Report

As filed with the Securities and Exchange Commission on March 14, 2024

UNITED STATES

SECURITIES EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

Form 20-F

☐ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES

EXCHANGE ACT OF 1934

☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE

ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2023

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES

EXCHANGE ACT OF 1934

☐ SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES

EXCHANGE ACT OF 1934

Date of event requiring this shell company report……………………………….

Commission file number 1-15242

Deutsche Bank Aktiengesellschaft

(Exact name of Registrant as specified in its charter)

Deutsche Bank Corporation

(Translation of Registrant’s name into English)

Federal Republic of Germany

(Jurisdiction of incorporation or organization)

Taunusanlage 12, 60325 Frankfurt am Main, Germany

(Address of principal executive offices)

Andrea Schriber, +49-69-910-40493, andrea.schriber@db.com, Taunusanlage 12, 60325 Frankfurt am Main, Germany

(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)

Securities registered or to be registered pursuant to Section 12(b) of the Act

See following page

Securities registered or to be registered pursuant to Section 12(g) of the Act.

NONE

(Title of Class)

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act.

NONE

(Title of Class)

Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report:

Ordinary Shares, no par value 1,992,047,850

(as of December 31, 2023)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes ☐ No ☒

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

Yes ☐ No ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See definition of “large accelerated filer”, “accelerated filer”, and emerging growth company in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer ☒ Accelerated filer ☐

Non-accelerated filer ☐ Emerging growth company ☐

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards* provided pursuant to Section 13(a) of the Exchange Act. ☐

*The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

U.S. GAAP☐ International Financial Reporting Standards☒ Other ☐

as issued by the International Accounting Standards Board

If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow

Item 17 ☐ Item 18 ☐

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☒

(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the

Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.

Yes ☐ No ☐

Securities registered or to be registered pursuant to Section 12(b) of the Act (as of February 29, 2024)

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Ordinary shares, no par value	DB	The New York Stock Exchange
4.50 % Fixed Rate Subordinated Tier 2 Notes Due 2025	DB 25	The New York Stock Exchange
DB Gold Double Long Exchange Traded Notes due February 15, 2038	DGP	NYSE Arca, Inc.
DB Gold Double Short Exchange Traded Notes due February 15, 2038	DZZ	NYSE Arca, Inc.
DB Gold Short Exchange Traded Notes due February 15, 2038	DGZ	NYSE Arca, Inc.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Deutsche Bank Aktiengesellschaft, also called Deutsche Bank AG, is a stock corporation organized under the laws of the Federal Republic of Germany. Unless otherwise specified or required by the context, in this document, references to “Deutsche Bank”, “the bank” or “the Group” are to Deutsche Bank Aktiengesellschaft and its consolidated subsidiaries.

Due to rounding, numbers presented throughout this document may not add up precisely to the totals the bank provides and percentages may not precisely reflect the absolute figures.

The bank’s registered address is Taunusanlage 12, 60325 Frankfurt am Main, Germany, and its telephone number is +49-69-910-00.

Inclusion of its Annual Report

Deutsche Bank has included as an integral part of this Annual Report on Form 20-F its Annual Report 2023, to which the bank refers to in response to certain items included in Form 20-F. Certain portions of the Annual Report 2023 have been omitted, as indicated therein. The included Annual Report 2023 contains the Consolidated Financial Statements, which the bank refers to in response to Items 8 and 18.

The Annual Report 2023 and Consolidated Financial Statements included herein differ from those Deutsche Bank publishes for other purposes (the “non-SEC” versions thereof) in that the financial information presented in the Annual Report 2023 and Consolidated Financial Statements included herein has been prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB). The financial information presented in the non-SEC Annual Report 2023 and Consolidated Financial Statements included therein, by contrast, has been prepared in accordance with IFRS as issued by the IASB and endorsed by the European Union (EU), including, effective as of January 1, 2020, the application of fair value hedge accounting for portfolio hedges of interest rate risk (fair value macro hedges) in accordance with the EU carve-out version of International Accounting Standard (IAS) 39. For further information, see Note 1, “Material accounting policies and critical accounting estimates – Basis of accounting – EU carve-out” to the Consolidated Financial Statements.

Such Consolidated Financial Statements differ from those contained in the Annual Report 2023 used for other purposes (the “non-SEC financial statements”) in that (i) Notes 42, 43 and 44 of the non-SEC financial statements, which address non-U.S. requirements, have been deleted, (ii) Note 45 of the non-SEC financial statements is set forth as Note 42 of the included financial statements, and (iii) Note 43, which addresses U.S. requirements, has been added to the included financial statements.

The Consolidated Financial Statements have been audited by EY GmbH & Co. KG Wirtschaftsprüfungsgesellschaft, as described in their “Report of Independent Registered Public Accounting Firm” included in the Annual Report 2023. Such report is included only in the version of the Annual Report 2023 included in this Annual Report on Form 20-F.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Cautionary Statement Regarding Forward-Looking Statements

Deutsche Bank makes certain forward-looking statements in this document with respect to its financial condition and results of operations. In this document, forward-looking statements include, among others, statements relating to:

– The potential development and impact on the bank of economic and business conditions and the legal and regulatory environment to which the bank is subject, including the significant challenges that may arise from persistent inflationary pressures and significantly higher interest rates, the continuing war in Ukraine, the Israel-Hamas war and the risk of a broader conflict in the region, tensions with China, deterioration of the macroeconomic environment, and elevated geopolitical risks

– Deutsche Bank’s ability to sustain its revenues or to control its cost base by means of its strategic initiatives and responses to economic and business conditions and the legal and regulatory environment

– The development of aspects of Deutsche Bank’s results of operations

– The bank’s expectations of the impact of risks that affect the bank’s business, including the risks of losses in its trading businesses and credit exposures

– Other statements relating to the bank’s future business development and economic performance

In addition, the Group may from time to time make forward-looking statements in the periodic reports to the United States Securities and Exchange Commission on Form 6-K, annual and interim reports, invitations to Annual General Meetings and other information sent to shareholders, offering circulars and prospectuses, press releases and other written materials. Deutsche Bank’s Management Board, Supervisory Board, officers and employees may also make oral forward-looking statements to third parties, including financial analysts.

Forward-looking statements are statements that are not historical facts, including statements about the bank’s beliefs and expectations. Deutsche Bank uses words such as “believe”, “anticipate”, “expect”, “intend”, “seek”, “estimate”, “project”, “should”, “potential”, “reasonably possible”, “plan”, “aim” and similar expressions to identify forward-looking statements.

By their very nature, forward-looking statements involve risks and uncertainties, both general and specific. Deutsche Bank bases these statements on its current plans, estimates, projections and expectations. The reader of this document should therefore not place too much reliance on them. The bank’s forward-looking statements speak only as of the date the bank makes them, and Deutsche Bank undertakes no obligation to update any of them in light of new information or future events.

Deutsche Bank cautions the reader that a number of important factors could cause its actual results to differ materially from those the bank describes in any forward-looking statement. These factors include those listed above and, among others, the following:

– Other changes in general economic and business conditions

– Changes and volatility in currency exchange rates, interest rates and asset prices

– Changes in governmental policy and regulation, including measures taken in response to economic, business, political and social conditions

– The potential development and impact on the bank of legal and regulatory proceedings to which the bank is or may become subject

– Changes in the bank’s competitive environment

– The success of acquisitions, divestitures, mergers and strategic alliances

– Other factors, including those the bank refers to in “Item 3: Key Information – Risk Factors” and elsewhere in this document and others to which the bank does not refer

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Use of Non-GAAP Financial Measures

This document and other documents Deutsche Bank has published or may publish contain non-GAAP financial measures. Non-GAAP financial measures are measures of the bank’s historical or future performance, financial position or cash flows that contain adjustments that exclude or include amounts that are included or excluded, as the case may be, from the most directly comparable measure calculated and presented in accordance with IFRS in the financial statements. Examples of Deutsche Bank’s non-GAAP financial measures, and the most directly comparable IFRS financial measures, are as follows:

Non-GAAP Financial Measure	Most Directly Comparable IFRS Financial Measure
Adjusted profit (loss) before tax, Profit (loss) before tax excluding nonoperating costs	Profit (loss) before tax
Profit (loss) attributable to Deutsche Bank shareholders and additional equity components for the segments, Profit (loss) attributable to Deutsche Bank shareholders for the segments, Adjusted profit (loss) attributable to Deutsche Bank shareholders, Profit (loss) attributable to Deutsche Bank shareholders excluding nonoperating costs	Profit (loss)
Revenues excluding specific items, Revenues on a currency-adjusted basis	Net revenues
Adjusted costs, Costs on a currency-adjusted basis, Nonoperating costs	Noninterest expenses
Cost/income ratio excluding nonoperating costs	Cost/income ratio based on noninterest expenses
Net assets (adjusted)	Total assets
Tangible shareholders’ equity, Average tangible shareholders’ equity, Tangible book value, Average tangible book value	Total shareholders’ equity (book value)
Post-tax return on average shareholders’ equity (based on Profit (loss) attributable to Deutsche Bank shareholders), Post-tax return on average tangible shareholders’ equity (based on Profit (loss) attributable to Deutsche Bank shareholders), Adjusted post-tax return on average tangible shareholders’ equity (based on adjusted profit (loss) attributable to Deutsche Bank Shareholders), Post-tax return on average shareholders’ equity excluding nonoperating costs, Post-tax return on average tangible shareholders’ equity excluding nonoperating costs	Post-tax return on total shareholders’ equity
Book value per basic share outstanding, Tangible book value per basic share outstanding	Book value per share outstanding

For descriptions of these non-GAAP financial measures and the adjustments made to the most directly comparable financial measures under IFRS, please refer to “Supplementary Information (Unaudited): Non-GAAP Financial Measures”, which is included herein.

When used with respect to future periods, non-GAAP financial measures used by Deutsche Bank are also forward-looking statements. The bank cannot predict or quantify the levels of the most directly comparable financial measures under IFRS that would correspond to these measures for future periods. This is because neither the magnitude of such IFRS financial measures, nor the magnitude of the adjustments to be used to calculate the related non-GAAP financial measures from such IFRS financial measures, can be predicted. Such adjustments, if any, will relate to specific, currently unknown, events and in most cases can be positive or negative, so that it is not possible to predict whether, for a future period, the non-GAAP financial measure will be greater than or less than the related IFRS financial measure.

Use of Internet Addresses

This document contains inactive textual addresses of Internet websites operated by the bank and third parties. Reference to such websites is made for informational purposes only, and information found at such websites is not incorporated by reference into this document.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Dividends

The following table shows the dividend per share in euro and in U.S. dollars for the years ended December 31, 2023, 2022, 2021, 2020 and 2019. Deutsche Bank declares dividends at its Annual General Meeting following each year. For 2023, the Management Board will propose to the Annual General Meeting to pay a dividend of € 0.45 per share. Deutsche Bank’s dividends are based on the non-consolidated results of Deutsche Bank AG as prepared in accordance with German accounting principles. Because the Group declares dividends in euro, the amount an investor actually receives in any other currency depends on the exchange rate between euro and that currency at the time the euros are converted into that currency.

In general, the German withholding tax applicable to dividends is 26.375 % (consisting of a 25 % withholding tax and an effective 1.375 % surcharge). Under the German Investment Tax Act, dividends received by an investment fund within the meaning of the German Investment Tax Act are subject to 15 % German withholding tax equal to the treaty tax rate. For individual German tax residents, the withholding tax paid represents for private dividends, generally, the full and final income tax applicable to the dividends. Dividend recipients who are tax residents of countries that have entered into a convention for avoiding double taxation may be eligible to receive a refund from the German tax authorities for a portion of the amount withheld and in addition may be entitled to receive a tax credit for the German withholding tax not refunded in accordance with their local tax law.

Generally, U.S. residents will be entitled to receive a refund equal to 11.375 % of the dividends paid. For U.S. federal income tax purposes, the dividends the Group pays are not eligible for the dividends received deduction generally allowed for dividends received by U.S. corporations from other U.S. corporations.

Dividends in the table below are presented before German withholding tax.

See “Item 10: Additional Information – Taxation” for more information on the tax treatment of the bank’s dividends.

			Payout ratio^2,3
	Dividends per share¹	Dividends per share	Basic earnings per share	Diluted earnings per share
2023 (proposed)	$ 0.50	€ 0.45	16%	16%
2022	$ 0.32	€ 0.30	13%	13%
2021	$ 0.23	€ 0.20	20%	21%
2020	$ 0.00	€ 0.00	N/M	N/M
2019	$ 0.00	€ 0.00	N/M	N/M

N/M – Not meaningful

¹ For convenience, the Group presents dividends in U.S. dollars for each year by translating the euro amounts at the period end rate for the last business day of each year

² Payout ratio defined as dividends per share the Group paid in respect of each financial year as a percentage of basic and diluted earnings per share for that year

³ For the financial years 2019 and 2020, no dividends were paid

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Capitalization and Indebtedness

Consolidated capitalization in accordance with IFRS as issued by the IASB as of December 31, 2023

		in € m.
Debt:¹
Long-term debt		119,390
Trust preferred securities		289
Long-term debt at fair value through profit or loss		10,709
Total debt		130,388

Shareholders’ equity:
Common shares (no par value)		5,223
Additional paid-in capital		40,187
Retained earnings		22,845
Common shares in treasury, at cost		(481)
Accumulated other comprehensive income, net of tax
Unrealized net gains (losses) on financial assets at fair value through other comprehensive income, net of tax and other		(879)
Unrealized net gains (losses) on derivatives hedging variability of cash flows, net of tax		22
Unrealized net gains (losses) on assets classified as held for sale, net of tax		0
Unrealized net gains (losses) attributable to change in own credit risk of financial liabilities designated at fair value through profit and loss, net of tax		18
Foreign currency translation, net of tax		(930)
Unrealized net gains (losses) from equity method investments		(6)
Total shareholders’ equity		65,999
Equity component of financial instruments		8,569
Noncontrolling interests		1,763
Total equity		76,330
Total capitalization		206,718

¹ € 39,847 million (31 %) of Deutsche Bank’s debt was secured as of December 31, 2023.

Reasons for the Offer and Use of Proceeds

Not required because this document is filed as an Annual Report.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Risk Factors

An investment in Deutsche Bank’s securities involves a number of risks. Potential investors should carefully consider the following information about the risks Deutsche Bank faces, together with other information in this document, when they make investment decisions involving Deutsche Bank’s securities. If one or more of these risks were to materialize, it could have a material adverse effect on Deutsche Bank’s financial condition, results of operations, cash flows or prices of its securities.

Summary of Risk Factors

Risks Relating to the Macroeconomic, Geopolitical and Market Environment . Deutsche Bank is materially affected by global macroeconomic and financial market conditions. Significant challenges may arise from market volatility, inflation risks, and impacts of a higher interest rate environment, more stringent lending standards and increased refinancing risks. A number of geopolitical and political risks, such as further escalation of the Israel-Hamas war in the region, impacts from the ongoing war in Ukraine, tensions between the United States and China, along with upcoming elections in the United States, EU and other regions around the world, could negatively affect the business environment, leading to weaker economic activity and a broader correction in the financial markets. Materialization of these risks could negatively affect Deutsche Bank’s results of operations in some of the bank’s businesses and its financial condition as well as its strategic plans.

Risks Relating to Deutsche Bank’s Business and Strategy. While the bank continuously plans for and adapts to changing situations, the bank runs the risk that a significant deterioration in the global operating environment, an adverse change in market confidence in the banking sector and/or client behavior, as well as higher competition, could lead to the bank missing its 2025 financial targets. If Deutsche Bank is unable to sustain its revenues or to control its costs, the bank may be unable to meet its 2025 targets and may have difficulties maintaining capital, liquidity and leverage at levels expected by market participants and regulators. Adverse market conditions, asset price deteriorations, volatility, foreign exchange rate movements and cautious investor sentiment may materially and adversely affect Deutsche Bank’s revenues and profits. Intense competition, in Deutsche Bank’s home market of Germany as well as in international markets, could have a material adverse impact on Deutsche Bank’s business, results of operations or strategic plans and targets.

Deutsche Bank’s liquidity, business activities and profitability may be adversely affected by an inability to access the debt capital markets or to sell assets during periods of market-wide or firm-specific liquidity constraints which could significantly impact aspects of the bank’s business model. Additional liquidity risks due to negative developments in the wider financial sector may also result in higher rates of outflows contributing to a deterioration in the public perception and causing even further outflows.

Risks Relating to Regulation and Supervision. Prudential reforms and increased regulatory scrutiny affecting the financial sector continue to have a significant impact on Deutsche Bank, which may adversely affect its business and, in cases of non-compliance, could lead to regulatory sanctions against the bank, including prohibitions against the bank from making dividend payments, share repurchases or payments on its regulatory capital instruments, or increasing regulatory capital and liquidity requirements. Competent regulators may prohibit the bank from making dividend payments, share repurchases or payments on its regulatory capital instruments or take other actions if the Group fails to comply with regulatory requirements. Regulatory changes may impact how key entities are funded which could affect how businesses operate and negatively impact results. Regulatory actions may also require Deutsche Bank to change its business model or result in some business activities becoming unviable. Regulatory and legislative changes require Deutsche Bank to maintain increased capital and debt that can be bailed in in a resolution scenario and abide by tightened liquidity requirements. Any perceptions in the market that the bank may be unable to meet its capital or liquidity requirements could intensify the effect of these factors on the bank’s business and results.

Risks Relating to Deutsche Bank’s Internal Control Environment. Deutsche Bank is focused on the need to strengthen its internal control environment and infrastructure and has embarked on initiatives to accomplish this. The German Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht , BaFin) has ordered the bank to improve its control and compliance infrastructure relating to anti-money laundering and know-your-client processes and appointed a special representative to monitor these measures’ implementation. If Deutsche Bank is unable to improve its infrastructure and control environment on the timelines set or expected by regulators, the bank’s reputation, regulatory position and financial condition may be materially adversely affected.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Risks Relating to Cybersecurity. Cybersecurity threats such as the risk of breaches in confidentiality, integrity, or availability of the bank’s or clients’ information, or breaches of the security of third-party computer systems could adversely affect the bank’s ability to conduct business, result in reputational damage, increase legal and regulatory risk and cause financial loss. Breaches can occur due to unauthorized access to networks or resources, the introduction of computer viruses or malware, or other forms of cybersecurity attacks or incidents.

Risks Relating to Litigation, Regulatory Enforcement Matters, Investigations and Tax Examinations. The bank operates in a highly regulated and litigious environment, potentially exposing the bank to liabilities and other costs, the amounts of which may be substantial and difficult to estimate, as well as to legal and regulatory sanctions and reputational harm. Should any legal proceedings be resolved against the bank or any investigations result in a finding that the bank failed to comply with an applicable law, Deutsche Bank could be exposed to material damages, fines, limitations on business, remedial undertakings, criminal prosecution or other material adverse effects on its financial condition as well as risk to the bank’s reputation and potential loss of business as a result of extensive media attention. Guilty pleas by or convictions of the bank or its affiliates in criminal proceedings, or regulatory or enforcement orders, settlements or agreements to which the bank or its affiliates become subject, may have consequences that have adverse effects on certain of its businesses. Moreover, if these matters are resolved on terms that are more adverse to the bank than expected, in terms of the costs or necessary changes to the bank’s businesses, or if related negative perceptions concerning its business and prospects and related business impacts increase, Deutsche Bank may not be able to achieve its strategic objectives or may be required to change them.

Climate Change and Other Risks Relating to Environmental, Social and Governance (ESG)-Related Matters. The impacts of rising global temperatures and the associated policy, technology and behavioral changes required to limit global warming have led to emerging sources of financial and non-financial risks. These include the physical risk impacts from extreme weather events, and transition risks as carbon-intensive sectors are faced with higher costs, potentially reduced demand and restricted access to financing. More rapid than currently expected emergence of transition and/or physical climate risks and other environmental risks may lead to increased credit and market losses as well as operational disruptions due to impacts on vendors and the bank’s own operations. Financial institutions are facing increased scrutiny and regulatory reporting requirements on climate and broader ESG-related issues from governments, regulators, shareholders and other bodies, including inconsistent (and sometimes conflicting) perspectives or requirements, leading to reputational risk if the bank is not seen to support ESG objectives and the risk that Deutsche Bank’s sustainability disclosures do not adhere to evolving standards.

Other Risks. Deutsche Bank is also subject to other risks, including the following:

– Remaining risks related to Postbank IT migrations could increase and/or impact the bank’s reputation and may result in loss of clients, business or impact the bank’s future results

– Deutsche Bank’s risk management policies, procedures and methods leave the bank exposed to unidentified or unanticipated risks, which could lead to material losses

– Deutsche Bank utilizes a variety of third parties in support of its business and operations. Services provided by third parties pose risks to the bank comparable to those it bears when performing the services internally, and the bank remains ultimately responsible for the services the third parties provide. If such a third party does not conduct business in accordance with applicable standards or the bank’s expectations, the bank could be exposed to material losses or regulatory action, litigation or reputational damage or fail to achieve the benefits sought from the third-party relationship

– Operational risks, which may arise from errors in the performance of the bank’s processes, including from customer backlog issues from the Postbank IT migration, the conduct of its employees, instability, malfunction or outage of IT systems and infrastructure, or loss of business continuity, or comparable issues with respect to its third-party service providers, may disrupt the bank’s businesses and lead to material losses

– The inability to have equivalence arrangements with Central Clearing Counterparties in countries outside the EU may have adverse effects on Deutsche Bank’s business, results of operations or financial targets; more generally, the bank’s large clearing and settlement business poses risks if it fails to operate properly for even short periods

– Impairments of goodwill and other intangible assets and reductions in deferred tax assets have had and may in the future have material adverse effects on Deutsche Bank’s profitability, equity and financial condition

– In addition to the bank’s traditional banking businesses of deposit-taking and lending, the bank may also engage in nontraditional credit businesses in which credit is extended via transactions that materially increase the bank’s exposure to credit risk

–

A substantial proportion of the bank’s assets and liabilities comprise financial instruments that the bank carries at fair value, with changes in fair value recognized in the income statement. Deutsche Bank has incurred losses, and may incur further losses, from such changes

– Deutsche Bank is exposed to pension risks which can materially impact the measurement of its pension obligations, including interest rate, inflation, longevity and liquidity risks that can materially impact the bank’s earnings

– Digital innovation offers market entry opportunities for new competitors such as cross-industry entrants, global high-tech companies or financial technology companies, which will increase the bank’s need for investment in digital product and process resources to mitigate the risk of a potential loss of market share

– Digital innovation and crypto assets, while presenting opportunities, also possess significant risks. The bank may miss opportunities to develop its franchise by missing trends or not sufficiently deploying financial resources in this area

– Deutsche Bank is subject to laws and other requirements relating to financial and trade sanctions and embargoes. If the bank breaches such laws and requirements, it can be subject, and in the past has been subject, to material regulatory enforcement actions and penalties

	Deutsche Bank
	Annual Report 2023 on Form 20-F

– Transactions with counterparties in countries designated by the U.S. State Department as state sponsors of terrorism or persons targeted by U.S. economic sanctions may lead potential customers and investors to avoid doing business with the bank or investing in Deutsche Bank’s securities, harm the bank’s reputation or result in regulatory or enforcement action, which could have a material and adverse effect on the bank’s business

Risks Relating to the Macroeconomic, Geopolitical and Market Environment

Deutsche Bank is materially affected by global macroeconomic and market conditions. Significant challenges may arise from persistent inflation, the interest rate environment, market volatility, and a deteriorating macroeconomic environment. These risks could negatively affect the business environment, leading to weaker economic activity and a broader correction in the financial markets. Materialization of these risks could negatively affect Deutsche Bank’s results of operations and financial condition as well as the bank’s strategic plans and financial targets. Deutsche Bank takes step to manage these risks through its risk management and hedging activities but remains exposed to these macroeconomic and market risks.

In 2023, several U.S. regional banks and one major European bank either failed or were restructured leading to investor concerns over the wider banking sector. While overall fundamentals remained sound, as indicated by the 2023 U.S. CCAR and EU-wide EBA stress tests, and market volatility has subsequently decreased, these events have in certain areas increased the likelihood of a tightening of financial conditions as banks act to preserve liquidity amid higher competition for deposits and increased depositor sensitivity around concentration risks and unrealized losses on rates sensitive exposures. A pronounced tightening in financial conditions would lead to more stringent lending standards and higher client refinancing risks, with Commercial Real Estate and more highly leveraged corporate clients among the sectors with increased risk.

Major central banks likely reached the peak of the policy rate cycle in 2023. Headline inflation and more recently core inflation have shown clearer signs of progress in decelerating towards central bank targets. Financial markets have started to anticipate significant rate cuts for 2024 which has supported a significant easing of financial conditions with lower bond yields, higher equities prices and tighter credit spreads. However, the path to monetary policy normalization remains somewhat uncertain with central banks signaling that market expectations of early rate cuts in 2024 may be too optimistic in light of remaining inflation risks.

The lagged effects from tighter monetary policy could lead to refinancing risks and potential downgrades across the bank’s client franchise while corporate default rates could continue to rise in 2024. The risk of idiosyncratic defaults also remains high. In addition, inflation, interest rates and market volatility could lead to significant collateral value reductions with risks related to recoveries in case of liquidation and therefore higher impacts on provision for credit losses. This is particularly relevant in instances where financing is asset based and without recourse to a third party. As the lagged effects of higher rates and quantitative tightening feed through to the real economy, further liquidity events may crystallize. The bank could therefore experience higher-than-expected provision for credit losses

, and elevated interest rates may adversely affect Deutsche Bank’s planned results of operations, financial and cost targets, and may also result in rating downgrades across the bank’s client franchise leading to credit risk RWA inflation. More persistent inflation and higher terminal interest rates could increase clients’ reallocation of savings to higher interest paying fixed deposits and dampen consumer spending and private client investments which could lead to a reduction in new lending for consumer finance and/or private mortgages. Furthermore, higher costs of living for private individuals as result of a more persistent inflationary environment could negatively affect their ability to repay credit obligations and consequently could lead to higher provisions for credit losses particularly in consumer finance.

Commercial real estate (CRE) markets remain under stress from the impact of high interest rates and borrowing costs, tight lending conditions and economic headwinds. Decreasing liquidity and price discovery for CRE valuations have resulted in a pronounced decline in transactions and reduced willingness to extend lending, particularly in the U.S. office market. The developments in the CRE markets impact collateral values and consequently loan-to-value ratios, particularly in the office sector, and may result in higher-than-expected provision for credit losses.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

The U.S. economy has remained resilient in 2023, performing in line with a soft-landing scenario, with the labor market softening gradually and inflation pressures receding. Consensus GDP growth forecasts for 2023 and 2024 have continuously been revised upwards. Economic downside risks remain though, mainly due to the lagged impact of monetary tightening. The same holds for the Eurozone economy where economic activity remains weak, particularly in manufacturing, and country performance is divergent with Germany underperforming as the energy induced competitiveness shock and other structural factors continue to weigh on the economy. Economic growth is projected to recover only slowly in 2024. External downside risks stem not only from the U.S. and Europe but also from China’s economy where domestic activity lacks momentum and the highly indebted real estate sector has yet to show signs of a turn around.

Overall, either in isolation or in combination with other risk factors such as an escalation of the China/Taiwan tensions and the political risks associated with the 2024 U.S. election, the aforementioned risks could lead to a deterioration in Deutsche Bank’s portfolio quality and higher-than-expected credit and market losses. This could also lead to rating declines among clients, leading to increasing provisioning levels as well as increased numbers of clients drawing down on credit facilities which would lead to higher capital requirements and liquidity demands. There could also be a higher risk of idiosyncratic defaults. Higher volatility in financial markets could lead to increased margin calls, higher market risk RWA and elevated valuation reserves. Negative impacts on investor appetite may also impact the Group’s ability to distribute and de-risk capital market commitments, which could potentially result in losses as well as making pricing and hedging more challenging and costly. Volatility in capital markets also increases the risk of idiosyncratic counterparty events both directly and indirectly, for example shortfalls under Lombard or securities financing transactions.

The aforementioned developments could also impact Deutsche Bank’s revenue generating capabilities and costs, while market declines and volatility could negatively impact the value of financial instruments, drive volatility in the bank’s valuation and timing differences and result in impairments of non-financial assets. This is particularly relevant as a decline in financial market liquidity would exacerbate price volatility and the risk of broader market stress. Market volatility, which can be also triggered by unexpected policy decisions or policy mistakes, and the challenging macro environment could also lead to increased inherent risks in several non-financial risks including transaction processing, internal and external fraud and conduct risks including attempts to conceal losses and increased litigation attempts from clients.

Another area of focus is private capital markets which include certain activities from non-bank financial institutions and private credit more broadly. The non-bank financial institutions sector is extremely broad with diverse risk profiles and vulnerabilities. A failure of one or multiple larger non-bank financial institutions has the potential to drive direct losses for banks including Deutsche Bank and other creditors and capital providers. Broader market instability with rising rates, risk aversion, market illiquidity and economic slowdown all increase the likelihood of failures occurring as returns drop and investors reallocate capital. Although the bank’s risk management approaches are intended to be commensurate to the risk profile of underlying counterparty and concentration risk exposures, they cannot ensure that the bank will not experience material losses in the event of future market instability.

A substantial proportion of the assets and liabilities on the Group’s balance sheet is comprised of financial instruments that are carried at fair value, with changes in fair value recognized in the bank’s income statement. As a result of such changes, Deutsche Bank has incurred losses in the past, and may incur further losses in the future. The bank is exposed to risks related to movements from foreign exchange rates, most notably related to USD and GBP. The bank also accounts for a substantial portion of assets and liabilities at amortized costs. The fair value of these assets may be lower than the carrying value and could result in realized losses if the assets are sold prior to maturity.

A number of geopolitical and political risks and events could negatively affect Deutsche Bank’s business environment, including via weaker economic activity, financial market corrections, compliance risks or a lower interest rate environment.

On October 7, 2023, Hamas terrorists attacked Israel, which Israel responded to with a military campaign against Hamas forces and infrastructure in Gaza. Although direct risk or impacts to the bank are contained to date and no significant losses are currently expected, the key risk relates to the potential for wider escalation within the region. Going forward this may also impact oil prices, broader energy markets and global supply chains thereby undermining confidence and global growth. In early 2024, this regional escalation has increased including Houthi attacks against cargo vessels in the Red Sea. The latter already impacting global supply chains, with Asia-to-North Europe freight rates more than doubling.

Amidst the ongoing war in Ukraine, further sanctions packages have been introduced in 2023. New sanctions, as well as countermeasures by the Russian government, increased differences between the local application and implementation of relevant requirements by Deutsche Bank’s subsidiaries in Russia and the Deutsche Bank Group, along with increasing operational complexity and creating conflict of law situations. Sanctions and Russian countermeasures, including expropriation of assets, may also complicate the wind-down of transactions and relationships that the bank may need to exit. This regulatory environment or other restrictions could result in accounting losses or the loss of control over Deutsche Bank’s subsidiaries or assets. Any of these risks could disrupt business and lead to material losses.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Against this backdrop, the Russian government and economy could further resort to activity aimed at circumventing the sanctions imposed, intentionally or unwittingly facilitated through economic operators in the West or in so-called proxy-countries which take a neutral position towards the Russian war against Ukraine. It may be challenging for the bank to identify such activity and protect the bank against the potential regulatory and reputational impacts of such illicit activity in all cases. Against the challenging sanctions backdrop, banks may also be implicated in economic disputes of and with counterparties which could result in costs or losses which would not occur in the normal course of business.

Also, tensions between the U.S. and China remain elevated across a wide range of areas, including trade and technology-related issues, Hong Kong, Taiwan, human rights, and cybersecurity. While the bank does not consider a China/Taiwan military conflict as its base case in the near-term, potential downside impacts from an escalation are significant and could substantially and adversely affect Deutsche Bank’s planned results of operations and financial targets. The German government published its own China strategy which envisages German companies to still partake in China’s economic development whilst also encouraging diversification efforts to reduce potentially harmful concentration risks and economic dependencies on China. Recently, in connection with the ongoing war in Ukraine, the U.S. sanctioned several Chinese companies adding to the tensions between the U.S. and China. In September, the EU Commission announced an investigation into subsidies to Chinese electric vehicle exporters which could lead to increased tariffs and possible Chinese trade retaliation measures. Geopolitical tensions could drive further economic polarization and fragmentation of global trade with the possible emergence of distinct China vs. U.S.-led blocs. Over the medium to long term, the International Monetary Fund among others has highlighted the potential negative impact of deglobalization on living standards and growth.

In many democratic countries, domestic political challenges have arisen from growing political polarization, rising social discontent and higher inflation. These challenges may impede political decision-making processes, forestall necessary structural reforms and lead to negative economic outcomes which could directly or indirectly impact the bank’s risk profile.

The U.S. elections in November 2024 could increase economic and geopolitical uncertainty given that current opinion polls indicate a potentially close outcome which could usher in radically different trade and foreign policies. The EU is also holding elections in June 2024 where populist parties could increase their share of the vote, potentially increasing political polarization and fragmentation in Europe. Other regions which are holding or expected to hold local / general elections in 2024 include the UK, Turkey, South Africa and India with unexpected outcomes having the potential to drive local market volatility and economic uncertainty.

There have been a number of military coups in 2023 mainly concentrated in West Africa. None of these have had a material impact on the bank. The bank’s risk management frameworks, including its approach to managing country risk, are designed to avoid undue concentration risks to such events, but an extension of such events to other countries and regions may lead to financial losses and operational disruption in a downside.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Risks Relating to Deutsche Bank’s Strategy and Business

If Deutsche Bank is unable to meet its 2025 financial targets or incurs future losses or low profitability, Deutsche Bank’s financial condition, results of operations and share price may be materially and adversely affected, and the bank may be unable to make contemplated distributions of profits to its shareholders or carry out share buybacks.

Deutsche Bank’s Global Hausbank strategy includes Group and divisional financial targets and objectives for the period until 2025. While the Group continuously plans for and adapts to changing situations, the bank runs the risk that a significant deterioration in the global operating environment, an adverse change in market confidence in the banking sector and/or client behavior, as well as higher competition, could lead to the bank missing its 2025 financial targets. As such, Deutsche Bank may incur unexpected losses including further impairments and provisions, experience lower than planned profitability or an erosion of the bank’s capital or liquidity base and broader financial condition, leading to a material adverse effect on Deutsche Bank’s results of operations and share price. This also includes the risk that Deutsche Bank will not be able to make desired cash distributions and share buybacks, all of which are subject to regulatory approval, shareholder authorization and German corporate law requirements. Where such targets reflect commitments to or requirements of regulators, missing them may also trigger action from such regulators or rating agencies. In these situations, the Group would need to take actions to ensure it meets its minimum capital or liquidity objectives. These actions or measures may result in adverse effects on Deutsche Bank’s business, results of operations or strategic plans and targets.

Deutsche Bank operates in highly competitive markets in all divisions. The ability to deploy capital and fund investments is an important factor to enable it to compete. The Group continuously monitors and responds to competitive developments to protect its market position and realize growth opportunities. Competitors in that context include large, international banks, smaller domestic banks as well as emerging, non-banking competitors.

Deutsche Bank communicated various capital objectives in the section “Item 4: Business Overview – Business Strategy”. One of them relates to the CET 1 ratio, where Deutsche Bank has the objective to preserve a CET 1 ratio of no less than 200 basis points above the bank’s Maximum Distributable Amount (MDA) threshold with some variability possible in 2024. The Group’s capital ratio development reflects among other things: the operating performance of core businesses; the extent of its restructuring costs and the delivery of associated benefits from change initiatives including for example front-to-back optimization programs; costs related to potential litigation and regulatory enforcement actions; growth in the balance sheet usage of the core businesses; changes in the bank’s tax and pensions accounts; impacts on Other Comprehensive Income; and changes in regulation and regulatory technical standards.

All of the above could have a material impact on the Group’s CET 1 ratio as well as other target ratios. It is therefore possible that the bank will fall below its CET 1 ratio objective of no less than 200 basis points above the bank’s MDA threshold, or the cost/income ratio or the Post-tax Return on Average Tangible Equity targets, as highlighted in “Item 4: Business Overview – Business Strategy” in this report.

In addition to other risks described in these Risk Factors, the following could negatively impact the bank’s strategic goals and ability to achieve its financial targets for 2025:

– The base case scenario for Deutsche Bank’s financial and capital plan includes revenue growth estimates which are dependent on positive macroeconomic developments. Stagnation or a downturn in the macroeconomic environment could significantly impact the bank’s ability to generate the revenue growth necessary to achieve these strategic financial and capital targets. This base case scenario also includes assumptions regarding the bank’s ability to reduce costs in future periods

– In addition, the bank’s base case scenario is based on current market implied forward interest rate curves. If interest rates do not evolve as expected, the bank’s revenues may not develop as the bank anticipates

– Deutsche Bank’s objectives are also based on assumptions regarding inflation levels. If inflation does not develop as the bank expects, the bank’s businesses may be adversely impacted, and the bank may not meet its cost target

– The bank’s plans are based upon December 31, 2023 foreign exchange rates, particularly with respect to the euro and U.S. dollar. If exchange rates change from these levels, the bank’s ability to achieve its targets may be adversely affected.

– Reputational risk or negative market perceptions of Deutsche Bank could impact client levels, deposits or asset outflows and adversely affect the bank’s results and ability to meet its 2025 financial targets, and

– In the event that staff attrition levels increase versus historical levels, this may adversely affect the bank’s ability to attract and retain talented personnel, particularly in front-office positions that are key to revenue generation and in positions key to improving the bank’s control environment

	Deutsche Bank
	Annual Report 2023 on Form 20-F

If Deutsche Bank fails to implement its strategic initiatives in whole or in part or should the initiatives that are implemented fail to produce the anticipated benefits, or the costs incurred to implement the initiatives exceed the amounts anticipated, or the bank fails to achieve the publicly communicated targets it has set for implementation of these initiatives, the bank may fail to achieve its financial objectives, incur losses or have low profitability or erosions of its capital base, and its financial condition, results of operations and share price may be materially and adversely affected.

Adverse market conditions, asset price deteriorations, volatility and cautious investor sentiment have affected and may in the future materially and adversely affect Deutsche Bank’s revenues and profits, particularly in investment banking, brokerage and other commission- and fee-based businesses.

Deutsche Bank has significant exposure to the financial markets and is more at risk from adverse developments in the financial markets than institutions predominantly engaged in traditional banking activities. Sustained market declines have in the past caused and can in the future cause the bank’s revenues to decline, and, if the bank is unable to reduce its expenses at the same pace, can cause the bank’s profitability to erode or result in material losses. Market volatility can also adversely affect Deutsche Bank by causing the value of financial assets it holds to decline or hedging costs to rise.

Specifically, revenues in the Investment Bank, in the form of financial advisory and underwriting fees, directly relate to the number and size of the transactions in which the bank participates and are susceptible to adverse effects from sustained market downturns. These fees and other income are generally linked to the value of the underlying transactions and therefore can decline with asset values. In addition, periods of market decline and uncertainty tend to dampen client appetite for market and credit risk, a critical driver of transaction volumes and investment banking revenues, especially transactions with higher margins. Recently and in the past, decreased client appetite for risk has led to lower levels of activity and lower levels of profitability in Investment Bank. Deutsche Bank’s revenues and profitability could sustain material adverse effects from a significant reduction in the number or size of debt and equity offerings and merger and acquisition transactions.

Market downturns have also led and may in the future lead to declines in the volume of transactions that the bank executes for its clients and result in a decline in noninterest income. In addition, because the fees that the bank charges for managing clients’ portfolios are in many cases based on the value or performance of those portfolios, a market downturn that reduces the value of clients’ portfolios, or increases withdrawals, reduces the revenues the bank receives from Asset Management and Private Banking businesses. In 2023, Asset Management was impacted by the ongoing margin erosion in the asset management industry with a resulting effect on revenues. Even in the absence of a market downturn, below market or negative performance by Asset Management’s investment funds may result in increased withdrawals and reduced inflows, which would reduce Deutsche Bank’s revenues. While clients would be responsible for losses incurred in taking positions for their accounts, the bank may be exposed to additional credit risk and its need to cover the losses if the bank does not hold adequate collateral or cannot realize it. Deutsche Bank’s businesses may also suffer if clients lose money and lose confidence in Deutsche Bank’s products and services.

In addition, the revenues and profits Deutsche Bank earns from trading and investment positions and transactions in connection with them can be directly and negatively impacted by market prices. When Deutsche Bank owns assets, market price declines can expose the bank to losses. Many of the Investment Bank’s more sophisticated transactions are influenced by price movements and differences among prices. If prices move in a way not anticipated, the bank may experience losses. In addition, Deutsche Bank has committed capital and takes market risk to facilitate certain capital markets transactions; doing so can result in losses as well as income volatility. Such losses may especially occur on assets the bank holds which do not trade in very liquid markets. Assets that are not traded on stock exchanges or other public trading markets, such as derivatives contracts between banks without publicly quoted prices, may have values that the bank calculates using models. Monitoring the deterioration of prices of assets like these is difficult and could lead to losses the bank does not anticipate. Deutsche Bank can also be adversely affected if general perceptions of risk cause uncertain investors to remain on the sidelines of the market, curtailing clients’ activity and in turn reducing the levels of activity in those businesses dependent on transaction flow.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Deutsche Bank has a continuous demand for liquidity to fund its business activities and the bank’s liquidity may be impaired if the bank is unable to access secured and/or unsecured debt markets, access funds from subsidiaries or otherwise allocate liquidity optimally across businesses, sell assets or redeem investments, or experiences unforeseen outflows of cash or collateral. This situation may arise due to circumstances outside Deutsche Bank’s control, such as disruptions in the financial markets, including limited liquidity, defaults, non-performance or other adverse developments that affect financial institutions, transaction counterparties or other companies in the financial services sector, or circumstances specific to the bank, such as reluctance of counterparties or the market to finance the bank’s operations due to perceptions about potential outflows (including deposit outflows) resulting from litigation, regulatory and similar matters, actual or perceived weaknesses in its businesses, business model or strategy, as well as in Deutsche Bank’s resilience to counter negative economic and market conditions. If such situations occur, internal estimates of the bank’s available liquidity over the duration of a stressed scenario could at times be negatively impacted.

Additional liquidity risks, due to negative developments in the wider financial sector, may also occur from withdrawal of deposits not insured by deposit guarantee schemes or result in deposits moving into other investment products. Further, in times of economic uncertainty or market stress, the developments in digital banking will allow depositors to swiftly move funds digitally to other market participants, leading to a faster and larger scale of deposit outflows.

In addition to the above, negative views about the financial services industry in general can also affect Deutsche Bank. These perceptions could affect the prices at which Deutsche Bank could access the capital markets to obtain the necessary funding to support its business activities. Should these perceptions exist, continue or worsen, the bank’s ability to obtain financing on acceptable terms may be adversely affected. Such events could result in an inability to refinance assets on balance sheet or maintain appropriate levels of capital. To protect the bank’s market capital against deteriorations, the bank may be forced to liquidate assets it holds at depressed prices or on unfavorable terms, and to curtail businesses, such as the extension of new credit. This could have an adverse effect on Deutsche Bank’s business, financial condition and results of operations; along with the bank’s ability to refinance business activities in their respective currencies.

Rising interest rates increase the pressure on funding markets and impact the valuations of liquid assets. Higher interest rates could trigger a significant economic slowdown in Europe and the United States and could lead to a rise of defaults across corporates. Additionally, persistently high inflation and consumer price levels could lead to a decline in levels of deposits in Deutsche Bank’s core retail markets as consumers use their savings to compensate for higher expenses. This could foster price competition among banks for retail deposits increasing Deutsche Bank’s funding costs, as well as putting further pressure on the volume of Deutsche Bank’s retail deposits, which are one of the main funding sources for the bank.

Uncertain macroeconomic developments could negatively affect Deutsche Bank’s ability to transact foreign exchange (FX) trades due to volatility in the FX markets or if counterparties are concerned about the bank’s ability to fulfil agreed transaction terms and therefore seek to limit their exposure. Additionally, increased FX mismatches on the bank’s balance sheet may lead to increased collateral outflows if the euro (Deutsche Bank’s local currency) materially depreciates against other major currencies and may lead to difficulties to support liquidity needs in different currencies.

As part of emerging risks, digital payments and blockchain are assessed as areas which could impact the depth and volatility of market liquidity and funding and may temporarily impact cost of funding and thereby adversely affect profitability.

Liquidity risk could arise from lower value and marketability of Deutsche Bank’s High Quality Liquid Assets (HQLA), impacting the amount of proceeds available for covering cash outflows during a stress event. Additional haircuts may be incurred on top of already impaired asset values. Moreover, securities might lose their eligibility as collateral necessary for accessing central bank facilities, as well as their value in the repo/wholesale funding market. At the same time, the Group’s liquidity position may also be impaired in situations where its counterparty on, for example, a derivative contract is not current on an obligation to post collateral, in which case the bank has to cover for the shortfall through other means.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Any future credit rating downgrade to below investment grade could adversely affect funding costs and the willingness of counterparties to do business with Deutsche Bank and could impact aspects of the bank’s business model.

Deutsche Bank’s credit ratings have been upgraded in 2023 by Fitch, Morningstar (DBRS) and Standard & Poor's (S&P). Despite the recent upgrades, rating agencies regularly review the bank’s credit ratings, and such reviews could be negatively affected by a number of factors that can change over time, including the credit rating agency’s assessment of the bank’s strategy and management’s capability; financial condition including in respect of profitability, asset quality, capital, funding and liquidity; the level of political support for the industries in which the bank operates; the implementation of structural reform; the legal and regulatory frameworks applicable to the bank’s legal structure; business activities and the rights of the bank’s creditors; changes in rating methodologies; changes in the relative size of the loss-absorbing buffers protecting bondholders and depositors; the competitive environment, political and economic conditions in the bank’s key markets; and market uncertainty. In addition, credit ratings agencies are increasingly considering environmental, social and governance factors, including climate risk, as part of the credit ratings analysis, as are investors in their investment decisions.

A reduction in Deutsche Bank’s credit rating below investment grade, or a deterioration in the capital markets’ perception of its financial resilience could affect the bank’s access to money markets, reduce the size of the bank’s deposit base or trigger additional collateral or other requirements in derivatives contracts and other secured funding arrangements or the need to amend such arrangements, which could adversely affect the cost of funding and access to capital markets and could limit the range of counterparties willing to enter into transactions with the bank. This could in turn adversely impact Deutsche Bank’s competitive position and threaten its prospects in the short to medium-term.

Deutsche Bank may have difficulties selling businesses or assets at favorable prices or at all and may experience material losses from these assets and other investments irrespective of market developments.

Deutsche Bank seeks to sell or otherwise reduce its exposure to assets as part of its strategy to simplify and focus the business and to meet or exceed capital and leverage requirements, as well as to help the bank meet its return on tangible equity targets. Where the bank sells businesses, it may remain exposed to certain losses or risks under the terms of the sale contracts, and the process of separating and selling such companies or businesses may give rise to operating risks or other losses. Unfavorable business or market conditions may make it difficult for the bank to sell companies, businesses or assets at favorable prices, or may preclude a sale altogether.

Deutsche Bank may have difficulty in identifying, integrating and executing business combinations, and avoiding business combinations could materially harm the bank’s results of operations and share price.

Deutsche Bank considers business combinations from time to time. If the bank were to announce or complete a significant business combination, its share price or the share price of the combined entity could decline significantly if investors viewed the transaction as too costly, dilutive to existing shareholders or unlikely to improve its competitive position. Also, the need to revalue certain classes of assets at fair value in a business combination may make transactions infeasible. If Deutsche Bank decided to acquire an entity, it is generally not feasible to complete all aspects of a review for any business prior to completion of the business combination. As a result, the business combination may not perform as well as expected or the bank may fail to integrate the combined entity’s operations successfully. Failure to complete announced business combinations or failure to achieve the expected benefits of any such combination could materially and adversely affect profitability. Such failures could also affect investors’ perception of the business prospects and management, and thus cause the share price to fall. It could also lead to departures of key employees or lead to increased costs and reduced profitability if the bank offered key employees financial incentives to remain.

If Deutsche Bank avoids or is unable to enter into business combinations or if announced or expected transactions fail to materialize, market participants may perceive the bank negatively. The bank may also be unable to expand its businesses, especially into new business areas, as quickly or successfully as competitors if the bank does so through organic growth alone. These perceptions and limitations could cost the bank business and harm its reputation, which could have material adverse effects on the financial condition, results of operations and liquidity.

Intense competition, in Deutsche Bank’s home market of Germany as well as in international markets, has impacted and could continue to materially adversely impact revenues and profitability.

If the bank is unable to respond to the competitive environment with attractive product and service offerings that are profitable, the bank may lose market share or incur losses. In addition, downturns in the economies of these markets could add to the competitive pressure, for example, through increased price pressure and lower business volumes.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Risks Relating to Regulation and Supervision

Prudential reforms and heightened regulatory scrutiny affecting the financial sector continue to have a significant impact on Deutsche Bank, which may adversely affect its business and, in cases of non-compliance, could lead to regulatory sanctions against the bank, including prohibitions against the bank making dividend payments, share repurchases or payments on its regulatory capital instruments, or increasing regulatory capital and liquidity requirements.

Governments and regulatory authorities continue to work to enhance the resilience of the financial services industry against future crises through changes to the regulatory framework, in particular through the final implementation of the regulatory reform agenda outlined by the Basel Committee on Banking Supervision (Basel Committee) and, more recently, the envisaged transition towards sustainable economies.

As a core element of the reform of the regulatory framework, the Basel Committee developed and continues to refine a comprehensive set of rules regarding minimum capital adequacy and liquidity standards as well as other rules (known as “Basel III”) which apply to Deutsche Bank (as described further in “Item 4: Regulation and Supervision” of this report under “Highlights”). The ongoing implementation of the remaining outstanding proposals under Basel III has the potential to increase risk-weighted assets and will likely affect Deutsche Bank’s business by raising the bank’s regulatory capital and liquidity requirements and by leading to increased costs. Such requirements may be in addition to regulatory capital buffers that may also be increased or be in addition to those already imposed on Deutsche Bank and could materially increase the bank’s capital requirements.

Furthermore, Deutsche Bank’s prudential regulators, including the European Central Bank (the “ECB”) under the EU’s Single Supervisory Mechanism (the “SSM”), may conduct reviews of asset quality or internal risk models or otherwise conduct stress tests in accordance with the supervisory review and evaluation process (the “SREP”). Prudential regulators have discretion to impose capital surcharges on financial institutions for risks, including for litigation, regulatory and similar matters, that are not otherwise recognized in risk-weighted assets or other surcharges depending on the individual situation of the bank. Such adjustments may, for example, reflect additional risks posed by deficiencies in Deutsche Bank’s control environment, or come as a result of supervisory inspections concerning the treatment of specific products or transactions. One of these areas in focus of the ECB with regard to risk taking is leveraged lending, for which the ECB in March 2022 clarified their expectations for all banks under the SSM. The ECB announced that it intends to follow up on its expectations using a wide range of supervisory tools and to take measures in future SREP decisions for institutions which the ECB assesses as non-compliant with its expectations. The ECB may take or require other measures, such as restrictions on or changes to the business. In this context, the ECB may impose, and has imposed, individual capital requirements on Deutsche Bank resulting from the SREP (referred to as “Pillar 2 requirements”). Institutions must meet their Pillar 2 requirements with at least 75% of Tier 1 capital and at least 56.25% of CET 1 capital. Pillar 2 requirements must be fulfilled in addition to the statutory minimum capital and buffer requirements and any non-compliance may have immediate legal consequences such as restrictions on dividend payments.

Regulatory authorities have substantial discretion in how to regulate banks, and this discretion and the powers available to them have been steadily increasing over the years. Also, new regulation may be imposed on an ad-hoc basis by governments and regulators in response to ongoing or future crises (such as global pandemics or the climate emergency), which may especially affect financial institutions such as Deutsche Bank that are deemed to be systemically important.

Following the 2023 SREP, Deutsche Bank has been informed by the ECB of its decision regarding prudential capital requirements to be maintained from January 1, 2024, onwards, that Deutsche Bank’s Pillar 2 requirement will be 2.65% of RWA, of which at least 1.49% must be covered by CET 1 capital and 1.99% by Tier 1 capital.

