidity held at subsidiaries such as Postbank, or at the US IHC, cannot

be repatriated in case of stress.

The bank calculates a stressed net liquidity position representing the surplus of liquidity

reserves and other business inflows over liquidity needs in a severe market and idiosyncratic

stress situation. This surplus was estimated at EUR47.5 billion at end-1H17 across all

currencies. At end-2016 the bank maintained a surplus of EUR69 billion over US dollar

stressed liquidity needs and EUR10 billion over sterling stressed needs. Outflows related the

DoJ settlement led to a decline of the stressed net liquidity position to EUR18 billion at end-

9M16, which prompted the bank to take corrective actions.

Support

DB’s Support Rating (SR) of ‘5’ and Support Rating Floor (SRF) of ‘No Floor’ reflect our view

that senior creditors can no longer rely on receiving full extraordinary support from the

sovereign in the event that DB becomes non-viable.

Debt Ratings

DB is a regular issuer of senior debt in various forms. Fitch rates non-preferred senior debt in

line with DB’s IDRs. Preferred senior debt and market linked notes are rated one notch higher,

reflecting our expectation that they would be protected from default in a resolution scenario by

large buffers of junior and non-preferred senior debt.

Subordinated debt and other hybrid capital instruments issued by DB and its subsidiaries are

all notched down from DB's VR in accordance with our assessment of each instrument's

respective non-performance and relative loss severity risk profiles.

Legacy Tier 1 securities are rated four notches below the VR, reflecting higher-than-average

loss severity (two notches), as well as high risk of non-performance (an additional two notches)

given partial discretionary coupon omission.

CRR/CRD IV AT1 instruments are rated five notches below the VR. The issues are notched

down twice for loss severity, reflecting poor recoveries as the instruments can be converted to

equity or written down well ahead of resolution. In addition, they are notched down three times

for high non-performance risk, reflecting fully discretionary coupon omission.

+132%

-58%

-6%

0

50

100

150

200

250

Cash andequivalents

Highly liquidsecurities

Other CB-eligible

securities

1H17 End-2016 End-2015

Source: DB, Fitch

(EURbn)

Liquidity Reserves

Banks

Deutsche Bank AG

August 2017 11

Peer Analysis – Financials

Deutsche Bank

(a-) Barclays

(a) BNP Paribas

(a+) Credit Suisse Group

(a-) HSBC Holdings

(aa-) Societe Generale

(a) UBS Group

(a)

Jun17 Dec 16 Jun 17 Dec 16 Jun 17 Dec 16 June 17 Dec 16 Jun 17 Dec 16 Jun 17 Dec 16 Jun 17 Dec 16

Asset quality Impaired loans/gross loans 1.7 1.8 1.5 1.6 5.1 5.7 0.8 0.9 1.7 2.1 5.3 5.7 0.3 0.4 NPL reserve coverage ratio 59.2 61.0 76.3 71.2 64.0 64.7 40.9 37.9 47.1 43.1 61.7 62.7 67.0 52.1 LICs/avg. gross loans 0.1 0.3 0.5 0.6 0.3 0.5 0.1 0.1 0.2 0.4 0.1 0.4 0.0 0.0 Net charge-offs/gross loans 0.3 0.4 n.a. 0.4 n.a. n.a. 0.1 0.1 0.4 0.3 n.a. n.a. n.a. n.a. Growth of gross loans -2.6 -4.5 -0.7 -1.7 0.2 4.9 -0.8 1.1 6.7 -6.9 -1.4 4.1 0.6 -1.8

Earnings & profitability OpRoRWA 1.3 0.1 1.3 0.8 1.8 1.6 1.0 -1.0 2.4 1.7 1.7 1.7 2.6 1.7 NII/earning assets 1.0 1.1 1.0 1.0 1.3 1.3 1.1 1.2 1.3 1.3 1.0 0.8 0.8 0.8 Cost-income ratio 83.8 95.5 71.1 76.0 68.4 68.0 87.2 114.2 62.9 68.9 73.1 69.0 78.9 86.1 LICs/pre-imp OpProfit 8.3 77.7 33.5 45.5 17.8 23.7 9.8 -10.6 6.1 18.7 10.1 25.8 1.9 1.0 Net RoE 3.4 -2.2 -2.1 4.7 9.1 8.3 4.2 -6.1 9.9 2.0 7.2 7.5 9.4 6.1

