Deutsche Bank 1Q13 Earnings Call Notes

posted in: Notes | 0

This post is part of a series of posts called “Company Notes.” These posts contain quotes and exhibits from earnings calls, conference presentations, analyst days and SEC filings. The quotes are generally pieces of information that I find interesting or helpful to understanding the company, industry or economy and are not meant to provide summaries of the full content of the call. Other posts in this series can be found by clicking here. Full transcripts can be found at Seeking Alpha.

“Capital strength is a core part of Strategy 2015. We began this journey with a Basel III pro forma Core Tier 1 capital ratio of below 6%, which was behind the leaders in our peer group. In September, we stated publicly that our aim is to raise that to 10% by first quarter 2015.’

“For 2 consecutive quarters, we beat the targets we set ourselves. In 9 months, we raised our Basel III Tier 1 ratio from below 6% to 8.8% versus a raised target of 8.5%. This is equivalent to a capital raise of over EUR 10 billion. To do this organically represents the fastest capital buildup of any major peer during the period, and we achieved this through disciplined risk reduction. Since June, we’ve reduced risk-weighted assets by EUR 103 billion. We’re aware of some suggestions that we achieved this risk reduction mainly through model adjustments. But let me say clearly, those suggestions are unfounded. We achieved the bulk of by true asset sales and hedging.”

“We’re now reporting on a package of 3 measures that strengthened our capital structure. These are: firstly, continued strengthening of our capital base by organic means in good measure through accelerated risk reduction; secondly, the capital measures announced today, which form part of the capital toolbox we discussed last September. This would take us from the Basel III pro forma ratio of 8.8%, which we’ve achieved organically, to approximately 9.5%. That ranks us today as one of the best capitalized banks of our global peer group. And thirdly, our intention to potentially issue up to EUR 2 billion of additional subordinated capital over the next 12 months. ”

“Today, we can say that the so-called hunger march is over. We can now accelerate the process of taking advantage of growth opportunities and simultaneously look forward to the day when we can return more capital to shareholders.”

“our fully loaded Basel III pro forma Core Tier 1 ratio for March was 8.8%, comfortably above our set target of 8.5%”

“There is no doubt we enjoyed greater confidence with regulators at 8.8% than we did at 5.9%.”

“We were asked to raise capital by virtually a unanimous opinion across investors and analysts in June, again September, again December. So the reality is that, that feedback isn’t brand new. The difference, of course, is that if you begin with a starting point of sub-6% or even sub-8%, which is where we were at the end of last year, we didn’t see how a meaningful capital raise even could get us to the point where the capital issue would simply be taken off the table. This is the first time that we can actually do that.”