The ECB is conducting its first-ever cyber resilience stress test in 2024. The exercise assesses how banks respond to and recover from a cyberattack, as opposed to simply looking at their ability to prevent it. Under the stress test scenario, a cyberattack successfully disrupts banks’ daily business operations. Banks will then test their response and recovery measures, including activating emergency procedures and contingency plans and restoring normal operations. The ECB has stated that this stress test is a predominantly qualitative exercise that will not have an impact on capital through the Pillar 2 guidance. Rather, the insights gained will be used for wider supervisory assessment and supervisors will discuss the findings and lessons learned with each bank as part of the next SREP. The main findings will be communicated in the summer of 2024.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

If Deutsche Bank fails to comply with regulatory requirements, in particular with statutory minimum capital requirements or Pillar 2 requirements, or if there are shortcomings in Deutsche Bank’s governance and risk management processes, competent regulators may prohibit the bank from making dividend payments to shareholders, distributions to holders of other regulatory capital instruments or require the Bank to take action which may impact its strategy, profitability, capital and liquidity profile. This could occur, for example, if the bank fails to make sufficient profits due to declining revenues, or as a result of substantial outflows due to litigation, regulatory and similar matters. Failure to comply with the quantitative and qualitative regulatory requirements could result in other forms of regulatory enforcement action being brought against Deutsche Bank, which may result in sanctions including fines. Such enforcement action could have a material adverse effect on Deutsche Bank’s current and future business, financial condition and results of operations, including Deutsche Bank’s ability to pay out dividends to shareholders or distributions on other regulatory capital instruments.

Please refer to “Item 4: Regulation and Supervision” of this report for further details on current regulation and supervision requirements applicable to Deutsche Bank.

Deutsche Bank is required to maintain increased capital and bail-inable debt (debt that can be bailed in resolution) and abide by tightened liquidity requirements. These requirements may significantly affect the bank’s business model, financial condition and results of operations, as well as the competitive environment generally. Any perceptions in the market that the bank may be unable to meet its capital or liquidity requirements with an adequate buffer, or that the bank should maintain capital or liquidity in excess of these requirements, or any other failure to meet these requirements, could intensify the effect of these factors on the business model and results of the bank.

As described above and as described further in “Item 4: Regulation and Supervision” of this report under “Capital Adequacy Requirements” and “Liquidity Requirements”, Deutsche Bank is, among other things, subject to increased capital and tightened liquidity requirements under applicable law, including additional capital buffer requirements. Further revisions, such as stricter rules on the measurement of risks, increased risk-weighted assets, and the corresponding capital demand for banks, as well as tightened liquidity requirements and the introduction of a binding leverage ratio (including the leverage ratio buffer) could affect the business model, financial conditions and results of operations of the bank. Furthermore, if Deutsche Bank fails to meet regulatory capital or liquidity requirements, the bank may become subject to enforcement actions. In addition, any requirement to maintain or increase liquidity could lead the bank to reduce activities that pursue revenue generation and profit growth.

In addition to such regulatory capital and liquidity requirements, Deutsche Bank is also required to maintain a sufficient amount of instruments which are eligible to absorb losses in resolution with the aim of ensuring that failing banks can be resolved without recourse to taxpayers’ money. These rules are referred to as “TLAC” (Total Loss Absorbing Capacity) and “MREL” (minimum requirement for own funds and eligible liabilities) requirements, as more fully described in “Item 4: Regulation and Supervision” of this report under “MREL Requirements”. The need to comply with these requirements may affect Deutsche Bank’s business, financial condition and results of operation and in particular may increase its financing costs.

Deutsche Bank may not have or may not be able to issue sufficient capital or other loss-absorbing liabilities to meet these increasing regulatory requirements. This could occur due to regulatory changes and other factors, such as the bank’s inability to issue new securities which are recognized as regulatory capital or loss-absorbing liabilities under the applicable standards, due to an increase of risk-weighted assets based on more stringent rules for the measurement of risks or as a result of a future decline in the value of the euro as compared to other currencies, due to stricter requirements for the compliance with the non-risk based leverage ratio, due to any substantial losses the bank may incur, which would reduce retained earnings, a component of CET 1 capital, or due to a combination of these or other factors.

If the bank is unable to maintain sufficient capital to meet the applicable minimum capital ratios, the buffer requirements, any specific Pillar 2 capital requirements, leverage ratio requirements, or TLAC or MREL requirements, the bank may become subject to enforcement actions and/or restrictions on the pay-out of dividends, share buybacks, payments on other regulatory capital instruments, and discretionary compensation payments. In addition, any requirement to increase risk-based capital ratios or the leverage ratio could lead the bank to adopt a strategy focusing on capital preservation and creation over revenue generation and profit growth, including the reduction of higher margin risk-weighted assets. If the bank is unable to increase its capital ratios to the regulatory minimum in such a case or by raising new capital through the capital markets, through the reduction of risk-weighted assets or through other means, the bank may be required to activate its group recovery plan. If these actions or other private or supervisory actions do not restore capital ratios to the required levels, and the bank is deemed to be failing or likely to fail, competent authorities may apply resolution powers under the Single Resolution Mechanism (SRM) and applicable rules and regulations, which could lead to a significant dilution of shareholders’ or even the total loss of the bank’s shareholders’ or creditors’ investment.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

In some cases, the bank is required to hold and calculate capital and to comply with rules on liquidity and risk management separately for its local operations in different jurisdictions, in particular in the United States.

Deutsche Bank is required to hold and calculate capital and to comply with rules on liquidity and risk management separately for its local operations in different jurisdictions. Federal Reserve Board rules set forth how the U.S. operations of certain foreign banking organizations (FBOs), such as Deutsche Bank, are required to be structured, as well as the enhanced prudential standards that apply to their U.S. operations. Under these rules, a large FBO with U.S.$ 50 billion or more in U.S. non-branch assets, such as Deutsche Bank, is required to establish or designate a separately capitalized top-tier U.S. intermediate holding company (an “IHC”) that would hold substantially all of the FBO’s ownership interests in its U.S. subsidiaries.

With the Federal Reserve Board’s prior approval, Deutsche Bank designated two IHCs: DB USA Corporation and DWS USA Corporation. DWS USA Corporation is a subsidiary of DWS Group GmbH & Co. KGaA, which is approximately 80% owned by Deutsche Bank and holds the bank’s Asset Management division and subsidiaries. Each IHC is subject, on a consolidated basis, to the risk-based and leverage capital requirements under the U.S. Basel III capital framework, capital planning and stress testing requirements, U.S. liquidity buffer requirements and other enhanced prudential standards comparable to those applicable to large U.S. banking organizations. The two IHCs are also subject to supplementary leverage ratio requirements, as well as requirements on the maintenance of TLAC and long-term debt. They, and Deutsche Bank’s principal U.S. bank subsidiary, Deutsche Bank Trust Company Americas (DBTCA), are also subject to liquidity coverage ratio and net stable funding ratio requirements. The Federal Reserve Board has the authority to examine an IHC, such as DB USA Corporation and DWS USA Corporation, and its subsidiaries, as well as U.S. branches and agencies of FBOs, such as Deutsche Bank’s New York branch.

Deutsche Bank AG is required under the Dodd-Frank Act to prepare and submit to the Federal Reserve Board and the Federal Deposit Insurance Corporation a resolution plan (the “U.S. Resolution Plan”) on a timeline prescribed by such agencies, alternating between filing a full plan and a targeted plan. The U.S. Resolution Plan must demonstrate that Deutsche Bank AG has the ability to execute a strategy for the orderly resolution of its designated U.S. material entities and operations. Deutsche Bank’s U.S. Resolution Plan describes the single point of entry strategy for Deutsche Bank’s U.S. material entities and operations and prescribes that DB USA Corporation would provide liquidity and capital support to its U.S. material entity subsidiaries and ensure their solvent wind-down outside of applicable resolution proceedings.

Deutsche Bank’s next full resolution plan submission is due on March 31, 2025. If the agencies were to jointly deem Deutsche Bank’s U.S. Resolution Plan not credible and Deutsche Bank failed to remediate any deficiencies in the required timeframe, these agencies could impose restrictions on Deutsche Bank or require the restructuring or reorganization of businesses, legal entities, operational systems and/or intra-company transactions which could negatively impact the bank’s operations and/or strategy. Additionally, the agencies could also subject Deutsche Bank to more stringent capital, leverage or liquidity requirements, or require Deutsche Bank to divest certain assets or operations.

DB USA Corporation and DWS USA Corporation are each subject, on an annual basis, to the Federal Reserve Board’s supervisory stress testing and capital plan requirements. DB USA Corporation and DWS USA Corporation are also subject to the Federal Reserve’s Comprehensive Capital Analysis and Review (CCAR), which is an annual supervisory exercise that assesses the capital positions and planning practices of large bank holding companies and IHCs. Following amendments in 2020, the CCAR process combines the CCAR quantitative assessment and the buffer requirements in the Federal Reserve Board’s capital rules to create an integrated capital buffer requirement. The amendments eliminated the quantitative and qualitative ‘pass/fail’ assessments from the CCAR and modified the static capital conservation buffer to incorporate an institution-specific stress capital buffer (“SCB”). The SCBs for DB USA Corporation and DWS USA Corporation based on the 2023 supervisory stress test results are 9.3% and 5.6%, respectively. These SCBs became effective October 1, 2023 and will remain in effect until September 30, 2024, at which point the size of the SCB for each of Deutsche Bank’s IHCs will be recalibrated based on the results of the 2024 stress tests, which are expected to be released in June 2024. Increases in the SCB may require the bank to increase capital or restructure businesses in ways that may negatively impact the bank’s operations and strategy.

U.S. rules and interpretations, including those described above, could cause the bank to reduce assets held in the United States, or to inject capital and/or liquidity into or otherwise change the structure of the bank’s U.S. operations, and could also restrict the ability of the U.S. subsidiaries to pay dividends or the amount of such dividends. To the extent that the bank is required to reduce operations in the United States or deploy capital or liquidity in the United States that could be deployed more profitably elsewhere, these requirements could have an adverse effect on the bank’s business, financial condition and results of operations.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

It is unclear whether the U.S. capital and other requirements described above, as well as similar developments in other jurisdictions, could lead to a fragmentation of supervision of global banks that could adversely affect the bank’s reliance on regulatory waivers allowing the bank to meet capital adequacy requirements, large exposure limits and certain organizational requirements on a consolidated basis only rather than on both a consolidated and non-consolidated basis. Should the bank no longer be entitled to rely on these waivers, the bank would have to adapt and take the steps necessary in order to meet regulatory capital requirements and other requirements on a consolidated as well as a non-consolidated basis, which could result also in significantly higher costs and potential adverse effects on the bank’s profitability and dividend paying ability.

Deutsche Bank’s regulatory capital and liquidity ratios and funds available for distributions on its shares or regulatory capital instruments will be affected by business decisions and, in making such decisions, the bank’s interests and those of the holders of such instruments may not be aligned, and the bank may make decisions in accordance with applicable law and the terms of the relevant instruments that result in no or lower payments being made on Deutsche Bank shares or regulatory capital instruments.

Deutsche Bank’s regulatory capital and liquidity ratios are affected by a number of factors, including decisions the bank makes relating to its business and operations as well as the management of its capital position, risk-weighted assets and balance sheet, and external factors, such as regulations regarding the risk weightings of the bank’s assets, commercial and market risks or the costs of its legal or regulatory proceedings. While the bank’s management is required to take into account a broad range of considerations in managerial decisions, including the interests of the bank as a regulated institution and those of its shareholders and creditors, particularly in times of weak earnings and increasing capital requirements, the regulatory requirements to build capital and liquidity may become paramount. Accordingly, in making decisions in respect of capital and liquidity management, the bank is not required to adhere to the interests of the holders of instruments issued that qualify for inclusion in regulatory capital, such as Deutsche Bank’s shares or Additional Tier 1 capital instruments. The bank may decide to refrain from taking certain actions, including increasing capital at a time when it is feasible to do so (through securities issuances or otherwise), even if failure to take such actions would result in a non-payment or a write-down or other recovery- or resolution-related measure in respect of any of the bank’s regulatory capital instruments. Deutsche Bank’s decisions could cause the holders of such regulatory capital instruments to lose all or part of the value of their investments in these instruments due to the effect on the bank’s regulatory capital ratios, and such holders will not have any claim against Deutsche Bank AG relating to such decisions, even if they result in a non-payment or a write-down or other recovery- or resolution-related measure in respect of such instruments it holds.

In addition, the annual profit and distributable reserves, which form an important part of the funds available to pay dividends on shares and make payments on other regulatory capital instruments, as determined in the case of each such instrument by its terms or by operation of law, are calculated on an unconsolidated basis generally in accordance with German accounting rules set forth in the Commercial Code (Handelsgesetzbuch). Any adverse change in Deutsche Bank’s financial prospects, financial position or profitability, or Deutsche Bank AG’s distributable reserves, each as calculated on an unconsolidated basis, may have a material adverse effect on the bank’s ability to make dividend or other payments on these instruments. In addition, as part of the implementation of Deutsche Bank’s strategy, it may record impairments that reduce the carrying value of subsidiaries on Deutsche Bank AG’s unconsolidated balance sheet and reduce profits and distributable reserves. Future impairments or other events that reduce profit or distributable reserves on an unconsolidated basis could lead the bank to be unable to make such payments in respect of future years in part or at all. In particular, the direct costs of Deutsche Bank’s potential settlements of litigation, enforcement and similar matters, especially to the extent in excess of provisions Deutsche Bank has established for them, and their related business impacts, if they occur, could impact such distributable amounts.

In addition, German law places limits on the extent to which annual profits and otherwise-distributable reserves, as calculated on an unconsolidated basis, may be distributed to shareholders or the holders of other regulatory capital instruments, such as Additional Tier 1 capital instruments. The bank’s management also has, subject to applicable law, broad discretion under the applicable accounting principles to influence all amounts relevant for calculating funds available for distribution. Such decisions may impact the ability to make dividend or other payments under the terms of the bank’s regulatory capital instruments.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

If resolvability or resolution measures were imposed on Deutsche Bank in accordance with European and German legislation, Deutsche Bank’s business operations could be significantly affected. Any such measures could lead to losses for shareholders and creditors of the bank.

Germany participates in the SRM, which centralizes at a European level the key competences and resources for managing the failure of any bank in member states of the European Union participating in the banking union. The SRM Regulation and the German Recovery and Resolution Act (Sanierungs- und Abwicklungsgesetz), which implemented the EU Bank Recovery and Resolution Directive in Germany, require the preparation of recovery and resolution plans for banks and grant broad powers to public authorities to intervene in a bank which is failing or likely to fail. Resolution measures that could be imposed upon a bank in resolution may include the transfer of shares, assets or liabilities of the bank to another legal entity, the reduction, including to zero, of the nominal value of shares, the dilution of shareholders or the cancellation of shares outright, or the amendment, modification or variation of the terms of the bank’s outstanding debt instruments, for example by way of a deferral of payments or a reduction of the applicable interest rate. Furthermore, certain eligible unsecured liabilities, in particular certain senior “non-preferred” debt instruments specified by the German Banking Act, may be written down, including to zero, or converted into equity (commonly referred to as “bail-in”) if the bank becomes subject to resolution.

Resolution laws are also intended to eliminate, or reduce, the need for public support of troubled banks. Therefore, financial public support for such banks, if any, would be used only as a last resort after having assessed and exploited, to the maximum extent practicable, the resolution powers, including a bail-in. The taking of measures by the competent authority to remove impediments to resolvability could materially affect the bank’s business operations. Resolution actions could furthermore lead to a significant dilution of shareholders or even the total loss of shareholders’ or creditors’ investment.

Other regulatory reforms that have been adopted or proposed – for example, extensive new regulations governing derivatives activities, compensation, bank levies, deposit protection and data protection – may materially increase Deutsche Bank’s operating costs and negatively impact its business model.

Beyond capital requirements and the other requirements discussed above, Deutsche Bank is affected, or expect to be affected, by various additional regulatory reforms, including, among other things, regulations governing its derivatives activities, compensation, bank levies, deposit protection and data protection.

Under the EU Regulation on over-the-counter (OTC) derivatives, central counterparties and trade repositories, referred to as European Market Infrastructure Regulation (EMIR) banks and other covered institutions must abide by certain requirements, including clearing obligations for certain classes of OTC derivatives and various reporting and disclosure obligations. Following a targeted review of EMIR which concluded in January 2023, certain changes to such EMIR requirements are currently being contemplated by the European Commission and the European Parliament, including the introduction of requirements for counterparties subject to clearing obligations to maintain active accounts at EU central counterparties. The implementation of any such future EMIR requirements may negatively impact Deutsche Bank’s profit margins.

Deutsche Bank is subject to restrictions on compensation including caps on bonuses that may be awarded to “material risk takers” and other employees as defined therein and in the German Banking Act and other applicable rules and regulations such as the Remuneration Regulation for Institutions (Institutsvergütungsverordnung). Such restrictions on compensation, whether by law or pursuant to any guidelines issued by the EBA to further implement them, could put the bank at a disadvantage to its competitors in attracting and retaining talented employees, especially compared to those outside the European Union that are not subject to these caps and other constraints.

Bank levies are provided for in some countries including, among others, Germany and the United Kingdom. Deutsche Bank paid € 528 million for bank levies in 2023, € 762 million in 2022 and € 553 million in 2021. Also, the bank is required to contribute substantially to the Single Resolution Fund under the SRM (which is intended to reach by the end of 2023 a target level of 1% of insured deposits of all banks in member states participating in the SRM) and the statutory deposit guarantee and investor compensation schemes under the recast European Union directive on deposit guarantee schemes (DGS Directive) and the European Union directive on investor compensation schemes. The bank does not anticipate making contributions to the Single Resolution Fund in 2024. However, the bank acknowledges the inherent risk of this assumption and will closely monitor developments that may impact its financial obligations to the Single Resolution Fund.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

The DGS Directive defines a 0.8% target level of prefunding by July 3, 2024 (similar to resolution funds), which has significantly increased the costs of the statutory deposit protection scheme. Deutsche Bank also participates in the voluntary deposit protection provided by the private banks in Germany through the Deposit Protection Fund (Einlagensicherungsfonds) which is funded through contributions by its members. While the total impact of future levies cannot currently be quantified, there could also be certain market conditions or events that give rise to higher-than-expected contributions required by members, which could have a material adverse effect on the bank’s business, financial condition and results of operations in future periods. Failure of banks, resolution measures and a decline of the value of the assets held by the SRM by the relevant DGS can cause an increase of contributions in order to replenish the shortfall.

In addition, Deutsche Bank may be impacted by future decisions made by the Court of Justice of the EU in regard to the terms and conditions related to irrevocable payment commitments to the Single Resolution Fund. If a ruling by the court is deemed to have a negative impact on the current accounting treatment of such irrevocable payment commitments, this could result in an accounting loss and have a material adverse effect on the bank’s results of operations.

Deutsche Bank is subject to the General Data Protection Regulation (GDPR) which has increased its regulatory obligations in connection with the processing of personal data, including requiring compliance with the GDPR’s data protection principles, the increased number of data subject rights and strict data breach notification requirements. The GDPR grants broad enforcement powers to supervisory authorities, including the potential to levy significant fines for non-compliance and provides for a private right of action for individuals who are affected by a violation of the GDPR. Compliance with the GDPR requires investment in appropriate technical and organizational measures and the bank may be required to devote significant resources to data protection on an ongoing basis. In the event that the bank is found to have not met the standards required by the GDPR, the bank may incur damage to its reputation and the imposition by data protection supervisory authorities of significant fines or restrictions on its ability to process personal data, and the bank may be required to defend claims for compensation brought by affected individuals, all of which could have a material adverse effect on the bank.

More generally, there continues to be scrutiny from both EU and non-EU authorities over financial services firms’ compliance with AML and CTF rules, which has led to a number of regulatory proceedings, criminal prosecutions and other enforcement action against firms in various jurisdictions.

Risks Relating to the Bank’s Internal Control Environment

A robust and effective internal control environment and adequate infrastructure (comprising people, policies and procedures, controls testing and IT systems) are necessary to enable Deutsche Bank to conduct its business in compliance with the laws, regulations and associated supervisory expectations applicable to the bank. The bank has identified the need to strengthen its internal control environment and infrastructure and has been required to do so in certain areas by its regulators. The bank has undertaken initiatives to accomplish this. If these initiatives are not successful or proceed too slowly, Deutsche Bank’s reputation, regulatory position and financial condition may be materially adversely affected, and its ability to achieve the bank’s strategic ambitions may be impaired.

Deutsche Bank’s businesses are highly dependent on its ability to maintain a robust and effective internal control environment. This is needed for the bank to process and monitor, on a daily basis, a wide variety of transactions, many of which are highly complex and occur at high speeds, volumes and frequencies, and across numerous and diverse markets and currencies. Such a robust and effective control environment is in turn dependent on the sufficiency of the bank’s infrastructure to support that environment. This infrastructure consists broadly of internal policies and procedures, testing protocols, and the IT systems and employees needed to enforce and enable them. An effective control environment is dependent on infrastructure systems and procedures that cover the processing and settling of transactions; the valuation of assets; the identification, monitoring, aggregation, measurement and reporting of risks and positions against various metrics; the evaluation of counterparties and customers for legal, regulatory and compliance purposes; the escalation of reviews; and the taking of mitigating and remedial actions where necessary. They are also critical for regulatory reporting and other data processing and compliance activities.

Both the internal control environment and the infrastructure that underlies it fall short in a number of areas of Deutsche Bank’s standards for completeness and comprehensiveness and are not well integrated across the bank. The bank’s IT infrastructure, in particular, is fragmented, with numerous distinct platforms, many of which need significant upgrades, in operation across the bank. The bank’s business processes and the related control systems often require manual procedures and actions that increase the risks of human error and other operational problems that can lead to delays in reporting information to management and to the need for more adjustments and revisions than would be the case with more seamlessly integrated and automated systems and processes. As a result, it is often difficult and labor-intensive for the bank to obtain or provide information of a consistently high quality and on a timely basis to comply with regulatory reporting and other compliance requirements or to meet regulatory expectations on a consistent basis and, in certain cases, to manage the bank’s risk comprehensively. Furthermore, it often takes intensive efforts to identify, when possible, inappropriate behavior by staff and attempts by third parties to misuse the bank’s services as a conduit for prohibited activities, including those relating to anti-financial crime laws and regulation.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

In addition, Deutsche Bank may not always have the personnel with the appropriate experience, seniority and skill levels to compensate for shortcomings in its processes and infrastructure, or to identify, manage or control risks, and it often has been difficult to attract and retain the requisite talent. This has impacted the bank’s ability to remediate existing weaknesses and manage the risks inherent in its activities. Additionally, attrition in positions key to improving the bank’s control environment remains a risk. Furthermore, engagement of third-party service providers may not be sufficient to address the bank’s staffing issues in these areas or the underlying shortcomings themselves.

Against this backdrop, regulators, the Management Board and the Group Audit function have increasingly and more intensively focused on internal controls and infrastructure through numerous formal reviews and audits of the bank’s operations. These reviews and audits have identified various areas for improvement relating to a number of elements of the bank’s control environment and infrastructure. These include the infrastructure relating to transaction capturing and recognition, classification of assets, asset valuation frameworks, models, data and process consistency, information security, software license management, payment services, risk identification, measurement and management and other processes required by laws, regulations, and supervisory expectations. They also include regulatory reporting, anti-money laundering (AML), transaction monitoring, “know-your-customer” (KYC), sanctions and embargoes, market conduct and other internal processes that are aimed at preventing use of the bank’s products and services for the purpose of committing or concealing financial crime.

The bank’s principal regulators, including the BaFin, the ECB, the UK Prudential Regulation Authority and the Federal Reserve Board, have also conducted numerous reviews focused on the bank’s internal controls and the related infrastructure. These regulators have required the bank formally commit to remediate its AML and other weaknesses, including the fragmented and manual nature of its infrastructure. In addition, local regulators in other countries in which the bank does business also review the adequacy of the bank’s control environment and infrastructure with respect to their jurisdictions. While the overall goals of the various prudential regulators having authority over the bank in the many places in which it does business are broadly consistent, and the general themes of deficiencies in internal controls and the supporting infrastructure are similar, the regulatory frameworks applicable to the bank in the area of internal controls are generally applicable at a national or EU-wide level and are not always consistent across the jurisdictions in which the bank operates around the world. This adds complexity and cost to its efforts to reduce fragmentation and put in place automated systems that communicate seamlessly and quickly with one another.

In order to improve in the areas discussed above, the bank has been undertaking several major initiatives to enhance the efficacy of the transaction processing environment, strengthen its controls and infrastructure, manage non-financial risks and enhance the skill set of personnel. Deutsche Bank believes that these initiatives will better enable it to avoid the circumstances that have resulted in many of the litigations and regulatory and enforcement investigations and proceedings to which the bank has been subject, and will improve its ability to comply with laws and regulations and meet supervisory expectations. In particular, the bank has been making efforts to reduce the complexity of the bank’s business and to integrate and automate processes and business and second-line controls. The bank has also exited certain businesses and high-risk countries, selectively off-boarded a number of clients and worked to strengthen its compliance culture and control functions. However, the bank may be unable to complete these initiatives as quickly as it intends or regulators demand, and its efforts may be insufficient to remediate existing deficiencies and prevent future deficiencies or to result in fewer litigations or regulatory and enforcement investigations, proceedings and criticism in the future. The bank may also, when faced with the considerable expense of these initiatives, fail to provide sufficient resources for them quickly enough or at all or underestimate the extent of resource requirements.

The bank’s remediation efforts and progress on achieving significant and durable improvements in the areas discussed above, may result in regulatory action if regulators deem progress to be insufficient or too slow. If the bank is unable to improve its infrastructure and control environment in a timely manner, the bank may be subject to fines or penalties, as well as to regulatory intervention in aspects of its businesses. For example, the bank might feel pressure or be required by regulators to reduce its exposure to or terminate certain kinds of products or businesses, counterparties or regions, which could, depending on the extent of such requirement, significantly challenge its ability to operate profitably under the current business model.

Regulators can also impose capital surcharges, requiring capital buffers in addition to those directly required under the regulatory capital rules applicable to the bank, to reflect the additional risks posed by deficiencies in its control environment. In extreme cases, regulators can suspend the bank’s permission to operate in the businesses and regions within their jurisdictions or require extensive and costly remedial actions. Furthermore, implementation of enhanced infrastructure and controls may result in higher-than-expected costs of regulatory compliance that could offset or exceed efficiency gains or significantly affect the bank’s profitability. Any of these factors could affect the bank’s ability to implement its strategy in a timely manner or at all.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

The BaFin has ordered the bank to improve its control and compliance infrastructure relating to anti-money laundering and know-your-client processes and appointed a special representative to monitor these measures’ implementation. Deutsche Bank’s results of operations, financial condition and reputation could be materially and adversely affected if the bank is unable to significantly improve its infrastructure and control environment by the set deadline.

The BaFin ordered Deutsche Bank in September 2018 to take appropriate internal safeguards and comply with general due diligence obligations to prevent money laundering and terrorist financing, in February 2019 to review its group-wide risk management processes in correspondent banking and adjust them where necessary, and in April 2021 to adopt further appropriate internal safeguards and comply with due diligence obligations, with regards to regular client file reviews. This expansion also applies to correspondent relationships and transaction monitoring. In 2023, BaFin ordered Deutsche Bank to adhere to its self-imposed remediation deadlines. Although no new obligations or findings were raised against Deutsche Bank, BaFin may impose financial penalties in case of non-compliance with these measures. The BaFin extended for an additional six months until the end of October 2024 the assignment of the special representative who has been appointed to monitor the implementation of the ordered measures as well as to assess and report on the progress of the implementation to the BaFin.

The bank’s AML and KYC processes and controls aimed at preventing misuse of its products and services to commit financial crime, continue to be subject of regulatory reviews, investigations, and enforcement actions in several jurisdictions. The bank continually seeks to enhance the efficacy of its internal control environment and improve its infrastructure to revised regulatory requirements and to close gaps identified by the bank and/or by regulators and monitors.

If Deutsche Bank is unable to significantly improve its infrastructure and control environment by the set deadlines, the bank’s results of operations, financial condition and reputation could be materially and adversely affected. Regulators can impose fines or require the bank to reduce its exposure to or terminate certain kinds of products or businesses or relationships with counterparties or regions. The bank may also face additional legal proceedings, investigations or regulatory actions in the future, including in other jurisdictions with material impact on the bank´s business and profitability. These could, depending on the extent of any resulting requirements, significantly challenge the bank’s reputation and its ability to operate profitably under its current business model.

Risks Relating to Cybersecurity

Cybersecurity threats such as the risk of breaches in confidentiality, integrity, or availability of Deutsche Bank’s or its clients’ information, or breaches of the security of third-party computer systems could adversely affect the bank’s ability to conduct its business, result in reputational damage, increase legal and regulatory risk and cause financial loss. Breaches can occur due to unauthorized access to networks or resources, computer viruses or malware, or other forms of cybersecurity attacks or incidents, including regulatory, geopolitical, operational, and third-party risk.

Deutsche Bank may face operational risks arising from failures in the control environment, including errors in the performance of processes or security controls, as well as loss of data, which may disrupt business and lead to material losses. At the same time, the bank may also face risks of material losses or reputational damage, if services are not provided as agreed, or in line with internal standards, which could result in regulatory penalties and financial losses. Cyberattacks could impact Deutsche Bank both directly and indirectly including impacts from third parties.

The increasing frequency and sophistication of recent cyberattacks has resulted in an elevated risk profile for many organizations around the world including Deutsche Bank. Significant attention by the bank’s management has been paid to the overall level of preparedness against such attacks. Cybersecurity continues as a focus area due to factors such as the continued and increasing reliance on the bank’s technology environment, as well as potential risks arising from the need for digital innovation, such as the usage of public cloud services, artificial intelligence, or quantum computing.

The technological advancements also pose demands on data privacy, security, and other information security risks. As the use of artificial intelligence becomes widespread, there are also increased risks to cybersecurity: denial of service, the criminal use of deepfakes, and more sophisticated social engineering attacks. Cybercrime groups may have the capability to use machine learning techniques to automate the deployment and operation of malware campaigns.

Financially motivated and other sophisticated cyberattacks, including ransomware, can be observed as persistent threats across industries and are expected to become more frequent. Additional threats are posed by supply chain attacks, an increasing frequency of critical software vulnerabilities potentially exploited by threat actors (zero-day exploits), and an expanding threat surface introduced by, for example, remote ways of working or the usage of cloud services.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Deutsche Bank experienced attacks on computer systems, including attacks aimed at obtaining unauthorized access to confidential company or client information, damaging, or interfering with company data, resources, or business activities, or otherwise exploiting vulnerabilities in its infrastructure, including attacks that occurred at the bank’s third-party providers. In 2023, the bank did not experience any material effect on its business strategy, results of operations, or financial condition as a result of an information security incident, including an attempted cyberattack. Deutsche Bank expects to continue to be the target of such attacks in the future and may not be able to effectively anticipate or prevent more material attacks from occurring in the future.

As a result, cyberattacks could lead to technology failures, security breaches, unauthorized access, unavailability of services, data loss, data destruction, and the inaccessibility of data and/or systems. This includes internal and third-parties information technology systems. A successful cyberattack could have a significant negative impact on the bank that may result in the disclosure or misuse of client as well as proprietary information, damage to or inability to access information technology systems, financial losses, remediation costs (such as for investigation and reestablishing services), increased cybersecurity costs (such as for additional personnel, technology, or third-party vendors), personal data breach notification obligations, reputational damage, client dissatisfaction and potential regulatory penalties or litigation exposure.

Risks Relating to Litigation, Regulatory Enforcement Matters, Investigations and Tax Examinations

Deutsche Bank operates in a highly and increasingly regulated and litigious environment, potentially exposing the bank to liability and other costs, the amounts of which may be substantial and difficult to estimate, as well as to legal and regulatory sanctions and reputational harm.

The financial services industry is among the most highly regulated industries. The bank’s operations throughout the world are regulated and supervised by the central banks and regulatory authorities in the jurisdictions in which it operates. In recent years, regulation and supervision in a number of areas has increased, and regulators, law enforcement authorities, governmental bodies and others have sought to subject financial services providers to increasing oversight and scrutiny, which in turn has led to additional regulatory investigations or enforcement actions which are often followed by civil litigation. There has been a steep escalation in the severity of the terms which regulatory and law enforcement authorities have required to settle legal and regulatory proceedings against financial institutions, with settlements in recent years including unprecedented monetary penalties as well as criminal sanctions. As a result, it may continue to be subject to increasing levels of liability and regulatory sanctions, and may be required to make greater expenditures and devote additional resources to addressing these liabilities and sanctions. Regulatory sanctions may include status changes to local licenses or orders to discontinue certain business practices.

The bank and its subsidiaries are involved in various litigation proceedings, including civil class action lawsuits, arbitration proceedings and other disputes with third parties, as well as regulatory proceedings and investigations by both civil and criminal authorities in jurisdictions around the world. The bank expects that the costs arising from the resolution of litigation, enforcement and similar matters pending against the bank to continue to be significant in the near to medium term and to adversely affect its business, financial condition and results of operations. Litigation and regulatory matters are subject to many uncertainties, and the outcome of individual matters is not predictable with assurance. The bank may settle litigation or regulatory proceedings prior to a final judgment or determination of liability. The bank may do so for a number of reasons, including to avoid the cost, management efforts or negative business, regulatory or reputational consequences of continuing to contest liability, even when the bank believes it has valid defenses to liability. The bank may also do so when the potential consequences of failing to prevail would be disproportionate to the costs of settlement. Furthermore, it may, for similar reasons, reimburse counterparties for their losses even in situations where the bank does not believe it is compelled to do so. The financial impact of legal risks might be considerable but may be difficult or impossible to estimate and to quantify, so that amounts eventually paid may exceed the amount of provisions made or contingent liabilities assessed for such risks.

Actions currently pending against Deutsche Bank or its current or former employees may not only result in judgments, settlements, fines or penalties, but may also cause substantial reputational harm to the bank. The risk of damage to the bank’s reputation arising from such proceedings is also difficult or impossible to quantify.

Regulators have increasingly sought admissions of wrongdoing in connection with settlement of matters brought by them. This could lead to increased exposure in subsequent civil litigation or in consequences under so-called "bad actor" laws, in which persons or entities determined to have committed offenses under some laws can be subject to limitations on business activities under other laws, as well as adverse reputational consequences. In addition, the U.S. Department of Justice (DOJ) conditions the granting of cooperation credit in civil and criminal investigations of corporate wrongdoing on the company involved having provided to investigators all relevant facts relating to the individuals responsible for the alleged misconduct. This policy may result in increased fines and penalties if the DOJ determines that that bank has not provided sufficient information about applicable individuals in connection with an investigation. Other governmental authorities could adopt similar policies.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

In addition, the financial impact of legal risks arising out of matters similar to some of those the bank faces have been very large for a number of participants in the financial services industry, with fines and settlement payments greatly exceeding what market participants may have expected and, as noted above, escalating steeply in recent years to unprecedented levels. The experience of others, including settlement terms, in similar cases is among the factors the bank takes into consideration in determining the level of provisions the bank maintains in respect of these legal risks. Developments in cases involving other financial institutions in recent years have led to greater uncertainty as to the predictability of outcomes and could lead the bank to add provisions. Moreover, the costs of the bank’s investigations and defenses relating to these matters are themselves substantial. Further uncertainty may arise as a result of a lack of coordination among regulators from different jurisdictions or among regulators with varying competencies in a single jurisdiction, which may make it difficult for the bank to reach concurrent settlements with each regulator. Should the bank be subject to financial impacts arising out of litigation and regulatory matters to which the bank is subject in excess of those it has calculated in accordance with its expectations and the relevant accounting rules, provisions in respect of such risks may prove to be materially insufficient to cover these impacts. This could have a material adverse effect on the bank’s results of operations, financial condition or reputation as well as on the bank’s ability to maintain capital, leverage and liquidity ratios at levels expected by market participants and regulators. In such an event, the bank could find it necessary to reduce its risk-weighted assets (including on terms disadvantageous to the bank) or substantially cut costs to improve these ratios, in an amount corresponding to the adverse effects of the provisioning shortfall.

Deutsche Bank is currently involved in civil proceedings in connection with its voluntary takeover offer for the acquisition of all shares of Postbank. The extent of the bank’s financial exposure to this matter could be material, and the bank’s reputation may be harmed.

On September 12, 2010, Deutsche Bank announced the decision to make a voluntary takeover offer for the acquisition of all shares in Deutsche Postbank AG (Postbank). On October 7, 2010, the bank published its official takeover offer and offered Postbank shareholders a consideration of € 25 for each Postbank share. This offer was accepted for a total of approximately 48.2 million Postbank shares.

In November 2010, a former shareholder of Postbank, Effecten-Spiegel AG, which had accepted the takeover offer, brought a claim against Deutsche Bank alleging that the offer price was too low and was not determined in accordance with the applicable German laws. The plaintiff alleges that Deutsche Bank had been obliged to make a mandatory takeover offer for all shares in Postbank, at the latest, in 2009, as the voting rights of Deutsche Post AG in Postbank had to be attributed to Deutsche Bank pursuant to Section 30 of the German Takeover Act. Based thereon, the plaintiff alleges that the consideration offered by Deutsche Bank for the share in Postbank in the 2010 voluntary takeover offer needed to be raised to € 57.25 per share.

The Regional Court Cologne (Landgericht) dismissed the claim in 2011 and the Cologne appellate court dismissed the appeal in 2012. The Federal Court set this judgment aside and referred the case back to the Cologne appellate court to take evidence on certain allegations of the plaintiff.

Starting in 2014, additional former shareholders of Postbank, who accepted the 2010 tender offer, brought similar claims as Effecten-Spiegel AG against Deutsche Bank which were pending with the Regional Court Cologne and the Higher Regional Court of Cologne, respectively. On October 20, 2017, the Regional Court Cologne handed down a decision granting the claims in a total of 14 cases which were combined in one proceeding. The Regional Court Cologne took the view that Deutsche Bank was obliged to make a mandatory takeover offer already in 2008 so that the appropriate consideration to be offered in the takeover offer should have been € 57.25 per Postbank share (instead of € 25). The additional consideration per share owed to shareholders which have accepted the takeover offer would thus amount to € 32.25. Deutsche Bank appealed this decision to the Higher Regional Court of Cologne.

On December 16, 2020, the Higher Regional Court of Cologne handed down a decision and fully dismissed the claims of Effecten-Spiegel AG. Further, in a second decision handed down on December 16, 2020, the Higher Regional Court Cologne granted the appeal of Deutsche Bank against the decision of the Regional Court Cologne dated October 20, 2017, and dismissed all claims of the plaintiffs. All relevant plaintiffs lodged appeals with the German Federal Court (Bundesgerichtshof) which on December 13, 2022, announced its decision, setting aside the judgments of the Higher Regional Court of Cologne and remanding the cases back to the Higher Regional Court of Cologne. The Higher Regional Court of Cologne scheduled a hearing for April 26, 2024.

Shortly before the end of 2017, the bank was served with a large number of additional lawsuits, almost all of which are now pending with the Regional Court Cologne. Some of the new plaintiffs allege that the consideration offered by Deutsche Bank for the shares in Postbank in the 2010 voluntary takeover should be raised to € 64.25 per share.

The claims for payment against Deutsche Bank in relation to these matters total almost € 700 million (excluding interest, which is significant due to the long duration of the proceedings).

	Deutsche Bank
	Annual Report 2023 on Form 20-F

The legal question of whether Deutsche Bank was obliged to make a mandatory takeover offer for all Postbank shares prior to its 2010 voluntary takeover may also impact two pending appraisal proceedings (Spruchverfahren). These proceedings were initiated by former Postbank shareholders with the aim to increase the cash compensation offered in connection with the squeeze-out of Postbank shareholders in 2015 and the cash compensation offered and annual compensation paid in connection with the execution of a domination and profit and loss transfer agreement (Beherrschungs- und Gewinnabführungsvertrag) between DB Finanz-Holding AG (now DB Beteiligungs-Holding GmbH) and Postbank in 2012.

The applicants in the appraisal proceedings claim that a potential obligation of Deutsche Bank to make a mandatory takeover offer for Postbank at an offer price of € 57.25 should be decisive when determining the adequate cash compensation in the appraisal proceedings. The Regional Court Cologne had originally followed this legal view of the applicants in two resolutions. In a decision dated June 2019, the Regional Court Cologne expressly gave up this legal view in the appraisal proceedings in connection with execution of a domination and profit and loss transfer agreement. According to this decision, the question whether Deutsche Bank was obliged to make a mandatory offer for all Postbank shares prior to its voluntary takeover offer in 2010 shall not be relevant for determining the appropriate cash compensation. It is likely that the Regional Court Cologne will take the same legal position in the appraisal proceedings in connection with the squeeze-out. On October 1, 2020 the Regional Court Cologne handed down a decision in the appraisal proceeding concerning the domination and profit and loss transfer agreement (dated December 5, 2012) according to which the annual compensation pursuant to Section 304 of the German Stock Corporation Act (jährliche Ausgleichszahlung) shall be increased by € 0.12 to € 1.78 per Postbank share and the settlement amount pursuant to Section 305 of the German Stock Corporation Act (Abfindungsbetrag) shall be increased by € 4.56 to € 29.74 per Postbank share. The increase of the settlement amount is of relevance for approximately 492,000 former Postbank shares whereas the increase of the annual compensation is of relevance for approximately 7 million former Postbank shares. Deutsche Bank as well as the applicants have lodged an appeal against this decision.

The extent of the bank’s financial exposure to these matters could be material and the bank’s reputation may be harmed.

Deutsche Bank is currently the subject of industry-wide inquiries and investigations by regulatory and law enforcement authorities relating to transactions of clients in German shares around the dividend record dates for the purpose of obtaining German tax credits or refunds in relation to withholding tax levied on dividend payments (so-called cum-ex transactions). In addition, the bank is exposed to potential tax liabilities and to the assertion of potential civil law claims by third parties, e.g., former counterparties, custodian banks, investors and other market participants, including as a consequence of criminal judgements in criminal proceedings in which the bank is not directly involved. The eventual outcome of these matters is unpredictable and may materially and adversely affect the bank’s results of operations, financial condition and reputation.

The Public Prosecutor in Cologne (Staatsanwaltschaft Köln, “CPP”) has been conducting a criminal investigation since August 2017 concerning two former employees of Deutsche Bank in relation to cum-ex transactions of certain former clients of the bank. In October 2022, the CPP conducted a search at Deutsche Bank’s offices in Frankfurt and Eschborn. Based on the search warrant the CPP expanded the scope of the investigation. Current and former Deutsche Bank employees and seven former Management Board members are included in the investigation. The investigation is still at an early stage and the scope of the investigation may be further broadened. Deutsche Bank is a potential secondary participant pursuant to Section 30 of the German Law on Administrative Offences in this proceeding. This proceeding could result in a disgorgement of profits and fines. Deutsche Bank is cooperating with the CPP. It is difficult to predict how the proceeding will further develop.

In 2021, the CPP opened a criminal investigation proceeding in relation to cum-ex transactions against unknown former personnel of Sal. Oppenheim jr. & Cie. AG & Co. KGaA (Sal. Oppenheim). There is a risk that the proceedings could lead to a formal indictment and criminal prosecution of accused individuals. There is also a risk that Deutsche Bank and/or Deutsche Oppenheim Family Office AG (DOAG), the bank’s subsidiary that is the legal successor of Sal. Oppenheim, could be included in criminal court proceedings as a secondary participant or a party subject to criminal confiscation ( Einziehungsbeteiligte ).

On July 12, 2023, Deutsche Bank as legal successor of Deutsche Postbank AG was informed by the CPP that the CPP has opened a new separate criminal cum/ex investigation against unnamed personnel of former Deutsche Postbank AG.

Ongoing media attention surrounding the cum-ex topic as well as any future criminal judgement that is unfavorable to the bank could create reputational risks. The imposition of fines and the disgorgement of profits or criminal confiscations could have a material adverse effect on the bank’s financial condition or results of operations.

The bank is further exposed to the assertion of potential tax and civil law recourse and compensation claims by German tax authorities and third parties.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

In regard to civil law claims, The Bank of New York Mellon SA/NV (BNY) – as a parent of two companies acting as depot bank and fund administrator which Deutsche Bank acquired in 2010 and sold to BNY later that year – has informed Deutsche Bank of its intention to assert indemnification claims under a contractual tax indemnity provision for potential cum-ex related tax liabilities incurred by these companies. BNY estimated the potential tax liability to be up to € 120 million (excluding interest of 6% per annum). In late 2020, counsel to BNY informed Deutsche Bank that certain BNY entities (among others) have received notices from tax authorities regarding the estimated amount with respect to cum-ex related trades by certain investment funds in 2009 and 2010. BNY has filed objections against the notices. Following receipt of payment orders from tax authorities in the amount of € 118.3 million in relation to the investment funds and after consultation with Deutsche Bank, BNY paid € 53.6 million to tax authorities. A further € 50.9 million were paid by third parties. In addition, BNY received a notice and payment request for penalty interest (Hinterziehungszinsen) in the amount of € 11.6 million from the Frankfurt Tax Office regarding one of the investment funds. BNY, after consultation with Deutsche Bank, applied for a suspension of enforcement (Aussetzung der Vollziehung) regarding the payment request which is now pending at the Fiscal Court of Hesse (Hessisches Finanzgericht).

In December 2023, Deutsche Bank received hearing letters from the German Federal Tax Office ( Bundeszentralamt für Steuern) regarding two third party investment funds that engaged in cum-ex trades in 2009. Deutsche Bank had provided services and financing to investors in the funds. Both funds received an aggregate of € 87 million in cum-ex withholding tax refunds in 2009.

The risks arising from the cum-ex topic are difficult to quantify and the likelihood of these risks materializing is hard to predict. In the event that Deutsche Bank is eventually liable under the civil law claims already asserted or under claims that will potentially be asserted by third parties in the future, this may materially and adversely affect the bank’s financial condition or results of operations.

Deutsche Bank has entered into a deferred prosecution agreement (DPA) with the DOJ concerning its historical engagements of finders and consultants and precious metals spoofing. If the bank violates the DPA, its term could be extended, or the bank could be subject to criminal prosecution or other actions, any of which could result in additional fines, penalties, settlements, payments or other materially adverse impacts to the bank.

On January 8, 2021, Deutsche Bank entered into a deferred prosecution agreement (DPA) with the DOJ concerning its historical engagements of finders and consultants and, as part of the bank’s obligations in the DPA, agreed to pay approximately U.S.$ 80 million in connection with this conduct. The DPA with the DOJ also involved a resolution involving precious metals spoofing. As part of the bank’s obligations in the DPA relating to precious metals, it agreed to pay approximately U.S.$ 8 million. On the same day, the bank also reached a settlement with the SEC to resolve its investigation into conduct regarding its compliance with the U.S. Foreign Corrupt Practices Act with respect to the bank’s engagement of finders and consultants. Deutsche Bank agreed to pay approximately U.S.$ 43 million in this SEC settlement. If it violated the DPA, its term could be extended, or it could be subject to criminal prosecution or other actions, any of which could result in additional fines, penalties, settlements, payments or other materially adverse impacts to the bank. On February 28, 2022, following a finding by the DOJ that the bank violated the 2021 DPA based on untimely reporting by the bank of certain allegations relating to ESG-related information at the bank’s subsidiary DWS, the bank agreed with the DOJ to extend an existing monitorship and abide by the terms of a prior deferred prosecution agreement until February 2023 to allow the monitor to certify to the bank’s implementation of the related internal controls. The DOJ has reserved all rights to take further action regarding the 2021 DPA if it deems necessary.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Deutsche Bank is under continuous examination by tax authorities in the jurisdictions in which it operates. Tax laws are increasingly complex and are evolving. The cost to the bank arising from the resolution of routine tax examinations, tax litigation and other forms of tax proceedings or tax disputes may increase and may adversely affect the bank’s business, financial condition and results of operation.

Deutsche Bank is under continuous examination by tax authorities in the jurisdictions in which it operates. Tax laws are increasingly complex. In the current political and regulatory environment, tax administrations' and courts' interpretation of tax laws and regulations and their application are evolving, and scrutiny by tax authorities has become increasingly intense. Wide ranging and continuous changes in the principles of international taxation emanating from the OECD's Base Erosion and Profit Shifting agenda are generating significant uncertainties for the bank and its subsidiaries and may result in an increase in instances of tax disputes or instances of double taxation, as member states may take different approaches in transposing these requirements into national law or may choose to implement unilateral measures. This includes, for example, the OECD global minimum taxation rules which are generally effective starting with tax year 2024. Tax administrations, including Germany, have also been focusing on the eligibility of taxpayers for reduced withholding taxes on dividends in connection with certain cross-border lending or derivative transactions. In addition, while a significant amount of guidance has been issued since the enactment of the U.S. tax reform in 2017, which included the Base Erosion Anti-Abuse Tax provisions, uncertainties remain. Similarly, uncertainties remain with respect to the U.S. Inflation Reduction Act of 2022, which included a new corporate alternative minimum tax effective starting with tax year 2023. As a result, the cost to the bank arising from the resolution of routine tax examinations, tax litigation and other forms of tax proceedings or tax disputes, as well as from rapidly changing and increasingly complex and uncertain tax laws and principles, may increase and may adversely affect the bank’s business, financial condition and results of operation.

Deutsche Bank has received requests for information from regulatory and law enforcement authorities concerning its anti-financial crime controls, including in the United States. In the event that violations of law or regulation are found to have occurred, legal and regulatory sanctions in respect thereof may materially and adversely affect the bank’s results of operations, financial condition and reputation.

The bank has received requests for information from regulatory and law enforcement authorities concerning its anti-financial crime controls over the past several years, both generally and in connection with specific clients, counterparties or incidents, including in the United States. Among the areas within the scope of these inquiries are client onboarding and KYC processes, transaction monitoring systems and procedures, processes concerning the decision to file or not to file a suspicious activity report, escalation procedures, and other related processes and procedures. The bank is cooperating in these investigations. In the event that violations of law or regulation are found to have occurred, legal and regulatory sanctions in respect thereof may materially and adversely affect the bank’s results of operations, financial condition and reputation.

On July 19, 2023, Deutsche Bank, Deutsche Bank AG New York Branch, DB USA Corporation, Deutsche Bank Trust Company Americas and DWS USA Corporation entered into a consent order and written agreement with the Federal Reserve concerning adherence to prior orders and settlements related to sanctions and embargoes and AML compliance, and remedial agreements and obligations related to risk management issues. The 2023 consent order alleges insufficient and tardy implementation of the post-settlement sanctions and embargoes and AML control enhancement undertakings required by prior consent orders the bank entered into with the Federal Reserve in 2015 and 2017. The 2023 consent order further provides that the material failure to remediate the unsafe and unsound practices or violations described therein may require additional and escalated formal actions by the Federal Reserve against Deutsche Bank, including additional penalties or additional affirmative corrective actions. In the event the bank is unable to timely complete the sanctions and embargoes and AML control enhancement undertakings required by the Federal Reserve, the damages could be substantial and the impact on the bank’s results of operations, financial condition and reputation would be material.

Deutsche Bank has received requests for information from certain regulators in connection with its internal investigation into the historical sales of certain FX derivatives products. Deutsche Bank is providing information to and otherwise cooperating with its regulators. Separately, on September 30, 2021, Deutsche Bank was served with a claim that was filed in the High Courts of England and Wales by four companies within the Palladium Hotels Group.

Following an internal investigation into the historical sales of certain FX derivatives products, Deutsche Bank is providing information to and otherwise cooperating with its regulators. In December 2023, the Spanish National Securities Market Commission (CNMV) announced it will initiate proceedings against Deutsche Bank, S.A.E. for advisory services provided to Spanish clients in relation to FX derivative products.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Separately, the Palladium Hotels Group (PHG) companies are claiming restitution or damages for alleged losses estimated at € 500 million in respect of FX derivatives trades entered into with Deutsche Bank between 2014 and 2019. They allege that Deutsche Bank made negligent misrepresentations, misstatements and/or breached a duty of care to PHG in relation to the trades. It is also alleged that one of the four PHG claimants lacked legal capacity to enter into some of the trades. Deutsche Bank has filed a defense disputing the claim. In January 2024, PHG filed amended pleadings to include additional allegations of fraudulent misrepresentation. Deutsche Bank filed an amended defense in February 2024 which disputes the new allegations. Trial is scheduled to commence in early 2025. In the event the bank is found liable to PHG, the damages could be substantial and impact the bank’s results.

Deutsche Bank’s subsidiary, Deutsche Bank Polska S.A., is subject to numerous demands for reimbursement in respect of mortgage loans agreements in foreign currency, based on allegations that they are unfair and invalid.