Capitalisation & leverage FCC/RWA 15.3 13.2 14.7 14.2 12.2 12.2 13.9 12.9 15.9 14.9 12.8 12.9 15.9 17.5 CET1 ratio (fully loaded) 14.1 11.9 13.1 12.4 11.8 11.6 14.2 13.5 14.7 13.6 11.9 11.8 14.8 16.8 Leverage ratio (fully loaded) 3.8 3.5 16.6 15.6 13.1 12.9 19.6 18.0 17.4 16.1 n.a. 14.8 18.0 19.7 Tang. equity/tang. assets 3.5 3.0 4.3 4.5 3.8 4.0 4.7 4.3 5.9 5.8 3.5 3.5 4.3 4.3 Unreserved imp. loans/FCC 5.1 6.2 3.0 3.6 17.5 18.9 3.7 4.4 6.1 8.1 19.2 19.9 0.8 1.5 Internal capital generation 3.2 -3.8 -4.6 2.4 9.4 4.9 4.1 -6.4 6.5 -5.0 7.6 4.4 9.6 6.2

Funding & liquidity Loans/customer deposits 69 75 90 94 93 97 77 78 71 68 105 105 76 72 Client dep/funding excl derivs 62 61 55 58 54 57 53 52 68 72 44 44 61 64 Liquidity coverage ratio 144 128 149 131 116 123 165 202 139 136 n.a. 142 131 132

Structural indicators (USDbn) Total assets 1,790.2 1,676.6 1,473.5 1,492.3 2,445.5 2,189.3 817.1 805.5 2,492.4 2,375.0 1,540.9 1,457.0 929.1 918.7 Total equity 75.9 63.4 73.0 76.2 110.2 102.0 45.7 41.6 169.2 159.5 63.3 59.1 54.7 53.5 Fitch core capital 61.7 49.4 62.4 64.0 89.4 82.1 37.7 34.4 138.9 128.0 49.5 46.6 39.5 38.8 Net income (m) 1,188 -1,429 -820 3,479 5,158 8,554 937 -2,660 8,048 3,446 2,393 4,573 2,597 3,329

Source: Banks, Fitch

Banks

Deutsche Bank AG

August 2017 12

Peer Analysis – Navigator Scores

Operating environment Company profile Management Risk appetite Asset quality Earnings & profitability Capitalisation &

