Business Context and Reporting Period
This Form 6-K filing by Deutsche Bank Aktiengesellschaft, dated June 1, 2018, addresses media reports regarding regulatory ratings of the bank's U.S. entities. The filing clarifies the bank's stance on regulatory feedback, the financial health of specific U.S. subsidiaries, and ongoing remediation efforts related to internal controls and infrastructure.
Key Financial Metrics and Liquidity
The filing emphasizes that Deutsche Bank AG is well-capitalized with significant liquidity reserves. Specific capital and liquidity metrics for key U.S. subsidiaries are provided as of March 31, 2018 (or December 31, 2017 for DBSI):
- Deutsche Bank Trust Company Americas (DBTCA):
- Common Equity Tier 1 (CET1) Capital: $9.1 billion
- CET1 Capital Ratio: 98.15%
- Tier 1 Leverage Ratio: 21.68%
- Liquidity: 75% of $42.1 billion in total assets invested in cash at the Federal Reserve or U.S. Treasury-backed financing.
- DB USA Corp:
- CET1 Capital: $7.1 billion
- CET1 Capital Ratio: 15.88%
- Tier 1 Leverage Ratio: 7.3%
- Deutsche Bank Securities Inc. (DBSI):
- US GAAP Equity (as of Dec 31, 2017): $10.5 billion
- Regulatory Net Capital: $12.2 billion
- Excess Net Capital: $11.9 billion (well above minimum requirements).
The assets of the three entities concerned represent less than 10% of the overall Deutsche Bank Group balance sheet.
Material Changes and Regulatory Context
The filing responds to media reports concerning regulatory ratings of U.S. entities. Deutsche Bank states it does not comment on specific regulatory feedback or supervisory ratings due to confidentiality. However, the bank acknowledges that regulators have identified areas for improvement regarding the control environment and infrastructure. The bank notes that four enforcement action resolutions related to these issues are published on the Federal Reserve website. The bank asserts that these issues do not affect its ability to serve clients and that operations are proceeding as usual.
Outlook, Management Commentary, and Risks
Management reaffirms a strong commitment to the U.S. business, describing it as the most important market outside Germany. Strategic announcements regarding the U.S. are framed as part of a program to increase profitability rather than a reaction to regulatory actions. The filing includes standard forward-looking statement disclaimers, noting that actual results may differ due to factors such as financial market conditions, borrower defaults, and the implementation of strategic initiatives. Detailed risk factors are referenced in the 2017 Annual Report on Form 20-F.
Key Facts for Investor Verification
- Verify the specific details of the four enforcement action resolutions published by the Federal Reserve regarding internal controls.
- Confirm the latest regulatory filings for DBTCA, DB USA Corp, and DBSI to ensure capital ratios remain robust.
- Monitor the progress of remediation work on the internal control environment and infrastructure in U.S. operations.
- Review the 2017 Annual Report on Form 20-F (pages 13-40) for a comprehensive list of risk factors.
- Assess the impact of the strategic program to increase profitability on the U.S. Corporate & Investment Bank, Wealth Management, and Asset Management businesses.