Starting in 2016, certain clients of Deutsche Bank Polska S.A. have reached out to Deutsche Bank Polska S.A. alleging that their mortgage loan agreements in foreign currency include unfair clauses and are invalid. These clients have demanded reimbursement of the alleged overpayments under such agreements totaling over € 685 million with over 5,000 civil claims having been commenced in Polish courts as of February 29, 2024. These cases are an industry wide issue in Poland and other banks are facing similar claims.

During 2023, there was a deterioration in the risk profile with respect to the Polish FX mortgage portfolio, especially following an adverse decision by the European Court of Justice on June 15, 2023, which affected the broader polish banking sector. In addition, the bank refined its model for estimating the provision in the third quarter for the expected development of court verdicts and other market parameters. As a result, the provision for this matter increased by € 244 million for the year ended December 31, 2023, and the total provision as of December 31, 2023 is € 534 million.

The outcome of this matter is uncertain and could result in the payment of substantial amounts by the bank, including beyond the provisions the bank has established.

Guilty pleas by or convictions of the bank or its affiliates in criminal proceedings, or regulatory or enforcement orders, settlements or agreements to which the bank or its affiliates become subject, may have consequences that have adverse effects on certain of the bank’s businesses.

Deutsche Bank and its affiliates have been and are subjects of criminal and regulatory enforcement proceedings.

Guilty pleas or convictions against the bank or its affiliates, or regulatory or enforcement orders, settlements or agreements to which the bank or its affiliates become subject, could lead to the bank’s ineligibility to conduct certain business activities. In particular, such guilty pleas or convictions could cause its asset management affiliates to no longer qualify as “qualified professional asset managers” (QPAMs) under the QPAM Prohibited Transaction Exemption under the U.S. Employee Retirement Income Security Act of 1974 (ERISA), which exemption is relied on to provide asset management services to certain pension plans in connection with certain asset management strategies. While there are a number of statutory exemptions and numerous other administrative exemptions that the bank’s asset management affiliates may use to trade on behalf of ERISA plans, and in many instances they may do so in lieu of relying on the QPAM exemption, loss of QPAM status could cause customers who rely on such status (whether because they are legally required to do so or because the bank has agreed contractually with them to maintain such status) to cease to do business or refrain from doing business with the bank and could negatively impact its reputation more generally. For example, clients may mistakenly see the loss as a signal that the bank’s asset management affiliates are somehow no longer approved as asset managers generally by the U.S. Department of Labor (DOL), the agency responsible for ERISA, and cease to do business or refrain from doing business with the bank for that reason. This could have a material adverse effect on the bank’s results of operations, particularly those of its asset management business in the United States. Following the issuance of a one-year temporary exemption, on December 29, 2017, the DOL published a three-year individual exemption permitting certain of the bank’s affiliates to retain their QPAM status despite both the conviction of DB Group Services (UK) Limited and the conviction of Deutsche Securities Korea Co. (the latter conviction has been subsequently overturned). This exemption was subsequently extended by the DOL for an additional three-year period and is scheduled to expire on April 17, 2024. The disqualification period extends until April 17, 2027, and so the bank will need to obtain a further extension. The bank has submitted a request for a further extension of the exemption through April 17, 2027, and, on February 21, 2024, the DOL published the proposed exemption for public comment prior to the DOL’s consideration for final approval. An extension would terminate if, among other things, Deutsche Bank or its affiliates were to be convicted of crimes in other matters.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Climate Change and Other Risks Relating to Environmental, Social and Governance (ESG)-Related Matters

The impacts of rising global temperatures and the associated policy, technology and behavioral changes required to limit global warming to no greater than 1.5 ^o c above pre-industrial levels have led to emerging sources of financial and non-financial risks. These include the physical risk impacts from extreme weather events, and transition risks as carbon-intensive sectors are faced with higher costs, potentially reduced demand and restricted access to financing. More rapid than currently expected emergence of transition and / or physical climate risks and other environmental risks may lead to increased credit and market losses as well as operational disruptions due to impacts on vendors and the bank’s own operations.

Financial institutions are facing increased scrutiny on climate and ESG-related issues from governments, regulators, shareholders and other bodies (including non-governmental organizations), leading to reputational risks if the bank is not seen to support the transition to a lower carbon economy, to limit nature-related risks such as biodiversity and habitat loss, and to protect human rights. This increased scrutiny includes more extensive and prescriptive ESG disclosure requirements such as the Corporate Sustainability Reporting Directive (CSRD). The emergence of significantly diverging ESG regulatory and / or disclosure standards across jurisdictions could lead to higher costs of compliance and risks of failing to meet requirements.

In the United States, state legislators and regulators are issuing potentially conflicting laws and certification requirements regarding ESG matters, reflecting a polarized political context. California, for example, issued ESG disclosure laws, whereas Florida requires the bank to certify that it does not discriminate based on business activities of borrowers. This may result in the risk of loss of business or licenses if the bank cannot certify, while also requiring DB to analyze and balance positions.

Deutsche Bank is rated by a number of ESG rating providers, with the ratings increasingly utilized as criteria to determine eligibility for sustainable investments and to assess management of ESG risks and opportunities. The methodologies and scores used by the different providers can lead to significant divergence in results and may not provide an accurate and consistent reflection of the risks facing the bank. Should the bank’s ratings lag peers, or materially deteriorate, this could lead to negative reputational impacts and reduced investor demand for equity or debt.

Data, methodologies and industry standards for measuring and assessing climate and other environmental risks are still evolving or, in certain cases, are not yet available. This, combined with a lack of comprehensive and consistent climate and other environmental risk disclosures by its clients, means that the bank, in line with the wider industry, is heavily reliant on proxy estimates and/or proprietary approaches for risk assessment and modelling and for the bank’s climate and environmental risk management disclosures. The high degree of uncertainty that this creates increases the risk that third parties may assert that the bank’s sustainability-related disclosures constitute greenwashing. In addition to the reputational risks associated with such allegations, competent supervisory authorities and law enforcement agencies may commence investigations based on such allegations, as was recently the case with DWS which has received requests for information from various regulatory and law enforcement agencies concerning certain ESG related matters. On September 25, 2023, DWS agreed, without admitting or denying the SEC’s findings, to a cease-and-desist order, censure and a U.S. $ 19 million civil money penalty to settle the SEC’s ESG related investigation of DWS Investment Management Americas, Inc. (DIMA) in relation to DIMA’s U.S. business.

Deutsche Bank is committed to managing its business activities and operations in a sustainable manner, including aligning portfolios with net zero emissions by 2050. The bank continues to develop and implement its approach to environmental risk assessments and management in order to promote the integration of environmental-related factors across its business activities. This includes the ability to identify, monitor and manage risks and to conduct regular scenario analysis and stress testing. Rapidly changing regulatory as well as stakeholder demands, combined with significant focus by stakeholders, may adversely affect its businesses if it fails to adopt such demands or appropriately implement its plans.

While Deutsche Bank remains committed to the targets outlined in its Sustainability Deep Dive on March 2, 2023, the bank may face headwinds in achieving its aim for € 500 billion in cumulative ESG financing and investment volumes through the end of 2025. If ambitions or targets are missed, this could impact, among other things, revenues and the reputation of the bank. In addition, scarcity of ESG assets may reduce Deutsche Bank’s ability to issue ESG compliant funding. Similarly, significant deviations from absolute and intensity-based net zero aligned emissions targets may open the bank up to reputational risks.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Other Risks

Remaining risks related to Postbank IT migrations could increase and/or impact the bank’s reputation and may result in loss of clients, business or impact the bank’s future results.

Deutsche Bank completed the last data migration of Postbank in July 2023. While the IT migration focused on executing the transfer of clients and employees’ use of the new IT infrastructure, it led to operational issues and client backlog. Deutsche Bank has implemented several mitigation measures and devised a remediation plan, which will be monitored by the BaFin via a monitor as outlined in the BaFin’s order, published on October 2, 2023.

Deutsche Bank has made progress in remediating outstanding inquiries. In most processes, remediation was accomplished by year end 2023. For some processes, however, the backlog remediation is ongoing and is expected to be mostly resolved by the end of the first quarter of 2024. If the bank needs more time to process the outstanding inquiries, credit and operational costs could increase further and/or impact the bank’s reputation and may result in loss of clients or business. This in turn could impact the bank’s future results.

The bank’s risk management policies, procedures and methods leave the bank exposed to unidentified or unanticipated risks, which could lead to material losses.

Deutsche Bank has devoted significant resources to developing its risk management policies, procedures and assessment methods and intends to continue to do so in the future. Nonetheless, the risk management techniques and strategies have not been and may in the future not be fully effective in mitigating the bank’s risk exposure in all economic market environments or against all types of risk, including risks that it fails to identify or anticipate. Some of the bank’s quantitative tools and metrics for managing risk are based upon its use of observed historical market behavior. The bank applies statistical and other tools to these observations to arrive at quantifications of its risk exposures. In a financial crisis, the financial markets may experience extreme levels of volatility (rapid changes in price direction) and the breakdown of historically observed correlations (the extent to which prices move in tandem) across asset classes, compounded by extremely limited liquidity. In such a volatile market environment, the bank’s risk management tools and metrics may fail to predict important risk exposures. In addition, Deutsche Bank’s quantitative modeling does not take all risks into account and makes numerous assumptions regarding the overall environment, which may not be borne out by events. As a result, risk exposures have arisen and could continue to arise from factors the bank did not anticipate or correctly evaluate in its models. This has limited and could continue to limit the bank’s ability to manage its risks especially in light of geopolitical developments, many of the outcomes of which are currently unforeseeable. The bank’s losses thus have been and may in the future be significantly greater than the historical measures indicate.

In addition, the bank’s more qualitative approach to managing those risks not taken into account by the quantitative methods could also prove insufficient, exposing the bank to material unanticipated losses. Also, if existing or potential customers or counterparties believe its risk management is inadequate, they could take their business elsewhere or seek to limit their transactions with the bank. This could harm the bank’s reputation as well as its revenues and profits. See “Management Report: Risk Report” in the Annual Report 2023 for a more detailed discussion of the policies, procedures and methods the bank uses to identify, monitor and manage its risks.

Deutsche Bank utilizes a variety of third parties in support of its business and operations. Services provided by third parties pose risks to the bank comparable to those it bears when it performs the services, and the bank remains ultimately responsible for the services its third parties provide. Furthermore, if a third party does not conduct business in accordance with applicable standards or its expectations, the bank could be exposed to material losses or regulatory action or litigation or fail to achieve the benefits it sought from the relationship.

The bank utilizes a variety of third parties in support of its business and operations. In support of the bank’s business and operations, the use of and dependence upon third parties in the sector has increased over the years, necessitating a corresponding increase in capabilities to manage them. The bank does so in order to focus on its core competencies and to seek improvements in costs, efficiency and effectiveness in its operations, for instance in connection with the bank’s IT modernization efforts. The nature of what the bank uses third parties for has evolved and now includes more fundamental aspects of services including the use of Cloud and other advanced technology providers. This represents different risks and requires more robust risk assessments, appropriate contracting and ongoing oversight commensurate with those risks. It has also led to steady increase in regulation and regulatory scrutiny over not just how the bank manages third parties day to day but also assessing the levels of resiliency needed that is proportional to the importance of the business services supported by the third party.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Services provided by third parties pose risks to the bank comparable to those the bank bears when it performs the services itself, and it remains ultimately responsible for the services the third parties provide. The bank depends on such third parties to conduct its delivery of services in compliance with applicable laws, regulations and generally accepted business standards and in accordance with the contractual terms and service levels it has agreed with the bank. If the third parties do not conduct business in accordance with these standards, the bank may be exposed to material losses and could be subject to regulatory action or litigation as well as be exposed to reputational damage. More generally, if a third-party relationship does not meet the bank’s expectations, the bank could be exposed to financial risks, such as the costs and expenses associated with migration of the services to another third party and business and operational risks related to the transition, and the bank could fail to achieve the benefits it sought from the relationship.

Similar to cybersecurity threats to Deutsche Bank itself, a successful cyberattack on a third-party vendor could have a significant negative impact on the bank that may result in the disclosure or misuse of client as well as proprietary information, damage or inability to access information technology systems, financial losses, additional costs, personal data breach notification obligations, reputational damage, client dissatisfaction and potential regulatory penalties or litigation exposure.

In situations where Deutsche Bank is the third-party service provider, the bank may be exposed to financial risks, such as lost revenues, costs and expenses associated with the cancellation of the service agreement, if Deutsche Bank were no longer able to benefit from the relationship.

Operational risks, which may arise from errors in the performance of the bank’s processes, the conduct of its employees, instability, malfunction or outage of its IT system and infrastructure, or loss of business continuity, or comparable issues with respect to the bank’s vendors, may disrupt its businesses and lead to material losses.

Deutsche Bank faces operational risk arising from errors, inadvertent or intentional, made in the execution, confirmation or settlement of transactions or from transactions not being properly recorded, evaluated or accounted for. An example of this risk concerns derivative contracts, which are not always confirmed with the counterparties on a timely basis. For so long as the transaction remains unconfirmed, the bank is subject to heightened credit and operational risk and in the event of a default may find it more difficult to enforce the contract.

In addition, Deutsche Bank’s businesses are highly dependent on its ability to process manually or through its systems a large number of transactions on a daily basis, across numerous and diverse markets in many currencies. Some of the transactions have become increasingly complex. Moreover, management relies heavily on its financial, accounting and other data processing systems that include manual processing components. If any of these processes or systems do not operate properly, or are disabled, or subject to intentional or inadvertent human error, the bank could suffer financial loss, a disruption of its businesses, liability to clients, regulatory intervention or reputational damage.

The bank is also dependent on its employees to conduct its business in accordance with applicable laws, regulations and generally accepted business standards. If the bank’s employees do not conduct its business in this manner, the bank may be exposed to material losses. Furthermore, if an employee’s misconduct reflects fraudulent intent, the bank could also be exposed to reputational damage. The bank categorizes these risks as conduct risk, a term used to describe the risks associated with behavior by employees and agents, including third parties, that could harm clients, customers or the integrity of the markets, such as selling products that are not suitable for a particular customer, fraud, unauthorized trading and failure to comply with applicable regulations, laws and internal policies. U.S. regulators in particular have been increasingly focused on conduct risk, and such heightened regulatory scrutiny and expectations could lead to investigations and other inquiries, as well as remediation requirements, more regulatory or other enforcement proceedings, civil litigation and higher compliance and other risks and costs.

The bank in particular faces the risk of loss events due to the instability, malfunction or outage of its IT system and IT infrastructure, as well as breaches in IT system and infrastructure (including cyber-attacks). Such losses could materially affect the bank’s ability to perform business processes and may, for example, arise from the erroneous or delayed execution of processes as a result of system outages, degraded services in systems and IT applications or the inaccessibility of its IT systems. A delay in processing a transaction, for example, could result in an operational loss if market conditions worsen during the period after the error. IT-related errors may also result in the mishandling of confidential information, damage to the bank’s computer systems, financial losses, additional costs for repairing systems, reputational damage, customer dissatisfaction or potential regulatory or litigation exposure (including under data protection laws such as the GDPR).

The continuing move across global industries to conduct business from home and away from primary office locations is driving a more accelerated evolution of business practices compared to historic trends. The demand on the bank’s technology infrastructure and the risk of cyber-attacks could lead to technology failures, security breaches, unauthorized access, loss or destruction of data or unavailability of services, as well as increase the likelihood of conduct breaches.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Business continuity risk is the risk of incurring losses resulting from the interruption of normal business activities. The bank operates in many geographic locations and is frequently subject to the occurrence of events outside of its control. Despite the contingency plans the bank has in place, its ability to conduct business in any of these locations may be adversely impacted by a disruption to the infrastructure that supports the bank’s business, whether as a result of, for example, events that affect the bank’s third-party vendors or the community or public infrastructure in which the bank operates. Any number of events could cause such a disruption including deliberate acts such as acts of war or other military action, sabotage, terrorist activities, bomb threats, strikes, riots and assaults on the bank’s staff; natural calamities such as hurricanes, snowstorms, floods, disease pandemics (such as the COVID-19 pandemic) and earthquakes; or other unforeseen incidents such as accidents, fires, explosions, utility outages and political unrest. Any such disruption could have a material adverse effect on the bank’s business and financial position.

As a global bank, Deutsche Bank is often the subject of news reports. Deutsche Bank conducts its media dialogue through official teams. However, members of the media sometimes approach Deutsche Bank staff outside of these channels and Deutsche Bank-internal information, including confidential matters, have been subject to external news media coverage, which may result in publication of confidential information. Leaks to the media can have severe consequences for Deutsche Bank, particularly when they involve inaccurate statements, rumors, speculation or unsanctioned opinions. This can result in financial consequences such as the loss of confidence or business with clients and may impact the bank’s share price or capital instruments by undermining investor confidence. Then bank’s ability to protect itself against these risks is limited.

The inability to have equivalence arrangements with Central Clearing Counterparties (CCPs) in countries outside the European Union may have adverse effects on Deutsche Bank’s business, results of operations or financial targets; along with the size of the bank’s clearing operations and risks if these operations fail to function properly.

For Indian CCPs, the BaFin published a statement in February 2023 allowing German credit institutions, including Deutsche Bank, the possibility to remain members of the six India CCPs until October 31, 2024. This allows Deutsche Bank to make changes needed to allow clients to continue to be served by the six India CCPs. If Deutsche Bank no longer has equivalence arrangements with India after October 31, 2024, this would have an adverse impact on the bank’s business results and could impact its financial targets.

Negotiations between the UK and EU have continued with regards to financial services not extensively covered by the existing post-Brexit deal. The extension to the temporary equivalence arrangements for UK CCPs until June 2025 has temporarily removed the risk that access to UK clearing would be withheld from EU firms. If an equivalence agreement is not reached by June 2025, this could adversely impact the bank’s business and financial targets.

The bank has large clearing and settlement businesses and an increasingly complex and interconnected IT landscape. These give rise to the risk that the bank’s customers or other third parties could lose substantial sums if the systems fail to operate properly for even short periods. This will be the case even where the reason for the interruption is external to the bank. In such a case, the bank might suffer harm to its reputation even if no material loss of money occurs. This could cause customers to take their business elsewhere, which could materially harm the bank’s revenues and profits.

The bank must test the value of the goodwill upon the acquisition of subsidiaries and affiliates and in its Asset Management division and of its other intangible assets at least annually for impairment. In the event the test determines that impairment exists, the bank must write down the value of the asset. Impairments of goodwill and other intangible assets have had and may have a material adverse effect on the bank’s profitability and results of operations.

Goodwill arises on the acquisition of subsidiaries and associates and represents the excess of the aggregate of the cost of an acquisition and any noncontrolling interests in the acquiree over the fair value of the identifiable net assets acquired at the date of the acquisition. As of December 31, 2023, the bank recognized goodwill in the amount of € 2.8 billion. Goodwill on the acquisition of subsidiaries is capitalized and reviewed for impairment annually or more frequently if there are indications that impairment may have occurred. Intangible assets are recognized separately from goodwill when they are separable or arise from contractual or other legal rights and their fair value can be measured reliably. These assets are tested for impairment and its useful lives reaffirmed at least annually. The bank recorded a goodwill impairment of € 233 million related to the acquisition of Numis in 2023 and an impairment of € 68 million on an unamortized intangible asset in 2022. The determination of the recoverable amount in the impairment assessment of non-financial assets requires estimates based on quoted market prices, prices of comparable businesses, present value or other valuation techniques, or a combination thereof, necessitating management to make subjective judgments and assumptions. These estimates and assumptions could result in significant differences to the amounts reported if underlying circumstances were to change.

Impairments of goodwill and other intangible assets have had and may have a material adverse effect on the bank’s profitability and results of operations.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

In addition to the bank’s traditional banking businesses of deposit-taking and lending, the bank may also engage in nontraditional credit businesses in which credit is extended via transactions (e.g., holding of securities of third parties or engaging in complex derivative transactions) that may materially increase the bank’s exposure to credit risk.

As a bank and provider of financial services, the bank is exposed to the risk that third parties who owe claims to the bank will not perform their obligations. Many of the bank’s businesses in beyond the traditional banking businesses of deposit-taking and lending also expose the bank to credit risk.

In particular, much of the business the bank conducts through the Investment Bank entails credit transactions, frequently ancillary to other transactions. Nontraditional sources of credit risk can arise, for example, from holding securities of third parties; entering into swap or other derivative contracts under which counterparties have obligations to make payments to the bank; executing securities, futures, currency or commodity trades that fail to settle at the required time due to nondelivery by the counterparty or systems failure by clearing agents, exchanges, clearing houses or other financial intermediaries; and extending credit through other arrangements. Parties to these transactions, such as trading counterparties, may default on their obligations to Deutsche Bank due to bankruptcy, political and economic events, lack of liquidity, operational failure or other reasons.

Many of the bank’s derivative transactions are individually negotiated and non-standardized, which can make exiting, transferring or settling the position difficult. Certain credit derivatives require that the bank delivers to the counterparty the underlying security, loan, or other obligation to receive payment. In several cases, the bank does not hold, and may not be able to obtain, the underlying security, loan or other obligation. This could cause the bank to forfeit the payments otherwise due to it or result in settlement delays, which could damage the bank’s reputation and ability to transact future business, as well as impose increased costs on the bank. Legislation in the European Union (EMIR) and the United States (the Dodd-Frank Act) has introduced requirements for the standardization, margining, central clearing and transaction reporting of certain over-the-counter derivatives. While such requirements aim at reducing the risk posed to counterparties and the financial system by such derivatives, they may reduce the volume and profitability of the transactions in which the bank engages, and compliance with such provisions may impose substantial costs on the bank.

In the past, exceptionally difficult market conditions severely adversely affected certain areas in which the bank does business that entail nontraditional credit risks, including the leveraged finance and structured credit markets, and similar market conditions, should they occur, may do so in the future.

A substantial proportion of the bank’s assets and liabilities comprise financial instruments that it carries at fair value, with changes in fair value recognized in the income statement. As a result of such changes, the bank has incurred losses in the past, and may incur further losses in the future. Fair value is defined as the price at which an asset or liability could be exchanged in an arm’s length transaction between knowledgeable, willing parties, other than in a forced or liquidation sale. If the value of an asset carried at fair value declines (or the value of a liability carried at fair value increases) a corresponding unfavorable change in fair value is recognized in the income statement. These changes have been and could in the future be significant.

Observable prices or inputs are not available for certain classes of financial instruments. Fair value is determined in these cases using valuation techniques the bank believes to be appropriate for the particular instrument. The application of valuation techniques to determine fair value involves estimation and management judgment, the extent of which will vary with the degree of complexity of the instrument and liquidity in the market. Management judgment is required in the selection and application of the appropriate parameters, assumptions and modeling techniques. If any of the assumptions change due to negative market conditions or for other reasons, subsequent valuations may result in significant changes in the fair values of the bank’s financial instruments, requiring the bank to record losses.

Deutsche Bank’s exposure and related changes in fair value are reported net of any fair value gains that may be recorded in connection with hedging transactions related to the underlying assets. However, the bank may never realize these gains, and the fair value of the hedges may change in future periods for a number of reasons, including as a result of deterioration in the credit of its hedging counterparties. Such declines may be independent of the fair values of the underlying hedged assets or liabilities and may result in future losses.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Deutsche Bank must review its deferred tax assets at the end of each reporting period. To the extent that it is no longer probable that sufficient taxable income will be available to allow all or a portion of the bank’s deferred tax assets to be utilized, the bank must reduce the carrying amounts. These reductions have had and may in the future have material adverse effects on Deutsche Bank’s profitability, equity, and financial condition.

The bank recognizes deferred tax assets for future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, unused tax losses and unused tax credits. Deferred tax assets are recognized only to the extent that it is probable that sufficient taxable profit will be available against which those unused tax losses, unused tax credits and deductible temporary differences can be utilized. As of December 31, 2023, the bank recognized deferred tax assets of € 7.0 billion.

Each quarter, the bank re-evaluates its estimate related to deferred tax assets, which can change from period to period and requires significant management judgment. For example, tax law changes or variances in future projected operating performance could result in an adjustment to the deferred tax assets that would be charged to income tax expense or directly to equity in the period such determination was made.

These adjustments have had and may in the future have material adverse effects on Deutsche Bank’s profitability or equity.

Deutsche Bank is exposed to pension risks which can materially impact the measurement of its pension obligations, including interest rate, inflation, longevity and liquidity risks that can materially impact the bank’s earnings.

Deutsche Bank sponsors a number of post-employment benefit plans on behalf of its employees, including defined benefit plans. The bank’s plans are accounted for based on the nature and substance of the plan. Generally, for defined benefit plans the value of a participant’s accrued benefit is based on each employee’s remuneration and length of service. The bank maintains various external pension trusts to fund the majority of its defined benefit plan obligations. The bank’s funding principle is to maintain funding of the defined benefit obligation by plan assets within a range of 90% to 100% of the obligation, subject to meeting any local statutory requirements. The bank has also determined that certain plans should remain unfunded, although its funding approach is subject to periodic review, for example, when local regulations or practices change. Obligations for the bank’s unfunded plans are accrued on the balance sheet. For most of the externally funded defined benefit plans there are local minimum funding requirements. The bank can decide on any additional plan contributions, with reference to its funding principle. There are some locations, for example the United Kingdom, where the trustees and the bank jointly agree contribution levels. The bank also sponsors retirement and termination indemnity plans in several countries, as well as some post-employment medical plans for a number of current and retired employees, mainly in the United States. The post-employment medical plans typically pay fixed percentages of medical expenses of eligible retirees after a set deductible has been met.

The bank develops and maintain guidelines for governance and risk management, including funding, asset allocation and actuarial assumption setting. In this regard, risk management means the management and control of risks for the bank related to market developments (e.g., interest rate, credit spread, price inflation), asset investment, regulatory or legislative requirements, as well as monitoring demographic changes (e.g., longevity). To the extent that pension plans are funded, the assets held mitigate some of the liability risks, but introduce investment risk. In its key pension countries, the bank’s largest post-employment benefit plan risk exposures relate to potential changes in credit spreads, interest rates, price inflation, longevity risk and liquidity risk, although these have been partially mitigated through the investment strategy adopted. Overall, the bank seeks to minimize the impact of pensions on its financial position from market movements, subject to balancing the trade-offs involved in financing post-employment benefits, regulatory capital and constraints from local funding or accounting requirements.

All plans are valued annually by independent qualified actuaries using the projected unit credit method, with inputs including the discount rate, inflation rate, rate of increase in future compensation and for pensions in payment and longevity expectations. For the bank’s most significant pension plans in the key countries, the discount rate used at each measurement date is set based on a high-quality corporate bond yield curve, which is derived using a bond universe sourced from reputable third-party index data providers and rating agencies, and reflects the timing, amount and currency of the future expected benefit payments for the respective plan.

The bank’s investment objective in funding the plans and its obligations in respect of them is to protect the bank from adverse impacts of its defined benefit pension plans on key financial metrics. The bank seeks to allocate plan assets closely to the market risk factor exposures of the pension liability to interest rates, credit spreads and inflation and, thereby, plan assets broadly reflect the underlying risk profile and currency of the pension obligations.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

To the extent that the factors that drive the bank’s pension liabilities move in a manner adverse to the bank, or that its assumptions regarding key variables prove incorrect, or that funding of the pension liabilities does not sufficiently hedge those liabilities, the bank could be required to make additional contributions or be exposed to actuarial or accounting losses in respect of its pension plans. More detailed information regarding the bank’s employee benefit plans is provided in Note 33, “Employee Benefits” of the consolidated financial statements.

Digital innovation offers market entry opportunities for new competitors such as cross-industry entrants, global high-tech companies or financial technology companies, which will increase the bank’s need for investment in digital product and process resources to mitigate the risk of a potential loss of market share.

To be able to respond to market developments, respond more quickly to clients’ needs and to have more flexibility, and to improve IT resiliency, the bank has decided to migrate a large number of applications to public cloud computing and storage systems through a strategic partnership with Google Cloud. This partnership with Google Cloud is a major milestone in the bank’s digital journey and shows a commitment to embracing innovative technologies. The objective is to enhance the client experience through improved products and services, system resiliency and security as well as reducing the cost inefficiencies of running legacy platforms. Such a major technology migration requires robust governance and planning, including required allocation of funding, to manage the risk of security and stability issues. Additionally, there is significant regulatory interest in this program. Also, as with any external service providers, the bank must ensure the highest standards of data privacy and security controls to safeguard client and bank information. Failure to do so can compromise client trust, lead to financial losses and, in severe cases, regulatory penalties, litigation and the obligation to compensate individuals for damage.

Deutsche Bank continues to mature its overall data management strategy against its core processes and data sets such as transactional, client and reference data. This includes the development and implementation of the bank’s enterprise architecture principles across the core technology infrastructure. This is central to Deutsche Bank’s wider technology and data strategy, enabling business growth and efficiencies, while also enhancing the control environment. Deutsche Bank’s regulators are actively focused on the bank’s progress on this component of its strategy. Furthermore, the bank also faces challenges with respect to embracing and incorporating new and disruptive technologies in conjunction with existing technological architecture in order to ensure industry standards of information security and customer experience.

If Deutsche Bank is unable to achieve its major technology transformations in the bank’s business and infrastructure areas, then the bank risks not achieving the intended benefits of these include IT and business cost reduction, control improvements, revenue growth through provision of new client features or targeted client growth.

The crypto-assets ecosystem experienced significant volatility in 2023 and continues to carry significant inherent risks.

Crypto assets carry extreme price volatility risk, unclear price transparency, have underdeveloped liquidity and may be susceptible to market manipulation. Deutsche Bank’s crypto-related activities and direct risk exposures are extremely limited and the risk of broader contagion to financial markets is still considered to be limited. Despite the risks currently posed by crypto assets, the bank is cognizant of the innovation that is occurring in this space and is considering possible opportunities to leverage the benefits of the underlying technology and address customer needs. However, by maintaining a cautious and highly selective approach, the bank may miss out on opportunities.

The ability for banks to engage in digital asset activities will vary depending on the stances taken within each jurisdiction and this may limit Deutsche Bank’s ability to engage in these activities. Discussions regarding the required policy frameworks required to address the risks and opportunities of digital assets have increased due to numerous insolvency and fraud cases related to individual crypto assets or platforms.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Deutsche Bank is subject to laws and other requirements relating to financial and trade sanctions and embargoes. If the bank breaches such laws and requirements, it can be subject, and in the past has been subject, to material regulatory enforcement actions and penalties.

The bank is required to monitor, evaluate, and observe laws and other requirements relating to financial and trade sanctions and embargoes set by the EU, the Deutsche Bundesbank, Germany’s Federal Office for Economic Affairs and Export Control, and other authorities, such as the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) and the UK Treasury Department’s Office of Financial Sanctions Implementation (OFSI). Sanctions are subject to rapid change, and it is also possible that new direct or indirect secondary sanctions could be imposed by the United States or other jurisdictions without warning as a result of geopolitical developments. New and far-reaching sanctions against Russian entities and individuals have been, and may continue to be, imposed by the United States, the EU, the United Kingdom and other individual countries very rapidly following the commencement by Russia of the war in Ukraine, and many of these sanctions require very rapid implementation. Should the bank fail to comply timely and in all respects with these new sanctions, the bank could be exposed to legal penalties and its reputation could suffer. New sanctions may also be imposed on other entities and individuals beyond the war in Ukraine at any time. If Deutsche Bank breaches any such new or preexisting laws and requirements, it can be subject, and has in the past been subject, to material regulatory enforcement actions and penalties.

Transactions with counterparties in countries designated by the U.S. State Department as state sponsors of terrorism or persons targeted by U.S. economic sanctions may lead potential customers and investors to avoid doing business with the bank or investing in the bank’s securities, harm its reputation or result in regulatory or enforcement action which could materially and adversely affect its business.

The bank engages or has engaged in a limited amount of business with counterparties, including government-owned or -controlled counterparties, in certain countries or territories that are subject to comprehensive U.S. sanctions (referred to as “Sanctioned Territories”), or with persons targeted by U.S. economic sanctions (referred to as “Sanctioned Persons”). U.S. law generally prohibits U.S. persons or any other persons acting within U.S. jurisdiction (which includes business with a U.S. nexus) from dealings with or relating to Sanctioned Territories or Sanctioned Persons. Additionally, U.S. indirect or “secondary” sanctions threaten the imposition of sanctions against non-U.S. persons entirely outside of U.S. jurisdiction for engaging in certain activities, most recently targeting foreign financial institutions that knowingly or unknowingly facilitate transactions or provide services relating to Russia’s military-industrial base. The bank’s U.S. subsidiaries, branch offices, and employees are, and, in some cases, its non-U.S. subsidiaries, branch offices, and employees are or may become, subject to such prohibitions and other regulations.

Deutsche Bank is a German bank and its activities with respect to Sanctioned Territories and Sanctioned Persons have been subject to policies and procedures designed to avoid the involvement of U.S. jurisdiction, including U.S. persons acting in any managerial or operational role and to ensure compliance with United Nations, European Union and German sanctions and embargoes; in reflection of legal developments in recent years, the bank has further developed its policies and procedures with the aim of promoting – to the extent legally permitted – compliance with regulatory requirements extending to other geographic areas regardless of jurisdiction. However, should its policies prove to be, or have been, ineffective, the bank may be subject to regulatory or enforcement action that could materially and adversely affect its reputation, financial condition, or business.

Deutsche Bank has set up processes and procedures aimed at complying with other substantial changes in U.S. economic sanctions relating to Russia since 2017. Further, in response to the war in Ukraine, the United States, as well as other nations and the EU, have continued to expand sanctions on Russia and Russian entities; such sanctions could have a material impact on the bank’s business activities. In response, the bank took a range of preparatory and responsive actions to implement the high number of, and in part newly developed, sanctions by inter alia filter and control updates, additional due diligence steps in transaction and client reviews with a nexus to Russia and by further restricting its policy and adjusting processes. Even though Deutsche Bank believes that it reacted quickly and thoroughly to these challenges, the sheer amount and complexity of changes have increased the operational risk relating to regulatory compliance; given the strict liability applied in areas of this regulatory environment, such operational risk may translate into regulatory risks for the bank leading to consequential losses. Furthermore, although the bank does not believe it has engaged or is currently engaged in any transactions that violate, or are sanctionable under, U.S. sanctions relating to Russia, U.S. authorities have broad discretion in interpreting, enforcing, and applying U.S. sanctions, including, as of December 2023, the authority to impose blocking sanctions or other restrictions against foreign financial institutions that are knowingly or unknowingly engaged in certain targeted activities relating to the Russian military-industrial base. There can be no assurances that U.S. authorities will not bring enforcement actions against the bank or impose secondary sanctions. Any such actions could have a material impact on the bank’s business and harm its reputation.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Item 4: Information on the company

History and development of the company

The legal and commercial name of the company is Deutsche Bank Aktiengesellschaft. It is a stock corporation organized under the laws of Germany.

Deutsche Bank Aktiengesellschaft originated from the reunification of Norddeutsche Bank Aktiengesellschaft, Hamburg, Rheinisch-Westfälische Bank Aktiengesellschaft, Düsseldorf, and Süddeutsche Bank Aktiengesellschaft, Munich. Pursuant to the Law on the Regional Scope of Credit Institutions, these were disincorporated in 1952 from Deutsche Bank, which had been founded in 1870. The merger and the name were entered in the Commercial Register of the District Court Frankfurt am Main on May 2, 1957.

The bank is registered under registration number HRB 30 000. Deutsche Bank’s registered address is Taunusanlage 12, 60325 Frankfurt am Main, Germany, and its telephone number is +49-69-910-00. The bank’s agent in the United States is: DB USA Corporation, c/o Office of the Secretary, 1 Columbus Circle, Mail Stop NYC01-1950, New York, New York 10019-8735.

For information on significant capital expenditures and divestitures, please see “Management Report: Operating and Financial Review: Deutsche Bank Group: Significant capital expenditures and divestitures” in the Annual Report 2023.

The Securities and Exchange Commission (“SEC”) maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC, such as Deutsche Bank Aktiengesellschaft, with the address http://www.sec.gov. Deutsche Bank’s filings are available on the SEC’s Internet site under File Number 001-15242 and Internet address is http://www.db.com.

Business Overview

Deutsche Bank’s organization

Please see “Management Report: Operating and financial review: Deutsche Bank Group: Deutsche Bank’s organization” in the Annual Report 2023. For information on net revenues by geographic area and by corporate division please see Note 4 ”Business Segments and related information: Entity-wide disclosures” to the consolidated financial statements and “Management Report: Operating and financial review: Results of operations: Segment results of operations” in the Annual Report 2023.

Management structure

Please see “Management Report: Operating and financial review: Deutsche Bank Group: Management structure” in the Annual Report 2023.

Business Strategy

Global Hausbank

Deutsche Bank’s strategic and financial roadmap through 2025 aims to position Deutsche Bank as a Global Hausbank, and to achieve the bank’s 2025 financial targets and capital objectives. The Global Hausbank strategy is underpinned by three key themes: risk management, sustainability and technology, which have become even more important considering the ongoing geopolitical and macro-economic challenges. In this environment, Deutsche Bank aims to leverage a more favorable interest rate environment, deploy risk management expertise to support clients, and allocate capital to high-return growth opportunities. As sustainability becomes ever more important, the bank aims to deepen its dialogue with and support for clients and broaden the agenda in respect of the bank’s own operations. As technology continues to evolve, Deutsche Bank aims to achieve further cost savings, accelerate the transition to a digital bank and expand upon strategic partnerships, which are already creating substantial value. At the same time, Deutsche Bank continues to work towards a long-term set-up that will enable a future of sustainable growth. This includes a clear definition of its purpose, vision and culture.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Deutsche Bank’s key performance indicators 2025

Financial targets and capital objectives for 2025

Financial targets:

– Post-tax Return on Average Tangible Equity of above 10% for the Group

– Compound annual growth rate of revenues between 2021 and 2025 of 5.5 to 6.5% (raised from 3.5 to 4.5%)

–

Cost/income ratio of less than 62.5%

Capital objectives:

– Common Equity Tier 1 capital ratio of approximately 13%

– 50% Total payout ratio from 2025

Deutsche Bank reaffirms its financial targets, including the compound annual growth rate of revenues target which it has raised from 3.5–4.5% to 5.5–6.5% at the beginning of 2024, as well as its capital objectives for 2025.

Post-tax Return on Average Tangible Equity and adjusted costs are non-GAAP financial measures. Please refer to “Supplementary financial information (Unaudited): Non-GAAP financial measures” of this report for the definitions of such measures and reconciliations to the IFRS numbers on which they are based.

Deutsche Bank’s financial and regulatory targets are based on the financial results prepared in accordance with IFRS as issued by the IASB and endorsed by the EU. For further details, please refer to “Note 01 – Material Accounting Policies and Critical Accounting Estimates – EU carve-out” to the consolidated financial statements.

Progress on strategy implementation

In 2023, Deutsche Bank made further progress in accelerating the execution of its Global Hausbank strategy on all dimensions: revenue growth, operational and capital efficiency.

Revenues grew to around € 29 billion, and the revenue growth rate was close to 7% per year since 2021 as benefits of the sharpened business model came through. The bank made conscious investment decisions in 2023 to further develop its franchise, mainly to drive business growth, strengthen controls and improve operational efficiency. Deutsche Bank believes that the bank has reached an inflection point on costs with these investments approaching completion. Furthermore, the bank demonstrated resilience, with high-quality risk management and a strong capital and balance sheet, resulting in both dividends and share buybacks increased by 50% compared to 2022.

Revenue growth

On revenue growth, Deutsche Bank believes that the bank delivered sustained growth from a well-balanced business mix. For example, the bank took advantage of rising interest rates, notably in the Corporate Bank and Private Bank, but also focused on increasing the bank’s fee income across all fee-generating businesses. Corporate Bank developed innovative products, hired relationship managers in strategic areas, and deepened relationships with key clients. Investment Bank continued to execute against its strategic priorities, including completing the acquisition of Numis to enhance its ability to deliver its service offering to its clients. Furthermore, Investment Bank and International Private Bank added senior bankers in client-facing areas. The bank also attracted net inflows of € 57 billion across the Private Bank and Asset Management, which has helped grow Assets under Management by € 115 billion to € 1.5 trillion across these businesses.

Given the progress achieved, Deutsche Bank raised its compound annual growth target for the period between 2021 and 2025 from 3.5 - 4.5% to 5.5 - 6.5% at the beginning of 2024, after outperforming the bank’s original target in both 2022 and 2023.

The bank’s expectation is that the achievement of the revised target will be supported by growth of noninterest income from a growing market share in Corporate Bank, reaping the benefits of investments in Origination & Advisory, building on the bank’s recent strong relative performance in the Fixed Income and Currencies (FIC) business, growing fees from investment products in Private Bank and expanding certain lending businesses. In Asset Management, the bank plans to take full advantage of the market recovery that started at the end of 2023 to grow further in Passive and Alternatives. Additionally, Private Bank and Asset Management aim to convert 2023’s net inflows and growth in assets under management into revenues.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Operational efficiency

Deutsche Bank made further progress on its € 2.5 billion operational efficiency program during 2023 and already realized savings from completed efficiency measures. The bank expects the remaining savings to result from the execution of measures relating to infrastructure and technology efficiencies, including application decommissioning and operating model improvements, optimization of the bank’s platform in Germany and front-to-back process redesign, including simplified workflows and automation. These measures are also expected to lead to a reduction of approximately 3,500 roles, mainly in non-client-facing areas, of which some have already left the platform. The bank aims for a quarterly run-rate of adjusted costs of € 5 billion in 2024 and aims to operate with total noninterest expenses of around € 20 billion in 2025.

Deutsche Bank’s 2023 cost base was impacted by inflation, business growth and investments to accelerate execution of the bank’s Global Hausbank strategy. Some of the investments to accelerate strategy execution are non-recurring and mainly related to improvements of the bank’s operational efficiency as outlined above and real estate one-offs. The bank also recognized an impairment of goodwill related to Numis in 2023. In addition, Deutsche Bank made investments that are expected to continue to impact the bank’s cost base. On business growth, the bank has invested in businesses which are less capital intensive and on controls, it further strengthened key functions.

Investment in innovation and digitalization remains a key focus area of Deutsche Bank’s operational efficiency targets. In 2023, the bank has broadened its technological reach with a focus on artificial intelligence (AI) including with the testing of Google Cloud's AI tools. Opportunities from AI are expected in operations and process automation to enable investments in client solutions and fuel revenue growth.

Capital efficiency

With respect to capital efficiency, Deutsche Bank reduced risk-weighted assets (RWA) in 2023, already putting the bank on track regarding its ambition for RWA reductions of € 25 to 30 billion by 2025. These measures, together with strong organic capital generation, enabled Deutsche Bank to increase its CET1 ratio to 13.7% as of year end 2023, up from 13.4% at year end 2022.

Deutsche Bank aims to maintain a Common Equity Tier 1 capital ratio of around 13%, i.e., to operate with a buffer of 200 basis points above the bank’s expected maximum distributable amount (MDA) threshold, also after the impacts from the adoption of CRR 3, which is expected to become effective on January 1, 2025.

Deutsche Bank plans to sustainably grow cash dividends and, over time, return to shareholders through share buybacks excess capital over and above the requirements to support profitable growth and upcoming regulatory changes. For the financial year 2023, the Management Board intends to propose to the Annual General Meeting a dividend of € 0.45 per share, after having paid a dividend of € 0.30 per share for 2022 and € 0.20 per share for 2021. For the financial year 2024 and subsequent years, the bank targets a payout ratio of 50% of net income attributable to Deutsche Bank shareholders, delivered through a combination of cash dividends and share buybacks. These distributions to shareholders are subject to shareholder authorization and German corporate law requirements, and in the case of share buybacks additionally require prior regulatory approval. Deutsche Bank plans to increase both share repurchases and dividends by at least 50% year on year in 2024. The bank has received supervisory approval for a share repurchase of € 675 million, which it aims materially to complete in the first half of 2024, having completed € 450 million in share repurchases in 2023; and Deutsche Bank plans to propose a dividend in respect of the 2023 financial year of € 0.45 per share, or approximately € 900 million, up from € 0.30 per share for 2022, at the bank’s Annual General Meeting in May 2024. For the financial years 2024 and 2025, Deutsche Bank aims for cash dividends of € 0.68 and € 1.00 per share, respectively, subject to a 50% payout ratio limitation relative to net income attributable to Deutsche Bank shareholders. The bank has set a capital distribution goal of € 8 billion in respect of the financial years 2021-2025, paid in 2022-2026, and believes that it is positioned to exceed this objective based on the achievement of the bank’s financial targets.

The rating agencies recognized the continued progress the bank has made over the course of 2023, specifically further improvements in profitability. This was reflected in upgrades by S&P, Fitch and Morningstar DBRS during the year. In May, S&P raised its outlook on the bank to positive. DBRS Morningstar upgraded all Deutsche Bank’s long-term ratings by one notch in June. Fitch upgraded the bank’s ratings by one notch in July. Towards the end of 2023, S&P upgraded Deutsche Bank’s credit ratings, the fourth successive upgrade of Deutsche Bank’s credit ratings by a leading rating agency during 2023. S&P highlighted the bank’s progress in growing the franchise, strengthening earnings, and maintaining solid capital and liquidity profiles.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Sustainability

Deutsche Bank has the strong intention to support and accelerate the historic transformation towards a more sustainable society and economy. Consequently, Deutsche Bank’s Management Board made sustainability a management priority in 2019.

To underpin this, the bank hosted its 2^nd Sustainability Deep Dive in March 2023, where senior leaders reported on the progress in implementing the bank’s sustainability strategy in the specific business and infrastructure areas.

The focus was on how the bank plans to embed environmental, social and governance aspects into products, policies, and processes. The sustainability strategy focuses on the following four pillars:

– Sustainable finance : navigating the bank’s clients on their sustainability journey by being deeply embedded in their decision making and processes, supported by an innovative and data-driven offering

– Policies and commitments : maintaining and developing dedicated control frameworks and processes to turn regulatory challenges into business opportunities and steer decision-making based on impact measurement

– People and own operations : building a sustainability-led organization driven by value-based leadership, empowered employees – embedding environmental and social aspects deeply in the bank’s processes

– Thought leadership and stakeholder engagement : playing a pivotal role for government agencies, academia and interest groups to accelerate standard setting locally and internationally

By implementing this strategy, the bank aims to maximize its contribution to the Paris Climate Agreement and the United Nations’ Sustainable Development Goals. Deutsche Bank has endorsed multiple universal sustainability frameworks and initiatives, such as the UN’s Environment Programme Finance Initiative, the UN Global Compact, and the Principles for Responsible Banking.

To measure and report transparently about the progress, Deutsche Bank has set the following targets and goals:

– The bank wants to achieve cumulative sustainable financing and ESG investment volumes of € 500 billion in the period from January 2020 to end of 2025 (excluding DWS); which transactions can be classified as sustainable is documented in Deutsche Bank’s Sustainable Finance Framework and published on Deutsche Bank’s website

–

It wants to achieve the bank’s net-zero commitment by 2050 and has, therefore, published net-zero targets for seven carbon-intensive sectors in the bank’s corporate loan book by end of 2030 (interim) and end of 2050 (final)

– The bank plans to ensure that at least 35% of Managing Director, Director and Vice President roles are held by women by 2025

– It wants to reduce emissions in the bank’s own operations and supply chain (Scope 1, Scope 2 and disclosed Scope 3: Category 1 to 14) by 46% by the end of 2030 compared to the 2019 baseline

In 2023, Deutsche Bank continued to deliver on the targets, goals and pillars of the bank’s sustainability strategy. For example, the bank:

– Published its initial Transition Plan summarizing the bank’s decarbonization strategy and actions along three dimensions: own operations (Scope 1 and 2), supply chain (disclosed Scope 3: Category 1 to 14); and the financing the bank provides to its clients (Scope 3: Category 15)

– Announced three additional sectoral emission reduction targets in the corporate loan portfolio for Shipping, Cement and Coal Mining after having published pathway targets for four sectors in the previous year (i.e., Oil & Gas, Automotive, Power Generation and Steel)

– Updated the bank’s thermal coal guideline by tightening the criteria on when a company is deemed a thermal coal company and in scope of the guideline, as well as specifying the requirements to be applied to clients in scope of the updated guideline

– Rolled out a “Sustainable Finance” training for client facing staff, and funded community conservation projects in several Asia-Pacific countries by partnering with The Nature Conservancy

– Further enhanced the bank’s risk management and related processes to prevent human rights violations in the supply chain in accordance with the German Supply Chain Due Diligence Act

To reinforce Deutsche Bank’s sustainability strategy, the transformation of the bank with regards to sustainability-related targets and goals is a component for the bank's top executives' performance-based compensation.

This section does not cover DWS which sets its own sustainability strategy. Please refer to the section Asset Management in this chapter.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Deutsche Bank Business segments

Corporate Bank

Corporate banking is an integral part of Deutsche Bank’s business. Corporate Bank’s capabilities in Cash Management, Trade Finance and Lending in close collaboration with Foreign Exchange in the Investment Bank enable the division to serve the core needs of corporate clients. As a leading bank serving multinational and German corporates domestically and abroad, the Corporate Bank helps clients in optimizing their working capital and liquidity, securing global supply chains and distribution channels and managing their risks (source: EUROMONEY). Furthermore, Corporate Bank acts as a specialized provider of services to financial institutions, offering Correspondent Banking, Trust and Agency Services as well as Securities Services. Finally, the division provides Business Banking services to small corporate and entrepreneur clients in Germany through a standardized product suite.

Corporate Bank has defined a number of specific initiatives to capitalize on its core competencies across these different areas to grow revenues to achieve its targets. In particular, the division’s investments in new initiatives and experience in managing complex situations for clients, such as uncertainties associated with increasing geopolitical tensions, lower economic growth in the major operating countries from ongoing supply chain disruptions, higher energy and commodity prices as well as uncertainty around central bank policies, allow Corporate Bank to prove its advisory and solution capabilities.

In 2023, Corporate Bank continued to make progress on the business segment’s strategic objectives, benefiting from rising interest rates and a strong pricing discipline. In July 2023, Deutsche Bank was selected as the new issuing partner for the Lufthansa Miles & More Credit Card, Europe’s leading loyalty program, from mid-2025. In addition, the segment intends to further expand its digital offerings, for example Corporate Bank applied to the German Federal Financial Supervisory Authority (BaFin) in the second quarter of 2023 to obtain a license for the custody of digital assets.

Looking ahead, Corporate Bank is expected to continue to act as an integral part of the Global Hausbank strategy and contribute to Deutsche Bank’s 2025 objectives. The segment sees growth opportunities across all core client groups Corporate, Institutional, Business Banking, both from existing Corporate Bank strengths and from new products. The segment's global network across 140 countries combined with profound local knowledge, a comprehensive product suite and tailored client offering, should continue to offer competitive advantages versus the division’s peers. Corporate Bank continues working towards its strategic ambitions, leveraging its strong brand and deep client relationships and aiming to offer a full range of advisory and financing solutions for corporate treasurers. The segment wants to remain the trusted partner for the German economy and build on its standing as the leading Corporate Bank in its home market. The segment is also committed to connect financial institutions worldwide, a business where it is one of the market leaders (source: SWIFT Euro peer benchmarking).

Corporate Bank’s initiatives will target revenue growth with corporate clients across cash management and payments, including growing its fee-based business with institutional clients and expanding lending.

As the segment seeks to grow its business with clients globally, Corporate Bank commits to apply sound risk management principles to maintain its high-quality loan portfolio and strict lending standards. Equally, the segment sees further potential to reduce its cost base from technology and front-to-back process optimization as well as automation and location strategy.

Moreover, as a transition partner, Corporate Bank helps its clients across sector value chains to achieve their strategic goals by offering a broad suite of sustainable finance solutions and sector aligned ESG industry expertise. Also, Corporate Bank aims to enable the accelerated renewables and infrastructure build-out through asset and project finance capabilities including new technologies like storage solutions, hydrogen and carbon management.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Investment Bank

The Investment Bank is a key pillar of Deutsche Bank’s business. Across FIC and Origination and Advisory, corporate and institutional clients access a comprehensive range of services, encompassing, financing, market making/liquidity provision, risk management solutions, advisory, and debt and equity issuance. The segment regionally encompasses EMEA, Americas and APAC across both Investment Bank businesses and client footprint.

In 2023, underlying markets were less conducive to client flows versus a very strong 2022 and the resulting uncertainty continued to depress levels of capital market and advisory activity. Despite this, the Investment Bank continued to execute against its strategic priorities, delivering an enhanced service offering to its clients and building on the progress made since the formation of the business in 2019.