leverage Funding & liquidity

aaa

aa+

CS

DB

U

BS

HS

BC

aa

BA

RC

BN

P

SG

HS

BC

aa-

HS

BC

B

NP

BN

P

HS

BC

UB

S

HS

BC

CS

HS

BC

UB

S

BN

P

HS

BC

HS

BC

UB

S

UB

S

a+

UB

S

BA

RC

SG

BA

RC

BN

P

DB

SG

UB

S

BA

RC

DB

SG

UB

S

BA

RC

BN

P

SG

BA

RC

BN

P

CS

DB

SG

a

BA

RC

CS

DB

SG

CS

DB

CS

CS

CS

DB

a-

BA

RC

DB

bbb+

BN

P

SG

bbb

bbb-

Source: Fitch

Banks

Deutsche Bank AG

August 2017 13

Deutsche Bank AG

Income Statement30 Jun 2017 31 Dec 2016 31 Dec 2015 31 Dec 2014 31 Dec 2013

6 Months - Interim Year End Year End Year End Year End

EURm EURm EURm EURm EURm

Reviewed -

Unqualified

Audited -

Unqualified

Audited -

Unqualified

Audited -

Unqualified

Audited -

Unqualified

1. Interest Income on Loans n.a. 12,311.0 12,219.0 11,820.0 11,941.0

2. Other Interest Income 11,768.0 13,120.0 13,448.0 13,084.0 13,579.0

3. Dividend Income n.a. 205.0 300.0 97.0 81.0

4. Gross Interest and Dividend Income 11,768.0 25,636.0 25,967.0 25,001.0 25,601.0

5. Interest Expense on Customer Deposits n.a. 2,583.0 2,764.0 3,210.0 3,360.0

6. Other Interest Expense 5,593.0 8,346.0 7,322.0 7,519.0 7,407.0

7. Total Interest Expense 5,593.0 10,929.0 10,086.0 10,729.0 10,767.0

8. Net Interest Income 6,175.0 14,707.0 15,881.0 14,272.0 14,834.0

9. Net Gains (Losses) on Trading and Derivatives 2,514.0 177.0 2,964.0 3,058.0 2,435.0

10. Net Gains (Losses) on Other Securities 197.0 653.0 203.0 242.0 394.0

11. Net Gains (Losses) on Assets at FV through Income Statement (560.0) 854.0 (32.0) (108.0) 155.0

12. Net Insurance Income n.a. (285.0) (148.0) (148.0) (270.0)

13. Net Fees and Commissions 5,773.0 11,744.0 12,765.0 12,409.0 12,308.0

14. Other Operating Income 272.0 1,288.0 1,449.0 1,425.0 1,248.0

15. Total Non-Interest Operating Income 8,196.0 14,431.0 17,201.0 16,878.0 16,270.0

16. Personnel Expenses 6,068.0 11,874.0 13,293.0 12,512.0 12,329.0

17. Other Operating Expenses 5,974.0 15,938.0 19,342.0 14,787.0 15,526.0

18. Total Non-Interest Expenses 12,042.0 27,812.0 32,635.0 27,299.0 27,855.0

19. Equity-accounted Profit/ Loss - Operating 103.0 455.0 164.0 619.0 369.0

20. Pre-Impairment Operating Profit 2,432.0 1,781.0 611.0 4,470.0 3,618.0

21. Loan Impairment Charge 211.0 1,347.0 882.0 1,129.0 2,060.0

22. Securities and Other Credit Impairment Charges 1.0 36.0 74.0 5.0 5.0

23. Operating Profit 2,220.0 398.0 (345.0) 3,336.0 1,553.0

24. Equity-accounted Profit/ Loss - Non-operating n.a. n.a. n.a. n.a. n.a.

25. Non-recurring Income n.a. n.a. n.a. 18.0 4.0

26. Non-recurring Expense 6.0 1,256.0 5,800.0 111.0 79.0

27. Change in Fair Value of Own Debt (513.0) 48.0 48.0 (127.0) (22.0)

28. Other Non-operating Income and Expenses n.a. n.a. n.a. n.a. n.a.

29. Pre-tax Profit 1,701.0 (810.0) (6,097.0) 3,116.0 1,456.0

30. Tax expense 660.0 546.0 675.0 1,425.0 775.0

31. Profit/Loss from Discontinued Operations n.a. n.a. n.a. n.a. n.a.

32. Net Income 1,041.0 (1,356.0) (6,772.0) 1,691.0 681.0

33. Change in Value of AFS Investments (104.0) (573.0) (405.0) 1,825.0 (249.0)

34. Revaluation of Fixed Assets n.a. n.a. n.a. n.a. n.a.

