Deutsche Bank reports continued delivery of transformation in 2021 and clear targets for 2025
Annual Report: transformation drives strong performance in 2021
Highest profit since 2011 with net profit up fourfold to € 2.5 billion
Net revenue growth of 6% to € 25.4 billion
Improvements in post-tax RoTE¹ and cost/income ratio
Proposed capital distribution of approximately € 700 million to shareholders
2021 compensation reflects cost discipline and reward for performance
Total compensation down 2% to € 9.9 billion due to efficiency measures
Variable compensation up 13% to € 2.1 billion, reflecting significantly improved results
Updated strategic and financial roadmap through 2025
Deutsche Bank to strengthen its position as ‘Global Hausbank,’ becoming first point of contact for a greater number of clients
Clear financial objectives for 2025, building on transformation:
Post-tax RoTE1 above 10% with cost/income ratio below 62.5%
Compound annual revenue growth of 3.5%-4.5% from 2021-25
~€ 8 billion of capital distribution in respect of financial years 2021-2025²
Non-Financial Report: ahead of target and raising ambitions in sustainability
Sustainable financing and investment volumes rise threefold to € 157 billion
€ 200 billion+ target accelerated to 2022 with €100 billion per year 2023-2025
Greenhouse gas emissions from own operations down 63% since 2019
Upgrades from four sustainability rating agencies
Investing in talent and diversity
1,420 graduates and vocational trainees hired, up 10% over 2020
20% of Management Board and 30% of Supervisory Board posts held by women
Target of at least 35% women in senior ranks by 2025
People Survey commitment index at highest level since 2012
“2021 was a pivotal year for Deutsche Bank”, said Christian Sewing, CEO. “We achieved our highest profit in ten years, made significant progress on our transformation journey, and we are working towards delivery on our 2022 objectives. Thanks to the outstanding efforts of our people, we delivered improved performance, set the course for a more sustainable business, and contributed in the communities we serve around the globe. As our strategy evolves, we can build on successful transformation to deliver sustainable growth and higher returns to shareholders through 2025.”
Deutsche Bank’s 2021 audited results, confirm delivery across all financial and strategic milestones of its transformation during 2021. There were no meaningful divergences from the bank’s unaudited results published at the Annual Media Conference on 27 January 2022.
In respect of events subsequent to December 31st 2021, the Annual Report describes Deutsche Bank’s exposures to Russia and Ukraine and the potential risks resulting from Russia’s invasion of Ukraine. On March 9, the bank reported that Russia exposures are very limited and set out measures taken to mitigate these exposures. Additional details are available on the bank’s website: https://investor-relations.db.com/RussiaExposure
Transformation on target with highest profit since 2011
Deutsche Bank’s 2021 Annual Report confirms progress towards the goals of the bank’s transformation programme, launched in 2019. The benefits of transformation are evident in the bank’s 2021 financial performance:
Profit before tax up more than threefold to € 3.4 billion and net profit up fourfold to € 2.5 billion
Post-tax return on tangible equity (RoTE)¹ up from 0.2% to 3.8%, with Core Bank RoTE1 up from 4.0% to 6.4%
Cost/income ratio improved to 85%, from 108% in 2019
Net revenues up 6% year on year to € 25.4 billion
97% of total anticipated transformation-related effects already recognised
Proposed capital distribution to shareholders of approximately € 700 million
Common Equity Tier 1 (CET1) capital ratio of 13.2%, in line with the bank’s commitment of above 12.5%
A clear strategic and financial roadmap through 2025
At its Investor Deep Dive on 10 March, Deutsche Bank outlined its strategic and financial roadmap through 2025, building on the progress of its transformation programme. Deutsche Bank aims to build on its position as ‘Global Hausbank’ by becoming the first point of contact in all financial matters for an even larger number of clients.
The bank aims to further strengthen cross-divisional collaboration through four leading core businesses, harness growth by driving its business strategies, and self-fund investments by enhancing efficiency.
If successful, this strategy would enable anticipated capital distribution to shareholders of around € 8 billion in respect of the financial years from 2021-2025, subject to the requisite approvals.
The bank published clear financial objectives for 2025:
Post-tax RoTE¹ of greater than 10%
Compound annual revenue growth of 3.5% -4.5% from 2021, implying net revenues of approximately € 30 billion in 2025
A cost-income ratio of below 62.5% with enhanced operating leverage through cost discipline enabling self-funded investments
The bank also published details of its capital plan through 2025. This includes:
Maintaining a CET1 capital ratio of approximately 13%, subject to a minimum threshold of 200 basis points above the expected Maximum Distributable Amount threshold of approximately 11%
Tangible equity retention to support business growth and implementation of the first elements of the expected Basel III regulatory capital changes effective January 1, 2025
The Management Board announced its intention to reach a total payout ratio of 50% of net income attributable to shareholders in 2025 and thereafter.