The development of the Investment Bank’s FIC business has been pronounced, with the long-term growth in revenue and market share reflecting the successful delivery against strategic objectives across multiple areas of the business. This success has been driven by a wide range of factors. A strong and stable management team is in place, with the segment demonstrating its ability to attract leading talent via a number of specific and targeted senior hires into sub-business leadership positions through 2023. A defined technology strategy is delivering simplified and sustainable capability, with over 175 applications decommissioned in the past two years, and investment into areas across the business is enabling product enhancements and the development of new capability for the division’s clients. This has been demonstrated by workflow solutions, which provide clients access to Deutsche Bank’s product suite in a simplified and operationally efficient manner. The continued focus on the division’s clients has been enhanced via the creation of dedicated relationship management and client enablement functions within the Institutional Coverage Group. This ensures deeper strategic relationships with clients, whilst providing them with the most efficient ways of working with Deutsche Bank. This is further enhanced by the significant increase in client engagement following the recent rating upgrades. The continued success has also been recognized externally. As an example, Euromoney recognized Deutsche Bank as the leading global FX provider for a second year in a row.

In an environment where fee pools continued to be restricted, the focus of Origination & Advisory has been building the platform to ensure the business is positioned to benefit when activity is expected to return in 2024. A significant number of targeted senior hires have been made, with a focus upon sectors and regions where Deutsche Bank is able to compete but is currently underweight. Alongside this organic growth, the acquisition of Numis will further enhance Origination & Advisory’s depth of offering in the UK, the largest EMEA fee pool, whilst also enabling the cross-sell of other segmental products into the client base. To ensure that strong relationships are maintained with clients, the business has established a Client Strategy and Analytics team which will drive the depth of relationships with its client base and ensure close monitoring of performance at the most granular level.

In 2024, the strategy of the Investment Bank is focused on working towards its vision of being the leading non-U.S. global investment bank and delivering upon the segment’s growth and return targets. This is aimed to be achieved via targeted growth investments and the continued development of its client strategy, combined with a focus on technology, data enabled capability, capital efficiency and control.

The investments made into the Origination & Advisory franchise are expected to increase the weighting of strategic advisory revenues as a percentage of total revenues over time. Within FIC, investment into existing businesses in areas where the division has a competitive advantage will continue. This will be complemented by the expansion into a small number of adjacent businesses where the existing platform and client base can be leveraged to enable growth at low marginal costs. The result of each of these will be a further diversification of revenue streams, whilst also ensuring an enhanced and relevant product offering for the client base.

Finally, ESG remains a priority across the Investment Bank as the segment continues supporting its clients globally. Deutsche Bank held its second Sustainability Deep Dive in March 2023, providing insight into the different approaches that the bank has developed with clients across the globe. From a transaction perspective there were a number of key events in 2023 including completing a bespoke deal-contingent interest rate hedge and a tailored financing for Hai Long, Taiwan’s largest offshore wind project to date, and acting as global coordinator and joint active bookrunner on Air France-KLM’s € 1 billion inaugural sustainability-linked long 3-year and long 5-year bond offering.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Private Bank

Private Bank is structured along two core businesses: Private Bank Germany and International Private Bank. Private Bank serves personal and private clients, wealthy individuals, entrepreneurs and families. Within the segment, the international businesses also focus on commercial clients. With over 20 million clients and a broad range of financial services in 19 countries, Private Bank significantly contributes to Deutsche Bank’s global businesses. The segment continued to drive a disciplined approach towards achieving its strategic and financial objectives. The achievements throughout 2023 enabled Private Bank to further close the gap towards its 2025 targets. Private Bank’s progress in evolving its businesses was also in line with the Group’s ambition across growth, operational and capital efficiency.

Private Bank Germany is positioned as the market leading private bank in Germany and serves 19 million customers with its two major brands Deutsche Bank and Postbank. While Deutsche Bank continues to offer private customers high-quality advisory services with outstanding individual product solutions, the customers of the Postbank brand benefit from non-complex and standardized product offerings alongside postal and parcel services in cooperation with Deutsche Post DHL. Across its omni-channel offerings, Private Bank customers not only have access to a nationwide branch network but also to diverse banking solutions via direct sales, mobile sales and distribution partners.

In 2023, Private Bank Germany increased its revenues materially versus the prior year, supported by robust growth in deposits and successful campaigns for fixed rate products. While mortgage lending business remained at a stable level, Private Bank Germany’s assets under management in the investment business increased compared to the prior year, driven by high inflows as a result of the positive market development. Furthermore, Private Bank Germany continued to work on its strategic transformation. This included the continued transformation of the sub-division’s go-to-market model including the reduction of Postbank branches to approximately 550 at year end 2023 and the implementation of new branch concepts. In the upcoming years, Private Bank Germany plans to further adjust its go-to-market model and strengthen its digital proposition. Additionally, Private Bank Germany completed one of the largest customer migrations in the European banking market in 2023. Twelve million customers with 19 million contracts were migrated to a unified platform for all customers in Germany paving the way for decommissioning all former Postbank Group legacy applications and enabling the bank to further drive its digital transformation. The migration resulted in a higher number of client requests leading to a backlog of unresolved requests. Private Bank Germany is prioritizing a remediation plan to improve capacities, address client concerns and to return to the target operational service levels.

International Private Bank has a well-diversified revenue mix across regions with client segments focused on Wealth Management, Bank for Entrepreneurs and Premium Banking. The business targets ultra-high net worth family entrepreneurs globally and affluent clients across Europe focused on a digitally led model, with a larger ambition to be the global house of choice for entrepreneurs.

International Private Bank maintained its strong momentum in attracting client inflows with positive net inflows in assets under management in each quarter for four consecutive years despite difficult market conditions in 2023. International Private Bank’s flagship strategic asset allocation and innovative private market/ultra-high net worth focused solutions have significantly contributed towards the International Private Bank’s net new assets growth. Furthermore, the business continued its progress on several targeted initiatives to fulfil its strategic agenda, e.g., strengthening wealth management coverage and product teams in key markets supported by entrepreneur-focused strategic hires. The business has also applied strict cost discipline, thereby successfully managing costs in an inflationary environment. The benefits of both OneBank and Bank for Entrepreneurs approaches were reflected in the business successfully addressing the complex needs of wealthy entrepreneur clients. Furthermore, in Premium Banking, the business continued its strategic transformation journey toward digital-first remote advisory and client engagement services, while optimizing and innovating the branch footprint.

In ESG, Private Bank announced its strategy for the upcoming years at Deutsche Bank’s Sustainability Deep Dive in March 2023, further substantiating its overall ESG value proposition through product portfolio enhancements, strategic thematic collaborations and focused inhouse ESG enablement efforts. This was aimed at supporting clients in their overall sustainable transition journeys.

In July 2023, Private Bank announced a new organizational set-up to further enhance the segment’s capabilities and to achieve its 2025 targets. Commencing from the first quarter of 2024, the Private Bank will follow a customer-focused approach with two client sub-segments: ‘Wealth Management & Private Banking’ and ‘Personal Banking’. Wealth Management & Private Banking will combine Private Banking, high-net-worth and ultra-high-net-worth clients globally. ‘Personal Banking’ includes all retail and affluent customers as well as commercial banking clients across specific international regions. These commercial banking clients consist of small business clients and small-sized corporate clients that are not covered by the Wealth Management & Private Banking sub-segment.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Asset Management

Asset Management principally consists of DWS Group GmbH & Co., a global asset manager with diverse investment capabilities that spans traditional active and passive strategies, as well as alternative bespoke solutions.

DWS operates in an ever-changing market environment and faces a variety of economical, fiscal, political and environmental challenges. DWS strategy consists of the four strategic clusters; Growth, Value, Build and Reduce, and are aligned to its capabilities and the growth prospects of the market. The aim is to maintain market leadership in Germany, building on expertise and customer relationships, in addition to expanding existing partnerships and developing new distribution channels, to gain additional market share. DWS sees additional market potential especially in Alternatives investments and Passive funds, represented by the Xtrackers brand. The overall strategy also takes account of sustainability and in 2023, DWS updated its sustainability strategy to clearly define its priorities.

The Growth strategy is built on the strength in Passive and Alternatives businesses. The Passive business, with the Xtrackers brand, in the division’s view offers sustained and profitable growth potential, which provides sufficient scalability. Building on the franchise and European business, DWS has decided to invest in a US growth plan including sustainability, thematic and Active ETFs. Further, DWS sees a strong demand for mandates in Asia Pacific, and therefore plans to expand its customized mandates business. In addition to regional growth potential, DWS continues to see opportunities for bespoke Passive solutions to outperform broad index replication.

In Alternatives, investor interest in real estate slowed down in 2023, while demand in the infrastructure sector remained strong. However, DWS expects an increase in demand within Alternatives, and aims to facilitate closing the gap between capital demand and supply with private capital investment solutions in Europe. DWS continues to focus on its real estate and infrastructure investment platforms and positioning the division for growth in the private debt space.

The Value strategy aims to maintain leadership in mature markets for Active investment strategies, specifically Equity, Fixed Income and Multi Asset. In Equity, DWS intends to further grow the platform for Thematic Equities and make progress on offerings towards sustainability. Given the changing market environment and higher interest rates, DWS will further focus on Fixed Income and institutional investors. In Multi-Asset, the aim is to further strengthen solutions capabilities and enhance the modular investment platform to achieve more scale.

The Build strategy’s emphasis on digitization trends aims to focus on asset management as-a-service and digital assets. DWS plans to build a respective modular offering which is scalable and integrated via application programming interfaces into offerings of new and existing distribution partners. DWS expects increasing tokenization of the economy, with resulting changes in market structure, and aims to utilize new blockchain infrastructure, develop new products and reach digital native clients. In December 2023, DWS agreed to establish a joint venture with Galaxy Digital and Flow Traders, to bring together traditional asset management expertise with digital asset know-how, with the aim of issuing a fully collateralized euro-denominated stablecoin in a regulated environment.

The Reduce strategy intends to reallocate financial resources to fund investments in the Build and Growth areas. DWS will continuously analyze measures to increase efficiency, including divesting from sub-scale businesses and reduction of management layers, thereby ensuring these measures do not have a negative impact on the ongoing business. In 2023, DWS completed the sale of its Private Equity solutions business unit. Additionally, DWS reduced management levels within the business as part of a broader efficiency program.

In 2023, DWS updated its sustainability strategy and refined its sustainability priorities. The ambition is to enable clients to navigate the sustainable transformation of the real economy by providing them with investment expertise and solutions. The topic of climate change remains the core theme of the updated sustainability strategy, built around three priorities: focus on climate related investing, strengthen engagement with investees and other relevant stakeholders, and advance DWS’ own corporate transformation to achieve commitment to net zero.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

The competitive environment

Geopolitics continued to impact the economic environment, in part because of the ongoing war in Ukraine as well as the Israel-Hamas war. In addition, central banks tightened monetary policy by raising key interest rates to curb inflation. As a result, growth slowed in some developed countries. Among emerging markets China’s growth rate normalized, because of the end of zero-COVID policies.

Global GDP growth weakened to 3.1% in 2023. The economic slowdown in many developed countries had a negative impact, while stronger Chinese growth resulted in slightly higher growth in emerging markets. Even though inflation had already peaked in the previous year, energy prices in particular remained at a high level for longer, which led to a loss of purchasing power and dampened industrial production in the affected regions. Wage increases may have also dampened the easing of inflationary pressure due to the ongoing passing on of associated cost increases. Global inflation averaged at 6.9% in 2023.

After an energy supply-driven recession was avoided in the eurozone at the start of the year, momentum remained stagnant. Inflation eased in 2023, but at an annual average of 5.4% remained well above the central bank’s target of 2%. The ECB therefore raised interest rates several times and maintained the level reached until the end of the year. Loss of purchasing power among private households, tighter monetary policy and a slowdown in global trade slowed GDP growth to 0.5% in 2023.

In 2023, the German economy was noticeably impacted by the loss of purchasing power of private households. The strong wage growth was not yet able to compensate for this. The still elevated energy prices were a burden for the economy, the slowdown in global trade dampened exports and the tight monetary policy provided a considerable headwind for the construction industry. The inflation rate only slowed to 5.9% measured in national terms, and GDP declined by 0.3%.

Despite a sharp rise in key interest rates, the U.S. economy proved robust in 2023. Although inflation eased from its high level in the previous year, it still remained above the U.S. Federal Reserve’s (Fed) target meaning that it maintained the key interest rate level reached in the middle of 2023. The strong momentum in the labor market, which lasted until the summer of 2023, slowed towards the end of the year. Overall, U.S. GDP grew by 2.5% and inflation was at 4.1%.

The Japanese economy continued its recovery during 2023. Domestic demand was supported by depletion of household savings and inbound tourism. There was also strong wage growth, which compensated for much of the loss of purchasing power due to inflation. The Bank of Japan (“BoJ”) maintained its accommodative stance. Japanese GDP grew by 2.0% in 2023 while inflation rose to 3.3%.

The Asian economic region continued to recover in 2023, albeit at a different pace across regions. China was the most important growth driver. Slowing momentum in key overseas trading partners was a headwind for exports. Demand from private households benefited from the very significant decline in inflation rates. Asian GDP expanded by 5.1% in 2023 and inflation slowed to 2.3%.

After China's economy had a buoyant start to the year, the recovery lost momentum towards the middle of the year. Among other things, the risks in the real estate market have come into sharper focus. Thanks to fiscal and monetary policy support, the economy regained momentum in the second half of the year. China’s GDP growth accelerated to 5.2% in 2023 and inflation fell to 0.2%.

2024 Outlook

Weak growth in various developed countries is expected to bottom out in the first half of 2024. Further declining inflation rates in combination with wage increases should give private consumption more momentum again from spring. If inflation continues its downward trend, central banks should be able to start lowering key interest rates. Annual average global inflation is expected to reach 5.1% in 2024 and GDP growth is likely to slow somewhat to 2.9%.

In the developed economies, growth is likely to slow to 1.2% in 2024 mainly due to weaker development of eurozone economies. A noticeable slowdown in inflation to 2.5% should support households' real incomes and thus limit the economic downturn. Weaker inflation is expected to enable central banks to start lowering key interest rates in the first half of the year.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

GDP growth in the emerging markets is expected to be somewhat weaker at 4.0% in 2024, with developments in the individual regions likely to vary considerably. Weak growth in developed countries will be a headwind for foreign trade. However, most countries should see a significant easing of inflation. The annual average inflation is expected to be 6.8%.

The Eurozone economy is likely to stagnate until the middle of 2024. After that, private consumption should provide stronger support for the economy if inflation continues to drop significantly. GDP growth is expected to slow to 0.2%. Inflation could drop below the target rate of 2% in the second half of the year but is likely to be at 2.2% on average in 2024. The ECB is expected to start lowering key interest rates in the first half of 2024.

German GDP is expected to shrink again in 2024 by 0.2%. Fiscal policy is likely to become tighter as a result of a ruling by the Federal Constitutional Court. If rising wages and easing inflation, which is expected to average 2.6% support private consumption, the economy should regain momentum in the summer. The somewhat weaker global economy is likely to limit the recovery. The still tight monetary policy will provide an additional headwind.

The U.S. economy is likely to continue to grow robustly, despite the lagged impact of previous policy rate hikes and lower wage growth. GDP is expected to expand by 2.4% and inflation to ease to 2.4%. If inflation continues to weaken, the Fed is expected to start cutting interest rates from the middle of the year.

The Japanese economic growth is expected to slow to 0.4% in 2024 from 2.0% the year before. The slowdown of overseas trading partners is providing a headwind and fiscal policy is expected to gradually become less accommodative. Wage growth is likely to be strong again in 2024 and support private consumption. Inflation is likely to ease to 2.9% in 2024. The Bank of Japan is expected end negative interest rate policy in 2024.

For the Asian economies, China's development remains of crucial importance. The slowdown in growth overseas is a headwind for the region. GDP growth of 4.8% is forecast for Asia in 2024. The easing of inflation is likely to come to an end in 2024, with the annual average expected at 2.0%. If the Fed starts to cut interest rates, the Asian central banks could also start to ease monetary policy.

In China, further fiscal and monetary policy measures may be necessary in 2024 in order to achieve the government's growth target. GDP growth is likely to slow to 4.7%. The expected weak growth in Europe could be a headwind for China's export economy. The weak property market is dampening demand from private households. Inflation is expected to accelerate to 0.6%.

There are a number of risks to the bank’s global economic outlook. Geopolitical risks remain elevated in Ukraine and in the Middle East. The U.S. versus China strategic competition could possibly continue to intensify. The potential intensification of interdependencies between crisis hotspots could exacerbate the impact on the markets.

In 2024, important elections will take place in many regions of the world, including the U.S. and the EU, and the news surrounding these could well have the potential to move the markets, at least in the short term.

Competitor landscape

Against this backdrop, Deutsche Bank competes in the financial services sector with a wide variety of competitors, who include other universal banks, commercial banks, savings banks and other public sector banks, broker dealers, investment banking firms, asset management firms, private banks, investment advisors, payments services providers, financial technology firms and insurance companies. Some of the competitors are global like Deutsche Bank, while others have a regional, product or niche client footprint. Deutsche Bank competes on a number of factors, including the quality of client relationships, transaction execution, products and services, innovation, reputation and price.

In 2023, the European banking industry continued to benefit substantially from the surge in interest rates. Net interest income jumped again, driving a double-digit increase in total revenues. On the other hand, banks maintained relatively tight cost discipline. Asset quality remained sound and loan loss provisions even fell slightly, from low levels. Post-tax profits climbed to an all-time high, in nominal terms, finally surpassing the pre-financial crisis peak. Following the boom, loan growth with the private sector in the euro area has broadly come to a halt. However, volumes are not contracting significantly. Banks’ tightening of credit standards has essentially ended but demand for credit weakened further due to much higher interest rates. Corporate finance activity was even lower than in the previous year and near the pre-pandemic average, while trading momentum slowed globally on the equity side yet stayed resilient in fixed income.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

The global banking industry will probably face additional headwinds in 2024 than in the past year when the operating environment had been quite benign. Interest rates are likely to have peaked in major economies and could start to fall from spring onwards. This may exert pressure on net interest margins in the medium term, despite a potential short-term benefit from lower funding cost. Asset quality might deteriorate somewhat from current levels as significantly higher interest rates than in the past decade continue to creep into the private sector and stretched borrowers face increasing refinancing risks, especially in the commercial real estate markets. At the same time, a sluggish real economy in most advanced countries may result in credit demand of companies and households weakening further until it stabilizes in the course of the year; with loan volumes possibly contracting moderately. Capital market momentum could see a cyclical improvement following two years of suppressed activity. European banks may continue to benefit from the substantially higher level of interest rates, although the associated side effects will gain in weight. As a result of considerable uncertainty about the speed and extent of the disinflation process, timing and size of the ECB’s initial rate cuts is also subject to changing expectations. Likewise, fiscal and economic policy uncertainty may increase due to the incoming new European Commission and European Parliament, on top of developments in individual EU member states and looming further geopolitical fragmentation. However, the banking industry should continue to operate from a position of strength, with revenues still strong despite slower growth and bottom-line profitability likely to remain close to current record high levels. Capital ratios might edge up slightly, while the specific impact of the implementation of Final Basel III reforms in the EU should become clear. Although additional improvements in profitability and capital may become harder to achieve. In the U.S., the economy may continue to expand robustly in 2024, which may support loan growth. While the Fed is likely to proceed more slowly in cutting interest rates than the ECB, lower rates could nevertheless help ease the burden of unrealized securities losses on banks’ balance sheets. Similar to Europe, policy uncertainty could increase ahead of the elections in November. But greater clarity is emerging regarding the Final Basel III reforms implementation and specifically the tighter requirements regional banks will face as a consequence of the turmoil in March 2023. This could slow their growth and make building up capital as well as strengthening liquidity a priority. Nevertheless, system-wide profitability should stay elevated. Banks in China and Japan may continue to experience headwinds from lackluster economic growth and low or zero, respectively, interest rates, even though a first rate hike in Japan is expected in spring. Chinese banks in particular are likely to be affected by the ongoing crisis in the domestic real estate market. Nevertheless, exact repercussions are difficult to predict given the strong role the authorities might potentially play in resolving any issues.

In Deutsche Bank’s home market, Germany, the retail banking market remains fragmented, and the competitive environment is influenced by the three-pillar system of private banks, public banks and cooperative banks. Competitive intensity overall has increased in recent years following some consolidation activity, particularly among public regional banks (Landesbanken) and private banks, and increased activity levels from foreign players.

Looking at the wider banking ecosystem, the evolution of financial technology firms remains as much an opportunity as a challenge for banks. While the bank sees the risk of banking disruption primarily through big technology companies and in select product areas, particularly the unregulated segments, some banks have also taken the opportunity to selectively partner with financial technology firms and leverage their solutions to become more efficient and/or develop differentiated delivery channels for end clients.

Regulatory environment

Various new legislative and regulatory proposals were issued in recent months, covering topics such as regulatory capital, liquidity, resolution planning and digital assets and the banking turmoil of spring 2023 in the U.S.

Capital, liquidity and leverage requirements – During 2023, the EU co-legislators continued and concluded their negotiation on the comprehensive package of reforms with respect to European Union banking rules which implement the Final Basel III set of global reforms, changing how banks calculate their Risk Weighted Assets. The package amends the EU Capital Requirements Regulation (“CRR”) and the Capital Requirements Directive (“CRD”). The EU co-legislators (Council of the EU and European Parliament) reached a political agreement in June, and a near-final version of the text was published in December 2023, with the final text expected to be adopted by mid-2024.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

CRR III and CRD VI include, among other things, a gradually introduced output floor establishing minimum risk-weighted assets that will ultimately be set at 72.5 % of the risk-weighted assets calculated under the standardized approach, changes to standardized and internal ratings-based approaches for determining credit risk, changes to the credit valuation adjustment, a revision of the approaches for operational risks and reforms to the market risk framework as set out in the FRTB, adjustments to the Pillar 2 requirements (“P2R”) and the SyRB and a “fit-and-proper” set of rules for the senior staff managing banks. Other proposed measures are aimed at addressing sustainability risks by requiring banks to identify, disclose and manage environmental, social and governance risks as part of their risk management framework and include regular climate stress testing by the banks’ supervisors. The implementation of the changes to CRR and CRD has the potential to increase Deutsche Bank’s risk-weighted assets and will likely affect its business by raising its regulatory capital and liquidity requirements and by leading to increased costs.

Separately, the European Banking Authority (“EBA”) assessed possible adjustments to the EU prudential framework for environmental, social and governance issues, and issued a report with relevant recommendations, mostly related to supervisory action and stress testing.

In parallel, the UK Prudential Regulation Authority (“PRA”) concluded the consultation of its proposal to implement the Final Basel III reforms, and in December 2023 it issued the first part of the near-final rules, covering market risk, credit valuation adjustment risk, counterparty credit risk and operational risk, with the remaining elements of credit risk, the output floor, and reporting and disclosure requirements expected in the second quarter of 2024.

On July 27, 2023, the U.S. Agencies also issued a Notice of Proposed Rulemaking (“NPR”) for the implementation of the Final Basel III reforms in the U.S., inviting comments by January 16, 2024. The NPR would implement the most wide-ranging and significant changes to the U.S. capital rules since 2013, requiring Category I-IV banking organizations, including DB USA Corporation, and their depository institution subsidiaries to calculate risk-weighted assets under both the current standardized approach that also incorporates a new approach for market risk and a new, more risk sensitive, approach referred to as the “Expanded Risk-Based Approach.” Total risk-weighted assets under the Expanded Risk-Based Approach would include standardized approaches for credit risk, operational risk and credit valuation adjustment risk, as well as a new approach for market risk that would be based on internal models and standardized supervisory models. Under the proposal, DB USA Corporation and its depository institution subsidiaries would be subject to the lower of the two resulting capital ratios from the current standardized approach and the Expanded Risk-Based Approach. The proposal, if enacted, would have an effective date of July 1, 2025, with certain elements having a three-year phase-in period.

The Basel Committee on Banking Supervision announced that it will consult on potential measures aimed at reducing “window-dressing” behavior by some banks in the context of the scoring for the qualification of banks as Global-Systemically Important (G-SIB). This could change the data or the frequency supervisors consider for assessing the bank’s risk profile.

Central Clearing Counterparties (“CCPs”) – Negotiations on the European Commission’s proposal for a legislative package with respect to clearing services (the “Clearing Package”) continued among the EU co-legislators and the first trialogue took place on December 13, 2023. The Clearing Package entails a proposal for a review of the European Market Infrastructure Regulation (“EMIR”) accompanied by targeted amendments to other European laws including the CRR and the CRD. A key focus in the Clearing Package is the obligation on clearing participants to open an active account at an EU CCP for clearing certain instruments and the calibration of the minimum level of required clearing activity in such accounts. It is currently unclear whether the negotiations on this Clearing Package will be brought to a close ahead of the EU Parliament elections in June 2024.

The European Securities and Markets Authority (“ESMA”) continued with the processing of the recognition of non-EU CCPs. During 2023 ESMA has – following a formal equivalence decision by the European Commission in 2022 – recognized a CCP in Indonesia and is in the process of withdrawing the recognition of CCPs in the United Arab Emirates and South Africa due to both jurisdictions having been identified as non-EU countries having strategic deficiencies in their national anti-money laundering and counter financing of terrorism regime that poses significant threats to the financial system of the Union under the Anti-Money Laundering (“AML”) Delegated Regulation. The withdrawal of one UAE CCP has for the moment been paused following a successful initial judgement by the European Supervisory Authorities’ Court of Appeal. For Indian CCPs, no Memorandum of Understanding (“MoU”) was signed between Indian and EU authorities and the Indian CCPs remain derecognized. BaFin has published a statement on February 17, 2023, allowing German credit institutions including Deutsche Bank the possibility to remain members of six Indian CCPs for a period of 18 months, up until October 31, 2024.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Capital Markets Union – Some of the key proposals from the European Commission on Capital Markets were brought to a close in 2023, including the Review of the Markets in Financial Instruments Regulation and Directive (“MiFIR” and “MiFID”, respectively), amendments to the Alternative Investment Fund Managers Directive (“AIFMD”), the European Long-Term Investment Fund (“ELTIF”) Regulation, and a regulation to set up the European Single Access Point (“ESAP”). Key elements of the proposals focus on supporting the market making abilities of European banks, in particular, by granting them access to UK derivatives trading venues, enhancing the framework for a Consolidated Tape for aggregated trade information across all execution venues in the European Union, and developing an ESAP so that investors can access financial and sustainability-related information in one place. The EU co-legislators already agreed on the amendments to these proposals in June 2023 and the final texts are expected to be published in early 2024.

On November 7, 2022, the European Commission published further proposals in connection with the CMU, which are referred to as the Listing Package and the Corporate Insolvency Package. The Listing Package aims to encourage companies to list and remain listed on EU stock exchanges and allow easier access to funding. The Corporate Insolvency Package aims to harmonize specific aspects of insolvency proceedings across the EU to facilitate cross-border investment. Both EU co-legislators have finalized their respective positions in November 2023. Political negotiations are expected to close in February 2024.

Benchmarks – Most LIBOR settings ceased by the end of 2021, and the remaining tenors of USD LIBOR ceased on June 30, 2023. Regulators have since developed “tough legacy” solutions and finalized legislation and authorities’ powers to implement replacement rates in their respective jurisdictions. The European Commission has also published its legislative proposal to reform the scope of the EU Benchmarks Regulation in October 2023, to significantly reduce the number of EU and non-EU benchmarks in scope. The EU co-legislators are now assessing their position on this proposal before political negotiations are expected to take place in the first quarter of 2024.

Digital Transformation – Several jurisdictions progressed initiatives in 2023 to both address risks and capitalize on the benefits associated with the digitalization of financial services and address the growing dependence on so-called critical third parties. Work in this area is expected to continue with a focus on data protection, open data access, e-privacy, cybersecurity, fraud prevention, operational resilience and capital treatment of crypto assets.

In 2023, the European Commission continued its work in the context of its 2020 Digital Finance Strategy which defined regulatory priorities and policy actions through 2024. The strategy included two key legislative proposals to strengthen and harmonize financial sector operational resilience requirements (proposal for a Digital Operational Resilience Act (“DORA”) and a complementing amending directive) and to establish a regulatory framework for crypto assets (proposals for regulations on markets in crypto assets (“MiCA Regulation”) and on a pilot regime for market infrastructures based on distributed ledger technology (“DLT Pilot Regulation”)). DORA and the complementing directive were finalized in 2022. They will apply from January 17, 2025, and introduce a comprehensive framework setting out rules on the digital operational resilience for all regulated financial institutions throughout the European Union. After its publication in June 2022, the DLT Pilot Regime became applicable on March 28, 2023, establishing a temporary framework for regulatory sandboxing that can be used by market participants for experimenting with new technologies in financial market infrastructure. On June 9, 2023, the final MiCA Regulation was published and will become applicable within the next 12-18 months. Throughout 2023, the European Commission, the ESMA and the EBA continued to complete the work on this new digital finance framework by proposing a number of Delegated Acts, Regulatory Technical Standards and Implementing Technical Standards related to both, MiCA and DORA.

Trialogue negotiations on the Data Act which had been proposed in 2022 concluded in summer 2023. This legislation which covers a variety of aspects such as a general framework for third-party access to information generated by connected devices, ad-hoc data requests from public authorities and international transfer of and access to non-personal data. It lays the foundation for so-called sectoral data spaces and data-sharing agreements and introduces rules for switching of cloud service providers. Specific to the financial sector, the European Commission published a proposal for Financial Data Access (“FiDA”) in June 2023. Building on lessons learned from the EU’s Second Payment Services Directive (“PSD2”), FiDA seeks to introduce mandatory data-sharing obligations across a broad range of financial products and accounts, including investments, savings, loans and insurance. The proposed scope is not limited to account and transaction data, but also covers customer onboarding information with the aim of facilitating comparability, competition and switching of providers. Finalization of the regulation is not expected before late 2024 to early 2025. In the U.S., the Consumer Financial Protection Bureau (“CFPB”) published an NPR in October 2023 on data access and data-sharing obligations, under which a consumer would be able to grant third parties’ access to the consumer’s information associated with credit card, checking, prepaid and digital wallet accounts under certain conditions. The comment deadline for the proposal was December 29, 2023. The CFPB has not yet issued a final rule.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Political negotiations on the European AI Act concluded on December 8, 2023, with further technical work expected to continue through the first quarter of 2024 before the provisions will become applicable 24 months later. Following a self-regulation approach for the longest time, the U.S. White House issued an Executive Order on Artificial Intelligence, mandating sectoral and horizontal authorities to develop standards, reports and regulatory requirements to increase safety, security, and transparency from AI companies regarding their model operations and introduces new standards aimed at protecting consumers, workers, and minority groups from potential harms. With particular relevance for the financial sector, the EO requires the Secretary of the Treasury to submit a public report on best practices for financial institutions to manage AI-specific cybersecurity risks within 150 days of the order’s publication date. On top of that, certain future horizontal requirements, e.g., on testing of AI safety including the red-teaming, or the guidelines on the assessment of privacy-preserving technologies may apply to financial services and the use / development of AI by financial institutions in the U.S. as well.

In the last quarter of 2023, the EU co-legislators agreed on the key elements of a legislative action that aims to make instant payments in euro available to all citizens and businesses by amending the Single Euro Area Payments (SEPA) Regulation and the regulation on cross border payments. This regulation is expected to be enforced in the first quarter of 2024 with a staggered implementation time starting in the last quarter of 2024 aiming to make instant payments the new normal across the EU. Further changes to the EU’s payment services legislative framework have also been proposed, with draft texts for a third EU Payment Services Directive (“PSD3”) and a new Payment Services Regulation (“PSR”) published in June 2023. The proposals in PSD3 and PSR include provisions aimed at enhancing competitiveness within the payments industry (including in respect of open banking), developing payment fraud prevention rules and improving certain consumer information requirements. The EU co-legislators will now consider the proposals throughout 2024.

In addition, the European political and regulatory landscape continues to be driven by a desire to increase “digital sovereignty”. This goal translates into active support for European initiatives in the field of digital identities and cloud services, while at the same time it leads to greater scrutiny of non-European technologies and respective providers, including calls for onshoring of data and services.

Aligned with the majority of central banks globally, the European Central Bank finalized its investigation project for the potential launch of a digital euro as a new form of digital central bank money to the wider public. In October 2023, the project moved into the next two-year phase of further experimentation and analysis, including the establishment of a rulebook for the digital euro. In June 2023, the European Commission proposed the legal framework for the digital euro as a legal tender together with a first legal framework defining the role of euro banknotes and coins as a legal tender. Political negotiations on this legislative proposal are expected to continue throughout the on-going project phase of the ECB. The Bank of England and the Fed have conducted similar analysis since 2021 but have not officially committed any timelines.

Work by UK and U.S. authorities focused on cloud services and the role of third-party service providers that are not regulated financial entities, but whose service provision is critical to the functioning of the financial market (“CTPs”). To that end, the UK Financial Conduct Authority (“FCA”) and the Bank of England (“BoE”) jointly launched a consultation on a future direct oversight framework for CTPs in December 2023. The U.S. Treasury at the same time assessed the current regulatory framework and need for action on cloud regulation in the U.S. The Federal Reserve Board, FDIC and OCC also released final joint guidance in June 2023 on banking organizations’ management of risks associated with third-party relationships.

In terms of crypto assets, stable coins and decentralized finance, the UK, U.S. federal and New York state authorities continue their scrutiny and provide supervisory guidance to consumers and the financial industry. The ability for banks to be able to engage in digital asset activities will vary depending on the stances taken within each jurisdiction and this may limit Deutsche Bank’s ability to engage in these activities. Discussions regarding the required policy frameworks required to address the risks and opportunities of digital assets have increased due to numerous insolvency and fraud cases related to individual crypto assets or platforms.

U.S. authorities have increased scrutiny of crypto-asset activities, particularly following several high-profile insolvency and fraud cases concerning crypto-asset intermediaries in 2022. The FDIC, Federal Reserve Board, OCC and the New York State Department of Financial Services (“DFS”) have each issued guidance requiring banks regulated by them to provide written notice to or obtaining approval from them prior to engaging in any crypto-asset-related activity. The federal banking agencies and the DFS have further signaled through guidance, public statements and other actions that all crypto-asset-related activities will be heavily scrutinized.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Anti-Money Laundering and Other Financial Crime – The political negotiations on the European Commission’s anti-money laundering (“AML”) and countering the financing of terrorism (“CFT”) legislative package (referred to as the “AML/CFT Package”) from July 2021 continued throughout 2023. The AML/CFT Package contains proposals for a regulation on AML/CFT containing directly applicable rules (“AML Regulation”), a sixth directive on AML/CFT (“AMLD 6”), a regulation establishing the EU AML/CFT Authority (“AMLA”), and a Regulation on information accompanying transfers of funds and certain crypto assets (“FTR Recast”). One key element of the AML/CFT Package is the establishment of an integrated European AML supervisory system closely involving national supervisors and the newly to be established EU AML Authority (“AMLA”) as well as the creation of a unified AML/CFT regulatory framework which includes directly applicable AML/CFT rules and requirements throughout the EU (single EU rulebook). Once the package is implemented, AMLA will directly supervise a small number of cross-border financial sector entities in the highest risk category, including Deutsche Bank, facilitate cooperation among financial intelligence units and coordinate national authorities. The single rulebook expands the list of obliged entities and includes harmonized, more detailed and granular rules, among other things, in the area of customer due diligence, beneficial ownership, and AML/CFT risk management.

Both the Council of the EU and European Parliament have reached their position on AML Regulation and AMLD 6. The institutions are now in discussions with each other. It is expected that the final texts of the acts will not be available before mid-2024.

On June 29, 2022, the European Council adopted its partial position on the proposal for the creation of the new AMLA and the final adopted text of the FTR Recast was published in the EU Official Journal on June 9, 2023, which will extend traceability requirements to crypto asset transfers effective from December 30, 2024.

Climate change, environmental and social issues

2023 saw a number of sustainability related legislations proposed and reach application dates. These include environmental taxonomy delegated acts, development of proposals around ESG ratings regulation internationally and a strong theme around ESG due diligence requirements – both in Germany and across the EU.

Environmental Taxonomy – On November 21, 2023, the European Commission adopted a new EU Taxonomy Environmental Delegated Act, as well as an amended EU Taxonomy Climate Delegated Act. The new Environmental Delegated Act focuses on the four remaining non-climate environmental objectives, namely the sustainable use and protection of water and marine resources; the transition to a circular economy; pollution prevention and control; and the protection and restoration of biodiversity and ecosystems. The amendments to the Climate Delegated Act include criteria for new activities in the manufacturing and transport sectors. The Environmental Delegated Act and the revised Climate Delegated Act provide technical screening criteria for economic activities that make a substantial contribution to one or more of the climate and/or non-climate environmental objectives and that do not cause significant harm to other objectives. Both delegated Acts entered into force on December 11, 2023, and became effective on January 1, 2024.

ESG ratings proposals and reporting requirements – 2023 saw the European Parliament and Member States (Council) adopt their General Approach on an ESG ratings regulation, which was proposed by the European Commission in June 2023. The European Commission proposed that ESMA become the supervisor for ESG rating agencies with authorization and enforcement powers with the goal of preventing conflicts of interest and increasing the integrity of the operations of ESG ratings providers. This proposal looks to establish transparency requirements for rating methodologies but will not regulate the methodologies themselves. Final inter-institutional negotiations are underway to finalize the text, expected in the first half of 2024.

With respect to reporting requirements in the EU, on July 31, 2023, the European Commission adopted the first set of the European Sustainability Reporting Standards (“ESRS”) supporting the Corporate Sustainability Reporting Directive (“CSRD”), extending non-financial reporting requirements for corporates and banks. The Delegated Regulation on the ESRS was prepared by the European Financial Reporting Advisory Group (“EFRAG”). The cross-sector standards cover ESG aspects including climate change, biodiversity and human rights. ESRS 1 (“General Requirements”) sets general principles to be applied when reporting according to ESRS but does not itself set specific disclosure requirements. ESRS 2 (“General Disclosures”) specifies essential information to be disclosed irrespective of which sustainability matter is being considered. Companies previously subject to the Non-Financial Reporting Directive (“NFRD”), are required to report for the first time under ESRS 1 and 2 for the financial year 2024, with a first sustainability statement to be published in 2025.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

With respect to reporting requirements in the U.S., on October 7, 2023, the Governor of California signed the Climate Corporate Data Accountability Act (SB 253), the Greenhouse Gasses: Climate-related Financial Risk Act (“SB 261”)” and the Voluntary Carbon Market Disclosures Act (AB 1305). SB 253 requires any public or private company that is formed in the U.S., that does business in California and has annual revenue of more than U.S.$ 1 billion to report Scope 1 and 2 greenhouse gas emissions beginning in 2026 and Scope 3 greenhouse gas emissions beginning in 2027. SB 261 requires any business (public or private) that is formed in the U.S. and that does business in California and has annual revenues in excess of U U.S.$ 500 million to disclose their climate-related financial risks beginning in 2026, in compliance with the Task Force on Climate-Related Financial Disclosures (“TCFD”) recommendations. AB 1305, which became effective on January 1, 2024, requires companies that operate within California and make certain claims within California, including regarding carbon neutrality, net zero or reduction of greenhouse gas emissions, and companies purchasing or using carbon offsets in addition to making such claims to disclose information on the determination of accuracy of the claim, interim progress measures, third-party verification and, if applicable, information on the carbon offsets purchased and emissions data. AB 1305 also requires certain factual disclosures from companies that market or sell carbon offsets within California.

During 2023, a number of jurisdictions progressed the adoption of the International Sustainability Standards Board's (ISSB) new International Financial Reporting Standards (IFRS). On June 26, 2023, the ISSB also published finalized sustainability-related disclosure standards, covering general disclosure requirements (“IFRS S1”) and climate-related disclosure requirements (“IFRS S2”). The UK is also looking to endorse ISSB reporting standards with a view to introducing ISSB-aligned UK Sustainability Disclosure Standards by July 2024. On October 9, 2023, the UK Transition Plan Taskforce (“TPT”) published its final disclosure framework on transition plans. The TPT recommendations were designed to help organizations set out a credible and robust climate transition plan as part of annual reporting on business strategy. Transition plans are to take a strategic plan and approach to explain how an organization will meet climate targets, manage climate-related risks, and contribute to the economy-wide climate transition. This was followed up by a consultation on sector-specific guidance, for those preparing and using climate transition plans, which was published on November 13, 2023.

In parallel, in November 2023 the UK FCA published its long-anticipated Sustainability Disclosure Requirements (“SDR”) rules, following a discussion paper and consultation paper in 2022 and 2023 respectively. The new requirements, which will come into force in phases between May 2024 and December 2026, create a framework governing the marketing of sustainable investment funds and products by UK firms through specific product naming, labelling and marketing rules, consumer information rules and an anti-greenwashing rule. The SDR framework currently does not apply to non-UK funds marketed into the UK but will be consulted upon in due course.

Finally, the European Commission consulted on a review of the EU Sustainable Finance Disclosure Regulation (“SFDR”) in 2023 to assess and address any issues since the implementation of the regulation. The consultation is a preliminary information gathering exercise rather than a detailed consultation on specific rules. It seeks to capture views on the usefulness and compatibility of the current rules, and possible changes to the disclosure requirements, but may also result in fundamentally revisiting the structure of the SFDR. The process was supported by a workshop run by the European Commission on October 10, 2023, to discuss key issues with participants including ESMA, the European Parliament and the Platform on Sustainable Finance.

ESG Due-Diligence – In Germany, the Supply Chain Due Diligence Act (Lieferkettensorgfaltspflichtengesetz, ‘SCDDA’) went into effect on January 1, 2023. The SCDDA applies to companies that have their head office, principal place of business or registered office in Germany and generally employ more than 3,000 employees (1,000 employees from 2024). The SCDDA requires companies to comply by implementing risk management policies and due diligence processes to ensure adherence to internationally recognized human rights and environmental requirements, with financial penalties for non-compliance, not only within an organization, but also within the supply chain vis-à-vis customers and direct suppliers within Germany and internationally.

At EU level, the Corporate Sustainability Due Diligence Directive (‘CSDDD’) was provisionally agreed by the Member States and the European Parliament in December 2023. The CSDDD outlines obligations for corporations to identify, mitigate, minimize and prevent adverse impacts on the environment and human rights for their business chain of activities. At the moment it is uncertain whether the CSDDD will pass the official adoption process before the EU elections in June and hence a potential application date is not clear.

In October 2023, the Fed, FDIC and OCC issued principles for climate-related financial risk management, which provide a high-level risk management framework for financial institutions with over U.S.$ 100 billion in total consolidated assets, including the U.S. operations of foreign banking organizations, IHCs, and foreign bank branches. In December 2023, the DFS released guidance relating to the management of material financial and operational risks from climate change with respect to the entities it regulates, including banks and branches of foreign banking organizations.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Further ESG-related topics – On June 30, 2023, BaFin updated its Minimum Requirements on Risk Management (MaRisk) to include ESG risk for the first time. The new rules became effective on January 1, 2024. From an ESG perspective, the updated MaRisk adds ESG risk considerations as a new component of risk management and formally adopts the EBA Guidelines on Loan Origination and Monitoring. The changes impact on how risk is managed within Deutsche Bank and requires involvement on risk management by the Management Board specifically to assess, monitor and limit Deutsche Bank’s risk regularly - both qualitatively and quantitively.

Finally, on November 30, 2023, a regulation establishing a European green bond standard (“EuGBS”) was published in the EU’s Official Journal, with its application commencing on December 21, 2024. The regulation introduces requirements for bond issuers that wish to use the designation “European green bond” for their environmentally sustainable bonds, with the aim of fostering consistency and comparability across the green bond market and also preventing greenwashing. The EuGBS generally requires all proceeds of a European green bond to be invested in economic activities aligned with the EU Taxonomy for environmentally sustainable activities, with ‘flexibility’ for up to 15% of the proceeds to be allocated for economic activities not yet covered by EU Taxonomy technical screening criteria or for international support including official development assistance.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Regulation and Supervision

Deutsche Bank’s operations throughout the world are regulated and supervised by the relevant authorities in each of the jurisdictions where the bank conducts business. Such regulation relates to licensing, capital adequacy, liquidity, risk concentration, conduct of business as well as organizational and reporting requirements. It affects the type and scope of the business the bank conducts in a country and how it structures specific operations.

Highlights

On October 27, 2021, the European Commission published a comprehensive package of reforms with respect to European Union banking rules (the “Banking Package 2021”) to ensure that banks become more resilient to potential future economic shocks while contributing to the European Union’s recovery from the COVID-19 pandemic and its transition to climate neutrality. The proposals aim to amend the Capital Requirements Regulation (“CRR”), the Capital Requirements Directive (“CRD”) and the Bank Recovery and Resolution Directive (“BRRD”). The amendment of the CRR and CRD (commonly referred to as “CRR III” and “CRD VI”) will, in particular, finalize the implementation of the Basel III framework in the European Union and also fully implement the market risk capital changes in the Fundamental Review of the Trading Book (“FRTB”). Another separate proposal entails combined amendments to the CRR and the BRRD with respect to the resolution regime.

In June 2023, the Council of the EU and the European Parliament reached political agreement on CRR III and CRD VI and published the agreed texts in December 2023. Provisions of the CRR III and CRD VI agreed texts include, among other things, a gradually introduced output floor establishing minimum risk-weighted assets that will ultimately be set at 72.5% of the risk

weighted assets calculated under the standardized approach, changes to standardized and internal ratings-based approaches for determining credit risk, changes to the credit valuation adjustment, a revision of the approaches for operational risks and reforms to the market risk framework as set out in the FRTB, adjustments to the Pillar 2 requirements and the systemic risk buffer (“SyRB”),a “fit-and-proper” set of rules for the senior staff managing banks, minimum requirements for the prudential supervision of third-country branches, and a provision for future dedicated legislation on the prudential treatment of crypto asset exposures and interim own-funds requirements for certain crypto-asset exposures. Other proposed measures are aimed at addressing sustainability risks by requiring banks to identify, disclose and manage environmental, social and governance risks as part of their risk management framework and include regular climate stress testing by the banks’ supervisors. The agreed texts do not entail any adjustments to the capital requirements for green or brown assets. However, the European Commission has stated that it is exploring this idea and has asked the European Banking Authority (“EBA”) to assess possible adjustments. CRR III is expected to be adopted by mid-2024.

Certain proposals laid out in the Banking Package 2021 included clarifications to the total loss absorbing capacity (“TLAC”) / minimum requirement for own funds and eligible liabilities (“MREL”) regimes. In October 2022, a regulation regarding the prudential treatment of global systemically important institutions (“G-SIIs”) with a multiple-point-of-entry resolution strategy and the indirect subscription of instruments eligible for meeting MREL (the so-called “Daisy Chain Regulation”) was published in the EU Official Journal, making targeted changes to CRR and BRRD in respect of MREL and TLAC. The changes included the introduction of a deduction regime requiring intermediate parents to deduct from their own internal MREL capacity the amount of their holdings of internal MREL eligible instruments, including own funds, issued by their subsidiaries belonging to the same resolution group, which became effective on January 1, 2024.

The European Commission intends for CRR III to apply from January 1, 2025, with certain elements of the regulation being phased in over subsequent years. The European Commission also intends for CRD VI to be implemented by the European Union Member States by mid-2025. According to an assessment conducted by the EBA, the full implementation of the Basel III framework in the European Union could lead to an increase in the minimum capital requirements of all European banks of 9% and 16% for G-SIIs.

The implementation of the remaining outstanding proposals under Basel III as contained in the Banking Package 2021 also has the potential to increase Deutsche Bank’s risk-weighted assets and will likely affect its business by raising its regulatory capital and liquidity requirements and by leading to increased costs.

Deutsche Bank AG is authorized and regulated by the European Central Bank (“ECB”) and the German Federal Financial Supervisory Authority (“Bundesanstalt für Finanzdienstleistungsaufsicht” or “BaFin”). Following the departure of the United Kingdom (UK) from the European Union as a result of Brexit, and European Union law ceasing to be applicable in the UK as from end of 2020, Deutsche Bank AG received a new UK authorization (Part 4A) from the Prudential Regulatory Authority (PRA), on December 19, 2022. With respect to its regulated activities in the UK, and the continued operation of its London Branch, Deutsche Bank AG is authorized by the PRA and subject to regulation by the Financial Conduct Authority (FCA) and limited regulation by the PRA.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Pursuant to that authorization Deutsche Bank AG continues to provide banking and other financial services in the UK both from its London Branch and also on a cross-border basis. Divergence between UK and European Union law will potentially, and increasingly, pose challenges for both Deutsche Bank AG and the financial services industry generally.

The following sections present a description of the regulation and supervision of Deutsche Bank’s business in its home market Germany under the European Union framework of regulation and in the United States.

Regulation in Germany under the Regulatory Framework of the European Union

Deutsche Bank is subject to comprehensive regulation under German law and regulations promulgated by the European Union which are directly applicable law in Germany.

The German Banking Act (Kreditwesengesetz) and the CRR are important sources of regulation for German banks with respect to prudential regulation, licensing requirements, and the business activities of financial institutions. In particular, the German Banking Act requires that an enterprise which engages in one or more of the activities categorized in the German Banking Act as “banking business” or “financial services” in Germany must be licensed as a credit institution (Kreditinstitut) or financial services institution (Finanzdienstleistungsinstitut), as the case may be. Deutsche Bank AG is licensed as a credit institution and is authorized to conduct banking business and to provide financial services.

Significant parts of the regulatory framework for banks in the European Union are governed by the CRR. The CRR includes requirements relating to regulatory capital, risk-based capital adequacy, monitoring and control of large exposures, consolidated supervision, leverage, liquidity and public disclosure, including Basel III standards.

Certain other requirements that apply to Deutsche Bank, including those with respect to capital buffers, organizational and risk management requirements, are set forth in the German Banking Act and other German laws, partly implementing European Union directives such as the CRD.

Deutsche Bank AG, headquartered in Frankfurt am Main, Germany, is the parent institution of Deutsche Bank Group. Under the CRR, Deutsche Bank AG, as credit institution and parent company, is responsible for regulatory consolidation of all subsidiary credit institutions, financial institutions, asset management companies and ancillary service undertakings. Generally, the bank regulatory requirements under the CRR and the German Banking Act apply both on a stand-alone and a consolidated basis. However, banks forming part of a consolidated group may receive a waiver with respect to the application of specific regulatory requirements on an unconsolidated basis if certain conditions are met. As of December 31, 2023, Deutsche Bank AG benefited from such a waiver, according to which Deutsche Bank AG needs to apply the requirements relating to own funds, large exposures, exposures to transferred credit risks, leverage and disclosure by institutions, as well as certain risk management requirements, only on a consolidated basis.

Capital Adequacy Requirements

Minimum Capital Adequacy Requirements (Pillar 1)

The minimum capital adequacy requirements for banks are primarily set forth in the CRR. The CRR requires German banks to maintain an adequate level of regulatory capital in relation to the total of their risk positions, referred to as total exposure amount. Risk positions include credit risk positions, market risk positions and operational risk positions (including, among other things, risks related to certain external factors, as well as to technical errors and errors of employees). The most important type of capital for compliance with the capital requirements under the CRR is Common Equity Tier 1 capital. Common Equity Tier 1 capital primarily consists of share capital, retained earnings and other reserves, subject to certain regulatory adjustments. Another component of regulatory capital is Additional Tier 1 capital, which includes, for example, certain unsecured subordinated perpetual capital instruments and related share premium accounts. An important feature of Additional Tier 1 capital is that the principal amount of the instruments will be written down, or converted into Common Equity Tier 1 capital, when the Common Equity Tier 1 capital ratio of the financial institution falls below a minimum of 5.125% (or such higher level as the issuing bank may determine). Common Equity Tier 1 capital and Additional Tier 1 capital together constitute Tier 1 capital. An additional type of regulatory capital is Tier 2 capital which generally consists of long-term subordinated debt instruments. Tier 1 capital and Tier 2 capital together constitute own funds.