35. Currency Translation Differences (1,679.0) 201.0 2,160.0 2,958.0 (949.0)

36. Remaining OCI Gains/(losses) 59.0 (993.0) 739.0 (372.0) (627.0)

37. Fitch Comprehensive Income (683.0) (2,721.0) (4,278.0) 6,102.0 (1,144.0)

38. Memo: Profit Allocation to Non-controlling Interests 23.0 46.0 21.0 28.0 n.a.

39. Memo: Net Income after Allocation to Non-controlling Interests 1,018.0 (1,402.0) (6,793.0) 1,663.0 681.0

40. Memo: Common Dividends Relating to the Period n.a. 400.0 n.a. n.a. n.a.

41. Memo: Preferred Dividends Related to the Period n.a. 504.0 n.a. n.a. n.a.

Banks

Deutsche Bank AG

August 2017 14

Deutsche Bank AG

Balance Sheet30 Jun 2017 31 Dec 2016 31 Dec 2015 31 Dec 2014 31 Dec 2013

6 Months -

Interim Year End Year End Year End Year End

EURm EURm EURm EURm EURm

AssetsA. Loans

1. Residential Mortgage Loans n.a. 150,776.0 154,689.0 153,140.0 148,076.0

2. Other Mortgage Loans 154,325.0 27,369.0 22,879.0 35,764.0 34,259.0

3. Other Consumer/ Retail Loans 35,555.0 37,093.0 45,317.0 44,839.0 45,440.0

4. Corporate & Commercial Loans 212,771.0 29,290.0 28,131.0 25,619.0 21,406.0

5. Other Loans n.a. 168,927.0 181,761.0 151,521.0 132,905.0

6. Less: Reserves for Impaired Loans 3,953.0 4,546.0 5,028.0 5,212.0 5,589.0

7. Net Loans 398,698.0 408,909.0 427,749.0 405,671.0 376,497.0

8. Gross Loans 402,651.0 413,455.0 432,777.0 410,883.0 382,086.0

9. Memo: Impaired Loans included above 6,683.0 7,447.0 8,151.0 9,348.0 10,143.0

10. Memo: Loans at Fair Value included above n.a. n.a. n.a. n.a. n.a.

B. Other Earning Assets

1. Loans and Advances to Banks 9,109.0 11,606.0 12,842.0 9,090.0 77,984.0

2. Reverse Repos and Cash Collateral 87,279.0 83,772.0 107,086.0 104,103.0 164,997.0

3. Trading Securities and at FV through Income 225,065.0 211,227.0 254,215.0 252,493.0 277,903.0

4. Derivatives 396,340.0 485,150.0 515,594.0 629,958.0 504,590.0

5. Available for Sale Securities 53,907.0 56,228.0 73,583.0 64,297.0 48,326.0

6. Held to Maturity Securities 3,189.0 3,206.0 0.0 n.a. 0.0

7. Equity Investments in Associates 948.0 1,027.0 1,013.0 4,143.0 3,581.0

8. Other Securities n.a. n.a. n.a. n.a. n.a.

9. Total Securities 766,728.0 840,610.0 951,491.0 1,054,994.0 999,397.0

10. Memo: Government Securities included Above 3,189.0 47,303.0 58,158.0 49,187.0 33,343.0

11. Memo: Total Securities Pledged n.a. 65,126.0 55,458.0 57,216.0 71,296.0

12. Investments in Property n.a. n.a. n.a. n.a. n.a.

13. Insurance Assets n.a. n.a. n.a. n.a. n.a.

14. Other Earning Assets 466.0 563.0 3,491.0 180.0 6,670.0

15. Total Earning Assets 1,175,001.0 1,261,688.0 1,395,573.0 1,469,935.0 1,460,548.0

C. Non-Earning Assets

1. Cash and Due From Banks 227,514.0 181,364.0 96,940.0 74,482.0 17,155.0

2. Memo: Mandatory Reserves included above n.a. n.a. n.a. n.a. n.a.

3. Foreclosed Real Estate n.a. n.a. n.a. n.a. n.a.

4. Fixed Assets 2,746.0 2,804.0 2,846.0 2,909.0 4,419.0

5. Goodwill n.a. 4,103.0 4,890.0 9,726.0 9,074.0

6. Other Intangibles 8,834.0 4,879.0 5,188.0 5,225.0 4,858.0

7. Current Tax Assets 1,248.0 1,559.0 1,285.0 1,819.0 2,322.0

8. Deferred Tax Assets 7,983.0 8,666.0 7,762.0 6,865.0 7,071.0

9. Discontinued Operations n.a. n.a. n.a. n.a. n.a.

