Business Context and Reporting Period
This Form 6-K filing by Deutsche Bank Aktiengesellschaft covers the period ending July 16, 2018. The report details preliminary financial results for the second quarter of 2018 and the first half of 2018. It also announces adjustments to segmental reporting within the Private & Commercial Bank (PCB) following the merger of Postbank and the German Private & Commercial Clients business, as well as the planned sale of retail businesses in Portugal and Poland.
Key Financial Metrics (Preliminary Q2 2018)
- Income Before Income Taxes (IBIT): Approximately 700 million euros for Q2 2018; approximately 1.15 billion euros for the first half of 2018.
- Net Income: Approximately 400 million euros for Q2 2018.
- Group Revenues: Approximately 6.6 billion euros for Q2 2018.
- Corporate & Investment Bank (CIB) Revenues: Approximately 3.5 billion euros, including 100 million euros from an asset sale gain and debt valuation adjustments.
- Noninterest Expenses: Approximately 5.8 billion euros, including 0.2 billion euros in restructuring and severance charges.
- Headcount: Reduced by approximately 1,700 full-time equivalents to slightly above 95,400.
- Common Equity Tier 1 (CET1) Capital Ratio: Approximately 13.6% (fully loaded).
- Leverage Ratio: Approximately 3.9% (fully loaded).
Material Changes and Comparisons
The preliminary results for Q2 2018 are considerably above the average consensus estimates compiled on July 11, 2018 (Consensus IBIT: 321 million euros; Consensus Net Income: 159 million euros; Consensus Revenues: 6.4 billion euros). Compared to the prior year quarter, Sales & Trading revenues are expected to decline by approximately 15%, while Origination & Advisory revenues are expected to increase by 2%. Noninterest expenses are lower than the consensus estimate of 6.0 billion euros.
Guidance, Outlook, and Risks
Management views the results as demonstrating the resilience of the franchise. Full details of the second quarter results are scheduled for disclosure on July 25, 2018. The filing includes standard forward-looking statement disclaimers, noting that actual results may differ due to financial market conditions, borrower defaults, and the implementation of strategic initiatives. Specific risks are referenced in the 2017 Annual Report on Form 20-F. The filing also clarifies the use of non-GAAP financial measures and "fully loaded" CRR/CRD 4 solvency measures, noting that these may not be directly comparable to competitors' calculations.
Investor Verification Checklist
- Verify the final audited Q2 2018 results when released on July 25, 2018, to confirm preliminary estimates.
- Review the adjusted Financial Data Supplement (Exhibit 99.1) for the restated 2016, 2017, and Q1 2018 results reflecting new segmental reporting.
- Confirm the impact of the 100 million euro gain on asset sale and debt valuation adjustments within CIB revenues.
- Monitor the progress of restructuring actions and the final headcount reduction targets.
- Assess the sustainability of the CET1 and leverage ratios against regulatory requirements and peer benchmarks.