Under the CRR, banks are required to maintain a minimum ratio of Tier 1 capital to total risk exposure amount of 6% and a minimum ratio of Common Equity Tier 1 capital to total risk exposure of 4.5%. The minimum total capital ratio of own funds to total risk exposure is 8%.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Capital Buffers

The German Banking Act also requires banks to build up a mandatory capital conservation buffer (Common Equity Tier 1 capital amounting to 2.5% of total risk exposure), and authorizes the BaFin to set a domestic countercyclical capital buffer (“CCyB”) for Germany (Common Equity Tier 1 capital of generally 0% to 2.5% of total risk exposure, or more in particular circumstances) during periods of high credit growth. The CCyB for Germany is currently set at 0.75%. In order to comply with the CCyB requirement, banks must calculate their institution-specific CCyB as the weighted average of the CCyBs that apply to them in the jurisdictions where their relevant credit exposures are located. Accordingly, the total CCyB requirement, if any, with which Deutsche Bank needs to comply also depends on the corresponding buffer requirements in other jurisdictions. In addition, BaFin may require banks to build up a SyRB (Common Equity Tier 1 capital of a minimum of 0.5% of the total risk exposure amount for all exposures to prevent and mitigate long term non-cyclical systemic or macro-prudential risks not otherwise covered by CRR/CRD). Any SyRB determined by BaFin in excess of 5% would require prior authorization of the European Commission. A SyRB with regard to residential real estate financing is currently set in Germany at 2%. Furthermore, since December 31, 2023, BaFin has imposed an additional SyRB of 4.5% to all risk exposure amounts in Norway. G-SIIs are subject to an additional capital buffer (Common Equity Tier 1 capital of between 1% and 3.5% of risk-weighted assets), which the BaFin determines for German banks based on a scoring system measuring the bank’s global systemic importance. Deutsche Bank’s current G-SII capital risk buffer is 1.5%. BaFin can also determine a capital buffer of Common Equity Tier 1 capital of up to 3% of risk-weighted assets for other systemically important banks (so-called O-SIIs) in Germany, based on criteria measuring, among others, the bank’s importance for the economy in Germany and the European Economic Area (EEA). Deutsche Bank is subject to treatment both as a G-SII, as well as an O-SII (on a consolidated basis). Any risk buffer for O-SIIs that exceeds the threshold of 3% requires prior authorization by the European Commission. Deutsche Bank’s current O-SII capital buffer is 2%. The buffers for G-SIIs and the buffer for O-SIIs are not cumulative; only the higher of these buffers applies. However, such higher buffer and the SyRB are cumulative. If the total buffer is higher than 5%, BaFin needs to seek approval by the European Commission. If a bank fails to build up the required capital buffers, it will be subject to restrictions on the pay-out of dividends, share buybacks and discretionary compensation payments. Also, within the single supervisory mechanism (“SSM”), the ECB may require banks to maintain higher capital buffers than those required by the BaFin.

Leverage Ratio

The CRR also provides for a Tier 1 capital-based binding minimum leverage ratio requirement of 3%. The minimum leverage ratio requirement is calculated on a non-risk basis and complements the other risk-based capital requirements. In addition to the minimum leverage ratio requirement, the CRR provides for a leverage ratio buffer requirement for G-SIIs (such as Deutsche Bank), which must be met with Tier 1 capital and is set at 50% of the G-SII's risk-weighted capital buffer rate. Certain aspects relating to the leverage ratio buffer requirement as contained in the CRD (such as restrictions on the pay out of dividends etc. if the requirements are not met) must be implemented in the laws of the individual Member States.

Pillar 2 Capital Requirements and Guidance

Furthermore, the ECB may impose capital and leverage ratio requirements on individual significant credit institutions which are more stringent than the statutory minimum requirements set forth in the CRR, the German Banking Act or the related regulations. Upon completion of the supervisory review and evaluation process (“SREP”) discussed in greater detail below, the competent supervisory authority makes an SREP decision in relation to each relevant bank, which may include specific capital and liquidity requirements for each affected bank. Any such additional bank-specific capital requirements resulting from the SREP are referred to as Pillar 2 requirements for its solvency ratios in addition to the statutory minimum capital and buffer requirements. Institutions must meet their Pillar 2 requirements with at least 75% of Tier 1 capital and at least 56.25% of Common Equity Tier 1 capital. In its SREP cycle 2023, the ECB has introduced a Pillar 2 requirement for the leverage ratio to address risks of excessive leverage. The Pillar 2 requirement for the leverage ratio became effective on January 1, 2024.

In addition, the ECB may decide following the SREP to communicate to individual banks an expectation to hold a further Pillar 2 Common Equity Tier 1 capital add-on, the so-called Pillar 2 guidance. The ECB has stated that it generally expects banks to meet the Pillar 2 guidance although it is not legally binding and failure to meet the Pillar 2 guidance does not automatically have legal consequences. The competent supervisory authority may take a range of other measures based on the SREP outcome to address shortcomings in a bank’s governance and risk management processes or its capital or liquidity position, such as prohibiting dividend payments to shareholders or distributions to holders of regulatory capital instruments.

For details of Deutsche Bank’s regulatory capital, see “Management Report: Risk Report: Risk and Capital Performance” in Deutsche Bank’s Annual Report 2023.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

MREL Requirements

As discussed below under “Recovery and Resolution”, to ensure that European banks have a sufficient amount of liabilities with loss-absorbing capacity, they are required to meet MREL determined for each institution individually on a case-by-case basis. The European Union implemented the Financial Stability Board’s (“FSB”) TLAC standard for global systemically important banks (“G-SIBs”, such as Deutsche Bank) by introducing a Pillar 1 MREL requirement for G-SIIs (the European equivalent term for G-SIBs). This requirement is based on both risk-based and non-risk-based denominators and will be set at the higher of 18% of total risk exposure and 6.75% of the leverage ratio exposure measure. It can be met with Tier 1 or Tier 2 capital or debt that meets specific eligibility criteria. Deduction rules apply for holdings by G-SIIs of TLAC instruments of other G-SIIs. In addition, the competent authorities have the ability to impose on G-SIIs individual MREL requirements that exceed the statutory minimum requirements. See “Highlights” above for further information on clarifications with respect to the TLAC/MREL regime that are included in the Banking Package 2021.

Limitations on Large Exposures

The CRR also contains the primary restrictions on large exposures, which limit a bank’s concentration of credit risks. The German Banking Act and the German Large Exposure Regulation (Großkredit- und Millionenkreditverordnung) supplement the CRR in this regard. Under the CRR, Deutsche Bank’s exposure to a customer and any customers affiliated with such customer is deemed to be a “large exposure” when the value of such exposure is equal to or exceeds 10% of its Tier 1 capital. All exposures to a single customer and any customers affiliated with such customer are aggregated for these purposes. In general, no large exposure may exceed 25% of Deutsche Bank’s Tier 1 capital, or, in case the customer is a bank designated as G-SII, 15% of its Tier 1 capital. For exposures in the trading book, the large exposure regime may give greater latitude, subject to an additional own funds requirement.

Liquidity Requirements

The CRR introduced a liquidity coverage requirement intended to ensure that banks have an adequate stock of unencumbered high quality liquid assets that can be easily and quickly converted into cash to meet their liquidity needs for a 30-calendar day liquidity stress scenario. The required liquidity coverage ratio (“LCR”) is calculated as the ratio of a bank’s liquidity buffer to its net liquidity outflows. Also, banks must regularly report the composition of the liquid assets in their liquidity buffer to their competent authorities.

In addition, the CRR provides for a net stable funding ratio (“NSFR”) to reduce medium- to long-term funding risks by requiring banks to fund their activities with sufficiently stable sources of funding over a one-year period. The NSFR is defined as the ratio of a bank’s available stable funding relative to the amount of required stable funding over a one-year period. Banks must maintain an NSFR of at least 100%. The NSFR applies to both the Group as a whole and to individual SSM regulated entities, including the parent entity Deutsche Bank AG.

The ECB may impose on individual banks liquidity requirements which are more stringent than the general statutory requirements if the bank’s continuous liquidity would otherwise not be ensured.

Separation of Proprietary Trading Activities by Universal Banks

The German Separation Act (Gesetz zur Abschirmung von Risiken und zur Planung der Sanierung und Abwicklung von Kreditinstituten und Finanzgruppen) provides that deposit-taking banks and their affiliates are prohibited from engaging in proprietary trading that does not constitute a service for others, high-frequency trading, and credit or guarantee transactions with hedge funds and comparable enterprises that are substantially leveraged, unless such activities are exempt or excluded, or in the case where no such exemption or exclusion is available, is transferred to a separate legal entity, referred to as a financial trading institution (Finanzhandelsinstitut). The separation requirement applies if certain thresholds are exceeded, which is the case for Deutsche Bank. In addition, the German Separation Act authorizes the BaFin to prohibit the deposit-taking bank and its affiliates, on a case-by-case basis, from engaging in market-making and other activities that are comparable to the activities prohibited by law, if these activities may put the solvency of the deposit-taking bank or any of its affiliates at risk. In the event that the BaFin orders such a prohibition, the respective activities must be discontinued or transferred to a separate financial trading institution. The financial trading institution may be established in the form of an investment firm or a bank and may be part of the same group as the deposit-taking bank. However, it must be economically and organizationally independent from the deposit-taking bank and its other affiliates, and it has to comply with enhanced risk management requirements. Deutsche Bank has established a compliance and control framework to ensure that no prohibited activities are conducted. Deutsche Bank has not established a financial trading institution.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Anti-Financial Crime, Sanctions, Fraud, Bribery and Corruption

Financial sector participants are required to take steps to prevent the abuse of the financial system through money laundering and other financial crime. The European Union has continually sought to strengthen its framework for anti-money laundering and combating the financing of terrorism, in line with international standards set by the Financial Action Task Force. On July 20, 2021, the European Commission presented a new package of legislative proposals to strengthen the existing rules (the “AML/CFT Package”). If adopted, the proposals in the new AML/CFT Package will establish an overhauled integrated European AML supervisory system with the single rulebook expanding the list of obliged entities and including harmonized, more detailed and granular rules on, among other things, customer due diligence, beneficial ownership, and AML/CFT risk management. Generally, the requirements (such as know-your-customer requirements) currently set out in the German AML Act (Geldwäschegesetz) and the German Banking Act apply to all business lines and infrastructure units as well as all subsidiaries and affiliates that undertake AML-relevant business and in which Deutsche Bank AG has a dominating influence.

Deutsche Bank is required to comply with economic sanctions laws and regulations in the jurisdictions in which it operates, including sanctions administered and enforced by the United Nations Security Council, the European Union, the United States Department of the Treasury’s Office of Foreign Assets Control (“OFAC”), the United Kingdom, and other sanctions measures imposed by governments in jurisdictions where the bank acts, as applicable (collectively, “Sanctions”). Deutsche Bank therefore implements a risk-based compliance program reasonably designed to comply with applicable Sanctions. As Sanctions continue to increase in breadth and complexity, this necessitates continued updating of the bank’s policies, procedures, processes, and controls.

Deutsche Bank, its board members and its employees, as the case may be, are subject to fraud, bribery and corruption laws and regulations under the German Criminal Code (Strafgesetzbuch) and in the other countries in which it conducts business. The UK Bribery Act 2010 has extraterritorial impact and requires Deutsche Bank to design and develop appropriate measures to mitigate bribery and corruption risk and to administer controls and safeguards to mitigate such risks.

Data Protection and Cyber Risk

Deutsche Bank has to comply with all applicable data protection laws in the countries in which it operates. In Germany and the other Member States, the regulation on the protection of natural persons with regard to the processing of personal data and on the free movement of such data, also referred to as the General Data Protection Regulation (“GDPR”), became applicable in the European Union on May 25, 2018. It relates to data protection and privacy rights of individuals within the European Union and addresses the export of personal data to other jurisdictions. The GDPR primarily aims at giving individuals control over their personal data and to unifying the regulatory environment for cross-border business. The GDPR contains provisions and requirements pertaining to the processing of personal data of individuals and also applies to businesses inside the European Union that are processing personal data. The regulation furthermore applies to businesses outside of the European Union if goods or services are offered to data subjects in the European Union, or if the behavior of data subjects in the European Union is being monitored. The GDPR imposes compliance obligations and grants broad enforcement powers to supervisory authorities, including the potential to levy significant fines for non-compliance.

Under the German Banking Act and the BaFin’s Minimum Requirements for Risk Management for Banks (Mindestanforderungen an das Risikomanagement) together with the BaFin’s Supervisory Requirements for IT in Financial Institutions (Bankaufsichtliche Anforderungen an die IT), information security needs to be an integral part of a financial institution’s IT strategy and risk management. The BaFin requires that financial institutions establish a comprehensive information and cyber security program, define standards, implement controls and adhere to their resulting security policies and standards in accordance with evolving business requirements, regulatory guidance, and an emerging threat landscape. Information security risk management is part of vendor risk management for any procurement if information technology or outsourcing activity include the use of new technologies like cloud services. Information security risk (also referred to as cyber risk) is a component of operational risk assessed in the context of the SREP under Guidelines on Information and Communication Technology Risk Assessment issued by the EBA, which expects financial institutions to protect the confidentiality, integrity, and availability of customer data and information assets. Such guidelines are complemented by the EBA’s Guidelines on ICT and Security Risk Management. Further, at the European Union level, the recently adopted Digital Operational Resilience Act, which will apply from January 17, 2025, and the complementing amending directive introduce a comprehensive framework setting out rules on the digital operational resilience for all regulated financial institutions throughout the European Union.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Remuneration Rules

Under the German Banking Act and the German Credit Institution Remuneration Regulation (Institutsvergütungsverordnung), Deutsche Bank AG is subject to certain restrictions on the remuneration it pays to its management board members and employees. These remuneration rules implement requirements of the CRD and impose a cap on bonuses. Pursuant to this cap, the variable remuneration for management board members and employees must not exceed the fixed remuneration. The maximum variable remuneration may be increased to twice the management board member's or employee’s fixed remuneration if expressly approved by the shareholders’ meeting with the required majority. In addition, Deutsche Bank AG is obliged to identify individuals who have a material impact on the bank’s risk profile (“material risk takers”). Such material risk takers are subject to additional rules, such as the requirement that at least 40% or, as the case may be, up to 60% of the variable remuneration granted to them must be on a deferred basis. The minimum deferral period is four years and may increase to five years depending on certain factors. For certain material risk takers the minimum deferral period is set to five years. Also at least 50% of the variable remuneration for material risk takers must be paid in shares of the bank or instruments linked to shares of the bank. Variable compensation of material risk takers has to be subject to an ex-post risk adjustment mechanism and to a claw back provision in case of personal wrongdoing. These deferral and claw back provisions do not apply to a material risk taker whose variable remuneration does not exceed € 50,000 gross and 1/3 of the total annual remuneration. Finally, Deutsche Bank is required to comply with certain disclosure requirements relating to the remuneration it pays to, and its remuneration principles in respect of, its material risk takers and other affected employees.

In addition, as an issuer whose shares are listed on the New York Stock Exchange (NYSE), the bank has adopted compensation recovery policies to recoup previously awarded executive compensation in the event of an accounting restatement. See below under “—Regulation and Supervision in the United States”.

For details of Deutsche Bank’s remuneration system, see “3 - Compensation Report” in Deutsche Bank’s Annual Report 2023.

Deposit Protection and Investor Compensation in Germany

The Deposit Protection Act and the Investor Compensation Act

The German Deposit Protection Act (Einlagensicherungsgesetz) and the German Investor Compensation Act (Anlegerentschädigungsgesetz) provide for a mandatory deposit protection and investor compensation system in Germany, based on a European Union directive on deposit guarantee schemes (“DGS Directive”) and a European Union directive on investor compensation schemes.

The German Deposit Protection Act (which implements the DGS Directive into German law) requires that each German bank participates in one of the statutory government-controlled deposit protection schemes (Entschädigungseinrichtungen). Since October 2021, the Entschädigungseinrichtung deutscher Banken GmbH (“EdB”), which has been commissioned by the Ministry of Finance to operate the mandatory deposit protection scheme, is the sole German deposit protection scheme for all German banks. The EdB collects and administers the contributions of the member banks, and settles any compensation claims of depositors in accordance with the German Deposit Protection Act.

Under the German Deposit Protection Act, deposit protection schemes are generally liable for obligations resulting from deposits denominated in any currency in an amount of up to € 100,000 per depositor and bank. Certain depositors, such as banks, insurance companies, investment funds and governmental bodies, are excluded from coverage.

Deposit protection schemes are financed by annual contributions of the participating banks proportionate to their potential liabilities, depending on the amount of its covered deposits and the degree of risk the bank is exposed to. A target level of 0.8% of the total covered deposits of the participating banks is supposed to be reached by July 3, 2024. Deposit protection schemes may also levy special contributions if required to settle compensation claims.

Deposit protection schemes will be required to contribute to bank resolution costs where resolution tools are used. The contribution made by the deposit protection scheme is limited to the compensation it would have to pay if the affected bank had become subject to insolvency proceedings. Furthermore, deposit protection schemes may provide funding to its participating banks to avoid their failure under certain circumstances.

Under the German Investor Compensation Act, in the event that the BaFin ascertains a compensation case, EdB as Deutsche Bank AG’s deposit protection scheme is also required to compensate 90% of the aggregate claims of each covered creditor arising from securities transactions denominated in euro or in a currency of any other Member State up to an amount of the equivalent of € 20,000. Many financial sector participants such as banks, insurance companies, investment funds, governmental bodies or medium-sized and large corporations, however, do not benefit from this coverage.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Voluntary Deposit Protection System

Liabilities to creditors that are not covered by a statutory compensation scheme may be covered by the Deposit Protection Fund (Einlagensicherungsfonds) set up by the Association of German Banks (Bundesverband deutscher Banken e.V.) of which Deutsche Bank AG is a member. The Deposit Protection Fund protects deposits, i.e., generally credit balances credited to an account or resulting from interim positions which the bank is required to repay, up to certain maximum amounts and subject to certain exclusions, of private individuals, foundations and corporates. Deposits of banks, broker-dealers and other financial sector entities, such as insurance and re-insurance undertakings or investment funds as well as governmental agencies, are excluded.

The financial resources of the Deposit Protection Fund are funded by contributions of the participating banks. If the resources of the Fund are insufficient, banks may be required to make special contributions, in particular if the resources of the Deposit Protection Fund become stretched due to bank insolvencies or otherwise.

The Association of German Banks launched on December 8, 2021 a far-reaching reform project for its Deposit Protection Fund. The project was finalized in April 2022 and has started phasing in from 2023 onwards. Deposits held with non-German branches of Deutsche Bank AG are no longer covered unless grandfathering rules apply. Also, absolute cover limit amounts will apply to all depositors. These amounts are € 5 million per depositor from January 1, 2023 onwards which will be reduced to € 3 million on January 1, 2025 and € 1 million on January 1, 2030. For corporates the limits will be ten times higher but limited to deposits with a maturity of up to twelve months.

Market Conduct, Investor Protection and Infrastructure Regulation

Under the German Securities Trading Act (Wertpapierhandelsgesetz), the BaFin regulates and supervises securities trading, including the provision of investment services, in Germany. The German Securities Trading Act contains, among other things, disclosure and transparency rules for issuers of securities that are listed on a German exchange and organizational requirements as well as rules of conduct which apply to all businesses that provide investment services. Investment services include, in particular, the purchase and sale of securities or derivatives for others and the intermediation of transactions in securities or derivatives as well as investment advice. The BaFin has broad powers to investigate businesses providing investment services to monitor their compliance with the organizational requirements, rules of conduct and reporting requirements. In addition, the German Securities Trading Act requires an independent auditor to perform an annual audit of the investment services provider’s compliance with its obligations under the German Securities Trading Act.

A related area is the Market Abuse Regulation (“MAR”) which establishes a common European Union framework for, inter alia, insider dealing, the public disclosure of inside information, market manipulation, and managers’ transactions. The German Securities Trading Act, which had contained rules on market abuse prior to the entering into force of the MAR, continues to supplement the MAR in this respect, for example by providing for sanctions in case of violations of the MAR. Certain changes to MAR have been proposed by the European Commission in its “Listing Act Package”, published on December 7, 2022, which if enacted would include clarifications in respect of the (delayed) disclosure of insider information, insider list requirements applicable to issuers, and market sounding procedures, among others. The Listing Act Package proposals are currently under review by the European Parliament and the Council.

In addition, the Markets in Financial Instruments Directive (“MiFID”), implemented primarily by the German Securities Trading Act, and the Markets in Financial Instruments Regulation (“MiFIR”) provide for a greater regulation and oversight of financial firms providing investment services or activities in the European Union by covering additional markets and instruments, the extension of pre- and post-trade transparency rules from equities to all financial instruments, greater restrictions on operating trading platforms, and greater sanctioning powers. The trading venues under supervision include organized trading facilities. In addition, MiFID/MiFIR, also provide for a trading obligation for over-the-counter (“OTC”) derivatives subject to mandatory clearing and which are sufficiently standardized, and investor protection rules that significantly impact the way investment firms distribute products. On November 25, 2021, the European Commission published a proposal for a review of the MiFIR (referred to as the “MiFIR Review”) that entails amendments to the MiFIR and the MiFID. On June 30, 2023, the European Parliament and the Council reached political agreement on the proposals. The proposals in the MiFIR Review, among other things, introduce an EU-wide consolidated tape for each asset class, enhanced transparency requirements for small trades in equities (such as shares) and for non-equities (such as derivatives and bonds), and adjust the scope of the EU share trading obligation and derivatives trading obligation.

The Regulation on Key Information Documents or Packaged Retail and Insurance-based Investment Products (“PRIIPs”) applies since January 1, 2018. It focuses on disclosure and transparency requirements when advising on or selling retail structured products and other complex and packaged investment products and aims at increasing investor protection.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

In May 2023, the European Commission adopted a Retail Investment Package, introducing proposed measures to improve and standardize investment product information, in order to enhance retail investor trust and confidence in the EU capital markets and to take full advantage of the EU’s Capital Market Union.

Beyond the infrastructure-related provisions of MiFID, PRIIPs and MiFIR, market infrastructure has been the focus of other regulatory initiatives of the European Union that are relevant for Deutsche Bank. The Regulation on Transparency of Securities Financing Transaction aims at increasing transparency and reducing risks associated with such transactions. The regulation requires that repos, securities lending transactions and transactions with equivalent effect and margin lending transactions be reported to trade repositories and requires risk disclosures and consent before assets are reused or re-hypothecated. For the OTC derivatives markets, the European Regulation on OTC Derivatives, Central Counterparties (“CCPs”) and Trade Repositories, also referred to as European Market Infrastructure Regulation (“EMIR”), pursues the goals of reducing system, counterparty and operational risk and increase transparency in the OTC derivatives markets. The regulation introduced requirements for standardized OTC derivatives, such as central clearing, margining, portfolio reconciliation or reporting to trade repositories. On December 7, 2022, the European Commission published a legislative package with respect to clearing services (the “Clearing Package”) that entails a proposal for a review of the EMIR that is accompanied by targeted amendments to other European laws like CRR and CRD. The Clearing Package aims to make EU CCPs more competitive, to channel clearing in EUR denominated instruments to EU CCPs and to enhance the existing supervisory framework.

In addition, the European Union’s Regulation on Financial Benchmarks seeks to ensure the integrity and accuracy of indices used as benchmarks for financial instruments and contracts, and prevent their manipulation. European Union-regulated banks, investment firms, fund managers and certain other supervised entities are only permitted to use benchmarks provided in accordance with the regulation. Benchmark administrators in the European Union are required to obtain authorization or registration, and are subject to rules and oversight regarding their organization, governance and conduct. Benchmarks provided by non-EU administrators are permissible under certain conditions.

Legal Requirements relating to Financial Statements and Audits

As required by the German Commercial Code (Handelsgesetzbuch), Deutsche Bank AG prepares its non-consolidated financial statements in accordance with German GAAP. Deutsche Bank Group’s consolidated financial statements are prepared in accordance with International Financial Reporting Standards (“IFRS”) as endorsed by the European Commission, and the bank’s compliance with capital adequacy requirements and large exposure limits is determined solely based upon such consolidated financial statements.

Under German law, Deutsche Bank AG is required to be audited annually by a certified public accountant (Wirtschaftsprüfer). Deutsche Bank AG’s auditor is appointed each year at the annual shareholders’ meeting. However, the supervisory board mandates the auditor and supervises the audit. The BaFin and the Deutsche Bundesbank (“Bundesbank”), the German central bank, must be informed of the appointment and the BaFin may reject the auditor’s appointment. The German Banking Act requires that a bank’s auditor inform the BaFin and the Bundesbank of any facts that come to the auditor’s attention which would lead it to refuse to certify or to limit its certification of the bank’s annual financial statements or which would adversely affect the bank’s financial position. The auditor is also required to notify the BaFin and the Bundesbank in the event of a material breach by management of the articles of association or of any other applicable law. The auditor is required to prepare a detailed and comprehensive annual audit report (Prüfungsbericht) for submission to the bank’s supervisory board, the BaFin and the Bundesbank. The BaFin and the Bundesbank share their information with the ECB. In addition to the statutory audit directive and its amendment that has been implemented into national law, Deutsche Bank is also subject to the European Union’s Regulation on Specific Requirements regarding Statutory Audit of Public-Interest Entities which includes requirements for mandatory audit firm rotation and restrictions on non-audit services.

Banking Supervision under the Single Supervisory Mechanism

Under the European Union’s system of financial supervision referred to as SSM, the ECB is the primary supervisor of all systemically important or significant credit institutions (such as Deutsche Bank AG) and their banking affiliates in the relevant Member States. The competent national authorities supervise the remaining, less significant banks under the oversight of the ECB. As a result, Deutsche Bank AG is supervised by the ECB, the BaFin and the Bundesbank.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

With respect to Deutsche Bank and other significant credit institutions, the ECB is the primary supervisor and is responsible for most tasks of prudential supervision, such as compliance with regulatory requirements concerning own funds, large exposure limits, leverage, liquidity, securitizations, corporate governance, business organization and risk management requirements. The ECB carries out its day-to-day supervisory functions through a joint supervisory team (“JST”) established for Deutsche Bank Group. The JST is led by the ECB and comprises staff from the ECB and national supervisory authorities, including the BaFin and the Bundesbank. In addition, and regardless of whether an institution is significant or not, the ECB is responsible for issuing new licenses to credit institutions and for assessing the acquisition and increase of significant participations (also referred to as qualifying holdings) in credit institutions established in those Member States of the European Union that participate in the SSM and where notification of such changes must be filed.

The BaFin is Deutsche Bank’s principal supervisor for regulatory matters with respect to which the bank is not supervised by the ECB. These include business conduct in the securities markets, in particular when providing investment services to clients, payment services and implementing measures against money laundering and terrorist financing, and they also include certain special areas of bank regulation, such as those related to the issuance of covered bonds (Pfandbriefe) and the supervision of German home loan banks (Bausparkassen) with regard to certain regulatory requirements specifically applicable to such home loan banks. Generally, the BaFin also supervises Deutsche Bank with respect to those requirements under the German Banking Act that are not based upon European law. The Bundesbank supports the BaFin and the ECB and closely cooperates with them. The cooperation includes the ongoing review and evaluation of reports submitted by Deutsche Bank and of its audit reports as well as assessments of the adequacy of the bank’s capital base and risk management systems. The ECB, the BaFin and the Bundesbank receive comprehensive information from Deutsche Bank in order to monitor its compliance with applicable legal requirements and to obtain information on its financial condition.

Supervisory Review and Evaluation Process

For significant institutions such as Deutsche Bank, the JST conducts the SREP for an ongoing assessment of risks, governance arrangements and the capital and liquidity situation. The SREP requires that the JSTs review the arrangements, strategies, processes and mechanisms of supervised banks on a regular basis, in order to evaluate risks to which these banks are or might be exposed, risks they could pose to the financial system, and risks revealed by stress testing.

The SREP framework consists of a business model analysis, an assessment of internal governance and institution-wide control arrangements, an assessment of risks to capital and adequacy of capital to cover these risks; and an assessment of risks to liquidity and adequacy of liquidity resources to cover these risks. The SREP can result in Pillar 2 capital and liquidity requirements or guidance for the relevant institution (see above “Pillar 2 Capital Requirements and Guidance”).

Audits, Investigations and Enforcement

Investigations and Supervisory Audits

The ECB and the BaFin may conduct audits of banks on a discretionary basis, as well as for cause. In particular, the ECB may audit Deutsche Bank’s compliance with requirements with respect to which it supervises Deutsche Bank, such as those set forth in the CRR/CRD. The BaFin may also decide to audit the bank’s compliance with requirements with respect to which it supervises the bank, such as those relating to business conduct in the securities markets and the regulation of anti-money laundering, to counter terrorist financing and payment services, as well as certain special areas of bank regulation, such as those related to the issuance of covered bonds and the supervision of German home loan banks.

The ECB as well as the BaFin may require a bank to furnish information and documents in order to ensure that the bank is complying with applicable bank supervisory laws. The ECB and the BaFin may conduct investigations without having to state a reason therefor. Such investigations may also take place at a foreign entity that is part of a bank’s group for regulatory purposes. Investigations of foreign entities are limited to the extent that the law of the jurisdiction where the entity is located restricts such investigations.

The ECB and the BaFin may attend meetings of a bank’s supervisory board and shareholders meetings. They also have the authority to require that such meetings be convened.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Supervisory and Enforcement Powers

The ECB has a wide range of enforcement powers in the event it discovers any irregularities concerning adherence to requirements with respect to which it supervises Deutsche Bank.

It may, for example,

– Impose additional own funds or liquidity requirements in excess of statutory minimum requirements;

– Restrict or limit a bank’s business;

– Require the cessation of activities to reduce risk;

– Require a bank to use net profits to strengthen its own funds;

– Restrict or prohibit dividend payments to shareholders or distributions to holders of Additional Tier 1 instruments; or

– Remove the members of the bank’s management or supervisory board members from office.

To the extent necessary to carry out the tasks granted to it, the ECB may also require national supervisory authorities to make use of their powers under national law. If these measures are inadequate, the ECB may revoke the bank’s license. Furthermore, the ECB has the power to impose administrative penalties in case of breaches of directly applicable European Union laws, such as the CRR, or of applicable ECB regulations and decisions. Penalties imposed by the ECB may amount to up to twice the amount of profits gained or losses avoided because of the violation, or up to 10% of the total annual turnover of the relevant entity in the preceding business year or such other amounts as may be provided for in relevant European Union law. In addition, where necessary to carry out the tasks granted to it, the ECB may also require that the BaFin initiate proceedings to ensure that appropriate penalties are imposed on the affected bank.

The BaFin also retains a wide range of enforcement powers. As discussed above, it may take action if instructed by the ECB in connection with supervisory tasks granted to the ECB. With respect to supervisory tasks remaining with the BaFin, the BaFin may take action upon its own initiative. In particular, if a bank is in danger of defaulting on its obligations to creditors, the BaFin may take emergency measures to avert default. These emergency measures may include:

– Issuing instructions relating to the management of the bank;

– Prohibiting the acceptance of deposits and the extension of credit;

– Prohibiting or restricting the bank’s managers from carrying on their functions;

– Prohibiting payments and disposals of assets;

– Closing the bank’s customer services; and

– Prohibiting the bank from accepting any payments other than payments of debts owed to the bank.

The BaFin may also impose administrative pecuniary penalties under the German Banking Act and other German laws. Penalties under the German Banking Act may amount to generally up to € 5 million or, in certain cases, € 20 million, depending on the type of offense. If the economic benefit derived from the offense is higher, the BaFin may impose penalties of up to 10% of the net turnover of the preceding business year or twice the amount of the economic benefit derived from the violation.

Finally, violations of the German Banking Act may result in criminal penalties against the members of the Management Board or senior management.

Recovery and Resolution

Germany participates in the European Union’s single resolution mechanism (“SRM”), which centralizes at a European level the key competences and resources for managing the failure of banks in Member States of the European Union participating in the banking union. The SRM is based on the SRM Regulation and the BRRD, which in Germany are mainly implemented through the German Recovery and Resolution Act (Sanierungs- und Abwicklungsgesetz).

Under the SRM, broad resolution powers with respect to banks domiciled in the participating Member States are granted to the Single Resolution Board (“SRB”) as the central European resolution authority and to the competent national resolution authorities. Resolution powers in particular include the power to reduce, including to zero, the nominal value of shares, or to cancel shares outright, and to write down certain eligible subordinated and unsubordinated unsecured liabilities, including to zero, or convert them into equity (commonly referred to as “bail-in”).

	Deutsche Bank
	Annual Report 2023 on Form 20-F

For a bank directly supervised by the ECB, such as Deutsche Bank, the SRB draws up the resolution plan, assesses the bank’s resolvability and may require legal and operational changes to the bank’s structure to ensure its resolvability. In the event that a bank is failing or likely to fail and certain other conditions are met, in particular where there is no reasonable prospect that any alternative private sector measures would prevent the failure and resolution measures are necessary in the public interest, the SRB is responsible for adopting a resolution scheme for resolving the bank pursuant to the SRM Regulation. The European Commission and, to a lesser extent, the Council of the European Union, have a role in endorsing or objecting to the resolution scheme proposed by the SRB. The resolution scheme would be addressed to and implemented by the competent national resolution authorities (the BaFin in Germany).

Resolution measures that could be imposed upon a failing bank may include a range of measures including the transfer of shares, assets or liabilities of the bank to another legal entity, the reduction, including to zero, of the nominal value of shares, the dilution of shareholders of a failing bank or the cancellation of shares outright, or the amendment, modification or variation of the terms of the bank’s outstanding debt instruments, for example by way of deferral of payments or a reduction of the applicable interest rate. Furthermore, by way of a “bail-in”, certain liabilities may be written down, including to zero, or converted into equity after the bank’s regulatory capital has been exhausted.

To ensure that resolution measures can be effectively taken, contractual obligations governed by the laws of a non-EU country or that are subject to jurisdiction outside the European Union are required to include contractual provisions that ensure that the relevant obligation can be bailed in. In the case of financial contracts governed by the laws of a non-EU country or that are subject to jurisdiction outside the European Union, stay acceptance clauses need to be included.

To ensure sufficient availability of liabilities with loss-absorbing capacity that could be bailed in, the SRM Regulation and the German Recovery and Resolution Act introduced a requirement for banks to meet MREL. The required level of MREL is determined by the competent resolution authorities for each supervised bank individually on a case-by-case basis, depending on the preferred resolution strategy. In the case of Deutsche Bank AG, MREL is determined by the SRB.

In addition, G-SIIs are subject to a special Pillar 1 MREL requirement that implements the FSB’s TLAC standard for G-SIBs (see “MREL Requirements” above).

G-SIIs will need to predominantly rely on capital instruments or eligible subordinated debt for this purpose. Effective January 1, 2017, the German Banking Act provided for a new class of statutorily subordinated debt securities that rank as senior non-preferred below the bank’s other senior liabilities (but in priority to the bank’s contractually subordinated liabilities, such as those qualifying as Tier 2 instruments). Following a harmonization effort by the European Union implemented in Germany effective July 21, 2018, banks are permitted to decide if a specific issuance of eligible senior debt will rank as senior non-preferred debt or as senior preferred debt.

The SRB is charged with administering the Single Resolution Fund, a pool of money which is financed by bank levies raised at national level and intended to reach a target level of 1% of insured deposits of all banks in Member States participating in the SRM by December 31, 2023. Early in 2024, the SRB will perform a verification exercise to determine whether the available financial means in the Single Resolution Fund equal at least 1% of covered deposits held in the banking union. Based on the outcome of that verification exercise, the SRB will decide whether ex ante contributions to the SRF will be calculated and collected in the 2024 contribution period. The SRF will be used for resolving failing banks after other options, such as the bail-in tool, have been exhausted. In line with the German Recovery and Resolution Act, public financial support for a failing bank should only be used as a last resort, after having assessed and exploited, to the maximum extent possible, resolution measures set forth in the SRM Regulation and the German Recovery and Resolution Act, including the bail-in tool.

Regulation in the EEA and Brexit

The European Union pursues common standards of laws and regulations to create consistency across the internal market and reduce compliance and regulatory burdens for businesses operating on a cross-border basis. The EEA Agreement extends this objective to Iceland, Liechtenstein and Norway. Within the EEA, Deutsche Bank AG generally operates in a branch structure (and on a cross border basis from its headquarters in Frankfurt am Main) throughout the Member States under the “European Passport” legislative provisions enacted within the EU. Deutsche Bank AG is authorized and regulated by the ECB and the BaFin. To the extent that any Member State deems the regulated activities of Deutsche Bank AG to be carried out within its supervisory jurisdiction, the national competent authorities of that Member State supervise the conduct of such regulated activities. This includes, for example, rules on treating clients fairly and rules governing a bank’s conduct in the securities market.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

As a result of Brexit, the UK ceased to be a Member State of the European Union and European law ceased to be applicable within the UK as from December 31, 2020. This meant, therefore, for the purposes of Deutsche Bank AG’s continuation of regulated activities in the UK, the European Passport provisions were no longer available and it was obliged to rely upon temporary regulatory permissions while it sought new regulatory (Part 4A) permissions from the UK national competent authority, namely the PRA. Deutsche Bank AG received its (Part 4A) authorization from the PRA on December 19, 2022. With respect to its regulated activities in the UK, and the continued operation of its London Branch, Deutsche Bank AG is currently authorized by the PRA and subject to regulation by the FCA and limited regulation by the PRA.

Deutsche Bank AG continues to provide banking and other financial services in the UK both from its London Branch and also on a cross-border basis. In June 2023, the UK enacted the Financial Services and Markets Act 2023, which provides for the eventual repeal of ‘onshored’ EU financial services laws that have been retained in the UK post-Brexit. Upon repeal, such laws will be replaced by UK rules under a new regulatory framework. The growing divergence between the financial services laws and regulations in the UK and the EEA gives rise to new challenges for both Deutsche Bank AG and the financial services industry generally.

Since Brexit, the subsidiaries of the Deutsche Bank Group have also had to assess whether they conduct regulated activity in the UK (e.g., by providing UK regulated services to UK based clients), and where so, make plans to run off that activity within the UK’s Financial Services Contracts Regime (FSCR) or otherwise ensure such activity can be conducted pursuant to a UK licensing exemption (i.e., the “overseas persons exclusion”). Deutsche Bank subsidiaries conducting contractual run-off operations within the FSCR include BHM (FFT), Norisbank (FFT), DB S.P.A. (Milan), DB SAEU (Madrid), DB Polska (Warsaw) and DB Luxembourg. The regulated activities being conducted by these subsidiaries in a run-off manner are all with respect to retail client activity (largely as a result of clients having moved to the UK since first availing of the services).

Regulation and Supervision in the United States

Deutsche Bank’s operations are subject to extensive federal and state banking, securities and derivatives regulation and supervision in the United States. Deutsche Bank engages in U.S. banking activities directly through its New York branch. It also controls U.S. bank subsidiaries, such as Deutsche Bank Trust Company Americas (“DBTCA”), and U.S. broker-dealers, such as Deutsche Bank Securities Inc., U.S. non-depository trust companies and other subsidiaries. Deutsche Bank holds its U.S. subsidiaries through two intermediate holding companies, DB USA Corporation, through which Deutsche Bank’s U.S. banking subsidiaries and the large majority of its other U.S. subsidiaries are held, and DWS USA Corporation, through which Deutsche Bank’s U.S. asset management subsidiaries are held.

In 2010, the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) revised the U.S. regulatory framework for financial institutions in almost every area of U.S. financial regulation. The impact of the Dodd-Frank Act and its implementing regulations continues with further rulemaking, changes to existing regulations and tailoring.

The Dodd-Frank Act provisions known as the “Volcker Rule” limit the ability of banking entities and their affiliates to engage as principal in certain types of proprietary trading and to sponsor or invest in private equity or hedge funds or similar funds (“covered funds”), subject to certain exclusions and exemptions. In the case of non-U.S. banking entities such as Deutsche Bank AG, these exemptions permit certain activities conducted outside the United States, provided that certain criteria are satisfied. The Volcker Rule also limits the ability of banking entities and their affiliates to enter into certain transactions with covered funds with which they or their affiliates have certain relationships. The Volcker Rule also requires banking entities to establish comprehensive compliance programs designed to help ensure and monitor compliance with restrictions under the Volcker Rule.

The Dodd-Frank Act also provides regulators with tools to provide greater capital, leverage and liquidity requirements and other prudential standards, particularly for financial institutions that pose significant systemic risk. U.S. regulators are also able to restrict the size and growth of systemically significant non-bank financial companies and large interconnected bank holding companies. U.S. regulators are also required to impose bright-line debt-to-equity ratio limits on financial companies that the Financial Stability Oversight Council determines pose a grave threat to financial stability if it determines that the imposition of such limits is necessary to minimize the risk.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Federal Reserve rules set forth how the U.S. operations of certain foreign banking organizations (“FBOs”), such as Deutsche Bank AG, are required to be structured, as well as the enhanced prudential standards that apply to their U.S. operations. Under these rules, a large FBO with U.S.$ 50 billion or more in U.S. non-branch assets, such as Deutsche Bank, is required to establish or designate a separately capitalized top-tier U.S. intermediate holding company (an “IHC”) that holds substantially all of the FBO’s ownership interests in its U.S. subsidiaries. The Federal Reserve Board may permit an FBO subject to the U.S. IHC requirement to establish or designate multiple IHCs upon written request. Deutsche Bank AG submitted such a request and received Federal Reserve Board approval to designate two IHCs: DB USA Corporation and DWS USA Corporation. DWS USA Corporation is a subsidiary of DWS Group GmbH & Co. KGaA, which is approximately 80% owned by Deutsche Bank AG and holds the bank’s Asset Management division and subsidiaries. Each IHC is subject, on a consolidated basis, to the risk-based and leverage capital requirements under the U.S. Basel III capital framework, capital planning and stress testing requirements, U.S. liquidity buffer requirements and other enhanced prudential standards comparable to those applicable to large U.S. banking organizations. They are also subject to supplementary leverage ratio requirements, requirements on the maintenance of TLAC and long-term debt and liquidity coverage ratio and net stable funding ratio requirements.

On October 10, 2019, the Federal Reserve Board finalized rules to categorize the U.S. operations of large FBOs based on size, complexity and risk for purposes of tailoring the application of the U.S. enhanced prudential standards (the “Tailoring Rules”). The Tailoring Rules did not significantly change the capital requirements that apply to DB USA Corporation or DWS USA Corporation. However, the Tailoring Rules provide modest relief for Deutsche Bank’s IHCs with respect to applicable liquidity requirements so long as the IHCs’ combined weighted short term wholesale funding remains below U.S.$75 billion.

On July 27, 2023, the U.S. federal banking agencies issued a Notice of Proposed Rulemaking (“NPR”) for the implementation of the Final Basel III reforms in the United States, inviting comments by January 16, 2024. The NPR would implement the most wide-ranging and significant changes to the U.S. capital rules since 2013, requiring Category I-IV banking organizations, including DB USA Corporation, and their depository institution subsidiaries to calculate risk-weighted assets under both the current standardized approach and a new, more risk sensitive, approach referred to as the “Expanded Risk-Based Approach.” Total risk-weighted assets under the Expanded Risk-Based Approach would include standardized approaches for credit risk, operational risk and credit valuation adjustment risk, as well as a new approach for market risk that would be based on internal models and standardized supervisory models. Under the proposal, DB USA Corporation and its depository institution subsidiaries would be subject to the lower of the two resulting capital ratios from the current standardized approach and the Expanded Risk-Based Approach. The proposal, if enacted, would have an effective date of July 1, 2025, with certain elements having a three-year phase-in period.

The Federal Reserve Board has the authority to supervise and examine an IHC, such as DB USA Corporation and DWS USA Corporation, and its subsidiaries, as well as U.S. branches and agencies of FBOs, such as Deutsche Bank’s New York branch. An FBO’s U.S. branches and agencies are not required to be held beneath an IHC; however, the U.S. branches and agencies of an FBO are subject to certain separate liquidity requirements, as well as other enhanced prudential standards applicable to the combined U.S. operations, such as risk management and oversight and, under certain circumstances, asset maintenance requirements. Additionally, the Tailoring Rules also placed requirements on the FBO itself related to the adequacy and reporting of the FBO’s home country capital and stress testing regime.

The Federal Reserve Board has adopted rules relating to single counterparty credit limits that apply to the combined U.S. operations and IHCs of certain large FBOs, including Deutsche Bank. Under these rules, Deutsche Bank’s IHCs are prohibited from having net credit exposure to a single unaffiliated counterparty in excess of 25 percent of the respective IHC’s Tier 1 capital. Deutsche Bank’s combined U.S. operations (including its IHCs and New York branch) would have become separately subject to similar restrictions beginning July 1, 2021, unless Deutsche Bank AG certified compliance with a home country large exposure regime that is consistent with the Basel large exposure framework. Deutsche Bank AG has availed itself of substituted compliance through certification for its combined U.S. operations, as the European Union’s framework became effective on June 28, 2021.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

As a bank holding company with assets of U.S.$ 250 billion or more whose combined U.S. operations meet the criteria for “triennial full filer”, Deutsche Bank AG is required under Title I of the Dodd-Frank Act to prepare and submit to the Federal Reserve Board and the FDIC a resolution plan (the “U.S. Resolution Plan”) on a timeline prescribed by such agencies, alternating between filing a full plan and a targeted plan. The U.S. Resolution Plan must demonstrate that Deutsche Bank AG has the ability to execute a strategy for the orderly resolution of its designated U.S. material entities and operations. For foreign-based companies subject to these resolution planning requirements such as Deutsche Bank AG, the U.S. Resolution Plan relates only to subsidiaries, branches, agencies and businesses that are domiciled in or whose activities are carried out in whole or in material part in the United States. Deutsche Bank’s U.S. Resolution Plan describes the single point of entry strategy for Deutsche Bank’s U.S. material entities and operations and prescribes that DB USA Corporation would provide liquidity and capital support to its U.S. material entity subsidiaries and ensure their solvent wind-down outside of applicable resolution proceedings. In December 2021, Deutsche Bank filed its first ‘targeted’ 2021 U.S. Resolution Plan, which described the core elements of Deutsche Bank’s U.S. resolution strategy — such as capital, liquidity, and recapitalization strategies — as well as how Deutsche Bank integrated lessons learned from its response to the COVID-19 pandemic into its resolution planning process. On December 16, 2022, the Federal Reserve Board and the FDIC announced the results of their review of Deutsche Bank’s 2021 U.S. Resolution Plan, as well as those of other banks and did not find any shortcomings or deficiencies in Deutsche Bank’s plan. In their feedback letter to Deutsche Bank, the agencies noted areas where further progress would help improve resolvability, which Deutsche Bank must address in its next full resolution plan submission, which is due by March 31, 2025. The deadline reflects an extension by the agencies from the original due date of July 1, 2024, to allow firms additional time to come into compliance with the new guidance proposed on August 29, 2023, by the Federal Reserve and FDIC for the resolution plans of certain foreign filers, including Deutsche Bank AG. The comment deadline for the proposal was November 30, 2023.

The Dodd-Frank Act also established a new regime for the orderly liquidation of failing financial companies through the appointment of the FDIC as receiver that is available only if the U.S. Secretary of the Treasury determines in consultation with the U.S. President that certain criteria are met, including that the failure of the company and its resolution under otherwise applicable federal or state law would have serious adverse effects on U.S. financial stability.

DB USA Corporation and DWS USA Corporation are each subject, on an annual basis, to the Federal Reserve Board’s supervisory stress testing and capital requirements. DB USA Corporation and DWS USA Corporation are also subject to the Federal Reserve’s Comprehensive Capital Analysis and Review (“CCAR”), which is an annual supervisory exercise that assesses the capital positions and planning practices of large bank holding companies and IHCs. On June 28, 2023, the Federal Reserve Board publicly released the results of its annual supervisory stress test, which showed that DB USA Corporation and DWS USA Corporation would continue to have capital levels above minimum requirements even under the stress test’s severely adverse scenario. DB USA Corporation and DWS USA Corporation submitted their annual capital plans in April 2023 and will make their next capital plan submissions to the Federal Reserve Board in April 2024. As a result of amendments in 2020, the CCAR process combines the CCAR quantitative assessment and the buffer requirements in the Federal Reserve Board’s capital rules to create an integrated capital buffer requirement. The amendments eliminated the quantitative and qualitative ‘pass/fail’ assessments from CCAR and modified the static capital conservation buffer to incorporate an institution-specific stress capital buffer (“SCB”), which is floored at 2.5%. The stress capital buffer equals (i) a bank holding company's projected peak-to-trough decline in Common Equity Tier 1 capital under the annual CCAR supervisory severely adverse stress testing scenario prior to any planned capital actions, plus (ii) one year of planned common stock dividends. The stress capital buffer is reset each year. On July 27, 2023, the Federal Reserve Board announced an SCB for each CCAR firm based on 2023 supervisory stress testing results, which for DB USA Corporation was 9.3% and for DWS USA Corporation was 5.6%. This SCB became effective October 1, 2023, and will remain in effect until September 30, 2024, at which point the size of the SCB for each of Deutsche Bank’s IHCs will be recalibrated based on the results of the 2024 stress tests, which are expected to be released in June 2024.

Large U.S. bank holding companies and certain of their subsidiary depositary institutions are subject to LCR requirements that are generally consistent with the Basel Committee’s revised Basel III liquidity standards. These LCR requirements are applicable to DB USA Corporation, DWS USA Corporation and DBTCA. The Tailoring Rules reduced the LCR requirements applicable to these entities from 100 to 85 percent coverage of net outflows over a projected 30-day period.

On October 20, 2020, the Federal Reserve Board and other U.S. regulators finalized rules implementing the second element of the Basel III liquidity framework, the net stable funding ratio (“NSFR”). Under the Tailoring Rules, DB USA Corporation, DWS USA Corporation and DBTCA are subject a reduced NSFR requirement, reflecting 85 percent of the required stable funding amount, so long as the IHCs’ combined weighted short term wholesale funding remains below $75 billion. Effective July 1, 2021, these firms were required to calculate the NSFR on a daily basis. Beginning in 2023, these firms were required to publicly report NSFR information on a periodic basis.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

The Federal Reserve Board’s TLAC rules require, among other things, the U.S. IHCs of non-U.S. G-SIBs, including DB USA Corporation and DWS USA Corporation, to maintain a minimum TLAC amount, and separately require them to maintain a minimum amount of eligible long-term debt. The required TLAC amount and the ability or inability of the IHC to count long-term debt issued externally towards the requirements varies depending on the G-SIB’s planned resolution strategy. DB USA Corporation and DWS USA Corporation are each considered a “non-resolution covered IHC”, which means that they are intended, under the planned global resolution strategy of their G-SIB parent (Deutsche Bank AG), to continue to operate outside of resolution proceedings while the G-SIB parent is subject to a bail-in under the applicable European resolution regime. The TLAC rules require a “non-resolution covered IHC” to maintain (i) internal minimum TLAC of at least 16% of its risk-weighted assets, 6% of its Basel III leverage ratio denominator and 8% of its average total consolidated assets, and (ii) internal eligible long-term debt of at least 6% of its risk-weighted assets, 2.5% of its Basel III leverage ratio denominator and 3.5% of its average total consolidated assets. Eligible long-term debt instruments for non-resolution covered IHCs are required to meet certain criteria, including issuance to a foreign company that controls directly or indirectly the covered IHC or a foreign affiliate (a non-U.S. entity that is wholly owned, directly or indirectly, by the non-U.S. G-SIB) and the inclusion of a contractual trigger allowing for, in limited circumstances, the immediate conversion or exchange of some or all of the instrument into Common Equity Tier 1 instruments upon an order by the Federal Reserve Board. Internal TLAC requirements may be satisfied with a combination of eligible long-term debt instruments and Tier 1 capital. Each of DB USA Corporation and DWS USA Corporation would also face restrictions on its discretionary bonus payments and capital distributions if it fails to maintain a TLAC buffer consisting of Common Equity Tier 1 capital above the minimum TLAC requirement equal to 2.5% of risk-weighted assets. The TLAC rules also prohibit or limit the ability of DB USA Corporation and DWS USA Corporation to engage in certain types of financial transactions.

In August 2023, the FDIC, Federal Reserve Board, and Office of the Comptroller of the Currency issued a joint NPR on long-term debt (“LTD”) requirements that would make limited amendments to the existing TLAC rules and would extend the LTD and clean-holding company portions of the Federal Reserve Board’s existing TLAC rule for U.S. G-SIBs and U.S. IHCs of foreign G-SIBs to all large banking organizations with U.S.$ 100 billion or more in total assets, with virtually no tailoring and only a few other amendments to the existing TLAC rule.