10. Other Assets 145,408.0 125,483.0 114,646.0 137,742.0 105,953.0

11. Total Assets 1,568,734.0 1,590,546.0 1,629,130.0 1,708,703.0 1,611,400.0

Liabilities and Equity

D. Interest-Bearing Liabilities

1. Customer Deposits - Current 350,805.0 329,776.0 345,568.0 304,905.0 290,284.0

2. Customer Deposits - Savings 89,287.0 90,129.0 97,210.0 103,679.0 109,679.0

3. Customer Deposits - Term 141,386.0 130,299.0 124,196.0 124,347.0 127,787.0

4. Total Customer Deposits 581,478.0 550,204.0 566,974.0 532,931.0 527,750.0

5. Deposits from Banks n.a. n.a. n.a. n.a. n.a.

6. Repos and Cash Collateral 80,012.0 79,735.0 44,710.0 34,279.0 89,327.0

7. Commercial Paper and Short-term Borrowings 20,232.0 17,295.0 28,010.0 65,260.0 61,873.0

8. Total Money Market and Short-term Funding 681,722.0 647,234.0 639,694.0 632,470.0 678,950.0

9. Senior Unsecured Debt (original maturity > 1 year) 114,570.0 122,006.0 125,218.0 96,983.0 101,199.0

10. Subordinated Borrowing 6,577.0 6,788.0 6,413.0 5,047.0 7,579.0

11. Covered Bonds n.a. n.a. n.a. n.a. n.a.

12. Other Long-term Funding 43,924.0 43,523.0 28,385.0 20,344.0 22,047.0

13. Total LT Funding (original maturity > 1 year) 165,071.0 172,317.0 160,016.0 122,374.0 130,825.0

14. Derivatives 371,682.0 463,858.0 494,076.0 610,202.0 483,428.0

15. Trading Liabilities 79,588.0 67,716.0 74,041.0 66,444.0 80,333.0

16. Total Funding 1,298,063.0 1,351,125.0 1,367,827.0 1,431,490.0 1,373,536.0

E. Non-Interest Bearing Liabilities

1. Fair Value Portion of Debt n.a. n.a. 71.0 134.0 151.0

2. Credit impairment reserves n.a. n.a. n.a. n.a. n.a.

3. Reserves for Pensions and Other 5,425.0 10,973.0 9,207.0 6,677.0 4,524.0

4. Current Tax Liabilities 1,081.0 1,329.0 1,699.0 1,608.0 1,600.0

5. Deferred Tax Liabilities 450.0 486.0 746.0 1,175.0 1,101.0

6. Other Deferred Liabilities n.a. n.a. n.a. n.a. n.a.

7. Discontinued Operations n.a. n.a. n.a. n.a. n.a.

8. Insurance Liabilities n.a. n.a. n.a. n.a. n.a.

9. Other Liabilities 186,811.0 155,441.0 174,936.0 183,823.0 163,596.0

10. Total Liabilities 1,491,830.0 1,519,354.0 1,554,486.0 1,624,907.0 1,544,508.0

F. Hybrid Capital

1. Pref. Shares and Hybrid Capital accounted for as Debt 5,694.0 6,373.0 7,020.0 10,573.0 11,926.0

2. Pref. Shares and Hybrid Capital accounted for as Equity 4,674.0 4,669.0 4,675.0 4,619.0 n.a.

G. Equity

1. Common Equity 64,470.0 56,284.0 58,936.0 66,428.0 57,177.0

2. Non-controlling Interest 278.0 316.0 270.0 253.0 247.0

3. Securities Revaluation Reserves 882.0 989.0 1,450.0 1,693.0 356.0

4. Foreign Exchange Revaluation Reserves 780.0 2,418.0 2,196.0 151.0 (2,713.0)

5. Fixed Asset Revaluations and Other Accumulated OCI 126.0 143.0 97.0 79.0 (101.0)

6. Total Equity 66,536.0 60,150.0 62,949.0 68,604.0 54,966.0

7. Total Liabilities and Equity 1,568,734.0 1,590,546.0 1,629,130.0 1,708,703.0 1,611,400.0

8. Memo: Fitch Core Capital 54,043.0 46,874.0 48,063.1 49,389.8 37,050.1

Banks

Deutsche Bank AG

August 2017 15

Deutsche Bank AG

Summary Analytics30 Jun 2017 31 Dec 2016 31 Dec 2015 31 Dec 2014 31 Dec 2013

6 Months - Interim Year End Year End Year End Year End

A. Interest Ratios