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Deutsche Bank reports pre-tax profit of 158 million euros in second quarter of 2020 with transformation fully on track
2nd-quarter profit despite restructuring and rise in credit loss provisions
Group pre-tax profit of 158 million euros, versus pre-tax loss of 946 million euros in 2nd quarter of 2019
Net profit of 61 million euros, versus net loss of 3.1 billion euros in the prior year quarter which included transformation-related effects
Provision for credit losses of 761 million euros, consistent with management expectations; re-affirming full year guidance of 35-45 basis points of loans
Core Bank earnings momentum in the quarter
Pre-tax profit of 753 million euros, versus loss in prior year quarter
Net profit of 489 million euros, post-tax return on tangible equity of 3.4%
Revenue growth year on year
Group net revenues up 1% to 6.3 billion euros despite exit of Equities
Core Bank net revenues up 6% to 6.4 billion euros, up 8% to 6.3 billion euros ex-specific items
Investment Bank net revenues up 46%, up 52% ex-specific items
Sustained progress on costs
Noninterest expenses down 23% year-on-year to 5.4 billion euros
Adjusted costs ex-transformation charges1 down 10% to 4.8 billion euros excluding reimbursement-eligible Prime Finance expenses
Significant progress on transformation
Completed legal entity merger of Private Bank in Germany
Created International Private Bank by combining Wealth Management and Private & Commercial Business International
Completed Integration of Corporate Bank in Germany
Set 200 billion euro target for sustainable financing and investment
Announced agreement to form partnership with Google Cloud
Christian Sewing, Chief Executive Officer, said: “In a challenging environment we grew revenues and continued to reduce costs, and we’re fully on track to meet all our targets. This enabled us to more than offset higher provision for credit losses and remain profitable while supporting clients through difficult conditions. Our strong capital position not only demonstrates our resilience, but also gives us scope for growth.”
Greece: EUR 140 million EIB backing for Port of Piraeus transformation
– Prime Minister welcomes largest ever EIB port investment in Greece
– Expanding principal port in Greece will create jobs and support growth nationwide
– Scheme to expand and upgrade cruise, container and car terminal, develop new port logistics centre and improve infrastructure and equipment of the ship repair zone
The European Investment Bank (EIB) formally agreed to provide EUR 140 million to support expansion and upgrading of the Port of Piraeus, the principal port of Greece. The largest ever loan for port investment in the country by Europe’s long-term lending institution, will support the implementation of part of investments at the Port of Piraeus in a total investment plan of more than EUR 600 million.
The 20-year loan was signed in Athens in the presence of Prime Minister of Greece Kyriakos Mitsotakis, Chinese President Xi Jinping and Xu Lirong, Chairman of COSCO Shipping Corporation, by Andrew McDowell, European Investment Bank Vice President, the Chairman of Piraeus Port Authority S.A. Yu Zenggang and Athanasios Liagkos, Board Member of the Piraeus Port Authority S.A.
“Greece welcomes the European Investment Bank’s support for transformation at the Port of Piraeus. The EIB has been supporting strategic infrastructure across Greece for more than 50 years and has unique technical and financial expertise financing leading ports across Europe and worldwide.” said Prime Minister of Greece Kyriakos Mitsotakis.
“Redevelopment of the Port of Piraeus will strengthen connections between Greece and the rest of the world and ensure that Greece benefits from a world-class maritime logistics hub. The European Investment Bank is pleased to provide a 20-year long-term loan for the principal maritime hub of Greece and the leading port in the Mediterranean. EIB support reflects the economic benefits to be unlocked in the coming years and the importance of ensuring competitive transport links for Greece and South Eastern Europe.” Said Andrew McDowell, European Investment Bank Vice President.
“Recent investment has shown how investment at the Port of Piraeus can support economic growth and benefit Greece. Confirmation of the European Investment Bank’s support follows detailed due diligence and reflects the broad benefits to be unlocked by the largest investment programme in the history of the Port of Piraeus.” said Yu Zenggang, Chairman of Piraeus Port Authority SA.
The first EUR 100 million tranche of the EIB loan was signed today and the remainder agreed as project construction progresses.
The EIB loan is guaranteed by the Export–Import Bank of China, and the guarantee facility contract between PPA and CEXIM was also signed today in the presence of CEXIM Chairwoman Ms HU Xiaolian and Mr Athanasios Liagkos from PPA.
Improving communications for millions of people across Europe
New investment at the Port of Piraeus includes development of a new port logistics centre, construction of a new cruise passenger handling facility, expansion of car shipping facilities, an improved ship repair area and the upgrade of the container terminal.
EIB loan complements Greek and European funds
The long-term EIB loan will complement other investments in the Port currently under consideration by the European Commission and the Greek government plus Technical Assistance work undertaken by JASPERS.
Port of Piraeus investment to support jobs and growth across Greece
Improvements to the Port of Piraeus are expected to support economic growth and job creation across the country, reduce transport costs and enable increased cruise tourism and shipping.
The Port of Piraeus is the busiest in the Mediterranean and the world’s 32nd largest port in terms of container cargo traffic.
Bank of Scotland to transform Argyle Street branch as part of multi-million pound Glasgow investment
A state-of-the-art ‘flagship’ Bank of Scotland branch is set to open in Glasgow later this year after the bank announced plans to transform its existing premises on Argyle Street.
Designed to meet the changing needs of high street customers and act as a testing ground for the future of banking in Scotland, the branch will be closed from today (20 September) for around three months as it undergoes the multi-million pound refit.
The branch is set to reopen in December and will bring together a host of new services, designed to create a very different high street banking experience for both personal and business customers.
It will also offer extended opening hours and feature a coffee shop to provide a warm, informal space for customers and visitors to chat, meet, work and learn.
“New technology is rapidly changing the way many people choose to do their day to day banking. However, support and guidance from our branch colleagues remains crucial for the big or unexpected moments in our customers’ lives, such as buying a home, having children, or dealing with a bereavement. “That’s why we’re creating a different kind of bank branch. This will offer the services that we know our customers want in a modern and flexible environment, combining the latest in interactive digital technology with the trusted personal service provided by our expert colleagues.” – Tara Foley, Manager Director at Bank of Scotland
Bank of Scotland’s branch in Glasgow’s Sauchiehall Street will also have its facilities upgraded as part of the investment plan; while the bank’s branch in Renfrew is also being modernised.