Furthermore, the Dodd-Frank Act provides for an extensive framework for the regulation of OTC derivatives, including mandatory clearing, exchange trading and transaction reporting of certain OTC derivatives, as well as rules regarding registration, capital, margin, business conduct standards, recordkeeping and other requirements for swap dealers, security-based swap dealers, major swap participants and major security-based swap participants. The Commodity Futures Trading Commission (“CFTC”) has adopted rules implementing the most significant provisions of the Dodd-Frank Act. Also pursuant to the Dodd-Frank Act, the CFTC has finalized regulations to impose position limits on certain commodities and economically equivalent swaps, futures and options. In addition, the CFTC has adopted final rules on the cross-border application of U.S. swap rules, building on the CFTC’s cross-border guidance from 2013 and related no-action relief letters. The Securities and Exchange Commission (“SEC”) has also finalized rules regarding registration, capital, margin, risk-mitigation techniques, trade reporting, business conduct standards, trade acknowledgement and verification requirements, recordkeeping and financial reporting, and cross-border requirements for security-based swap dealers. These rules generally came into effect in November 2021, the first compliance date for registration of security-based swap dealers and major security-based swap participants. Finally, the Federal Reserve Board, the FDIC, the Office of the Comptroller of the Currency, the Farm Credit Administration and the Federal Housing Finance Agency have adopted final rules establishing margin requirements for non-cleared swaps and security-based swaps that are applicable to swap dealers and security-based swap dealers that are subject to U.S. prudential regulations in lieu of the CFTC’s and SEC’s margin rules. The final margin rules were phased in from September 2016 through September 2022.

In December 2023, the CFTC published a notice of proposed rulemaking to require swap dealers, such as Deutsche Bank AG, to document, implement, and maintain an operational resilience framework reasonably designed to identify, monitor, manage, and assess risks relating to information and technology security, third-party relationships, and emergencies or other significant disruptions to normal business operations. The proposed rule is subject to industry review and comment, and may be amended prior to finalization. Deutsche Bank AG is presently reviewing the rule proposal and considering its compliance framework in this respect.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

In addition, the Dodd-Frank Act requires U.S. regulatory agencies to prescribe regulations with respect to incentive-based compensation at financial institutions in order to prevent inappropriate behavior that could lead to a material financial loss; such rules were proposed in 2011 and 2016, but were not finalized. Other provisions require issuers with securities listed on U.S. stock exchanges to establish a “claw back” policy to recoup previously awarded executive compensation in the event of an accounting restatement; in November 2022, the SEC adopted rules to implement these provisions that cover foreign private issuers such as Deutsche Bank. The New York Stock Exchange (“NYSE”), on which Deutsche Bank’s ordinary shares are listed, has adopted listing standards to implement these rules, pursuant to which NYSE-listed issuers, including Deutsche Bank, were required to adopt a compensation recovery policy by December 1, 2023. The compensation recovery policies the bank has adopted are attached as Exhibits 97.1 and 97.2 hereto.

The Dodd-Frank Act also grants the SEC discretionary rule-making authority to impose a new fiduciary standard on brokers, dealers and investment advisers; pursuant to this authority, on June 5, 2019, the SEC adopted rules and interpretations applicable to the relationships between such entities and their retail customers, and full compliance was required on June 30, 2020. The Dodd-Frank Act also expands the extraterritorial jurisdiction of U.S. courts over actions brought by the SEC or the United States with respect to violations of the antifraud provisions of the Securities Act of 1933, the Securities Exchange Act of 1934 and the Investment Advisers Act of 1940.

Regulatory Authorities

Deutsche Bank AG as well as its wholly owned subsidiary DB USA Corporation are bank holding companies under the U.S. Bank Holding Company Act of 1956, as amended (the “Bank Holding Company Act“), by virtue of, among other things, their ownership of DBTCA. Deutsche Bank AG and DB USA Corporation have elected to be financial holding companies pursuant to the provisions of the Gramm-Leach-Bliley Act (the “GLB Act”) and, accordingly, may affiliate with securities firms and engage in other activities that are financial in nature or incidental or complementary to activities that are financial in nature. As a bank holding company and financial holding company, Deutsche Bank’s U.S. operations are subject to regulation, supervision and examination by the Federal Reserve Board as Deutsche Bank’s U.S. “umbrella supervisor”.

DBTCA is a New York state-chartered bank whose deposits are insured by the FDIC to the extent permitted by law. DBTCA is subject to regulation, supervision and examination by the Federal Reserve Board and the New York State Department of Financial Services and to applicable FDIC rules. In addition, DBTCA is also subject to regulation by the Consumer Financial Protection Bureau in relation to retail products and services offered to its customers. Deutsche Bank Trust Company Delaware is a Delaware state-chartered bank which is subject to regulation, supervision and examination by the FDIC and the Office of the State Bank Commissioner of Delaware. Deutsche Bank AG’s New York branch is supervised by the Federal Reserve and the New York State Department of Financial Services. Deutsche Bank’s federally chartered non-depository trust companies are subject to regulation, supervision and examination by the Office of the Comptroller of the Currency. Deutsche Bank and its subsidiaries are also subject to regulation, supervision and examination by state banking regulators of certain states in which they conduct banking operations.

Restrictions on Activities

As described below, federal and state banking laws, regulations and supervisory authorities restrict Deutsche Bank’s ability to engage, directly or indirectly through subsidiaries, in activities in the United States. Among other requirements, Deutsche Bank and its subsidiaries are required to obtain the prior approval of the Federal Reserve Board before directly or indirectly acquiring the ownership or control of more than 5% of any class of voting shares of U.S. banks, certain other depository institutions, and bank or depository institution holding companies. Under applicable U.S. federal banking law, Deutsche Bank’s U.S. banking operations are also restricted from engaging in certain “tying” arrangements involving products and services.

Deutsche Bank’s two U.S. FDIC-insured bank subsidiaries, as well as its New York branch, are subject to requirements and restrictions under federal and state law, including requirements to maintain reserves against deposits, restrictions on the types and amounts of loans that may be made and the interest that may be charged thereon, and limitations on the types of investments that may be made and the types of services that may be offered.

In addition to the business of banking, and managing or controlling banks, so long as Deutsche Bank is a financial holding company under U.S. law, it and its subsidiaries may also engage in nonbanking activities in the United States that are financial in nature, or incidental or complementary to such financial activity, including certain securities, merchant banking, insurance and other financial activities, subject to certain limitations on the conduct of such activities and to notice or prior regulatory approval in some cases. As a non-U.S. bank, Deutsche Bank AG and its non-U.S. subsidiaries are generally authorized under U.S. law and regulations to acquire a non-U.S. company engaged in nonfinancial activities as long as that company’s U.S. operations do not exceed certain thresholds and certain other conditions are met.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

In November 2018, the Federal Reserve Board adopted a revised supervisory rating system for bank holding companies with U.S.$ 100 billion or more in total consolidated assets and for IHCs with U.S.$ 50 billion or more in total consolidated assets, such as DB USA Corporation. The revised system also generally applies to DWS USA Corporation. Under the revised system, covered companies receive separate ratings from the Federal Reserve for (i) capital planning and positions, (ii) liquidity risk management and positions and (iii) governance and controls. Each of these component areas will receive one of the following four ratings: (i) Broadly Meets Expectations, (ii) Conditionally Meets Expectations, (iii) Deficient-1, and (iv) Deficient-2. A covered company must maintain a rating of Broadly Meets Expectations or Conditionally Meets Expectations for each of the three components to be considered “well managed.”

A financial institution’s status as a financial holding company, and resulting ability to engage in a broader range of nonbanking activities, are dependent on the institution and its subsidiary IHCs and insured U.S. depository institutions qualifying as “well capitalized” and “well managed” under applicable regulations and upon the insured U.S. depository institutions meeting certain requirements under the Community Reinvestment Act. The Federal Reserve Board’s and other U.S. regulators’ “well capitalized” standards are generally based on specified quantitative thresholds set at levels above the minimum requirements to be considered “adequately capitalized.” For Deutsche Bank’s two insured depository institution subsidiaries, DBTCA and Deutsche Bank Trust Company Delaware, the well-capitalized thresholds under the U.S. Basel III framework are a Common Equity Tier 1 capital ratio of 6.5%, a Tier 1 capital ratio of 8%, a Total capital ratio of 10%, and a U.S. leverage ratio of 5%. For bank holding companies, including Deutsche Bank AG and DB USA Corporation, the well-capitalized thresholds are a Tier 1 capital ratio of 6% and a Total capital ratio of 10%, both of which in the case of Deutsche Bank AG are calculated for Deutsche Bank AG under its home country standards.

State-chartered banks (such as DBTCA) and state-licensed branches and agencies of foreign banks (such as the New York branch) may not, with certain exceptions that require prior regulatory approval, engage as principal in any type of activity not permissible for their federally chartered or licensed counterparts. In addition, DBTCA and Deutsche Bank Trust Company Delaware are subject to their respective state banking laws pertaining to legal lending limits and permissible investments and activities. Likewise, the United States federal banking laws also subject state-licensed branches and agencies of foreign banking organizations to the single-borrower lending limits that apply to federally licensed branches or agencies, which are substantially similar to the lending limits applicable to national banks. The single-borrower lending limits applicable to branches and agencies are calculated based on the dollar equivalent of the capital of the foreign bank (i.e., Deutsche Bank AG in the case of the New York branch).

The Federal Reserve Board may terminate the activities of any U.S. office of a foreign bank if it determines that the foreign bank is not subject to comprehensive supervision on a consolidated basis in its home country or that there is reasonable cause to believe that such foreign bank or its affiliate has violated the law or engaged in an unsafe or unsound banking practice in the United States or, for a foreign bank that presents a risk to the stability of the United States financial system, the home country of the foreign bank has not adopted, or made demonstrable progress toward adopting, an appropriate system of financial regulation to mitigate such risk.

Also, under the so-called swaps “push-out” provisions of the Dodd-Frank Act, certain structured finance derivatives activities of FDIC-insured banks and U.S. branch offices of foreign banks (including Deutsche Bank’s New York branch) are restricted.

There are various qualitative and quantitative restrictions on the extent to which Deutsche Bank and its nonbank subsidiaries can borrow or otherwise obtain credit from Deutsche Bank’s U.S. banking subsidiaries or engage in certain other transactions involving those subsidiaries, including derivative transactions and securities borrowing or lending transactions. In general, these transactions must be on terms that would ordinarily be offered to unaffiliated entities, must be secured by designated amounts of specified collateral and are subject to volume limitations. These restrictions also apply to certain transactions of Deutsche Bank’s New York branch with its U.S. broker-dealers and certain of its other U.S. affiliates.

A major focus of U.S. governmental policy relating to financial institutions is aimed at preventing money laundering and terrorist financing and compliance with economic sanctions in respect of designated countries or activities. Failure of an institution to have policies and procedures and controls in place to prevent, detect and report money laundering and terrorist financing could in some cases have serious legal, financial and reputational consequences for the institution.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

New York Branch

The New York branch of Deutsche Bank AG is licensed by the Superintendent of the New York State Department of Financial Services to conduct a commercial banking business and is required to maintain and pledge eligible high-quality assets with banks in the State of New York. The Superintendent of Financial Services may also impose asset maintenance requirements on foreign banks with branch offices in New York. In addition, the Federal Reserve Board is authorized to impose institution-specific asset maintenance requirements under certain conditions, pursuant to the Tailoring Rules.

The New York State Banking Law authorizes the Superintendent of Financial Services to take possession of the business and property of a New York branch of a foreign bank under certain circumstances, generally involving violation of law, conduct of business in an unsafe manner, impairment of capital, suspension of payment of obligations, or initiation of liquidation proceedings against the foreign bank at its domicile or elsewhere. In liquidating or dealing with a branch’s business after taking possession of a branch, only the claims of depositors and other creditors which arose out of transactions with a branch are to be accepted by the Superintendent of Financial Services for payment out of the business and property of the foreign bank in the State of New York or in the U.S. and reflected on the books of the New York branch, without prejudice to the rights of the holders of such claims to be satisfied out of other assets of the foreign bank. After such claims are paid, the Superintendent of Financial Services will turn over the remaining assets, if any, first to the liquidators of other offices of the foreign bank that are being liquidated in the United States and then, if any assets remain, to the foreign bank or its duly appointed liquidator or receiver.

The New York branch’s deposits and other note obligations are not insured by the FDIC. In general, under the International Banking Act and FDIC regulations, the New York branch is not permitted to engage in domestic retail deposit activity (accepting an initial deposit of less than US$250,000). The New York branch may not engage as principal in any type of activity that is not permissible for a federally licensed branch of a foreign bank unless the Federal Reserve Board has determined that such activity is consistent with sound banking practice. The New York branch must also comply with the same single borrower (or issuer) lending and investment limits applicable to federally licensed branches, which are substantially similar to the lending limits applicable to national banks, as well as those imposed by the New York State Banking Law. The lending limits applicable to the New York branch take into account credit exposures from derivative transactions. These limits are based on the foreign banks worldwide capital. In addition, regulations that the U.S. Financial Stability Oversight Council or other regulators may adopt could affect the nature of the activities which the New York branch may conduct, and may impose restrictions and limitations on the conduct of such activities.

Deutsche Bank Trust Company Americas

The Federal Deposit Insurance Corporation Improvement Act of 1991 (“FDICIA”) provides for extensive regulation of depository institutions (such as DBTCA and its direct and indirect parent companies), including requiring federal banking regulators to take “prompt corrective action” with respect to FDIC-insured banks that do not meet minimum capital requirements. As an insured bank’s capital level declines and the bank falls into lower categories (or if it is placed in a lower category by the discretionary action of its supervisor), greater limits are placed on its activities and federal banking regulators are authorized (and, in many cases, required) to take increasingly more stringent supervisory actions, which could ultimately include the appointment of a conservator or receiver for the bank (even if it is solvent). In addition, FDICIA generally prohibits an FDIC-insured bank from making any capital distribution (including payment of a dividend) or payment of a management fee to its holding company if the bank would thereafter be undercapitalized. If an insured bank becomes “undercapitalized”, it is required to submit to federal regulators a capital restoration plan guaranteed by the bank’s holding company. Since the enactment of FDICIA, both of Deutsche Bank’s U.S. insured bank subsidiaries have maintained capital above the “well capitalized” standards, the highest capital category under applicable regulations.

DBTCA, like other FDIC-insured banks, is required to pay assessments to the FDIC for deposit insurance under the FDIC’s Deposit Insurance Fund (calculated using the FDIC’s risk-based assessment system). The minimum reserve ratio for the Deposit Insurance Fund was increased under the Dodd-Frank Act from 1.15% to 1.35%. After having reached 1.35% as of September 30, 2018, the reserve ratio had declined below that amount following extraordinary growth in insured deposits across the banking industry in the first and second quarters of 2020. In response to this, the FDIC adopted a restoration plan to restore the Deposit Insurance Fund to 1.35% by September 28, 2028. The restoration plan, as amended, incorporates an increase in initial base deposit assessment rate schedules uniformly by two basis points beginning in the first quarterly assessment period of 2023. Such increase is applicable to insured depositary institutions generally, including to DBTCA.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

In November 2023, the FDIC approved a final rule to implement a special assessment to recover the loss to the Deposit Insurance Fund associated with protecting uninsured depositors following the closures of Silicon Valley Bank and Signature Bank. The special assessment allows banking organizations to deduct U.S.$5 billion of uninsured deposits from their insured depository institutions’ assessment bases. For banking organizations like DB USA Corporation that have multiple insured depository institutions, the deduction is distributed across the affiliated insured depository institutions. The special assessment will be collected at an annual rate of approximately 13.4 basis points for an anticipated total of eight quarterly assessment periods, beginning with the first quarter of 2024.

In addition, the FDIC has set the designated reserve ratio at 2% as a long-term goal.

The FDIC’s standard maximum deposit insurance amount per depositor at an insured depository institution is U.S.$ 250,000.

Other

In the United States, Deutsche Bank’s U.S.-registered broker-dealer subsidiaries are regulated by the SEC. Broker-dealers are subject to regulations that cover all aspects of the securities business, including sales methods, trade practices among broker-dealers, use and safekeeping of customers’ funds and securities, capital structure, recordkeeping, the financing of customers’ purchases and the conduct of directors, officers and employees.

Deutsche Bank’s principal U.S. SEC-registered broker-dealer subsidiary, Deutsche Bank Securities Inc., is a member of the NYSE (and other securities exchanges) and is regulated by the Financial Industry Regulatory Authority, Inc. (“FINRA”) and the individual state securities authorities in the states in which it operates. The U.S. government agencies and self-regulatory organizations, as well as state securities authorities in the United States having jurisdiction over Deutsche Bank’s U.S. broker-dealer affiliates, are empowered to conduct administrative proceedings that can result in censure, fine, the issuance of cease-and-desist orders or the suspension or expulsion of a broker-dealer or its directors, officers or employees. Deutsche Bank Securities Inc. is also registered with and regulated by the SEC as an investment adviser, and by the CFTC and the National Futures Association as a futures commission merchant and commodity pool operator.

Under the Dodd-Frank Act, entities that are swap dealers or major swap participants are required to register with the CFTC and entities that are security-based swap dealers or major security-based swap participants are required to register with the SEC. Deutsche Bank AG is registered as a swap dealer with the CFTC and a security-based swap dealer with the SEC. As a registrant, Deutsche Bank AG is subject to certain requirements relating to capital, margin, business conduct standards and recordkeeping, among others.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Organizational Structure

In 2023, Deutsche Bank operated its business along the structure of four corporate divisions. Deutsche Bank AG is the direct or indirect holding company for its subsidiaries. The following table sets forth the significant subsidiaries the Group owns, directly or indirectly, as of December 31, 2023. Deutsche Bank used the three-part test set out in Section 1-02 (w) of Regulation S-X under the U.S. Securities Exchange Act of 1934 to determine significance. The bank does not have any other subsidiaries it believes are material based on other less quantifiable factors.

Deutsche Bank owns 100 % of the equity and voting interests in these subsidiaries except for DWS Group GmbH & Co. KGaA, of which it owns 79.49 % of equity and voting interests. These subsidiaries are included in the consolidated financial statements and prepare standalone financial statements as of December 31, 2023. The principal countries of operations are the same as the countries of incorporation.

Subsidiary		Place of Incorporation
DB USA Corporation¹		Delaware, United States
Deutsche Bank Americas Holding Corporation²		Delaware, United States
DB U.S. Financial Markets Holding Corporation³		Delaware, United States
Deutsche Bank Securities Inc.⁴		Delaware, United States
Deutsche Bank Trust Corporation⁵		New York, United States
Deutsche Bank Trust Company Americas⁶		New York, United States
Deutsche Bank Luxembourg S.A.⁷		Luxembourg
DB Beteiligungs-Holding GmbH⁸		Frankfurt am Main, Germany
DWS Group GmbH & Co. KGaA⁹		Frankfurt am Main, Germany

¹ DB USA Corporation is the top-level holding company for its subsidiaries in the United States.

² Deutsche Bank Americas Holding Corporation is a second tier holding company for subsidiaries in the United States.

³ DB U.S. Financial Markets Holding Corporation is a second tier holding company for subsidiaries in the United States.

⁴ Deutsche Bank Securities Inc. is a U.S. company registered as a broker dealer and investment advisor with the Securities and Exchange Commission and as a futures commission merchant with the Commodities Futures Trading Commission.

⁵ Deutsche Bank Trust Corporation is a bank holding company under Federal Reserve Board regulations.

⁶ Deutsche Bank Trust Company Americas is a New York State-chartered bank and member of the Federal Reserve System. It originates loans and other forms of credit, accepts deposits, arranges financings and provides numerous other commercial banking and financial services.

⁷ The company's primary business model comprises loan business with international clients (Corporate Bank & Investment Bank), where the bank acts globally as lending office and as risk transfer hub for the Strategic Corporate Lending of Deutsche Bank, as well as structured finance activities covering long-term infrastructure projects and high quality investment goods. Furthermore, the bank offers tailor-made solutions with a wide range of products and services to their ultra-high-net-worth (UHNW) clients.

⁸ The company holds the majority stake in DWS Group GmbH & Co. KGaA.

⁹ The company is a partnership limited by shares (Kommanditgesellschaft auf Aktien) with a German limited liability company (Gesellschaft mit beschränkter Haftung) as a general partner. The business purpose of the company is the holding of participations in as well as the management and support of a group of financial services providers. Following the public listing on March 23, 2018 on the Frankfurt Stock Exchange Deutsche Bank Group owns 79.49 % of equity and voting interests in the entity.

Property and Equipment

As of December 31, 2023, Deutsche Bank operated in 57 countries out of 1,432 branches around the world, of which 66 % were in Germany. The Group leases a majority of its offices and branches under long-term agreements.

The bank continues to review its property requirements worldwide taking into account cost containment measures as well as growth initiatives in selected businesses. Please see Note 21 “Property and Equipment” to the consolidated financial statements for further information.

Information required by subpart 1400 of SEC Regulation S-K

Please see pages S-1 through S-12 of the Supplemental Financial Information (Unaudited), which pages are included herein, for information required by subpart 1400 of SEC Regulation S-K.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Item 4A: Unresolved Staff Comments

Deutsche Bank has not received written comments from the Securities and Exchange Commission regarding its periodic reports under the Exchange Act, as of any day 180 days or more before the end of the fiscal year to which this Annual Report relates, which remain unresolved.

Item 5: Operating and Financial Review and Prospects

Overview

The following discussion and analysis should be read in conjunction with the consolidated financial statements and the related notes to them included in “Item 18: Financial Statements” of this document, on which we have based this discussion and

analysis.

The Group has prepared its consolidated financial statements in accordance with IFRS as issued by the International Accounting Standards Board.

Material Accounting Policies and Critical Accounting Estimates

The Group’s material accounting policies are essential to understanding its reported results of operations and financial condition. Certain of these accounting policies require critical accounting estimates that involve complex and subjective judgments and the use of assumptions, some of which may be for matters that are inherently uncertain and susceptible to change. Such critical accounting estimates could change from period to period and have a material impact on the banks’s financial condition, changes in financial condition or results of operations. Critical accounting estimates could also involve estimates where management could have reasonably used another estimate in the current accounting period. Actual results may differ from these estimates if conditions or underlying circumstances were to change. See Note 1 “Material Accounting Policies and Critical Accounting Estimates” to the consolidated financial statements for a discussion on the Group’s material accounting policies and critical accounting estimates.

Deutsche Bank has identified the following material accounting policies that involve critical accounting estimates:

– The impairment of loans and provisions for off-balance sheet positions

– The impairment of financial assets at fair value through other comprehensive income

– The determination of fair value

– The recognition of trade date profit

– The impairment of goodwill and other intangibles

– The recognition and measurement of deferred tax assets

– The accounting for legal and regulatory contingencies and uncertain tax positions

Recently Adopted Accounting Pronouncements and New Accounting Pronouncements

See Note 2 “Recently Adopted and New Accounting Pronouncements” to the consolidated financial statements for a discussion on the Group’s recently adopted and new accounting pronouncements.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Operating results

The following discussion and analysis should be read in conjunction with the bank’s consolidated financial statements.

Executive summary

Please see “Management Report: Operating and financial review: Executive summary” in the Annual Report 2023.

Trends and uncertainties

For insight into the trends impacting the bank’s performance please see the “Management Report: Operating and financial review” section of the Annual Report 2023. Key risks and uncertainties for the bank are discussed in “Item 3: Key Information – Risk Factors”.

The Group’s aspirations are subject to various external and internal factors, some of which it cannot influence. Timely and successful achievement of its strategic targets or aspirations, including containing costs at the expected run rate, may be adversely impacted by reduced revenue-generating capacities of some of the bank’s core businesses should downside risks crystallize. These risks include but are not limited to the uncertain future path of inflation and central bank’s policies on interest rates, the Israel-Hamas conflict and the war in Ukraine with both having escalation potential, a deteriorating macroeconomic environment, elevated geopolitical risks, cyber events, the ongoing headwinds posed by regulatory reforms and the effects on the bank’s legal and regulatory proceedings. A key focus in 2023 was the persistently high inflation which drove further monetary tightening, risks of a higher-for-longer interest rate environment and generally tighter financial conditions in the major advanced economies. Towards the end of the year, evidence of waning inflation pressure led to a repricing of market expectations with respect to earlier and more significant central bank rate cuts in 2024 accompanied by an easing of financial conditions. In addition, there were episodes of significant market volatility particularly around selective failures and/or restructurings in the U.S. and European banking sector as well as increasing pressure on the CRE market, particularly in the U.S. office sector. Overall, these trends could continue to drive high levels of uncertainty and could result in fluctuations in the results of the Group’s operations, strategic plans and financial targets.

Opportunities may arise if macroeconomic conditions, the inflation and interest rate environment improve beyond currently forecasted levels, leading to higher revenues and improving the Group’s ability to meet its financial targets. Currently, macro-financial forecasts feature a “soft landing” of most advanced economies (with short episodes of a mild recession or stagnation), only moderate increases in unemployment, lower inflation rates and a significant easing of monetary policy by major central banks in 2024. At the same time, potentially higher inflation and interest rate levels and market volatility could lead to increased revenues from trading flows and higher net interest income and lending margins. Through times of volatility or uncertainty, Deutsche Bank could also benefit from helping clients navigate such financial markets. Focusing on and investing in Deutsche Bank’s areas of core strengths and the implementation of its strategy may create further opportunities if implemented to a greater extent or under more favorable conditions than currently anticipated.

Risks to the Corporate Bank’s outlook include lower economic growth in the major operating countries from ongoing supply chain disruptions, higher energy and commodity prices as well as uncertainty around central bank policies (e.g., the interest rate environment). In addition, ongoing regulatory developments (e.g., the finalization of the Basel III framework) and lower levels of client activity may also have an adverse impact.

There are several risks to the outlook of the Investment Bank, including potential impacts on the business model from macroeconomic changes, including uncertainties associated with the ongoing conflicts in Europe and the Middle East, while second order effects on energy, supply chain disruptions and food prices will continue to have a significant impact on financial markets. Central bank policies, specifically around interest rates and expected fiscal loosening could create further risks. In addition, the evolving regulatory framework could lead to unforeseen regulatory compliance costs and possible delays in the implementation of the division’s efficiency measures, which could adversely impact its cost base.

Risks to Private Bank’s outlook include global inflationary pressures due to higher energy and commodity prices as well as ongoing supply chain disruptions, uncertainty on interest rates, slower economic growth in the major operating countries and lower client activity. Client activity could be impacted by market uncertainties including higher than expected volatility in equity and credit markets. The implementation of regulatory requirements, delays in the implementation of strategic projects, delays in Postbank service remediation or changes resulting from contract renegotiations could also have a negative impact on revenues, capital consumption and costs.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Risks to Asset Management’s outlook include protectionist and anti-trade policies, that could have unpredictable consequences in the economy, market volatility and investors’ confidence, which may lead to declines in business and could affect revenues and profits. In addition, the evolving regulatory framework could lead to unforeseen regulatory compliance costs and possible delays in the implementation of the efficiency measures, which could adversely impact the division’s cost base.

Corporate & Other is expected to generate a pre-tax loss in 2024. Corporate & Other will continue to retain shareholder expenses, which are expected to be around € 0.6 billion for the full year 2024, as well as certain funding and liquidity impacts, which are expected to be around € 0.2 billion for full year 2024. Corporate & Other will continue to record the reversal of noncontrolling interests reported in the business segments, primarily from DWS. Legacy portfolios are expected to generate a larger pre-tax loss in 2024, primarily from the non-recurrence of a litigation provision release recorded in the fourth quarter of 2023. In addition, results in Corporate & Other will continue to be impacted by valuation and timing differences on positions that are economically hedged, but do not meet hedge accounting requirements. RWA are expected to be significantly lower in 2024, mainly driven by the reallocation of operational risk RWA and model changes.

The effective tax rate in future periods may be influenced by changes in tax laws or interpretative guidance, the occurrence of non-tax-deductible litigation and other charges, changes in the measurement of deferred tax assets, or the resolution of tax examinations and investigations.

Results of operations

Please see “Management Report: Operating and financial review: Results of operations” in the Annual Report 2023 and the Group’s discussion of Non-GAAP financial measures in the “Supplementary Financial Information (Unaudited): Non-GAAP financial measures”.

Financial position

Please see “Management Report: Operating and financial review: Financial position” in the Annual Report 2023.

Liquidity and capital resources

For a detailed discussion of the bank’s liquidity risk management, see “Management Report: Risk Report: Liquidity risk” in the Annual Report 2023.

For a detailed discussion of the Group’s capital management, see “Management Report: Risk Report: Capital management” in the Annual Report 2023.

Post-employment benefit plans

Please see “Management Report: Employees: Post-employment benefit plans” in the Annual Report 2023.

Off-balance sheet arrangements

For information on the nature, purpose and extent of the Group’s off-balance sheet arrangements, please see Note 38 “Structured entities” to the consolidated financial statements. For further information on off-balance sheet arrangements, including allowances for off-balance sheet positions, please refer to “Management Report: Risk Report: Asset quality: Allowance for credit losses” in the Annual Report 2023 and Note 19 “Allowance for credit losses” to the consolidated financial statements. For information on irrevocable lending commitments and contingent liabilities with respect to third parties, please see Note 28 “Credit related commitments” to the consolidated financial statements.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Item 6: Directors, Senior Management and Employees

Directors and Senior Management

In accordance with the German Stock Corporation Act (Aktiengesetz), Deutsche Bank has a Management Board (Vorstand) and a Supervisory Board (Aufsichtsrat). The German Stock Corporation Act prohibits simultaneous membership on both the Management Board and the Supervisory Board. The members of the Management Board are the executive officers of the company. The Management Board is responsible for managing the company and representing the bank in dealings with third parties. The Supervisory Board oversees the Management Board, appoints and removes its members and determines their remuneration and other compensation components, including pension benefits. According to German law, the Supervisory Board represents Deutsche Bank in dealings with members of the Management Board. Therefore, no members of the Management Board may enter into any agreement for Deutsche Bank without the prior consent of the Supervisory Board.

Age limits for members of the Management Board are defined contractually. Accordingly, the appointment as member of the Management Board shall end in principle with the close of the ordinary general meeting in the year, in which the Management Board Member reaches the retirement age according to the rules of the German statutory pension insurance scheme applicable in Germany for the long-time insured to claim an early retirement pension (“Renteneineintrittsalter zur vorzeitigen Inanspruchnahme der Altersrente für langjährig Versicherte”), which is currently 63 years of age. Age limits also exist for the members of the Supervisory Board according to the terms of reference (Geschäftsordnung) for the Supervisory Board. There is a maximum age limit of 70 years for members of the Supervisory Board. In exceptional cases, a Supervisory Board member can be elected or appointed for a period that extends no longer than until the end of the fourth ordinary general meeting that takes place after he/she has reached the age of 70.

The Supervisory Board may not make management decisions. However, German law and Deutsche Bank’s Articles of Association (Satzung) require the Management Board to obtain the approval of the Supervisory Board for certain actions. The most important of these actions are:

– Granting of general powers of attorney (Generalvollmachten). A general power of attorney authorizes its holder to represent the company in substantially all legal matters without limitation to the affairs of a specific office

– Acquisitions and disposals (including transactions carried out by a dependent company) of real estate in so far as the object involves more than € 500,000,000

– Granting of credits, including the acquisition of participations in other companies, where the German Banking Act (Kreditwesengesetz) requires approval by the Supervisory Board. In particular, pursuant to the German Banking Act, it requires of the Supervisory Board inter alia the approval if the bank grants a loan (to the extent legally permissible) to a member of the Management Board or the Supervisory Board or one of the bank’s employees who holds a procuration (Prokura) or general power of attorney, and

– Acquisitions and disposals (including transactions carried out by a dependent company) of other participations, insofar as the object involves more than € 1 billion. The Supervisory Board must be informed without delay of any acquisition or disposal of such participations involving more than € 500,000,000

The Management Board must submit regular reports or ad-hoc reports, as the case may be, to the Supervisory Board on its current operations and future business planning as well as on its risk situation. The Supervisory Board may also request special reports from the Management Board at any time.

With respect to voting powers, a member of the Supervisory Board or the Management Board may not vote on resolutions open to a vote at a board meeting if the proposed resolution concerns:

– A legal transaction between Deutsche Bank and the respective member, or

– Commencement, settlement or completion of legal proceedings between Deutsche Bank and the respective member

A member of the Supervisory Board or the Management Board may not directly or indirectly exercise voting rights on resolutions open to a vote at a shareholders’ meeting (Hauptversammlung, which the bank refers to as the General Meeting) if the proposed resolution concerns:

– Ratification of the member’s acts

– A discharge of liability of the member, or

– Enforcement of a claim against the member by the bank.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Supervisory Board and Management Board

In carrying out their duties, members of both the Management Board and the Supervisory Board must exercise the standard of care of a prudent and diligent business person, and they are liable to the bank for damages if they fail to do so.

The liability of the members of the Management Board or the Supervisory Board under the German Stock Corporation Act for breach of their fiduciary duties is to the company rather than individual shareholders. However, individual shareholders that hold at least 1 % or € 100,000 of the subscribed capital and are granted standing by the court may also invoke such liability to the company. The underlying concept is that all shareholders should benefit equally from amounts received under this liability by adding such amounts to the company’s assets rather than disbursing them to plaintiff shareholders. Deutsche Bank may waive the right to claim damages or settle these claims if at least three years have passed since the alleged breach and if the shareholders approve the waiver or settlement at the General Meeting with a simple majority of the votes cast, and provided that opposing shareholders do not hold, in the aggregate, one tenth or more of its share capital and do not have their opposition formally noted in the minutes maintained by a German notary.

Supervisory Board

The German Co-Determination Act of 1976 (Mitbestimmungsgesetz) requires the bank’s Supervisory Board to have twenty members, which is also reflected in the Articles of Association. In the event that the number of members of the Supervisory Board falls below twenty, upon application to a competent court, the court must appoint replacement members to serve on the board until regular appointments are made by the General Meeting (with respect to shareholder representatives) or the employees and their representatives (with respect to employee representatives).

The German Co-Determination Act of 1976 (Mitbestimmungsgesetz) requires that the shareholders elect half of the members of the supervisory board of large German companies, such as Deutsche Bank, and that employees in Germany elect the other half. None of the current members of either of the bank’s boards were selected pursuant to any arrangement or understandings with major shareholders, customers or others.

Each member of the Supervisory Board generally serves for a fixed term of approximately five years. For the election of shareholder representatives the term of shareholder representatives is usually limited to approximately four years by the General Meeting since 2021. Pursuant to German law, the term expires at the latest at the end of the Annual General Meeting that approves and ratifies such member’s actions in the fourth fiscal year after the year in which the Supervisory Board member was elected. Supervisory Board members may also be re-elected. The shareholders may, by a majority of the votes cast in a General Meeting, remove any member of the Supervisory Board the shareholders have elected in a General Meeting. The employees may remove any member they have elected by a vote of three-quarters of the employee votes cast.

The members of the Supervisory Board elect the chairperson and the deputy chairperson(s) of the Supervisory Board. Traditionally, the chairperson is a representative of the shareholders, and the first deputy chairperson is a representative of the employees. At least half of the members of the Supervisory Board must be present at a meeting or must have submitted their vote in writing to constitute a quorum. In general, approval by a simple majority of the members of the Supervisory Board present and voting is required to pass a resolution. In the case of a deadlock, the resolution is put to a second vote. In the case of a second deadlock, the chairperson has the deciding vote.

For additional information on Deutsche Bank’s Supervisory Board, including a table providing the names of and biographical information for the current members, see “Corporate Governance Statement: Management Board and Supervisory Board: Supervisory Board” in the Annual Report 2023.

Committees of the Supervisory Board

For information on the committees of the bank’s Supervisory Board, please see “Corporate Governance Statement: Management Board and Supervisory Board: Committees of the Supervisory Board” in the Annual Report 2023.

The business address of the members of the Supervisory Board is the same as Deutsche Bank’s business address, Taunusanlage 12, 60325 Frankfurt am Main, Germany.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Management Board

Deutsche Bank’s Articles of Association require the Management Board to have at least three members. The Management Board currently has nine members. The Supervisory Board has also appointed a Chairman (CEO) and a Deputy Chairman (President) of the Management Board.

The Supervisory Board appoints and oversees the members of the Management Board. The initial appointment is for a maximum of three years. Members may be re-appointed or have their terms extended for one or more terms of up to a maximum of five years each, although also re-appointments shall be for a maximum of three years. The Supervisory Board may remove a member of the Management Board prior to the expiration of his or her term for good reason.

Pursuant to Deutsche Bank’s Articles of Association, two members of the Management Board, or one member of the Management Board together with a holder of procuration, may represent the bank for legal purposes. A holder of procuration is an attorney-in-fact who holds a legally defined power of attorney under German law, which cannot be restricted with respect to third parties. However, pursuant to German law, the Management Board as a whole must resolve on certain matters and may neither delegate the decision to one or more individual members. In particular, the Management Board may not delegate the determination of the bank’s business and risk strategies, and the coordinating or controlling responsibilities. The Management Board is required to ensure that shareholders are treated on an equal basis and receive equal information. The Management Board is also responsible for ensuring proper business organization, which includes appropriate and effective risk management as well as compliance with legal requirements and internal guidelines, and for taking the necessary measures to ensure that adequate internal guidelines are developed and implemented.

Other selected responsibilities of the Management Board in accordance with the Terms of Reference for the Management Board and/or German law are:

– Appointing key personnel at the level directly below the Management Board, in particular, appointing the Global Key Function Holders employed by the bank

– Making decisions regarding significant credit exposures or other risks which have not been delegated to individual risk management units

– Acquisition and disposal of equity investments, including capital measures in all cases in which (i) the law or the Articles of Association require approval by the Supervisory Board, or (ii) the equivalent of € 100 million is exceeded

– Acquisition and disposal of real estate – directly or by separate legal entities, in all cases in which: (i) the law or the Articles of Association require approval by the Supervisory Board, or (ii) the real estate’s equivalent exceeds € 100 million

– Individual vendor or intra Group-outsourcings (or material changes to those outsourcings) in all cases in which the equivalent of € 100 million is exceeded on an annual basis or include the delegation of core organizational duties of the Management Board

– Calling shareholders’ meetings

– Filing petitions to set aside shareholders’ resolutions

– Preparing and executing shareholders’ resolutions and

– Reporting to the Supervisory Board

For additional information on Deutsche Bank’s Management Board, including the names of and biographical information for the current members, see “Corporate Governance Statement: Management Board and Supervisory Board: Management Board” in the Annual Report 2023. The Terms of Reference of the Management Board are published on the bank’s website www.db.com/ir/en/documents.htm.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Board practices of the Management Board

The Terms of Reference for the Management Board are in accordance with the Supervisory Board resolution of January 31, 2024. These Terms of Reference provide that the members of the Management Board have the collective responsibility for managing Deutsche Bank. Notwithstanding this principle, the allocation of functional responsibilities to the individual members of the Management Board and member substitutions (in case of temporary absence) are set out in the Business Allocation Plan for the Management Board in accordance with the Supervisory Board resolution of January 31, 2024. The allocation of functional responsibilities does not exempt any member of the Management Board from collective responsibility for the management of the business. The members of the Management Board are responsible for the proper performance and/or delegation of its duties and the clear allocation of accountabilities and responsibilities within the area of its functional responsibility (so-called “Ressort”) in accordance with the Business Allocation Plan.

Members of the Management Board are bound to the corporate interest of Deutsche Bank. No member of the Management Board may pursue personal interests in his or her decisions or use business opportunities intended for the company for himself/herself. To the extent permitted by German law, individual members of the Management Board may assume mandates outside of Deutsche Bank Group, honorary offices or special assignments. In order to effectively prevent any conflicts of interest, the members of the Management Board may accept such positions only upon the approval of the other members of the Management Board and the Chairman’s Committee of the Supervisory Board. Management Board members generally do not accept the role of chair of supervisory boards of companies outside the Group.

Section 161 of the German Stock Corporation Act requires that the management board and supervisory board of any German stock exchange-listed company declare annually that the company complies with the recommendations of the German Corporate Governance Code or, if not, which recommendations the company does not comply with and why it does not comply with these recommendations (so-called “comply or explain”-principle). On some points, these recommendations go beyond the requirements of the German Stock Corporation Act. The Management Board and Supervisory Board issued a new Declaration of Conformity in accordance with Section 161 of the German Stock Corporation Act in October 2023, which is available on the bank’s internet website at www.db.com/ir/en/documents.htm under the heading “Declaration of Conformity pursuant to Section 161 German Stock Corporation Act (AktG), Oct 2023”.

For information on the Management Board’s terms of office, please see “Corporate Governance Statement: Management Board and Supervisory Board: Management Board” in the Annual Report 2023. For details of the Management Board’s service contracts providing benefits upon termination, please see “Compensation Report: Benefits as of the end of the mandate” and “Compensation Report: Benefits upon Early Termination” in the Management Report of the Annual Report 2023.

The allocation of functional responsibilities to the individual members of the Management Board is described in the Business Allocation Plan for the Management Board, which sets the framework for the delegation of responsibilities to senior management below the Management Board. The Management Board endorses individual accountability of senior position holders as opposed to joint decision-taking in committees. At the same time, the Management Board recognizes the importance of having comprehensive and robust information across all businesses in order to take well informed decisions and established, in addition to Infrastructure Committees, Business Executive Committees and Regional Committees, the “Group Management Committee” which aims to improve the information flow across the Corporate Divisions and between the Corporate Divisions and the Management Board. The Group Management Committee as a senior platform, which is not required by the German Stock Corporation Act, is composed of all Management Board members as well as most senior business representatives to exchange information and discuss business, growth and profitability.

Compensation

For information on the compensation of the members of the bank’s Management Board, see Compensation Report: Management Board Compensation Report” in the Annual Report 2023.

For information on the compensation of the members of the bank’s employees, see Compensation Report: Employee Compensation Report” in the Annual Report 2023.

For information on the compensation of the members of the bank’s Supervisory Board, see Compensation Report: Compensation System for Supervisory Board Members” in the Annual Report 2023.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Employees

Labor Relations

In Germany, labor unions and employers’ associations generally negotiate collective bargaining agreements on salaries and benefits for employees below the management level. Many companies in Germany, including Deutsche Bank and its material German subsidiaries, are members of the employers’ association and are bound by collective bargaining agreements.

Accordingly, the bank’s employers’ association, the “Arbeitgeberverband des privaten Bankgewerbes e.V.”, regularly renegotiates the collective bargaining agreements that cover many of the Group’s employees. The last agreement was reached in April 2022. As part of the final package, salaries were increased in two steps by in total 5.0%, the second step being 2.0% from August 2023. In addition, two one-time payments for a total of € 1,000 was agreed for all entitled employees, the second payment in the amount of € 500 occurring in February 2023. In total these salary increases add up to 5.5% to 6.2% over the term of this collective wage agreement. This collective wage agreement will last until end of May 2024.

Deutsche Bank’s employers’ association negotiates with the following unions:

– ver.di (Vereinigte Dienstleistungsgewerkschaft)

– Deutscher Bankangestellten Verband (DBV – Gewerkschaft der Finanzdienstleister)

Many employees of Deutsche Bank, who are former employees of the merged Postbank, are covered by in-house collective bargaining agreements that are agreed between Deutsche Bank and trade unions directly. The last agreement was reached in March 2022. As part of the final package, salaries were increased in two steps by a total of 5.2%, the second step being 2.1%, but at least € 100 per month from February 2023. In addition, two one-time payments for a total of € 1,500 was agreed for all entitled employees, the second payment in the amount of EUR 750 occurring in January 2023. In total the salary increases add up to 6% to 10% over the term of this collective wage agreement. This collective wage agreement will last until end of January 2024.

In the afore mentioned context Deutsche Bank negotiates with the following unions:

– ver.di (Vereinigte Dienstleistungsgewerkschaft)

– Deutscher Bankangestellten Verband (DBV – Gewerkschaft der Finanzdienstleister)

– Kommunikationsgewerkschaft DPV (DPVKOM)

– komba gewerkschaft (komba)

As German law prohibits the bank from asking its employees whether they are members of labor unions, there is no record of how many of the bank’s employees are union members.

On the basis of the agreement on cross-border information and consultation of Deutsche Bank employees in the EU concluded on September 10, 1996, all employees in the EU are represented by the European Works Council. This adds up to around 51% of the Group's total workforce.

For further information on the bank’s employees, see “Management Report: Employees” in the Annual Report 2023.

Share Ownership

For the share ownership of the Group’s Management Board, see “Management Report: Compensation Report: Management Board Share Ownership” in the Annual Report 2023.

For the share ownership of the members of the Supervisory Board, see “Corporate Governance Statement/Corporate Governance Report: Reporting and Transparency: Directors’ Share Ownership” in the Annual Report 2023.

For a description of the Group’s employee share programs, please see Note 33 “Employee Benefits” to the consolidated financial statements.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Item 7: Major Shareholders and Related Party Transactions

Major Shareholders

On December 31, 2023, Deutsche Bank’s issued share capital amounted to € 5,223,021,975.04 divided into 2,040,242,959 no par value ordinary registered shares.

On March 5, 2024, Deutsche Bank cancelled 45,541,366 of no par value ordinary registered shares owned by Deutsche Bank, representing € 116,585,896.96. Following this cancellation, Deutsche Bank’s issued share capital amounted to € 5,106,436,078.08 divided into 1,994,701,593 no par value ordinary registered shares.

On December 31, 2023, Deutsche Bank had 583,495 registered shareholders. 1,044,360,168 of the bank’s shares were registered in the names of 572,504 shareholders resident in Germany, representing 51.19% of the share capital. 262,054,613 of Deutsche Bank’s shares were registered in the names of 496 shareholders resident in the United States, representing 12.84% of the share capital.

The German Securities Trading Act (Wertpapierhandelsgesetz) requires investors in publicly traded corporations whose investments reach or cross certain thresholds to notify both the corporation and the BaFin of such change within four trading days. The minimum disclosure threshold is 3% of the corporation’s issued voting share capital.

BlackRock, Inc., New York, has notified Deutsche Bank that as of February 9, 2024 it held 5.86% of the bank’s shares. Deutsche Bank has received no further notification by BlackRock, Inc., New York, through February 16, 2024.

Paramount Service Holding Ltd. S.ÀR.L., British Virgin Islands, has notified Deutsche Bank that as of January 25, 2023 it held 4.54% of the bank’s shares. Deutsche Bank has received no further notification by Paramount Service Holding Ltd. S.ÀR.L., British Virgin Islands, through February 16, 2024.

Supreme Universal Holdings Ltd., Cayman Islands, has notified Deutsche Bank that as of August 20, 2015 it held 3.05% of the bank’s shares. Deutsche Bank has received no further notification by Supreme Universal Holdings Ltd., Cayman Islands, through February 16, 2024.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Over the last three years, Deutsche Bank has been notified of the following changes with regards to the minimum disclosure threshold.

	Disclosure date	% of outstanding shares held at disclosure date
Amundi S.A.	February 1, 2023	2.97
	October 19, 2022	3.07
	October 3, 2022	2.90
	September 27, 2022	3.10
	July 28, 2022	2.78
	June 22, 2022	3.08
	June 21, 2022	2.89
	June 20, 2022	3.07
	May 5, 2022	2.69
	April 27, 2022	3.08

BlackRock, Inc.	February 9, 2024	5.86
	February 8, 2024	5.78
	March 31, 2023	5.38
	March 30, 2023	5.01
	March 24, 2023	3.81

The Capital Group Companies, Inc.¹	April 13, 2022	0.01

Douglas L. Braunstein (Hudson Executive Capital LP)²	January 25, 2024	0.92

Paramount Service Holding Ltd. S.ÀR.L.³	January 25, 2023	4.54

Stephen A. Feinberg (Cerberus)⁴	January 10, 2022	1.99

¹ From previously 5.20 % of Deutsche Bank shares as of November 23, 2020

² From previously 3.18 % of Deutsche Bank shares as of November 20, 2020

³ From previously 3.05 % of Deutsche Bank shares as of August 20, 2015

⁴ From previously 3.001 % of Deutsche Bank shares as of November 14, 2017

Deutsche Bank is neither directly nor indirectly owned nor controlled by any other corporation, by any government or by any other natural or legal person severally or jointly.

Pursuant to German law and our Articles of Association, to the extent that Deutsche Bank may have major shareholders at any time, Deutsche Bank may not give them voting rights different from those of any of its other shareholders. Even if the bank’s articles of association were amended to allow for the issuance of shares with multiple voting rights, the issuance of such shares would require the consent of all affected shareholders.

Deutsche Bank is aware of no arrangements which may at a subsequent date result in a change in control of the company.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Related Party Transactions

Deutsche Bank has business relationships with a number of the companies in which the bank owns significant equity interests. Deutsche Bank also has business relationships with a number of companies where members of the bank’s Management Board also hold positions on boards of directors. Deutsche Bank’s business relationships with these companies cover many of the financial services the bank provides to their clients generally. For more detailed information, refer to Note 36 “Related Party Transactions” to the consolidated financial statements.

Deutsche Bank conducts its business with these companies on terms equivalent to those that would prevail if the bank did not have equity holdings in them or management members in common, and the bank has conducted business with these companies on that basis in 2023 and prior years. None of these transactions is or was material to the bank.

Among Deutsche Bank’s business with related party companies in 2023, there have been and currently are loans, guarantees and commitments, which totaled € 42 million (including loans amounting to € 41 million) as of December 31, 2023, compared to € 124 million (including loans amounting to € 119 million) as of December 31, 2022.

All these credit exposures

– Were made in the ordinary course of business

– Were made on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with other persons, and

– Did not involve more than the normal risk of collectability or present other unfavorable features compared to loans to nonrelated parties at their initiation

Related Party Impaired Loans

The Group did not have any impaired loans to related parties in 2023 and 2022.

Interests of Experts and Counsel

Not required because this document is filed as an Annual Report.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Item 8: Financial Information

Consolidated statements and other financial information

Consolidated financial statements

The Financial statements of this Annual Report on Form 20-F consist of the Consolidated financial statements including Notes 1 to 43 thereto, which are set forth as Part 2 of the Annual Report 2023, and, as described in Note 1 “Material accounting policies and critical accounting estimates” thereto under “Basis of accounting – IFRS 7 disclosures (including war in Ukraine and climate risk related disclosures)”, certain parts of the Management Report set forth as Part 1 of the Annual Report 2023. Such consolidated financial statements have been audited by

EY GmbH & Co. KG Wirtschaftsprüfungsgesellschaft, as described in their “Report of Independent Registered Public Accounting Firm” included in the Annual Report 2023.

Legal proceedings

Deutsche Bank and its subsidiaries operate in a legal and regulatory environment that exposes them to significant litigation risks. As a result, they are involved in litigation, arbitration and regulatory proceedings and investigations in Germany and in a number of jurisdictions outside Germany, including the United States. Please refer to Note 27 “Provisions” to the consolidated financial statements for descriptions of material legal proceedings and certain other significant legal proceedings.

Dividend policy

For the financial year 2023, the Management Board intends to propose to the Annual General Meeting a dividend of € 0.45 per share, after having paid a dividend of € 0.30 per share for 2022 and € 0.20 per share for 2021.

For the financial year 2024 and subsequent years, the bank targets a payout ratio of 50% of net income attributable to Deutsche Bank shareholders, delivered through a combination of cash dividends and share buybacks. These distributions to shareholders are subject to shareholder authorization and German corporate law requirements, and in the case of share buybacks, regulatory approval. Deutsche Bank plans to increase both share repurchases and dividends by at least 50% year on year in 2024. The bank has received supervisory approval for a share repurchase of € 675 million, which it aims to materially complete in the first half of 2024, having completed € 450 million in share repurchases in 2023; and it plans to propose a dividend in respect of the 2023 financial year of € 0.45 per share, or approximately € 900 million, up from € 0.30 per share for 2022, at the bank’s Annual General Meeting in May 2024. For the financial years 2024 and 2025, Deutsche Bank aims for cash dividends of € 0.68 and € 1.00 per share, respectively, subject to a 50% payout ratio limitation relative to net income attributable to Deutsche Bank shareholders. The bank has set a capital distribution goal of € 8 billion in respect of the financial years 2021-2025, paid in 2022-2026, and believes that it is positioned to exceed this objective if it achieves its financial targets.