1. Interest Income on Loans/ Average Gross Loans n.a. 2.88 2.85 3.00 3.04

2. Interest Expense on Customer Deposits/ Average Customer Deposits n.a. 0.46 0.49 0.60 0.61

3. Interest Income/ Average Earning Assets 1.94 1.84 1.71 1.71 1.54

4. Interest Expense/ Average Interest-bearing Liabilities 0.85 0.77 0.70 0.77 0.68

5. Net Interest Income/ Average Earning Assets 1.02 1.05 1.05 0.98 0.89

6. Net Int. Inc Less Loan Impairment Charges/ Av. Earning Assets 0.98 0.96 0.99 0.90 0.77

7. Net Interest Inc Less Preferred Stock Dividend/ Average Earning Assets 1.02 1.02 1.05 0.98 0.89

B. Other Operating Profitability Ratios

1. Non-Interest Income/ Gross Revenues 57.03 49.53 52.00 54.18 52.31

2. Non-Interest Expense/ Gross Revenues 83.79 95.45 98.65 87.64 89.55

3. Non-Interest Expense/ Average Assets 1.54 1.65 1.87 1.64 1.49

4. Pre-impairment Op. Profit/ Average Equity 7.87 2.88 0.90 7.18 6.47

5. Pre-impairment Op. Profit/ Average Total Assets 0.31 0.11 0.04 0.27 0.19

6. Loans and securities impairment charges/ Pre-impairment Op. Profit 8.72 77.65 156.46 25.37 57.08

7. Operating Profit/ Average Equity 7.19 0.64 (0.51) 5.36 2.78

8. Operating Profit/ Average Total Assets 0.28 0.02 (0.02) 0.20 0.08

9. Operating Profit / Risk Weighted Assets 1.26 0.11 (0.09) 0.84 0.52

C. Other Profitability Ratios

1. Net Income/ Average Total Equity 3.37 (2.19) (9.96) 2.72 1.22

2. Net Income/ Average Total Assets 0.13 (0.08) (0.39) 0.10 0.04

3. Fitch Comprehensive Income/ Average Total Equity (2.21) (4.40) (6.29) 9.80 (2.04)

4. Fitch Comprehensive Income/ Average Total Assets (0.09) (0.16) (0.25) 0.37 (0.06)

5. Taxes/ Pre-tax Profit 38.80 (67.41) (11.07) 45.73 53.23

6. Net Income/ Risk Weighted Assets 0.59 (0.38) (1.70) 0.43 0.23

D. Capitalization

1. FCC/FCC-Adjusted Risk Weighted Assets 15.26 13.16 12.09 12.45 12.33

2. Tangible Common Equity/ Tangible Assets 3.47 3.00 3.07 3.02 2.43

3. Tier 1 Regulatory Capital Ratio 15.00 15.60 14.70 16.10 16.90

4. Total Regulatory Capital Ratio 16.80 17.40 16.20 17.20 18.50

5. Common Equity Tier 1 Capital Ratio 12.60 13.40 13.20 15.20 12.80

6. Equity/ Total Assets 4.24 3.78 3.86 4.01 3.41

7. Cash Dividends Paid & Declared/ Net Income n.a. (66.67) n.a. n.a. n.a.

8. Internal Capital Generation 3.16 (3.76) (10.76) 2.46 1.24

E. Loan Quality

1. Growth of Total Assets (1.37) (2.37) (4.66) 6.04 (20.32)

2. Growth of Gross Loans (2.61) (4.46) 5.33 7.54 (4.97)

3. Impaired Loans/ Gross Loans 1.66 1.80 1.88 2.28 2.65

4. Reserves for Impaired Loans/ Gross Loans 0.98 1.10 1.16 1.27 1.46

5. Reserves for Impaired Loans/ Impaired Loans 59.15 61.04 61.69 55.76 55.10

6. Impaired loans less Reserves for Impaired Loans/ Fitch Core Capital 5.05 6.19 6.50 8.37 12.29

7. Impaired Loans less Reserves for Impaired Loans/ Equity 4.10 4.82 4.96 6.03 8.29

8. Loan Impairment Charges/ Average Gross Loans 0.10 0.32 0.21 0.29 0.52

9. Net Charge-offs/ Average Gross Loans 0.34 0.41 0.26 0.38 0.27

10. Impaired Loans + Foreclosed Assets/ Gross Loans + Foreclosed Assets 1.66 1.80 1.88 2.28 2.65

F. Funding and Liquidity

1. Loans/ Customer Deposits 69.25 75.15 76.33 77.10 72.40

2. Interbank Assets/ Interbank Liabilities n.a. n.a. n.a. n.a. n.a.