However, Deutsche Bank cannot assure investors that it will pay dividends or conduct share buybacks as it did in previous years, nor at any other level, or at all, in any future period. If Deutsche Bank AG is not profitable enough, it may not pay dividends or conduct share buybacks at all. Furthermore, if Deutsche Bank AG fails to meet the regulatory capital adequacy requirements under CRR/CRD (including individually imposed capital requirements (“Pillar 2” requirements) and the combined buffer requirement), it may be prohibited from making, and the ECB or the BaFin may suspend or limit, the payment of dividends or execution of share buybacks. In particular, a credit institution, such as Deutsche Bank, will be considered as failing to meet the combined buffer requirement when it does not have sufficient own funds in an amount and of the quality needed to meet at the same time (i) its minimum capital requirements under the CRR, (ii) certain Pillar 2 capital requirements, and (iii) the sum of the capital buffers applicable to the relevant credit institution. In calculating the respective amounts that may be distributed (“Maximum Distributable Amount” or “MDA”), the bank will have to take into account certain Pillar 2 capital requirements. Since January 2022, the Group has also been subject to MDA restrictions in instances of non-compliance with its leverage ratio buffer introduced in the CRR. In addition, Deutsche Bank is subject to additional restrictions on distributions if it breaches the harmonized minimum TLAC requirement under the CRR or its institution-specific minimum requirement for own funds and eligible liabilities (MREL) set by the Single Resolution Board.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

In addition, the ECB expects banks to meet Pillar 2 guidance. If Deutsche Bank AG operates or expects to operate below Pillar 2 guidance, the ECB will review the reasons why the bank’s capital level has fallen or is expected to fall and may take appropriate and proportionate measures in connection with such shortfall. Any such measures might have an impact on Deutsche Bank AG’s willingness or ability to pay dividends or conduct share buybacks. For further information on regulatory capital adequacy requirements and the powers of Deutsche Bank AG’s regulators to suspend dividend payments or share buybacks, see “Item 4: Information on the Company – Regulation and Supervision – Capital Adequacy Requirements” and “— Investigative and Enforcement Powers.”

In order to meet the German corporate law requirements, Deutsche Bank AG’s dividends and capacity to conduct share buybacks are based on the unconsolidated results of Deutsche Bank AG as prepared in accordance with the German Commercial Code (HGB). Deutsche Bank AG’s Management Board, which prepares the annual financial statements of Deutsche Bank AG on an unconsolidated basis, and its Supervisory Board, which reviews the financial statements, first allocate part of Deutsche Bank AG’s annual surplus (if any) to Deutsche Bank AG’s statutory reserves and to any losses carried forward, in accordance with applicable legal requirements. Deutsche Bank then allocate the remainder of any surplus to other revenue reserves (or retained earnings) and balance sheet profit. Deutsche Bank may allocate up to one-half of this remainder to other revenue reserves and must allocate at least one-half to balance sheet profit. A profit distribution from the balance sheet profit is only permitted to the extent that the balance sheet profit plus distributable earnings exceed potential dividend blocking items, which consist primarily of deferred tax assets, self-developed software and unrealized gains on plan assets, all net of respective deferred tax liabilities.

Deutsche Bank AG may then distribute as dividend a portion of or all the amount of the balance sheet profit not subject to dividend blocking of Deutsche Bank AG if the Annual General Meeting so resolves. The Annual General Meeting may resolve a non-cash distribution instead of, or in addition to, a cash dividend. However, Deutsche Bank AG is not legally required to distribute its balance sheet profit to its shareholders to the extent that it has issued participatory rights (Genussrechte) or granted a silent participation (stille Beteiligung) that accord their holders the right to a portion of Deutsche Bank AG’s distributable profit.

Deutsche Bank AG declares dividends by resolution of the Annual General Meeting and pays them (if any) once a year. Dividends approved at a General Meeting are payable on the third business day after that meeting, unless a later date has been determined at that meeting or by the Articles of Association. In accordance with the German Stock Corporation Act, the record date for determining which holders of Deutsche Bank AG’s ordinary shares are entitled to the payment of dividends, if any, or other distributions whether cash, stock or property, is the date of the General Meeting at which such dividends or other distributions are declared.

Significant changes

Except as otherwise stated in this document, there have been no significant changes subsequent to December 31, 2023.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Item 9: The Offer and Listing

Offer and Listing Details and Markets

Deutsche Bank’s share capital consists of ordinary shares issued in registered form without par value. Under German law, shares without par value are deemed to have a “nominal” value equal to the total amount of share capital divided by the number of shares. Deutsche Bank’s shares have a nominal value in this sense of € 2.56 per share.

The principal trading market for Deutsche Bank’s shares is the Frankfurt Stock Exchange, where it trades under the symbol DBK. Deutsche Bank’s shares are also traded on the six other German stock exchanges (Berlin, Duesseldorf, Hamburg, Hanover, Munich and Stuttgart, where on each exchange it also trades under the symbol DBK), on the Eurex and the New York Stock Exchange, where it trades under the symbol DB.

Deutsche Bank maintains a share register in Frankfurt am Main and, for the purposes of trading our shares on the New York Stock Exchange, a share register in New York.

All shares on German stock exchanges trade in euros, and all shares on the New York Stock Exchange trade in U.S. dollars.

You should not rely on Deutsche Bank’s past share performance as a guide to the bank’s future share performance.

Plan of Distribution

Not required because this document is filed as an Annual Report.

Selling Shareholders

Not required because this document is filed as an Annual Report.

Dilution

Not required because this document is filed as an Annual Report.

Expenses of the Issue

Not required because this document is filed as an Annual Report.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Item 10: Additional Information

Share Capital

Not required because this document is filed as an Annual Report.

Memorandum and Articles of Association

The following is a summary of certain information relating to certain provisions of Deutsche Bank’s Articles of Association, its share capital and German law. This summary is not complete and is qualified by reference to its Articles of Association and German law in effect at the date of this filing. Copies of the bank’s Articles of Association are publicly available at the Commercial Register (Handelsregister) in Frankfurt am Main, and an English translation is filed as Exhibit 1.1 to this Annual Report.

Deutsche Bank’s Business Objectives

Section 2 of the Articles of Association sets out the objectives of the Group’s business:

– To transact all aspects of banking business

– To provide financial and other services and

– To promote international economic relations

The bank’s Articles of Association permit it to pursue these objectives directly or through subsidiaries and affiliated companies.

The Articles of Association also provide that, to the extent permitted by law, the Group may transact all business and take all steps that appear likely to promote the bank’s business objectives. In particular, the bank may:

– Acquire and dispose of real estate

– Establish branches in Germany and abroad

– Acquire, administer and dispose of participations in other enterprises and

– Conclude intercompany agreements ( Unternehmensverträge )

Supervisory Board and Management Board

For more information on the Supervisory Board and Management Board, see “Item 6: Directors, Senior Management and

Employees.”

Voting Rights and Shareholders' Meetings

Each of the bank’s shares entitles its registered holder to one vote at Deutsche Bank’s General Meeting. The Annual General Meeting takes place within the first eight months of the fiscal year. Pursuant to the Articles of Association, Deutsche Bank may hold the meeting in Frankfurt am Main, Düsseldorf or any other German city with over 250,000 inhabitants. Unless a shorter period is permitted by law, the Group must give the notice convening the General Meeting at least 30 days before the last day on which shareholders can register their attendance of the General Meeting (which is the sixth day immediately preceding that General Meeting). Shorter periods apply if the General Meeting is called to adopt a resolution on a capital increase in the context of early intervention measures pursuant to the Act on the Recovery and Resolution of Institutions and Financial Groups (Gesetz zur Sanierung und Abwicklung von Instituten und Finanzgruppen).

The Management Board or the Supervisory Board may also call an extraordinary General Meeting. Shareholders holding in the aggregate at least 5% of the nominal value of Deutsche Bank’s share capital may also request that such a meeting be called. The bank’s Articles of Association authorize the Management Board to hold any General Meeting taking place on or before August 31, 2025 in virtual form without physical attendance of the shareholders or their authorized representatives.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

According to the Articles of Association, Deutsche Bank’s shares are issued in the form of registered shares. For purposes of registration in the share register, all shareholders are required to notify the bank of the number of shares they hold and, in the case of natural persons, of their surname, first name, address and date of birth and, in the case of legal persons, of their registered name, business address and registered domicile, and in both cases should add an electronic address. Both being registered in the bank’s share register and the timely registration for attendance of the General Meeting constitute prerequisite conditions for any shareholder’s attendance and exercise of voting rights at the General Meeting. Shareholders may register their attendance of a General Meeting with the Management Board (or as otherwise designated in the invitation) by written notice or electronically, no later than the sixth day immediately preceding the date of that General Meeting. Any shareholders who have failed to comply with certain notification requirements summarized under “Notification Requirements” below are precluded from exercising any rights attached to their shares, including voting rights.

Under German law, upon the bank’s request a registered shareholder must inform the Group whether that shareholder owns the shares registered in its name or whether that shareholder holds the shares for any other person as a nominee shareholder. Both the nominee shareholder and the person for whom the shares are held have an obligation to provide the same personal data as required for registration in the share register with respect to the person for whom the shares are held.

Shareholders may appoint proxies to represent them at General Meetings. As a matter of German law, a proxy relating to voting rights granted by shares may be revoked at any time.

As a foreign private issuer, Deutsche Bank is not required to file a proxy statement under U.S. securities law. The proxy voting process for the bank’s shareholders in the United States is substantially similar to the process for publicly held companies incorporated in the United States.

The Annual General Meeting normally adopts resolutions on the following matters:

– Appropriation of distributable balance sheet profits ( Bilanzgewinn ) from the preceding fiscal year;

– Formal ratification of the acts ( Entlastung ) of the members of the Management Board and the members of the Supervisory Board in the preceding fiscal year and

– Appointment of independent auditors for the current fiscal year

A simple majority of votes cast is generally sufficient to approve a measure, except in cases where a greater majority is otherwise required by the bank’s Articles of Association or by law. Under the German Stock Corporation Act and the German Transformation Act (Umwandlungsgesetz), certain resolutions of fundamental importance require a majority of at least 75% of the share capital represented at the General Meeting adopting the resolution, in addition to a majority of the votes cast. Such resolutions include the following matters, among others:

– Amendments to the Articles of Association changing the Group’s business objectives

– Capital increases that exclude preemptive rights

– Capital reductions

– Creation of authorized or conditional capital

– Deutsche Bank’s dissolution

– “Transformations” under the German Transformation Act such as mergers, spin-offs and changes in the bank’s legal form

– Transfer of all the bank’s assets and

– Intercompany agreements (in particular, domination and profit-transfer agreements)

Under certain circumstances, such as when a resolution violates the Articles of Association or the German Stock Corporation Act, shareholders may file a shareholder action with the appropriate Regional Court (Landgericht) in Germany to set aside resolutions adopted at the General Meeting.

Under German law, the rights of shareholders as a group can be changed by amendment of the company's articles of association. Any amendment of the Articles of Association requires a resolution of the General Meeting. The authority to amend the Articles of Association, insofar as such amendments merely relate to the wording, such as changes of the share capital as a result of the issuance of shares from authorized capital, has been assigned to the Supervisory Board by the Articles of Association. Pursuant to the Articles of Association, the resolutions of the General Meeting are taken by a simple majority of votes and, insofar as a majority of capital stock is required, by a simple majority of capital stock, except where law or the Articles of Association determine otherwise. The rights of individual shareholders can only be changed with their consent. Amendments to the Articles of Association become effective upon their registration in the Commercial Register.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Share Register

Deutsche Bank maintains a share register with Link Market Services GmbH and its New York transfer agent, pursuant to an agency agreement between Deutsche Bank and Link Market Services GmbH and a sub-agency agreement between Link Market Services GmbH and the New York transfer agent.

The shareholder may request information about the data concerning its person that have been entered in the share register. The share register generally contains each shareholder's surname, first name, date of birth, address, as the case may be, electronic address and the number or the quantity of the shares held. Shareholders may prevent its personal information from appearing in the share register by holding its securities through a bank or custodian. Although the shareholder would remain the beneficial owner of the securities, only the bank's or custodian's name would appear in the share register. In this case the exercise of some shareholder rights will depend on the cooperation of the bank or custodian.

Dividend Rights

For a summary of Deutsche Bank’s dividend policy and legal basis for dividends under German law, see “Item 8: Financial Information – Dividend Policy.”

Increases in Share Capital

German law permits Deutsche Bank to increase its share capital in any of three ways:

– Resolution by the General Meeting authorizing the issuance of new shares

– Resolution by the General Meeting authorizing the Management Board, subject to the approval of the Supervisory Board, to issue new shares up to a specified amount (no more than 50% of existing share capital) within a specified period, which may not exceed five years. This is referred to as authorized capital ( genehmigtes Kapital )

– Resolution by the General Meeting authorizing the issuance of new shares up to a specified amount (no more than 60% of existing share capital) for specific purposes, such as for employee stock options (additional limit of no more than 20% of existing share capital), for use as consideration in a merger or to issue to holders of convertible bonds or other convertible securities (additional limit of no more than 50% of existing share capital). This is referred to as conditional capital ( bedingtes Kapital )

The issuance of new ordinary shares by resolution of the General Meeting requires the simple majority of the votes cast and of the share capital represented at the General Meeting. Should the resolution of the General Meeting provide for the exclusion of shareholders’ preemptive rights in full or in part, the simple majority of the votes cast and a majority of at least 75% of the share capital represented at the General Meeting are required. Similarly, resolutions of the General Meeting concerning the creation of authorized or conditional capital require the simple majority of the votes cast and a majority of at least 75% of the share capital represented at the General Meeting.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Liquidation Rights

The German Stock Corporation Act requires that if the bank is liquidated, any liquidation proceeds remaining after the payment of all the bank’s liabilities will be distributed to the bank’s shareholders in proportion to their shareholdings.

Preemptive Rights

In principle, holders of Deutsche Bank shares have preemptive rights allowing them to subscribe any shares, bonds convertible into, or with attached warrants to subscribe for, the bank’s shares or participatory certificates it issues. Such preemptive rights exist in proportion to the number of shares currently held by the shareholder. Preemptive rights of shareholders may be excluded with respect to any capital increase, however, as part of the resolution by the General Meeting on such capital increase. Such a resolution by the General Meeting on a capital increase that excludes the shareholders’ preemptive rights with respect thereto requires both a majority of the votes cast and a majority of at least 75% of the share capital represented at the General Meeting. A resolution to exclude preemptive rights requires that the proposed exclusion is expressly disclosed in the agenda to the General Meeting and that the Management Board presents the reasons for the exclusion to the shareholders in a written report. Under the German Stock Corporation Act, preemptive rights may in particular be excluded with respect to capital increases not exceeding 20% of the existing share capital with an issue price payable in cash not significantly below the stock exchange price at the time of issuance. In addition, shareholders may, in a resolution by the General Meeting on authorized capital, authorize the Management Board to exclude the preemptive rights with respect to newly issued shares from authorized capital in specific circumstances set forth in the resolution.

Shareholders are generally permitted to transfer their preemptive rights. Preemptive rights may be traded on one or more German stock exchanges for a limited number of days prior to the final day the preemptive rights can be exercised.

Notices and Reports

Deutsche Bank publishes notices pertaining to its shares and the General Meeting in the German Federal Gazette (Bundesanzeiger).

The bank sends its New York transfer agent, through publication or otherwise, a copy of each of its notices pertaining to any General Meeting, any adjourned General Meeting or its actions with respect to any cash or other distributions or the offering of any rights. The Group provides such notices in the form given or to be given to its shareholders. The bank’s New York transfer agent is requested to arrange for the mailing of such notices to all shareholders registered in the New York registry.

Charges of Transfer Agents

Deutsche Bank pays Link Market Services GmbH and its New York transfer agent customary fees for their services as transfer agents and registrars. The Group’s shareholders will not be required to pay Link Market Services GmbH or its New York transfer agent any fees or charges in connection with its transfers of shares in the share register. The bank’s shareholders will also not be required to pay any fees in connection with the conversion of dividends from euros to U.S. dollars.

Liability of Transfer Agents

Neither Link Market Services GmbH nor the bank’s New York transfer agent will be liable to shareholders if prevented or delayed by law, or any circumstances beyond its control, from performing its obligations as transfer agents and registrars.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Notification Requirements

Disclosure of Interests in a Listed Stock Corporation

Disclosure Obligations under the German Securities Trading Act

Deutsche Bank AG, as a listed company, and its shareholders are subject to the shareholding disclosure obligations under the German Securities Trading Act (Wertpapierhandelsgesetz). Pursuant to the German Securities Trading Act, any shareholder whose voting interest in a listed company like Deutsche Bank AG, through acquisition, sale or by other means, reaches, exceeds or falls below a 3%, 5%, 10%, 15%, 20%, 25%, 30%, 50% or 75% threshold must notify the bank and the BaFin of its current aggregate voting interest in writing and without undue delay, but at the latest within four trading days. In connection with this requirement, the German Securities Trading Act contains various provisions regarding the attribution of voting rights to the person who actually controls the voting rights attached to the shares.

Furthermore, the voting rights attached to a third party’s shares are attributed to a shareholder if the shareholder coordinates its conduct concerning the listed company with the third party (so-called “acting in concert”) either through an agreement or other means. Acting in concert is deemed to exist if the parties coordinate their voting at the listed company’s general meeting or, outside the general meeting, coordinate their actions with the goal of significantly and permanently modifying the listed company’s corporate strategy. Each party’s voting rights are attributed to each of the other parties acting in concert.

Shareholders failing to comply with their notification obligations are prevented from exercising any rights attached to their shares (including voting rights and the right to receive dividends) until they have complied with the notification requirements. If the failure to comply with the notification obligations specifically relates to the size of the voting interest in Deutsche Bank AG and is the result of willful or grossly negligent conduct, the suspension of shareholder rights is – subject to certain exceptions in case of an incorrect notification deviating no more than 10% from the actual percentage of voting rights – extended by a six-month period commencing upon the submission of the required notification.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Except for the 3% threshold, similar notification obligations exist for reaching, exceeding or falling below the thresholds described above when a person holds, directly or indirectly, certain instruments other than shares. This applies to instruments which grant upon maturity an unconditional right to acquire existing voting shares of Deutsche Bank AG, a discretionary right to acquire such shares, as well as to instruments that refer to such shares and have an economic effect similar to that of the aforementioned instruments, irrespective of whether such instruments are physically or cash-settled. These instruments include, for example, transferable securities, options, futures contracts and swaps. Voting rights to be attributed to a person based on any such instrument will generally be aggregated with the person’s other voting rights deriving from shares or other instruments.

Notice must be given without undue delay, but within four trading days at the latest. The notice period commences as soon as the person obliged to notify knows, or, under the circumstances should know, that his or her voting rights reach, exceed or fall below any of the abovementioned relevant thresholds, but in any event no later than two trading days after reaching, exceeding or falling below the threshold. Only in case that the voting rights reach, exceed or fall below any of the thresholds as a result of an event affecting all voting rights, the notice period might commence at a later stage. Deutsche Bank AG must publish the foregoing notifications without undue delay, but no later than within three trading days after their receipt, and report such publication to the BaFin. Furthermore, Deutsche Bank AG must publish a notification in case of any increase or decrease of the total number of voting rights without undue delay, but within two trading days at the latest, and such notification must be reported to the BaFin and forwarded to the German Company Register (Unternehmensregister). An exception applies where the increase of the total number of voting rights is due to the issue of new shares from conditional capital. In this case, Deutsche Bank AG must publish the increase at the end of the month in which it occurred. However, such increase must also be notified without undue delay, but within two trading days at the latest, where any other increase or decrease of the total number of voting rights triggers the aforementioned notification requirement.

Non-compliance with the disclosure requirements regarding shareholdings and holdings of other instruments may result in a significant fine imposed by the BaFin. In addition, the BaFin publishes, on its website, sanctions imposed, and measures taken indicating the person or entity responsible and the nature of the breach (so-called “naming and shaming”).

Shareholders whose voting rights reach or exceed thresholds of 10% of the voting rights in a listed company, or higher thresholds, are obliged to inform the company within 20 trading days of the purpose of their investment and the origin of the funds used for such investment, unless the articles of association of the listed company provide otherwise. The bank’s Articles of Association do not contain such a provision.

Disclosure Obligations under the German Securities Acquisition and Takeover Act

Pursuant to the German Securities Acquisition and Takeover Act (Wertpapiererwerbs- und Übernahmegesetz), any person whose voting interest reaches or exceeds 30% of the voting shares of a listed stock corporation must, within seven working days, publish this fact (including the percentage of its voting rights) on the Internet and by means of an electronically operated financial information dissemination system. In addition, the person must subsequently make a mandatory public tender offer within four weeks to all shareholders of the listed company unless an exemption has been granted. The German Securities Acquisition and Takeover Act contains a number of provisions intended to ensure that shareholdings are attributed to those persons who actually control the voting rights attached to the shares. The provisions regarding coordinated conduct as part of the German Securities Acquisition and Takeover Act (so-called “acting in concert”) and the rules on the attribution of voting rights attached to shares of third parties are the same as the statutory securities trading provisions described above under “Disclosure Obligations under the German Securities Trading Act” except with respect to voting rights of shares underlying instruments whose holders are vested with the right to unilaterally acquire existing voting shares of the listed company or voting rights which may be acquired on the basis of instruments with similar economic effect. If a shareholder fails to provide notice on reaching or exceeding the 30% threshold, or fails to make a public tender offer, the shareholder will be precluded from exercising any rights associated with its shares (including voting and dividend rights) until it has complied with the requirements under the German Securities Acquisition and Takeover Act. In addition, non-compliance with the disclosure requirement may result in a fine.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Disclosure of Participations in a Credit Institution

The German Banking Act (Kreditwesengesetz) requires any person intending to acquire, alone or acting in concert with another person, directly or indirectly, a qualifying holding (bedeutende Beteiligung) in a credit or financial services institution to notify the BaFin and the Bundesbank without undue delay and in writing of the intended acquisition. A qualifying holding is a direct or indirect holding in an undertaking which represents 10% or more of the capital or voting rights or which makes it possible to exercise a significant influence over the management of such undertaking. The required notice must contain information demonstrating, among other things, the reliability of the person or, in the case of a corporation or other legal entity, the reliability of its directors and officers.

A person holding a qualifying holding shall also notify the BaFin and the Bundesbank without undue delay and in writing if they intend to increase the amount of the qualifying holding up to or beyond the thresholds of 20%, 30% or 50% of the voting rights or capital or in such way that the institution comes under such person’s control or if such person intends to reduce the participation below 10% or below one of the other thresholds described above.

The BaFin will have to confirm the receipt of a complete notification within two working days in writing to the proposed acquirer. Within a period of 60 working days from the BaFin’s written confirmation that a complete notification has been received (assessment period), the BaFin will review and, in accordance with Council Regulation (EU) No 1024/2013 of October 15, 2013 conferring specific tasks on the European Central Bank concerning policies relating to the prudential supervision of credit institutions, forward the notification and a proposal for a decision whether or not to object to the acquisition to the ECB. The ECB will decide whether or not to object to the acquisition on the basis of the applicable assessment criteria. Within the assessment period the ECB may prohibit the intended acquisition in particular if there appears to be reason to assume that the acquirer or its directors and officers are not reliable or that the acquirer is not financially sound, that the participation would impair the effective supervision of the relevant credit institution, that a prospective managing director (Geschäftsleiter) is not reliable or not qualified, that money laundering or financing of terrorism has occurred or been attempted in connection with the intended acquisition, or that there would be an increased risk of such illegal acts as a result of the intended acquisition. During the assessment period the BaFin may request further information necessary for its or the ECB’s assessment. Generally, such a request delays the expiration of the assessment period by up to 30 business days. If the information submitted is incomplete or incorrect the ECB may prohibit the intended acquisition.

If a person acquires a qualifying holding despite such prohibition or without making the required notification, the competent authority may prohibit the person from exercising the voting rights attached to the shares. In addition, non-compliance with the disclosure requirement may result in the imposition of a fine in accordance with statutory provisions. Moreover, the competent authority may order that any disposition of the shares requires its approval and may ultimately appoint a trustee to exercise the voting rights attached to the shares or to sell the shares to the extent they constitute a qualifying holding.

Disclosure of Participations in Regulated Subsidiaries

The acquisition of shares in Deutsche Bank AG may trigger an obligation to notify certain national competent authorities in charge of the supervision of regulated subsidiaries of Deutsche Bank AG, provided that such acquisition of shares is treated as an indirect acquisition of a stake in the relevant subsidiaries and the applicable threshold under local law is reached or exceeded. This applies in particular to subsidiaries in a member state of the European Economic Area for which the CRR sets forth a threshold of 10%. Other jurisdictions may apply lower thresholds. For example, because the bank controls Deutsche Bank (Malaysia) Berhad, Section 87(1) of the Malaysian Financial Services Act 2013 requires approval of Bank Negara Malaysia (the Malaysian central bank) of any acquisition of 5% or more of the bank’s ordinary shares. Also, because Deutsche Bank controls bank subsidiaries in the United States, including Deutsche Bank Trust Company Americas, and has securities registered under the U.S. Securities Exchange Act of 1934, the U.S. Change in Bank Control Act requires that any person or any persons acting in concert may acquire control of 10% or more of the bank’s ordinary shares only subject to the approval of the Federal Reserve Board and other U.S. regulators.

100

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Review of Acquisition of 10% of voting rights or more by the German Federal Ministry of Economic Affairs and Climate Action

Pursuant to the German Foreign Trade Act (Außenwirtschaftsgesetz) and the German Foreign Trade Regulation (Außenwirtschaftsverordnung), acquisitions may be reviewed by the German Federal Ministry of Economic Affairs and Climate Action (the “Ministry”) where the initial direct or indirect acquisition of voting rights in a German company by investors from outside the European Union (EU) and the European Free Trade Association (Iceland, Lichtenstein, Norway and Switzerland) exceed 10%, 20% or 25%, or where voting rights in a German company by investors outside the EU or European Free Trade Association exceed 20%, 25%, 40%, 50% or 75% through direct or indirect subsequent acquisitions. Both the thresholds for the applicable initial voting rights (10%, 20% or 25%) and whether a filing obligation exists or not, depend on the industry sector the target company is active in. The Ministry must be notified in writing regarding the conclusion of a contract where the direct or indirect acquisition by an investor from outside the European Union and the European Free Trade Association is 10% or 20% (or where the direct or indirect subsequent acquisitions exceeding 20%, 25%, 40%, 50% or 75% of the voting rights) of the voting rights in a German company which operates certain critical infrastructure (including inter alia certain services in the financial sector) or operates in other certain sensitive sectors (including inter alia certain technologies, IT, telecommunication, healthcare or the media). The Ministry must also be notified in writing regarding the conclusion of a contract where there is a direct or indirect acquisition by an investor from outside Germany of 10% or more of the voting rights in a German company operating in the defense or cryptology sectors (or where the direct or indirect subsequent acquisitions exceeds 20%, 25%, 40%, 50% or 75% of the voting rights). If Deutsche Bank is considered to be a company which operates in any such critical infrastructure or sensitive sector, the Ministry would need to be notified of an acquisition of voting rights in Deutsche Bank that meets the abovementioned thresholds. Pending clearance by the Ministry, an acquisition subject to this notification requirement must not be consummated without clearance and its implementation would be legally void.

Consummating such an acquisition without clearance may also result in administrative fines of up to € 500,000 (acting negligently) or up to five years imprisonment or monetary fines (acting willfully). The acquirer may seek voluntary pre-clearance of a proposed acquisition from the Ministry that is not subject to a mandatory filing. The Ministry may impose conditions on the acquisition, prohibit the acquisition, or require that it is unwound, if the Ministry determines that the acquisition will likely affect the public order or public security of Germany or another EU member state, or in relation to certain projects or programs of interest for the European Union pursuant to the EU-Screening regulation, or likely affects the essential security interests of Germany. The Ministry’s decision to review an acquisition must be made within two months following the Ministry’s knowledge of the conclusion of the acquisition contract, of the publication of the decision to launch a take-over bid or of the publication of the acquisition of control. The review must be completed within four months following receipt of the complete set of acquisition documents and any additional information requested by the Ministry. The Ministry can extend its review period up to an additional four months. A review is precluded if more than five years have passed since the acquisition.

EU Short Selling Regulation (ban on naked short selling)

Regulation (EU) No 236/2012 of the European Parliament and of the Council of March 14, 2012, on short selling and certain aspects of credit default swaps (the “EU Short Selling Regulation”) came into force on November 1, 2012. The EU Short Selling Regulation, the regulations adopted by the EU Commission implementing it, and the German act implementing the EU Short Selling Regulation replace the previously applicable German federal provisions governing the ban on naked short selling of shares and certain debt securities. (Short sales are sales of securities that the seller does not own, with the intention of buying back an identical security at a later point in time in order to be able to deliver the security. A short sale is “naked” when the seller has not borrowed the securities at the time of the short sale, or ensured they can be borrowed or obtained under a similar arrangement.) Under the EU Short Selling Regulation, except for certain exemptions, naked short sales of listed shares are not permitted. Short sales of listed shares that are covered by borrowing or similar arrangements are subject to the following transparency requirements. Significant net short positions in shares must be reported to the BaFin and, if a certain threshold is exceeded, they must also be publicly disclosed. Net short positions are calculated by netting the long and short positions held by a natural or legal person in the issued capital of the company concerned. The details are set forth in the EU Short Selling Regulation and the regulations adopted by the EU Commission implementing it. In certain situations, described in greater detail in the EU Short Selling Regulation, the BaFin is permitted to limit short selling and comparable transactions.

101

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Disclosure of Transactions of Managers

Art. 19 of Regulation (EU) No 596/2014 of the European Parliament and of the Council of April 16, 2014 on market abuse (the “EU Market Abuse Regulation”) requires persons with management responsibilities (“Managers”) in a listed company like Deutsche Bank AG to notify the company and the BaFin of their own transactions in shares or debt instruments of the company or financial instruments based thereon, in particular derivatives. Such notifications must be made promptly and no later than three business days after the date of the transaction. The notification obligation also applies to persons who are closely associated with a Manager. The obligation does not apply if the aggregate annual transactions by a Manager or persons with whom he or she is closely associated do not, individually, exceed a certain threshold amount through the end of a calendar year. The BaFin has made use of its authority to increase the threshold of € 5,000 set forth in the EU Marked Abuse Regulation to the maximum possible amount of € 20,000.

Deutsche Bank AG is required to promptly publish any notification received but, in any case, no later than two business days after receipt of such notification. The publication must be made in a manner which enables fast access to this information on a non-discriminatory basis in accordance with the implementing standards published by the European Securities and Markets Authority. Furthermore, Deutsche Bank AG must without undue delay notify the BaFin and forward the notification to the Company Register (Unternehmensregister). For the purposes of the EU Market Abuse Regulation, the bank identified the following persons to be a Manager: members of the Management Board and the Supervisory Board of Deutsche Bank AG as well as holders of general power of attorney (Generalbevollmächtigte) of Deutsche Bank AG. The following persons are deemed to be closely associated with a Manager: spouses, registered civil partners (eingetragene Lebenspartner), dependent children and other relatives who at the time of the transaction requiring notification have lived in the same household with the Manager for at least one year. Legal entities for which the aforementioned persons have management responsibilities are also subject to the notification requirement. The aforementioned provisions also apply to legal entities, companies and institutions directly or indirectly controlled by a Manager or by a person closely associated with a Manager, which have been founded to the benefit of such a person, or whose economic interests correspond to a considerable extent to those of such a person. Non-compliance with the notification requirements may result in a fine.

102

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Material Contracts

In the usual course of the bank’s business, Deutsche Bank enters into numerous contracts with various other entities. The bank has not, however, entered into any material contracts outside the ordinary course of its business within the past two years.

Exchange Controls

As in other member states of the European Union, regulations issued by the competent European Union authorities to comply with United Nations resolutions have caused freeze orders in Germany on assets of certain legal and natural persons designated in such regulations. In addition, the European Union maintained a wide range of autonomous economic and financial sanctions on Iran. While all nuclear-related economic and financial EU sanctions against Iran were repealed on January 16, 2016, some restrictions remain in force.

Moreover, in response to the war in Ukraine the European Union, the United States, the United Kingdom and others imposed broad-based sanctions against natural and legal persons residing in Russia and/or Belarus and/or of Russian/Belarus nationality.

With some exceptions, corporations or individuals residing in Germany are required to report to the Bundesbank any payment received from, or made to or for the account of, a nonresident corporation or individual that exceeds € 12,500 (or the equivalent in a foreign currency). This reporting requirement is for statistical purposes.

Subject to the above-mentioned exceptions and the applicable sanctions, there are currently no German laws, decrees or regulations that would prevent the transfer of capital or remittance of dividends or other payments to shareholders who are not residents or citizens of Germany.

There are also no restrictions under German law or the bank’s Articles of Association concerning the right of nonresident or foreign shareholders to hold the bank’s shares or to exercise any applicable voting rights. Where the investment reaches or exceeds certain thresholds, however, certain reporting obligations apply and the investment may become subject to review by the BaFin, the European Central Bank and other competent authorities. For more information see “Item 10: Additional Information – Notification Requirements”.

Taxation

The following is a general summary of material German and United States federal income tax consequences of the ownership and disposition of shares for a resident of the United States for purposes of the income tax convention between the United States and Germany (the “Treaty”) who is fully eligible for benefits under the Treaty. A U.S. resident will generally be entitled to Treaty benefits if it is:

– The beneficial owner of shares (and of the dividends paid with respect to the shares)

– An individual resident of the United States, a U.S. corporation, or a partnership, estate or trust to the extent its income is subject to taxation in the United States in its hands or in the hands of its partners or beneficiaries

– Not also a resident of Germany for German tax purposes and

– Not subject to “anti-treaty shopping” articles under German domestic law or the Treaty that apply in limited circumstances

The Treaty benefits discussed below generally are not available to shareholders who hold shares in connection with the conduct of business through a permanent establishment in Germany. The summary does not discuss the treatment of those

shareholders.

The summary does not purport to be a comprehensive description of all of the tax considerations that may be relevant to any particular shareholder, including tax considerations that arise from rules of general application or that are generally assumed to be known by shareholders. In particular, the summary deals only with shareholders that will hold shares as capital assets and does not address the tax treatment of shareholders that are subject to special rules, such as fiduciaries of pension (e.g. U.S. pension funds), profit-sharing or other employee benefit plans, banks, insurance companies, dealers in securities or currencies, persons that hold shares as a position in a straddle, conversion transaction, synthetic security or other integrated financial transaction, persons that elect mark-to-market treatment, persons that own, directly or indirectly, 10% or more of our stock, measured by vote or value, persons that hold shares through a partnership or hybrid entity and persons whose “functional currency” is not the U.S. dollar. The summary is based on German and U.S. laws, the Treaty and regulatory interpretations, including in the current and proposed U.S. Treasury regulations as of the date hereof, all of which are subject to change (possibly with retroactive effect).

103

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Shareholders should consult their own advisors regarding the tax consequences of the ownership and disposition of shares in light of their particular circumstances, as well as the effect of any state, local or other national laws.

Taxation of Dividends

In general, dividends that Deutsche Bank pays are subject to German withholding tax at an aggregate rate of 26.375% (consisting of a 25% withholding tax and a 1.375% surcharge). Under the Treaty, a U.S. resident will be entitled to receive a refund from the German tax authorities of 11.375 in respect of a declared dividend of 100. For example, for a declared dividend of 100, a U.S. resident initially will receive 73.625 and may claim a refund from the German tax authorities of 11.375 and, therefore, receive a total cash payment of 85 (i.e., 85% of the declared dividend). According to the German Investment Tax Act dividends received by an investment fund within the meaning of the German Investment Tax Act are generally subject to 15% German withholding tax equal to the Treaty tax rate. U.S. residents who are entitled to a refund of more than 11.375% (e.g., U.S. pension funds) have to fulfil further requirements according to para. 50j German Income Tax Act, in particular certain holding requirements.

For U.S. tax purposes, a U.S. resident will be deemed to have received total dividends of 100 in the example above. The gross amount of dividends that a U.S. resident receives (which includes amounts withheld in respect of German withholding tax) generally will be subject to U.S. federal income taxation as foreign source dividend income, and will not be eligible for the dividends received deduction generally allowed to U.S. corporations. German withholding tax at the 15% rate provided under the Treaty will be treated as a foreign income tax that, subject to generally applicable limitations under U.S. tax law, is eligible for credit against a U.S. resident’s U.S. federal income tax liability or, at its election, may be deducted in computing taxable income. Thus, for a declared dividend of 100, a U.S. resident will be deemed to have paid German taxes of 15. A U.S. resident cannot claim credits for German taxes that would have been refunded to it if it had filed a claim for refund. Foreign tax credits will not be allowed for withholding taxes imposed in respect of certain short-term or hedged positions. The creditability of foreign withholding taxes may be limited in certain situations. The foreign tax credit rules are complex. U.S. residents should consult their tax advisers regarding the creditability of German taxes in their particular circumstances.

Subject to certain exceptions for short-term and hedged positions, “qualified dividends” received by certain non corporate U.S. shareholders will generally be subject to taxation in the United States at a lower rate than other ordinary income. Dividends received will be qualified dividends if Deutsche Bank (i) is eligible for the benefits of a comprehensive income tax treaty with the United States that the U.S. Internal Revenue Service (“IRS”) has approved for purposes of the qualified dividend rules and (ii) was not, in the year prior to the year in which the dividend was paid, and is not, in the year in which the dividend is paid, a passive foreign investment company (“PFIC”). The Treaty has been approved for purposes of the qualified dividend rules, and Deutsche Bank believes it qualifies for benefits under the Treaty. The determination of whether the bank is a PFIC must be made annually and is dependent on the particular facts and circumstances at the time. It requires an analysis of the bank’s income and valuation of its assets, including goodwill and other intangible assets.

Based on the audited financial statements and relevant market and shareholder data, the bank believes that it was not a PFIC for U.S. federal income tax purposes with respect to its taxable years ended December 31, 2022 or December 31, 2023. In addition, based on the Group’s current expectations regarding the value and nature of its assets, the sources and nature of its income, and relevant market and shareholder data, the bank does not currently anticipate becoming a PFIC for its taxable year ending December 31, 2024, or for the foreseeable future. However, the PFIC rules are complex and their application to financial services companies is unclear. Each U.S. shareholder should consult its own tax advisor regarding the potential applicability of the PFIC regime to Deutsche Bank and its implications for their particular circumstances.

If a U.S. resident receives a dividend paid in euros, it will recognize income in a U.S. dollar amount calculated by reference to the exchange rate in effect on the date of receipt, regardless of whether the payment is in fact converted into U.S. dollars. If dividends are converted into U.S. dollars on the date of receipt, a U.S. resident generally should not be required to recognize foreign currency gain or loss in respect of the dividend income but may be required to recognize foreign currency gain or loss on the receipt of a refund in respect of German withholding tax to the extent the U.S. dollar value of the refund differs from the U.S. dollar equivalent of that amount on the date of receipt of the underlying dividend.

104

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Refund Procedures

To claim a refund, a U.S. resident must submit, within four years from the end of the calendar year in which the dividend is received, a claim for refund to the German tax authorities. The claim for refund must be accompanied by a withholding tax certificate (Kapitalertragsteuerbescheinigung) on an officially prescribed form and issued by the institution that withheld the tax.

According to para. 50c (5) German Income Tax Act, claims for refunds have to be transmitted via the officially specified interface according to the officially prescribed data set. The German claim for refund forms can be submitted to the Bundeszentralamt für Steuern via the online portal of the Bundeszentralamt für Steuern (“BOP”): https://www.elster.de/bportal/start. Every claimant needs a certificate file to login into the BOP. A special form is available in cases where para. 50j German Income Tax Act is applicable. A U.S. resident must also submit to the German tax authorities a certification (on IRS Form 6166) with respect to its last filed U.S. federal income tax return. Requests for IRS Form 6166 are made on IRS Form 8802, which requires payment of a user fee. IRS Form 8802 and its instructions can be obtained from the IRS website at www.irs.gov. Instead of the individual refund procedure described above, a U.S. resident may use an IT-supported quick-refund procedure (“Datenträgerverfahren – DTV”/ “Data Medium Procedure – DMP”). If the U.S. resident’s bank or broker elects to participate in the DMP, it will perform administrative functions necessary to claim the Treaty refund for the beneficiaries. The refund beneficiaries must provide specified information to the DMP participant and confirm to the DMP participant that they meet the conditions of the Treaty provisions and that they authorize the DMP participant to file applications and receive notices and payments on their behalf.

The refund beneficiaries also must provide a “Certification of U.S. Tax Residency” on IRS Form 6166 with the DMP participant. In addition, if the individual refund procedure requires a withholding tax certificate (see above), such certificate is generally also necessary under the DMP.

The German tax authorities reserve the right to audit the entitlement to tax refunds for several years following their payment pursuant to the Treaty in individual cases. The DMP participant must assist with the audit by providing the necessary details or by forwarding the queries to the respective refund beneficiaries/shareholders. Presently the DMP cannot be used in all cases: i.e., if the Treaty tax rate is below 15% or if a holder of Depository Receipts claims a refund, the application of DMP is excluded.

The German tax authorities will issue refunds denominated in euros. In the case of shares held through banks or brokers participating in the Depository Trust Company, the refunds will be issued to the Depository Trust Company, which will convert the refunds to U.S. dollars. The resulting amounts will be paid to banks or brokers for the account of holders.

If a U.S. resident holds its shares through a bank or broker who elects to participate in the DMP, it could take at least three weeks for it to receive a refund after a combined claim for refund has been filed with the German tax authorities. If a U.S. resident files a claim for refund directly with the German tax authorities, the time until the receipt of a refund is much longer. The length of time between filing a claim for refund and receipt of that refund is uncertain and we can give no assurances as to when any refund will be received.

The Bundeszentralamt für Steuern published on its website information regarding the tax refund process in Germany: BZSt – Capital income tax relief.

For dividends received by a U.S. holder after 2024 withholding tax certificates will be replaced by electronic submission of data directly to the tax authorities by the institution that withheld the tax.

Taxation of Capital Gains

Under the Treaty, a U.S. resident will generally not be subject to German capital gains tax in respect of a sale or other disposition of shares. For U.S. federal income tax purposes, a U.S. holder will generally recognize capital gain or loss on the sale or other disposition of shares in an amount equal to the difference between such holder’s tax basis in the shares and the U.S. dollar value of the amount realized from their sale or other disposition. Such gain or loss will be long-term capital gain or loss if the shares were held for more than one year. The net amount of long-term capital gain realized by an individual generally is subject to taxation at a lower rate than ordinary income. Any such gain generally would be treated as income arising from sources within the United States; any such loss would generally be allocated against U.S. source income. The ability to offset capital losses against ordinary income is subject to limitations.

Shareholders whose shares are held in an account with a German bank or financial services institution (including a German branch of a non-German bank or financial services institution) are urged to consult their own advisors. This summary does not discuss their particular tax situation.

105

	Deutsche Bank
	Annual Report 2023 on Form 20-F

United States Information Reporting and Backup Withholding

Dividends and payments of the proceeds on a sale of shares, paid within the United States or through certain U.S. related financial intermediaries are subject to information reporting and may be subject to backup withholding unless the U.S. resident (i) is a corporation (other than an S corporation) or other exempt recipient or (ii) provides a taxpayer identification number and certifies (on IRS Form W-9) that no loss of exemption from backup withholding has occurred. Shareholders that are not U.S. persons generally are not subject to information reporting or backup withholding.

However, a non-U.S. person may be required to provide a certification (generally on IRS Form W-8BEN or W-8BEN-E) of its non-U.S. status in connection with payments received in the United States or through a U.S. related financial intermediary.

Backup withholding tax is not an additional tax, and any amounts withheld under the backup withholding rules will be allowed as a refund or a credit against a holder’s U.S. federal income tax liability, provided the required information is furnished to the IRS.

Shareholders may be subject to other U.S. information reporting requirements. Shareholders should consult their own advisors regarding the application of U.S. information reporting rules in light of their particular circumstances.

German Gift and Inheritance Taxes

Under the current estate, inheritance and gift tax treaty between the United States and Germany (the “Estate Tax Treaty”), a transfer of shares generally will not be subject to German gift or inheritance tax so long as the donor or decedent, and the heir, donee or other beneficiary, were not domiciled in Germany for purposes of the Estate Tax Treaty at the time the gift was made, or at the time of the decedent’s death, and the shares were not held in connection with a permanent establishment or fixed base in Germany.

The Estate Tax Treaty provides a credit against U.S. federal estate and gift tax liability for the amount of inheritance and gift tax paid in Germany, subject to certain limitations, where shares are subject to German inheritance or gift tax and United States federal estate or gift tax.

Other German Taxes

There are currently no German net wealth, transfer, stamp or other similar taxes that would apply to a U.S. resident as a result of the receipt, purchase, ownership or sale of shares.

106

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Dividends and Paying Agents

Not required because this document is filed as an Annual Report.

Statement by Experts

Not required because this document is filed as an Annual Report.

Documents on Display

Deutsche Bank is subject to the informational requirements of the Securities Exchange Act of 1934, as amended. In accordance with these requirements, it files reports and other information with the Securities and Exchange Commission. The Group’s Securities and Exchange Commission filings are available at the Securities and Exchange Commission’s website at www.sec.gov under File Number 001-15242.

Subsidiary Information

Not applicable.

Item 11: Quantitative and Qualitative Disclosures about Credit, Market and Other Risk

For Quantitative and Qualitative Disclosures about Credit, Market and Other Risk, please see “Management Report: Risk Report” in the Annual Report 2023.

Please see pages S-1 through S-12 of the Supplemental Financial Information (Unaudited), which pages are included herein, for information required by Subpart 1400 of SEC Regulation S-K.

Item 12: Description of Securities other than Equity Securities

Deutsche Bank’s ordinary shares are not represented by American Depositary Receipts and accordingly no information is required to be provided pursuant to Item 12.D.3 and Item 12.D.4. The remainder of the information required by this Item 12 and by Instruction 2(d) under the Instructions as to Exhibits of Form 20-F is provided as Exhibit 2.2 to this Annual Report on Form 20-F.

107

	Deutsche Bank
	Annual Report 2023 on Form 20-F

PART II

Item 13: Defaults, Dividend Arrearages and Delinquencies

Not applicable.

Item 14: Material Modifications to the Rights of Security Holders and Use of Proceeds

None.

Item 15: Controls and Procedures

Disclosure Controls and Procedures

An evaluation was carried out under the supervision and with the participation of Deutsche Bank’s management, including the bank’s Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the bank’s disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934) as of December 31, 2023. There are, as described below, inherent limitations to the effectiveness of any control system, including disclosure controls and procedures. Accordingly, even effective disclosure controls and procedures can provide only reasonable assurance of achieving their control objectives. Based upon such evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the design and operation of Deutsche Bank’s disclosure controls and procedures were effective as of December 31, 2023.

Management’s Annual Report on Internal Control over Financial Reporting

Management of Deutsche Bank Aktiengesellschaft, together with its consolidated subsidiaries, is responsible for establishing and maintaining adequate internal control over financial reporting. Deutsche Bank’s internal control over financial reporting is a process designed under the supervision of the bank’s Chief Executive Officer and its Chief Financial Officer to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the firm’s financial statements for external reporting purposes in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB) and endorsed by the European Union (EU). As of December 31, 2023, Deutsche Bank management conducted an assessment of the effectiveness of the bank’s internal control over financial reporting based on the framework established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on the assessment performed, management has determined that Deutsche Bank’s internal control over financial reporting as of December 31, 2023 was effective based on the COSO framework (2013).

EY GmbH & Co. KG Wirtschaftsprüfungsgesellschaft, the registered public accounting firm that audited the financial statements included in this document, has issued a report on Deutsche Bank’s internal control over financial reporting, which is set forth below.

108

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Report of Independent Registered Public Accounting Firm

To the Shareholders and the Supervisory Board of Deutsche Bank Aktiengesellschaft:

Opinion on Internal Control Over Financial Reporting

We have audited Deutsche Bank Aktiengesellschaft’s internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, Deutsche Bank Aktiengesellschaft (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2023, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2023 and 2022, the related consolidated statements of income, comprehensive income, changes in equity and cash flows for each of the three years in the period ended December 31, 2023, the related notes and the specific disclosures described in Note 1 to the consolidated financial statements as being part of the financial statements, and our report dated March 11, 2024 expressed an unqualified opinion thereon.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.

Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ EY GmbH & Co. KG Wirtschaftsprüfungsgesellschaft

Eschborn/Frankfurt am Main, Germany

March 11, 2024

109

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Change in Internal Control over Financial Reporting

There was no change in Deutsche Bank’s internal control over financial reporting identified in connection with the evaluation referred to above that occurred during the year ended December 31, 2023 that has materially affected, or is reasonably likely to materially affect, the bank’s internal control over financial reporting.

A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. As such, disclosure controls and procedures or systems for internal control over financial reporting may not prevent all error and all fraud. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and any design may not succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

110

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Item 16A: Audit Committee Financial Expert

Please see “Corporate Governance Statement according to Sections 289f and 315d of the German Commercial Code: Auditing and Controlling: Audit Committee Financial Expert” in the Annual Report 2023.

Item 16B: Code of Ethics

Please see “Corporate Governance Statement according to Sections 289f and 315d of the German Commercial Code: Values and Leadership Principles of Deutsche Bank AG and Deutsche Bank Group: Deutsche Bank Group Code of Conduct and Code of Ethics for Senior Financial Officers” in the Annual Report 2023.

Item 16C: Principal accountant fees and services

Please see “Management Report: Corporate Governance Statement/Corporate Governance Report: Auditing and Controlling: Principal Accountant Fees and Services” in the Annual Report 2023.

Item 16D: Exemptions from the Listing Standards for Audit Committees

Deutsche Bank’s common shares are listed on the New York Stock Exchange, the corporate governance rules of which require a foreign private issuer such as the bank to have an audit committee that satisfies the requirements of Rule 10A-3 under the U.S. Securities Exchange Act of 1934. These requirements include a requirement that the audit committee be composed of members that are “independent” of the issuer, as defined in the corporate governance rules of the New York Stock Exchange, subject to certain exemptions, including an exemption for employees who are not executive officers of the issuer if the employees are elected or named to the board of directors or audit committee pursuant to the issuer’s governing law or documents, an employee collective bargaining or similar agreement or other home country legal or listing requirements. The German Co-Determination Act of 1976 (Mitbestimmungsgesetz) requires that the shareholders elect half of the members of the supervisory board of large German companies, such as Deutsche Bank, and that employees in Germany elect the other half. Employee-elected members are typically themselves employees or representatives of labor unions representing employees. Pursuant to law and practice, committees of the Supervisory Board are typically composed of both shareholder- and employee-elected members. Of the current members of the Audit Committee, four – Susanne Bleidt, Manja Eifert, Claudia Fieber and Gerlinde Siebert – are current employees of Deutsche Bank who have been elected as Supervisory Board members by the employees. None of them is an executive officer. Accordingly, their service on the Audit Committee is permissible pursuant to the exemption from the independence requirements provided for by paragraph (b)(1)(iv)(C) of the Rule. The Group does not believe the reliance on such exemption would materially adversely affect the ability of the Audit Committee to act independently and to satisfy the other requirements of the Rule.

111

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Item 16E: Purchases of Equity Securities by the Issuer and Affiliated Purchasers

The Management Board was authorized by the 2022 Annual General Meeting to buy, on or before April 30, 2027, shares of up to 10% of the share capital at the time the resolution was taken or, if lower, of the share capital at the respective time the authorization was exercised. At the 2022 Annual General Meeting, this corresponded to a volume of up to 206.6 million shares. During the period from the 2022 Annual General Meeting until the 2023 Annual General Meeting, 36.3 million shares were purchased for equity compensation purposes in the same period or for upcoming periods.

The 2023 Annual General Meeting on May 17, 2023 granted the Management Board the approval to buy, on or before April 30, 2028, shares of up to 10% of the share capital at the time the resolution was taken or, if lower, of the share capital at the respective time the authorization was exercised. At the 2023 Annual General Meeting, this corresponded to 204 million shares. This authorization replaced the authorization of the previous year. During the period from the 2023 Annual General Meeting until December 31, 2023, 45.5 million shares were purchased for cancellation for the purpose of distributing capital to shareholders.

At December 31, 2023, the number of shares held in Treasury from buybacks totaled 48.2 million. This figure stems from 28.9 million shares at the beginning of the year, plus 81.9 million shares from buybacks in 2023, less 36.1 million shares which were used to fulfill delivery obligations in the course of share-based compensation of employees, and 26.5 million shares were cancelled during the year.

The following table sets forth, for each month in 2023 and for the year as a whole, the total gross number of Deutsche Bank’s shares repurchased by the bank and its affiliated purchasers (pursuant to both activities described above), the total gross number of shares sold, the net number of shares purchased or sold, the average price paid per share (based on the gross shares repurchased), the number of shares that were purchased for Group purposes mentioned above and the maximum number of shares that at that date remained eligible for purchase under such programs.