3. Customer Deposits/ Total Funding (excluding derivatives) 62.07 61.25 64.03 63.71 58.51

4. Liquidity Coverage Ratio 144.00 128.00 119.00 119.00 n.a.

5. Net Stable Funding Ratio n.a. n.a. n.a. n.a. n.a.

Banks

Deutsche Bank AG

August 2017 16

Reference Data30 Jun 2017 31 Dec 2016 31 Dec 2015 31 Dec 2014 31 Dec 2013

6 Months -

Interim Year End Year End Year End Year End

EURm EURm EURm EURm EURm

A. Off-Balance Sheet Items

1. Managed Securitized Assets Reported Off-Balance Sheet n.a. n.a. n.a. n.a. n.a.

2. Other off-balance sheet exposure to securitizations n.a. n.a. n.a. n.a. n.a.

3. Guarantees n.a. n.a. n.a. n.a. n.a.

4. Acceptances and documentary credits reported off-balance sheet n.a. n.a. n.a. n.a. n.a.

5. Committed Credit Lines 160,945.0 166,063.0 174,549.0 154,446.0 126,660.0

7. Other Off-Balance Sheet items n.a. n.a. n.a. n.a. 65,630.0

8. Total Assets under Management n.a. n.a. n.a. n.a. n.a.

B. Average Balance Sheet

Average Loans 409,911.0 427,072.8 428,163.0 394,648.4 392,772.2

Average Earning Assets 1,222,205.0 1,395,712.4 1,517,324.2 1,460,696.8 1,667,379.4

Average Assets 1,574,678.7 1,690,497.2 1,741,369.6 1,666,255.2 1,872,843.0

Average Managed Securitized Assets (OBS) n.a. n.a. n.a. n.a. n.a.

Average Interest-Bearing Liabilities 1,319,815.3 1,411,825.0 1,445,993.6 1,389,078.8 1,585,235.0

Average Common equity 59,175.7 58,220.4 63,796.8 62,787.4 57,236.4

Average Equity 62,287.7 61,831.6 68,017.2 62,234.8 55,956.8

Average Customer Deposits 562,374.0 556,514.4 563,257.0 531,541.6 554,259.8

C. Risk Weighted Assets

1. Risk Weighted Assets 354,193.0 356,235.0 397,382.0 396,648.0 300,369.0

2. Fitch Core Capital Adjustments for Insurance and Securitisation Risk Weighted Assets n.a. n.a. n.a. n.a. n.a.

3. Fitch Core Capital Adjusted Risk Weighted Assets 354,193.0 356,235.0 397,382.0 396,648.0 300,369.0

4. Other Fitch Adjustments to Risk Weighted Assets n.a. n.a. n.a. n.a. n.a.

5. Fitch Adjusted Risk Weighted Assets 354,193.0 356,235.0 397,382.0 396,648.0 300,369.0

D. Equity Reconciliation

1. Equity 66,536.0 60,150.0 62,949.0 68,604.0 54,966.0

2. Add: Pref. Shares and Hybrid Capital accounted for as Equity 4,674.0 4,669.0 4,675.0 4,619.0 n.a.

3. Add: Other Adjustments n.a. n.a. n.a. n.a. n.a.

4. Published Equity 71,210.0 64,819.0 67,624.0 73,223.0 54,966.0

E. Fitch Core Capital Reconciliation

1. Total Equity as reported (including non-controlling interests) 66,536.0 60,150.0 62,949.0 68,604.0 54,966.0

2. Fair value effect incl in own debt/borrowings at fv on the B/S- CC only 73.0 (440.0) (407.0) (544.0) 151.0

3. Non-loss-absorbing non-controlling interests 0.0 0.0 0.0 0.0 0.0

4. Goodwill 0.0 4,103.0 4,890.0 9,518.0 9,074.0

5. Other intangibles 8,834.0 4,879.0 5,188.0 5,433.0 4,858.0

6. Deferred tax assets deduction 3,732.0 3,854.0 3,310.0 2,620.0 2,300.0

7. Net asset value of insurance subsidiaries 0.0 0.0 1,090.9 1,099.2 889.9

8. First loss tranches of off-balance sheet securitizations 0.0 0.0 0.0 0.0 945.0

9. Fitch Core Capital 54,043.0 46,874.0 48,063.1 49,389.8 37,050.1

Banks

Deutsche Bank AG

August 2017 17

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