Issuer Purchases of Equity Securities in 2023

Month	Total number of shares purchased	Total number of shares sold/cancelled	Net number of shares purchased or (sold)/(cancelled)	Average price paid per share (in €)	Number of shares purchased for group purposes	Maximum number of shares that may yet be purchased under plans or programs
January	18,938,000	7,745	18,930,255	11.38	0	187,739,313
February	17,389,000	29,189,356	(11,800,356)	11.03	0	167,697,295
March	0	31,030,550	(31,030,550)	0.00	0	167,697,295
April	0	180	(180)	0.00	0	167,697,295
May	0	127,600	(127,600)	0.00	0	204,024,295
June	0	300,714	(300,714)	0.00	0	204,024,295
July	0	270	(270)	0.00	0	204,024,295
August	17,499,382	270	17,499,112	9.90	17,499,382	186,524,913
September	9,981,015	1,175,965	8,805,050	9.77	9,981,015	176,543,898
October	16,446,278	210	16,446,068	9.75	16,446,278	160,097,620
November	0	107,138	(107,138)	0.00	0	160,097,620
December	1,614,691	664,877	949,814	11.66	1,614,691	158,482,929
Total 2023	81,868,366	62,604,875	19,263,491	10.47	45,541,366	158,482,929

As of December 31, 2023, the number of shares held by Deutsche Bank in Treasury totaled 48.2 million. This figure stems from 28.9 million shares at the beginning of the year, plus 19.3 million net shares purchased in 2023. As of December 31, 2023, Deutsche Bank’s issued share capital consisted of 2,040 million ordinary shares, of which 1,992 million were outstanding.

Item 16F: Change in Registrant’s Certifying Accountant

Not applicable.

112

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Item 16G: Corporate Governance

Deutsche Bank’s common shares are listed on the New York Stock Exchange, as well as on all seven German stock exchanges. Set forth below is a description of the significant ways in which the corporate governance practices differ from those applicable to U.S. domestic companies under the New York Stock Exchange’s listing standards as set forth in its Listed Company Manual (the “NYSE Manual”).

The Legal Framework. Corporate governance principles for German stock corporations (Aktiengesellschaften) are set forth in the German Stock Corporation Act (Aktiengesetz), the German Co-Determination Act of 1976 (Mitbestimmungsgesetz) and the German Corporate Governance Code (Deutscher Corporate Governance Kodex, referred to as the Code).

The Two-Tier Board System of a German Stock Corporation. The German Stock Corporation Act provides for a clear separation of management and oversight functions. It therefore requires German stock corporations to have both a supervisory board (Aufsichtsrat) and a management board (Vorstand). These boards are separate; no individual may be a member of both. Both the members of the management board and the members of the supervisory board must exercise the standard of care of a diligent businessperson to the company. In complying with this standard of care they are required to take into account a broad range of considerations, including the interests of the company and others like those of its shareholders, employees and creditors.

The management board is responsible for managing the company and representing the company in its dealings with third parties. The management board is also required to ensure appropriate risk management within the corporation and to establish an internal monitoring system. The members of the management board, including its chairperson or speaker, are regarded as peers and share a collective responsibility for all management decisions.

The supervisory board appoints and removes the members of the management board. It also may appoint a chairperson (CEO) and one or more deputy chairpersons of the management board. Although it is not permitted to make management decisions, the supervisory board has comprehensive monitoring functions with respect to the activities of the management board, including advising the management board and participating in decisions of fundamental importance to the company. To ensure that these monitoring functions are carried out properly, the management board must, among other things, regularly report to the supervisory board with regard to current business operations and business planning, including any deviation of actual developments from concrete and material targets previously presented to the supervisory board. The supervisory board may also request special reports from the management board at any time. Transactions of fundamental importance to the company, such as major strategic decisions or other actions that may have a fundamental impact on the company’s assets and liabilities, financial condition or results of operations, may be subject to the consent of the supervisory board. Pursuant to the bank’s Articles of Association (Satzung), such transactions include the granting of general powers of attorney, granting of credits, including the acquisition of participations in other companies for which the German Banking Act (Kreditwesengesetz) requires approval by the supervisory board, as well as major acquisitions or disposals of real estate or other participations.

Pursuant to the German Co-Determination Act, Deutsche Bank’s Supervisory Board consists of representatives elected by the shareholders and representatives elected by the employees in Germany. Based on the total number of Deutsche Bank employees in Germany these employees have the right to elect one-half of the total of twenty Supervisory Board members. The chairperson of the Supervisory Board of Deutsche Bank is a shareholder representative who has the deciding vote in the event of a tie.

This two-tier board system contrasts with the unitary board of directors envisaged by the relevant laws of all U.S. states and the New York Stock Exchange listing standards for U.S. companies.

German companies which have their shares listed on a stock exchange must each year issue a statement on the company’s corporate governance (corporate governance statement) and either include such statement in their annual management report or publish it separately on their website.

The Recommendations of the Code. The Code was issued in 2002 by a commission composed of German corporate governance experts appointed by the German Federal Ministry of Justice in 2001. The Code was last amended in April 28, 2022 with effect as of June 27, 2022. It describes and summarizes the basic mandatory statutory corporate governance principles found in the provisions of German law. In addition, it contains supplemental recommendations and suggestions for standards on responsible corporate governance intended to reflect generally accepted best practice.

113

	Deutsche Bank
	Annual Report 2023 on Form 20-F

The Code is structured from a task perspective and addresses seven core areas of corporate governance. These are the tasks of (a) management and supervision, (b) appointment to the management board, (c) composition of the supervisory board, (d) supervisory board procedures, (e) conflicts of interest, (f) transparency and external reporting as well as (g) the remuneration of the management board and the supervisory board. The Code contains three types of provisions. First, the Code contains principles which reflect material legal requirements for responsible governance, and are used in the Code to inform investors and other stakeholders. The second type of provisions is recommendations. While these are not legally binding, Section 161 of the German Stock Corporation Act requires that any German exchange-listed company declare annually that the company complies with the recommendations of the Code or, if not, which recommendations the company does not comply with and the reasons for the non-compliance (“comply or explain”). The third type of Code provisions comprises suggestions which companies may choose not to comply with without disclosure.

In its last Declaration of Conformity of October 25, 2023, the Management Board and the Supervisory Board of Deutsche Bank stated that, since the last Declaration of Conformity issued on October 26, 2022, it has acted and will act in the future in conformity with the recommendations of the Code, with certain specified exceptions. The Declaration of Conformity is available on Deutsche Bank’s internet website at www.db.com/ir/en/documents.htm.

Supervisory Board Committees. The supervisory board may form committees. Pursuant to the German Stock Corporation Act, any supervisory board committee must regularly report to the supervisory board.

The German Co-Determination Act requires that the supervisory board form a mediation committee to propose candidates for the management board in the event that the two-thirds majority of the members of the supervisory board needed to appoint members of the management board is not met.

Section 107 (4) of the German Stock Corporation Act also requires that companies of “public interest”, including, among others, listed companies and credit institutions, establish an “audit committee” to deal with the supervision of accounting processes, the efficiency of the internal control system the risk management system and the internal audit system as well as with the annual auditing, in particular with the selection and the independence of the external auditor and the additional services rendered by the external auditor. The Code also recommends establishing a “nomination committee” comprised only of shareholder-elected supervisory board members to prepare the supervisory board’s proposals for the election or appointment of new shareholder representatives to the supervisory board. In general, the Code recommends that the supervisory board shall form, depending on the specific circumstances of the enterprise and the number of supervisory board members, committees of members with relevant specialist expertise which can handle subjects, such as corporate strategy, compensation of the members of the management board, investments and financing.

Sections 25d (7) to (12) of the German Banking Act require, depending on the size and complexity of the respective credit institution, the establishment of supervisory board committees with specific tasks to be performed as follows: risk committee, audit committee, nomination committee (with tasks and composition requirements different from those set out in the Code) and compensation control committee. The Code’s recommendation that the nomination committee shall only comprise shareholder representatives is not complied with by Deutsche Bank AG because of mandatory special rules set forth in the German Banking Act, which assign further tasks to the nomination committee in addition to the preparation of proposals for the appointment of new shareholder representatives to the supervisory board. These further tasks do not justify the exclusion of employee representatives from the nomination committee. Based on an earlier version of the Code, which was applicable until March 20, 2020, this non-compliance had to be disclosed and justified in the annual Declaration of Conformity. The Code, as amended, provides that credit institutions and insurance companies are exempt from recommendations of the Code which conflict with special rules or regulations applicable to them. However, the Code recommends that in the case of such conflicts, companies indicate in their annual corporate governance statement what recommendations of the Code were not applicable to them.

The Supervisory Board of Deutsche Bank has established a Chairman’s Committee (Präsidialausschuss) which is inter alia responsible for conclusion, amendment and termination of employment and pension contracts with members of the Management Board, taking into account the responsibility of the Supervisory Board as a whole for the remuneration of the members of the Management Board, a Nomination Committee (Nominierungsausschuss), an Audit Committee (Prüfungsausschuss), a Risk Committee (Risikoausschuss), a Regulatory Oversight Committee (Regulatory Oversight Ausschuss), a Compensation Control Committee (Vergütungskontrollausschuss), a Strategy and Sustainability Committee (Strategie- und Nachhaltigkeitsausschuss), a Technology, Data and Innovation Committee (Technologie-, Daten- und Innovationsausschuss) and a Mediation Committee (Vermittlungsausschuss). The functions of a nominating/corporate governance committee and of a compensation committee required by the NYSE Manual for U.S. companies listed on the NYSE are therefore performed by the Supervisory Board or one of its committees, in particular the Chairman’s Committee, the Compensation Control Committee and the Mediation Committee.

114

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Independent Board Members. The NYSE Manual requires that a majority of the members of the board of directors of a NYSE listed U.S. company and each member of its nominating/corporate governance, compensation and audit committees be “independent” according to strict criteria and that the board of directors determines that such member has no material direct or indirect relationship with the company.

As a foreign private issuer, Deutsche Bank is not subject to these requirements. However, its audit committee must meet the more lenient independence requirement of Rule 10A-3 under the Securities Exchange Act of 1934. German corporate law does not require an affirmative independence determination, meaning that the Supervisory Board need not make affirmative findings that audit committee members are independent. However, the German Stock Corporation Act and the Code, as the case may, be contain several rules, recommendations and suggestions to ensure the supervisory board’s independent advice to, and supervision of, the management board. As noted above, no member of the management board may serve on the supervisory board (and vice versa). Supervisory board members will not be bound by directions or instructions from third parties. Any advisory, service or similar contract between a member of the supervisory board and the company is subject to the supervisory board’s approval. A similar requirement applies to loans granted by the company to a supervisory board member or other persons, such as certain members of a supervisory board member’s family. In addition, the German Stock Corporation Act prohibits a person who within the last two years was a member of the management board from becoming a member of the supervisory board of the same company unless he or she is elected upon the proposal of shareholders holding more than 25 % of the voting rights of the company.

The Code also recommends that each member of the supervisory board inform the supervisory board of any conflicts of interest. In the case of material conflicts of interest or ongoing conflicts, the Code recommends that the mandate of the Supervisory Board member shall end either as a result of such supervisory board member’s withdrawal or, failing which, based on his or her removal from office by the shareholders’ meeting. The Code further recommends that any conflicts of interest that have occurred be reported by the supervisory board at the annual general meeting, together with the action taken, and that potential conflicts of interest also be taken into account in the nomination process for the election of supervisory board members.

Audit Committee Procedures. Pursuant to the NYSE Manual the audit committee of a U.S. company listed on the NYSE must have a written charter addressing its purpose, an annual performance evaluation, and the review of an auditor’s report describing internal quality control issues and procedures and all relationships between the auditor and the company. The Audit Committee of Deutsche Bank operates under written terms of reference and reviews the efficiency of its activities regularly.

Disclosure of Corporate Governance Guidelines. Deutsche Bank discloses its Articles of Association, the Terms of Reference of its Management Board, its Supervisory Board, the Chairman’s Committee, the Audit Committee, the Risk Committee, the Regulatory Oversight Committee, the Compensation Control Committee, the Nomination Committee, the Strategy Committee and the Technology, Data and Innovation Committee, its Declaration of Conformity under the Code pursuant to Section 161 of the German Stock Corporation Act, the Corporate Governance Statement and other documents pertaining to its corporate governance on its internet website at www.db.com/ir/en/documents.htm.

115

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Disclosures Under Iran Threat Reduction and Syria Human Rights Act of 2012

Under Section 219 of the Iran Threat Reduction and Syria Human Rights Act of 2012, which added Section 13(r) of the U.S. Securities Exchange Act of 1934, as amended, an issuer of securities registered under the Securities Exchange Act of 1934 is required to disclose in its periodic reports filed under the Securities Exchange Act of 1934 certain of its activities and those of its affiliates relating to Iran and to other persons sanctioned by the U.S. under programs relating to terrorism and proliferation of weapons of mass destruction that occurred during the period covered by the report. The bank describes below a number of potentially disclosable activities of Deutsche Bank AG and its affiliates. Disclosure is generally required regardless of whether the activities, transactions or dealings were conducted in compliance with applicable law. Deutsche Bank also reports transactions in which other Iranian persons or entities listed on OFAC sanctions lists were involved, whether or not they are directly or indirectly owned or controlled by the Iranian government.

Legacy Contractual Obligations Related to Guarantees and Letters of Credit. Prior to 2007, Deutsche Bank provided guarantees to a number of Iranian entities. In almost all of these cases, the bank issued counter-indemnities in support of guarantees issued by Iranian banks because the Iranian beneficiaries of the guarantees required that they be backed directly by Iranian banks. In 2007, the bank made a decision to discontinue issuing new guarantees to Iranian or Iran-related beneficiaries. Although the pre-existing guarantees stipulate that they must be either extended or honored if the bank receives such a demand and is legally not able to terminate these guarantees, the firm decided to reject any “extend or pay” demands under such guarantees. Even though the bank had exited, where possible, many of these guarantees, guarantees with an aggregate face amount of approximately € 7.0 million are still outstanding as of year-end 2023. The gross revenues from this business in 2023 which the bank received from non-Iranian parties were approximately € 32,000 and the net profit derived from these activities was less than this amount.

Deutsche Bank also has outstanding legacy guarantees in relation to a Syrian bank sanctioned by the United States under its non-proliferation program. The aggregate face amount of these legacy guarantees was approximately € 9.1 million as of December 31, 2023, the gross revenues received from non-Syrian parties for these guarantees were approximately € 65,000 in 2023 and the net profit derived from these activities was less than this amount. The bank intends to exit these guarantee arrangements.

Payments Executed. Deutsche Bank continues to severely restrict its policy on Iran and consequently the execution of payments relating to Iran.

Incoming Payments. In 2023, three incoming payments adding up to € 2.6 billion were executed on behalf of Iranian parties outside of Germany; These payments were processed for the benefit of a Qatari bank for humanitarian purposes at the request of the US authorities. Revenues for these incoming payments were less than € 30; with regard to the Iranian Embassy in Germany, see below.

Outgoing Payments. With regards to the Iranian Embassy in Germany, see below.

Operations of Iranian Bank Branches and Subsidiaries in Germany. Several Iranian banks, including Bank Melli Iran, Bank Saderat, Bank Sepah, and Europäisch-Iranische Handelsbank, have branches or offices in Germany, even though their funds and other economic resources had been frozen earlier under European law. As part of the payment clearing system in Germany and other European countries, when these branches or offices needed to make payments in Germany or Europe to cover their day-to-day operations such as rent, taxes, insurance premiums and salaries for their remaining staff, or for any other kind of banking-related operations, fund transfers from these Iranian banks had been accepted through Target2 or in SEPA format.

In 2023, Deutsche Bank executed approximately € 2.4 million in (almost only in-coming) transfers through Target2 or SEPA across approximately 1,000 transactions and credited the relevant amounts to the non-Iranian clients. The gross revenues derived from these payments were approximately € 3,900.

The bank does not consider the execution of such transactions to be significant and expects to continue to execute such transactions in the future.

117

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Maintaining of Accounts for Iranian Consulates and Embassies. In 2023, Iranian embassies and consulates in Germany held accounts with Deutsche Bank. The purpose of these accounts is the funding of day-to-day operational costs of the embassies and consulates, such as salaries, rent and electricity. In 2023, the total volume of outgoing payments from these accounts was approximately € 5.2 million which have been funded through € 7.8 million of incoming payments. From these activities, the bank derived gross revenues of approximately € 0.12 million and net profits which were less than this amount. The German government has requested that Deutsche Bank provide these services to enable the government of Iran to conduct its diplomatic relations and the bank intends to continue maintenance of such accounts.

Activities of Entities in Which Deutsche Bank Has Interests. Section 13(r) requires the Group to provide the specified disclosure with respect to Deutsche Bank and its “affiliates,” as defined in Exchange Act Rule 12b-2. Although the bank has minority equity interests in certain entities that could arguably result in these entities being deemed “affiliates,” it does not have the authority or the legal ability to acquire in every instance the information from these entities that would be necessary to determine whether they are engaged in any disclosable activities under Section 13(r). In some cases, legally independent entities are not permitted to disclose the details of their activities to the bank because of German privacy and data protection laws or the applicable banking laws and regulations. In such cases, voluntary disclosure of such details could violate such legal and/or regulatory requirements and subject the relevant entities to criminal prosecution or regulatory investigations.

118

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Content

1 –
Combined Management Report

6	Operating and financial review
41	Outlook
42	Risks and opportunities
43	Risk Report
173	Sustainability
175	Employees
179	Internal control over financial reporting
181	Information pursuant to Section 315a (1) of the German Commercial Code
183	Corporate Governance Statement acc to Sec 289f, 315d of the German Commercial Code
185	Standalone parent company information (HGB)
2 –
Consolidated Financial Statements

188	Consolidated Statement of Income
189	Consolidated Statement of Comprehensive Income
190	Consolidated Balance Sheet
191	Consolidated Statement of Changes in Equity
192	Consolidated Statement of Cash Flows
194	Notes to the consolidated financial statements
233	Notes to the consolidated income statement
240	Notes to the consolidated balance sheet
296	Additional Notes
339	Report of Independent Registered Public Accounting Firm
3 –
Compensation Report

347	Compensation of the Management Board
383	Compensation of members of the Supervisory Board
388	Comparative presentation of compensation and earnings trends

391	Compensation of the employees (unaudited)
4 –
Corporate Governance Statement according to sections §289f and §315d of the German Commercial Code/Corporate Governance Report

407	Management Board and Supervisory Board
423	Reporting and Transparency
423	Related Party Transactions
424	Auditing and Controlling
427	Compliance with German Corporate Governance Code
5 –
Supplementary Information (Unaudited)

430	Non-GAAP Financial Measures
438	Declaration of Backing
439	Group Five-Year Record
441	Imprints – Publications

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Operating and financial review

The following discussion and analysis should be read in conjunction with the consolidated financial statements and the related notes. Deutsche Bank’s Operating and financial review includes qualitative and quantitative disclosures on Segment results of operations and entity-wide disclosures on net revenue components as required by International Financial Reporting Standard (IFRS) 8, “Operating Segments”. For additional business segment disclosure under IFRS 8 please refer to Note 4 “Business Segments and related information” of the consolidated financial statements. Forward-looking statements are disclosed in the section “Outlook” in this report.

Executive summary

Global economy

Economic growth (in %)¹	2023²	2022³	Main driver
Global Economy	3.1	3.4	The global economy lost some momentum in 2023. Although the bank believes inflation has passed its peak, the high price level continued to weigh on demand from private households. The tighter monetary policy to combat inflation also slowed down the global economy
Of which: Developed countries	1.6	2.6	Developments in the developed countries varied. While the U.S. economy remained resilient at the end of 2023, the Eurozone economy was already slowing down noticeably. Central banks maintained peak interest rates and signaled their intention to continue their data-driven monetary policy. Inflation rates continued to fall but remained above the central banks' targets at the end of the year
Emerging markets	4.2	3.9	Developments in the emerging markets varied from region to region at the end of 2023. Asian countries benefited from the momentum in China, while focus in Latin America was on combating inflation. High energy prices and the spillovers of geopolitics continued to be a burden for countries in Central and Eastern Europe
Eurozone Economy	0.5	3.4	The Eurozone economy weakened in the second half of 2023. Private consumption continued to be negatively impacted by the loss of purchasing power, even though inflation eased significantly. The labor market was stable, as a result of companies holding on to staff. The ECB kept its key interest rates unchanged in the fourth quarter 2023
Of which: German economy	(0.3)	1.8	The German economy continued to weaken until end of 2023, having previously more or less stagnated. Private consumption remained weak, although the impact of inflation has eased. The labor market remained robust and wage growth has already compensated for some loss of purchasing power
U.S. Economy	2.5	1.9	The U.S. economy slowed somewhat towards the end of 2023, with the labor market becoming more balanced and inflationary pressure easing. Private household consumption remained robust. The Fed left its key interest rates unchanged at a high level
Japanese Economy	2.0	0.9	The Japanese economy regained some momentum towards the end of the year. Private consumption benefited from strong wage growth, while inflation did not weaken noticeably. The Bank of Japan's key interest rates remained unchanged at their accommodative level
Asian Economy⁴	5.1	4.1	The Asian economies benefited from China's recovery. Inflation trends varied regionally and were driven not least by food prices. The weakening of global trade had a negative impact on exports
Of which: Chinese Economy	5.2	3.0	As a result of fiscal and monetary policy support, the Chinese economy gained additional momentum in the final quarter of 2023. Nevertheless, the property sector dampened the recovery in private consumption. Inflation rates turned negative in the second half of 2023

¹ Annual Real GDP Growth (% YoY). Sources: National Authorities unless stated otherwise

² Sources: Deutsche Bank Research

³ Some economic data for 2022 were revised by public statistics authorities due to the economic effects of the pandemic. As a result, this data may differ from that previously published

⁴ Includes China, Hong Kong, India, Indonesia, Malaysia, Philippines, Singapore, Sri Lanka, South Korea, Thailand and Vietnam; excludes Japan

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Banking Industry

	Dec 31, 2023
Growth year-over-year (in %)	Corporate Lending	Retail Lending	Corporate Deposits	Retail Deposits	Main driver
Eurozone	(0.1)	0.2	(0.5)	1.2	Following the previous boom, lending and deposit-taking with both corporates and households essentially slowed to a standstill as a result of significantly higher interest rates, with volumes largely flat over the course of the year. Corporate deposits were slightly more volatile than the other categories
Of which: Germany	1.0	0.7	1.4	2.2	Mortgage lending slowed strongly, to the weakest level since 2012, but remained moderately positive despite the surge in rates. This also pulled down total retail lending. Similarly, loan growth with non-financial corporations fell to a multi-year low, with volumes almost flat year over year. Likewise, outstanding private-sector deposits largely stagnated during the year
U.S.	0.9	3.6	(1.7)¹	(1.7)¹	Loan growth with households moderated from the strong dynamics in the previous year, but remained solid. Corporate credit volumes were nearly constant throughout the year, following even greater momentum in 2022. Total deposits contracted until spring and then flattened out, leading to a moderate shrinkage for the full year. It is only the second time this has happened since records began in 1973, and the second time in a row after the mild contraction in 2022, which followed the pandemic boom in 2020/2021
China	14.4	6.9	4.9	13.7	Corporate loans boomed, while retail loans expanded at less than half that pace. Deposit developments were quite the opposite, buoyant inflows from households stood in contrast to a subdued increase from companies

¹ Total U.S. deposits as segment breakdown is not available

In 2023, Commercial Real Estate (CRE) markets continued to face headwinds due to the impacts of higher interest rates, decreasing market liquidity combined with tightened lending conditions, and structural changes in the office sector.The market stress has been more pronounced in the U.S., where property price indices point to a greater decline of CRE asset values from recent peaks compared to Europe and APAC. Especially within the office segment, the market weakness is most evident in the U.S., reflected in subdued leasing activity and higher vacancy rates compared to Europe.

The global Origination & Advisory industry fee pool in 2023 fell a further 16%, following a 35% drop in 2022 from record highs in 2021, driven by a subdued Mergers & Acquisitions market, challenging primary credit markets, and largely inactive sponsors. Mergers & Acquisitions in 2023 fell 23% but was still higher than the pre-COVID-19 pandemic fee pool of € 26 billion, while the fourth quarter 2023 had strong volumes. Equity Capital Markets issuance increased in 2023 as equity markets bounced back and volatility was low. The high yield market was up over 60% from a decade-long low, while leveraged loan issuance fell 17% with sponsors choosing to continue their pause on acquisitions. The investment grade bond market remained relatively robust with issuance down 3% in 2023 and has had a strong start to 2024. Within Fixed Income, revenue pools remained at elevated levels compared to historical averages, although below the levels seen in 2022. Foreign exchange activity decreased across the ten most traded currencies globally, with Rates and Emerging Markets each declining from strong levels in the prior year. Conversely within Credit, an increase year on year was driven by a more favorable environment for secondary trading with the general trend of tightening spreads, while in Financing client demand remained stable and broadly aligned to prior year.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Deutsche Bank performance

Deutsche Bank reported a net profit of € 6.5 billion, up 16% year on year, due to higher interest income as well as noninterest revenues as the bank delivered revenue growth in 2023. Post-tax profit in 2023 included positive year end deferred tax asset (DTA) valuation adjustments of € 1.0 billion, largely reflecting continuously strong performance in the UK. This compared to a positive year end DTA valuation adjustment of € 1.4 billion in 2022 which related to the bank’s U.S. operations. Provision for credit losses was € 1.5 billion in 2023, up from € 1.2 billion in 2022, or 31 basis points of average loans, slightly above the bank’s guidance, reflecting the continued challenging impact of macroeconomic and interest rate conditions on parts of the credit portfolio during 2023. Deutsche Bank published further details of its plans for distributions to shareholders, following the raising of its capital outlook by € 3 billion in October 2023. The bank plans to increase both share repurchases and dividends by 50% in 2024. The bank has received supervisory approvals for share repurchases of € 675 million initially in 2024, having completed its € 450 million 2023 repurchase program, and plans to recommend a dividend of € 0.45 per share for 2023, up from € 0.30 per share for 2022, at the Annual General Meeting in May 2024.

Profit before tax was € 8.0 billion for the full year 2023, up by 46% compared to the prior year. Revenues grew by 15% to € 31.2 billion, and by 17% excluding specific items. Noninterest expenses were € 21.7 billion, up 6%, with growth driven primarily by nonoperating costs of € 1.1 billion, up from € 474 million in 2022. Adjusted costs, which exclude these nonoperating items, rose 3% to € 20.6 billion, as savings from efficiency measures partly offset costs relating to investments. The cost/income ratio was 70% in 2023, improved from 75.3% in 2022. Post-tax return on average shareholders’ equity (RoE) was 9.1% compared to 8.2% in the prior year. Post-tax return on average tangible shareholders’ equity (RoTE) was 10.2%, compared to 9.1% in 2022, while. The year on year development in both ratios resulted primarily from higher net revenues compared to 2022.

Key Performance Indicators

Financial targets	Financial targets and capital objectives 2025	Status end of 2023	Status end of 2022
Post-tax return on average tangible shareholders’ equity¹	Above 10%	10.2%	9.1%
Compound annual growth rate of revenues from 2021²	3.5 to 4.5%³	10.5%	6.0%
Cost/income ratio⁴	Less than 62.5%	69.6%	75.3%
Capital objectives
Common Equity Tier 1 capital ratio⁵	~ 13%⁶	13.7%	13.4%
Total payout ratio⁷	50%⁸	22%	35%

¹ Based on profit (loss) attributable to Deutsche Bank shareholders after AT1 coupon; for further information, please refer to “Supplementary Information (Unaudited): Non-GAAP Financial Measures” of this report

² Twelve months period until the end of the respective reporting period compared to full year 2021

³ Target ratio until December 31, 2023;

raised at the beginning of 2024 to 5.5 to 6.5% between 2021 and 2025

⁴ Noninterest expenses as a percentage of total net revenues, which are defined as net interest income before provision for credit losses plus noninterest income

⁵ Further detail on the calculation of this ratio is provided in the Risk Report in this report

⁶ Target ratio while maintaining a buffer of 200 basis points above the bank’s expected maximum distributable amount (MDA) threshold

⁷ Distributions in form of common share dividend paid and share buybacks for cancellation executed in the reporting period in relation to prior period net income attributable to Deutsche Bank shareholders

⁸ In respect of financial year 2024 onwards

Net revenues were € 31.2 billion in 2023, up 15% year on year, and up 17% if adjusted for specific items. These items included a prior year gain on the sale of Deutsche Bank Financial Advisors in Italy of approximately € 310 million and € 125 million from workout activities related to Sal. Oppenheim in 2022, neither of which recurred in 2023. Both of these items arose in the Private Bank. Additionally, debt valuation adjustments in the Investment Bank had a € 47 million negative impact in 2023 versus a € 49 million benefit in 2022. Compound annual revenue growth since 2021 for the Group was 6.6%, well above the bank’s original target of between 3.5% and 4.5% between 2021 and 2025. Given the progress achieved, the bank raised its target of a compound annual growth rate of revenues to 5.5 to 6.5% between 2021 and 2025 at the beginning of 2024.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Provision for credit losses was € 1.5 billion in 2023, or 31 basis points of average loans, slightly above the bank’s previously announced guidance, reflecting the continued challenging impact of macro-economic and interest rate conditions on parts of the credit portfolio during the year. In 2022, provision for credit losses was € 1.2 billion, or 25 basis points of average loans.

Noninterest expenses were € 21.7 billion in 2023, up 6% year on year. This development largely reflected a rise in nonoperating costs to € 1.1 billion, up from € 474 million in 2022, largely related to the execution of the bank’s Global Hausbank strategy. 2023 nonoperating costs included restructuring and severance expenses of € 566 million, compared to a release of € 8 million in 2022, and impairments of goodwill and other intangible assets of € 233 million, up from € 68 million in 2022, driven by the goodwill impairment charge related to Numis. Adjusted costs were € 20.6 billion, up 3%. Investments in business growth, controls and efficiency measures were partly offset by the aforementioned realized savings from the bank’s efficiency programs.

Income tax expense was € 1.5 billion in 2023, compared to an income tax benefit of € 107 million in the prior year. The effective tax rate in 2023 of 19% benefited from the abovementioned positive year end DTA valuation adjustments of € 1.0 billion, largely reflecting continuously strong performance in the UK.

Common Equity Tier 1 capital ratio was 13.7% at the end of 2023, up from 13.4% at the end of 2022. Organic capital generation more than offset the combined impacts of dividends, share buybacks, regulatory risk weighted asset inflation and business growth during the year. Capital efficiency measures, which form part of Deutsche Bank’s accelerated execution of its Global Hausbank strategy, delivered RWA reductions of € 13 billion during 2023.

Revenues excluding specific items, adjusted costs, post-tax return on average tangible shareholders’ equity and net Assets (adjusted) are Non-GAAP financial measures. Please refer to “Supplementary Information (Unaudited): Non-GAAP Financial Measures” of this Annual Report for the definitions of such measures and reconciliations to the IFRS measures on which they are based.

Deutsche Bank’s financial and regulatory targets are based on the financial results prepared in accordance with IFRS as issued by the IASB and endorsed by the EU. For further details, please refer to the section ‘Basis of preparation/impact of changes in accounting principles’ in this report.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Deutsche Bank Group

Deutsche Bank’s Organization

Headquartered in Frankfurt am Main, Germany, Deutsche Bank is the largest bank in Germany and one of the largest financial institutions in the world, as measured by total assets of € 1,317 billion as of December 31, 2023. As of that date, the bank had 90,130 full-time equivalent internal employees and operated in 57 countries with 1,432 branches, of which 66% were located in Germany. The bank offers a wide variety of investment, financial and related products and services to private individuals, corporate entities and institutional clients around the world.

As of December 31, 2023, the bank was organized into the following segments:

– Corporate Bank

– Investment Bank

– Private Bank

– Asset Management

– Corporate & Other

As announced in the Annual Report 2022, having fulfilled the Capital Release Unit’s de-risking and cost reduction mandate from 2019 through year end 2022, the Capital Release Unit ceased to be reported as a separate segment with effect from the first quarter of 2023. The remaining portfolio, resources and employees are reported within the Corporate & Other segment. In line with the change, the Core Bank, which previously represented the Group excluding the Capital Release Unit, ceased to be reported as of the first quarter of 2023. Prior years comparatives have been aligned to the presentation in the current year.

In addition, Deutsche Bank has a country and regional organizational layer to facilitate a consistent implementation of global strategies.

The bank has operations or dealings with existing and potential customers in most countries in the world. These operations and dealings include working through:

– Subsidiaries and branches

– Representative offices

– One or more representatives assigned to serve customers

Capital expenditures or divestitures related to the divisions are included in the respective corporate division overview.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Management Structure

The Management Board has structured the Group as a matrix organization, comprising corporate divisions and infrastructure functions operating in legal entities and branches across geographic locations.

The Management Board is responsible for the management of the company in accordance with the law, the Articles of Association and the Terms of Reference for the Management Board with the objective of creating sustainable value in the interests of the company. It considers the interests of shareholders, employees and other company-related stakeholders. The Management Board manages Deutsche Bank Group in accordance with uniform guidelines; it exercises general control over all entities and branches.

The allocation of functional responsibilities to the individual members of the Management Board is described in its Business Allocation Plan, which sets the framework for the delegation of responsibilities to senior management below the Management Board. The Management Board endorses individual accountability of senior position holders as opposed to joint decision-taking in committees. At the same time, the Management Board recognizes the importance of having comprehensive and robust information across all businesses in order to take well informed decisions and established the “Group Management Committee”, which aims to improve the information flow across the corporate divisions and between the corporate divisions and the Management Board along with the Infrastructure Committees, Business Executive Committees and Regional Committees. The Group Management Committee, which is not required by the German Stock Corporation Act, is a senior committee that is composed of all Management Board members and the most senior business representatives to exchange information and to discuss business, growth and profitability.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Corporate Bank

Corporate Division Overview

Corporate Bank is primarily focused on serving corporate clients, including the German “Mittelstand”, larger and smaller sized commercial and business banking clients in Germany as well as multinational companies. The division also provides financial institutions with certain transaction banking services. Corporate Bank reports revenues based on three client categories: Institutional Client Services, Corporate Treasury Services and Business Banking.

There have been no significant capital expenditures or divestitures since January 1, 2021.

Products and Services

Corporate Bank is a global provider of risk management solutions, cash management, lending, trade finance, trust and agency services as well as securities services. Cash management services include integrated payments and FX solutions. Trade finance and lending offering spans from documentary and guarantee business to structured trade finance and lending. Trust and agency services cover depository receipts, corporate trust and document custody. Focusing on the finance departments of corporate and commercial clients and financial institutions in Germany and across the globe, its holistic expertise and global network allows the bank to offer integrated solutions.

In addition to Corporate Bank’s product suite, coverage teams provide clients with access to the expertise of Investment Bank.

Distribution Channels and Marketing

The corporate coverage function of Corporate Bank focuses on international mid and large corporate clients and is organized into three units: Global Coverage, MidCorps Coverage and Risk Management Solutions. Coverage includes multi-product generalists covering headquarter level and subsidiaries via global, regional and local coverage teams for multinational companies. MidCorps Coverage includes multi-product generalists with a special focus to medium sized enterprises. Risk Management Solutions includes Foreign Exchange, Emerging Markets and Rates product specialists. This unit is managed regionally in Asia Pacific, Americas and EMEA to ensure close connectivity to clients.

Corporate clients are served out of all three of the Corporate Bank’s client categories. Corporate Treasury Services covers mid and large corporate clients across two brands, Deutsche Bank and Postbank, and offers the whole range of solutions across cash, trade financing, lending and risk management for the corporate treasurer. Business Banking covers small corporates and entrepreneur clients and offers a largely standardized product suite and selected contextual-banking partner offerings (e.g., accounting solutions). Institutional Client Services comprises of Cash Management for Institutional clients, Trust and Agency Services, as well as Securities Services.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Investment Bank

Corporate Division Overview

Investment Bank combines Deutsche Bank’s Fixed Income & Currencies (FIC) Sales & Trading and Origination & Advisory businesses, as well as Deutsche Bank Research. The Investment Bank focuses on its traditional strengths in these markets, bringing together wholesale banking expertise across risk management, sales and trading, investment banking and infrastructure. This enables the Investment Bank to align resourcing and capital across its client and product perimeter to effectively support the bank’s strategic goals.

Commencing from the first quarter of 2024, Investment Bank introduces additional sub-categories to FIC Sales and Trading revenues, entitled “Fixed Income & Currencies: Financing” and “Fixed Income & Currencies: Ex Financing”. At the same time, FIC Sales and Trading will be renamed to “Fixed Income & Currencies”. Origination & Advisory revenues will continue to be presented in the sub-categories Debt Origination, Equity Origination and Advisory. Additionally, Research revenues will be reported together with Other in the category “Research and Other”.

In April 2023, Deutsche Bank announced that it reached an agreement on an all-cash offer for the acquisition of Numis Corporation Plc (“Numis”). On October 13, 2023, Deutsche Bank completed the transaction and acquired a 100% interest in Numis for a cash purchase price of GBP 397 million. The acquisition is intended to allow Deutsche Bank to accelerate its Global Hausbank strategy by unlocking a much deeper engagement with corporate clients in the United Kingdom. After the initial purchase price allocation, a goodwill of € 233 million related to the transaction was identified. Deutsche Bank assigned the identified goodwill to the Investment Bank cash-generating unit (“CGU”). Given the value of the Investment Bank CGU, the goodwill was considered impaired and written off in the fourth quarter of 2023.

There have been no significant divestitures since January 1, 2021.

Products and Services

FIC Sales & Trading brings together institutional sales, trading and structuring expertise across Foreign Exchange, Rates, Emerging markets, Credit trading and Financing. The FIC Sales & Trading business operates globally and provides both corporate and institutional clients liquidity, market making services and a range of specialized risk management solutions across a broad range of FIC products, complemented by a comprehensive financing offering. The application of technology and continued innovation of transaction lifecycle processes is enabling Deutsche Bank to increase automation/electronification in order to respond to client and regulatory requirements.

Origination & Advisory is responsible for the division’s debt origination business, mergers and acquisitions, and a focused equity advisory and origination platform. It is comprised of regional and industry-focused coverage teams, co-led from the bank’s hubs in Europe, the U.S. and Asia Pacific. This facilitates the delivery of a range of financial products and services to the bank’s corporate clients.

Distribution Channels and Marketing

Coverage of the Investment Bank’s clients is provided principally by three groups working in conjunction with each other: The Institutional Client Group, which houses the debt sales team, Investment Banking Coverage within Origination & Advisory and Risk Management Solutions in Corporate Bank, which covers capital markets and treasury solutions. The close cooperation between these groups helps to create enhanced synergies leading to increased cross selling of products/solutions to clients.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Private Bank

Corporate Division Overview

Private Bank serves personal and private clients, wealthy individuals, entrepreneurs and families. The international businesses also focus on commercial clients in selected markets. Private Bank is organized along the businesses Private Bank Germany and International Private Bank.

Commencing from first quarter of 2024, the Private Bank will follow a customer-focused approach by classifying the existing customer base into two distinct categories: Wealth Management & Private Banking and Personal Banking. This approach reflects the aim to serve clients in a more targeted and effective way across the Private Bank. Wealth Management & Private Banking combines the coverage of private banking, high-net-worth and ultra-high-net-worth clients, as well as business clients in selected international businesses. The client segment Personal Banking includes retail and affluent customers as well as commercial banking clients in specific international businesses (i.e., all small business clients and small sized corporate clients that are not covered as part of the Wealth Management & Private Banking client segment).

In August 2021, Deutsche Bank SpA signed an agreement to sell its Deutsche Bank Financial Advisors business in Italy to Zurich Insurance Group (Zurich Italy). The transaction was closed after regulatory approval on October 17, 2022.

There have been no significant capital expenditures since January 1, 2021.

Products and Services

Private Bank’s product range includes payment and account services, credit and deposit products as well as investment advice. These offerings include a range of ESG products, which enable clients to access ESG-compliant lending and investment products in line with ESG values and according to specified ESG strategies, scores and exclusionary criteria.

Private Bank Germany pursues a differentiated, customer-focused approach with two strong and complementary main brands: Deutsche Bank and Postbank. The Deutsche Bank brand focuses on providing their private customers with banking and financial products and services that include sophisticated and individual advisory solutions. The focus of the Postbank brand is on providing its retail customers with standard products and daily retail banking services supported by direct banking capabilities. In cooperation with Deutsche Post DHL AG, Private Bank Germany also offers postal and parcel services in the Postbank brand branches.

International Private Bank also has a differentiated, customer-focused approach with two client categories: Premium Banking and Wealth Management & Bank for Entrepreneurs. International Private Bank provides its clients with banking and other financial services including support in planning, managing and investing wealth, financing personal and business interests and servicing institutional and corporate needs.

Distribution Channels and Marketing

Private Bank pursues an omni-channel approach and customers can flexibly choose between different possibilities to access services and products.

The distribution channels include branch networks, supported by advisory and customer call centers, self-service terminals as well as digital offerings including online and mobile banking. Private Bank also has collaborations with self-employed financial advisors and other sales and cooperation partners, including various cooperations with Business-to-Business-to-Consumer partners in Germany. For the Wealth Management & Bank for Entrepreneurs client category, International Private Bank has a distinct client coverage team approach with relationship and investment managers supported by client service executives assisting clients with wealth management services and open-architecture products. In addition, in Germany, Deutsche Oppenheim Family Offices AG provides family office services, discretionary funds and advisory solutions.

The expansion of digital capabilities remains a strong focus across the businesses as a significant change in client behavior towards digital channels is observed. The Private Bank will continue to optimize the omni-channel mix in the future in order to provide customers with the most convenient access to products and services.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Asset Management

Corporate Division Overview

With € 896 billion of assets under management as of December 31, 2023, the Asset Management division, which operates under the brand DWS, aspires to be a leading asset manager. DWS serves a diverse client base of retail and institutional investors worldwide, with a strong presence in the bank’s home market in Germany. These clients include large government institutions, corporations and foundations as well as individual investors. As a regulated asset manager, DWS acts as a fiduciary for clients and is conscious of its societal impact. Responsible investing has been an important part of DWS’s heritage for more than twenty years.

Deutsche Bank retains 79.49% ownership interest in DWS, and asset management remains a core business for the Group. The shares of DWS are listed on the Frankfurt stock exchange.

In 2022, DWS completed the transfer of its digital investment platform into a joint venture with Blackfin. DWS holds a 30% stake in the newly established company MorgenFund GmbH.

There have been no significant capital expenditures since January 1, 2021.

Products and Services

DWS offers individuals and institutions access to investment capabilities across all major asset classes in active equity, fixed income, cash, multi asset and systematic and quantitative investments as well as passive investments including Xtrackers range and alternative investments. The alternative investments include real estate, infrastructure, liquid real assets and sustainable investments. In addition, DWS’s solution strategies are targeted to client needs that cannot be addressed by traditional asset classes alone. Such services include insurance and pension solutions, asset-liability management, portfolio management solutions and asset allocation advisory.

Distribution Channels and Marketing

DWS product offerings are distributed across EMEA, the Americas and Asia Pacific through a global distribution network. DWS also leverages third-party distribution channels, including other divisions of Deutsche Bank Group.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Infrastructure

The Infrastructure functions perform control and service activities for the businesses, including tasks relating to Group-wide, cross-divisional resource-planning, steering and control, as well as tasks relating to risk, liquidity and capital management.

The Infrastructure functions are organized into the following areas of responsibility linked to a dedicated member of the Management Board:

– Chief Executive Office

– Chief Financial Office

– Chief Risk Office

– Chief Administration Office

– Technology, Data and Innovation

– Chief Operating Office

– CB & IB Operations and Controls

Infrastructure also includes Communications & Corporate Social Responsibility, Chief Sustainability Office, Regional Management, Group Audit, Legal, Business Selection and Conflicts Office, Compliance, Anti Financial Crime, Global Procurement, Global Real Estate and Human Resources.

For 2021 and 2022, costs relating to Infrastructure functions were allocated using an actuals to plan approach. From the first quarter of 2023, the bank introduced a Driver-Based Cost Management methodology for the allocation of costs originated in applicable Infrastructure functions. The new approach aims to provide transparency over the drivers of Infrastructure costs and links costs closely to service consumption by segments. Whilst in 2023 the allocations to the corporate divisions continued to be based on planned allocations, except for technology development costs which are charged to divisions based on actual expenditures, from 2024 Infrastructure costs will all be charged to divisions based on actual costs and service consumption in support of the bank’s continued focus on cost discipline.

Significant capital expenditures and divestitures

Information on each corporate division’s significant capital expenditures and divestitures for the last three financial years has been included in the above descriptions of the corporate divisions.

Since January 1, 2021, there have been no public takeover offers by third parties with respect to Deutsche Bank’s shares.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Results of Operations

Consolidated Results of Operations

The following discussion and analysis should be read in conjunction with the consolidated financial statements.

Condensed consolidated statement of income

in € m.				2023 increase (decrease) from 2022		2022 increase (decrease) from 2021
(unless stated otherwise)	2023	2022	2021	in € m.	in %	in € m.	in %
Net interest income	16,122	13,983	11,117	2,139	15	2,866	26
Provision for credit losses	1,505	1,226	515	280	23	710	138
Net interest income after provision for credit losses	14,617	12,757	10,602	1,860	15	2,155	20
Commissions and fee income¹	9,206	9,838	10,934	(632)	(6)	(1,096)	(10)
Net gains (losses) on financial assets/liabilities at fair value through profit or loss¹	5,575	2,962	3,139	2,613	88	(177)	(6)
Net gains (losses) on financial assets at fair value through other comprehensive income	(0)	(216)	237	216	(100)	(453)	N/M
Net gains (losses) on financial assets at amortized cost	(96)	(2)	1	(94)	N/M	(3)	N/M
Net income (loss) from equity method investments	(38)	152	98	(190)	N/M	54	56
Other income (loss)	387	346	13	40	12	333	N/M
Total noninterest income	15,033	13,080	14,421	1,953	15	(1,341)	(9)
Memo: Total net revenues²	31,155	27,063	25,538	4,092	15	1,525	6
Compensation and benefits	11,131	10,712	10,418	418	4	294	3
General and administrative expenses	10,112	9,728	10,821	384	4	(1,093)	(10)
Impairment of goodwill and other intangible assets	233	68	5	165	N/M	64	N/M
Restructuring activities	220	(118)	261	338	N/M	(379)	N/M
Total noninterest expenses	21,695	20,390	21,505	1,305	6	(1,115)	(5)
Profit (loss) before tax	7,955	5,447	3,518	2,508	46	1,929	55
Income tax expense (benefit)	1,503	(107)	923	1,610	N/M	(1,030)	N/M
Profit (loss)	6,452	5,554	2,595	898	16	2,959	114
Profit (loss) attributable to noncontrolling interests	120	134	144	(14)	(11)	(10)	(7)
Profit (loss) attributable to Deutsche Bank shareholders and additional equity components	6,332	5,420	2,451	913	17	2,969	121
Profit (loss) attributable to additional equity components	560	500	426	60	12	74	17
Profit (loss) attributable to Deutsche Bank shareholders	5,772	4,919	2,025	853	17	2,895	143

N/M – Not meaningful

¹ For further details please refer to Note 1 “Material accounting policies and critical accounting estimates” of this report

² Total net revenues defined as net interest income before provision for credit losses plus noninterest income

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Net interest income

in € m.				2023 increase (decrease) from 2022		2022 increase (decrease) from 2021
(unless stated otherwise)	2023	2022	2021	in € m.	in %	in € m.	in %
Total interest and similar income	43,546	24,449	16,773	19,097	78	7,677	46
Total interest expenses	27,424	10,466	5,655	16,958	162	4,811	85
Net interest income	16,122	13,983	11,117	2,139	15	2,866	26
Average interest-earning assets¹	977,624	987,124	938,269	(9,500)	(1)	48,855	5
Average interest-bearing liabilities¹	735,956	727,265	690,742	8,691	1	36,523	5
Gross interest yield²	4.44%	2.33%	1.57%	2.11ppt	90	0.76ppt	48
Gross interest rate paid³	3.71%	1.24%	0.53%	2.47ppt	198	0.72ppt	135
Net interest spread⁴	0.73%	1.09%	1.05%	(0.36)ppt	(33)	0.04ppt	4
Net interest margin⁵	1.65%	1.42%	1.18%	0.23ppt	16	0.23ppt	20

ppt – Percentage points

¹ Average balances for the year calculated based on month-end balances

² Gross interest yield as the average interest rate earned on average interest-earning assets

³ Gross interest rate paid as the average interest rate paid on average interest-bearing liabilities

⁴ Net interest spread as the difference between the average interest rate earned on average interest-earning assets and the average interest rate paid on average interest-bearing liabilities

⁵ Net interest margin as net interest income as a percentage of average interest-earning assets

2023

Net interest income was € 16.1 billion in 2023, up 15% compared to prior year. The increase of € 2.1 billion was driven by gains on portfolio hedges of interest rate risk, where fair-value hedge accounting cannot be applied under IFRS as issued by the IASB. Net interest income included interest expenses of € 741 million under the Targeted Long-Term Refinancing Operation III (TLTRO III) program in 2023, whereas 2022 included interest income of € 211 million under this program. Overall, the bank's net interest margin was 1.65% in 2023, up from 1.42% in 2022.

2022

Net interest income was € 14.0 billion in 2022 compared to € 11.1 billion in 2021, an increase of € 2.9 billion, or 26%, driven by higher interest rates and strong underlying business performance partly offset by lower benefits from the TLTRO III program. Interest income included € 211 million under the TLTRO III program in 2022, whereas 2021 included € 494 million under this program. Overall, the bank’s net interest margin was 1.42% in 2022, an increase of 23 basis points compared to the prior year.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Net gains (losses) on financial assets/liabilities at fair value through profit or loss

in € m.				2023 increase (decrease) from 2022		2022 increase (decrease) from 2021
(unless stated otherwise)	2023	2022	2021	in € m.	in %	in € m.	in %
Trading income	5,506	2,745	1,954	2,761	101	791	41
Net gains (losses) on non-trading financial assets mandatory at fair value through profit or loss	217	(61)	1,106	278	N/M	(1,167)	N/M
Net gains (losses) on financial assets/liabilities designated at fair value through profit or loss	(148)	277	79	(426)	N/M	198	N/M
Total net gains (losses) on financial assets/liabilities at fair value through profit or loss	5,575	2,962	3,139	2,613	88	(177)	(6)

N/M – Not meaningful

2023

Net gains on financial assets/liabilities at fair value through profit or loss were € 5.6 billion in 2023, compared to € 3.0 billion in 2022. The increase of € 2.6 billion, or 88% was driven by positive impacts from interest rate hedges in Corporate & Other and an increase in Asset Management from valuation adjustments on guaranteed funds, which had a corresponding offset in other income. The Investment Bank benefited from the non-recurrence of prior year losses on loan commitments and hedge activities in 2023. These drivers were partly offset by decreases in the Private Bank, mainly due to lower mark-to-market impacts from hedge activities, which had a partial offsetting effect in other income and revaluation losses in the Corporate Bank compared to gains in the prior year.

2022

Net gains on financial assets/liabilities at fair value through profit or loss were € 3.0 billion in 2022, compared to € 3.1 billion in 2021. The decrease of € 177 million, or 6%, was driven by negative impacts from interest rate hedges in Corporate & Other as well as an unfavorable change in the fair value of guarantees in Asset Management which had a corresponding offset in other income. The overall decrease was partly offset by mark-to-market gains on derivatives in Investment Bank driven by the ongoing heightened market activity and strong client flows as well as mark-to-market gains from hedge activities in Private Bank, which had an offsetting effect in other income.

Net interest income and net gains (losses) on financial assets/liabilities at fair value through profit or loss

The bank’s trading and risk management activities include interest rate instruments and related derivatives. Under IFRS, interest and similar income earned from trading instruments and financial instruments at fair value through profit or loss (i.e., coupon and dividend income) and the costs of funding net trading positions are part of net interest income. The bank’s trading activities can periodically shift income between net interest income and net gains (losses) on financial assets/liabilities at fair value through profit or loss depending on a variety of factors, including risk management strategies.

In order to provide a more business-focused discussion, the following table presents net interest income and net gains (losses) on financial assets/liabilities at fair value through profit or loss by corporate division.

in € m.				2023 increase (decrease) from 2022		2022 increase (decrease) from 2021
(unless stated otherwise)	2023	2022	2021	in € m.	in %	in € m.	in %
Net interest income	16,122	13,983	11,117	2,139	15	2,866	26
Total net gains (losses) on financial assets/liabilities at fair value through profit or loss	5,575	2,962	3,139	2,613	88	(177)	(6)
Total net interest income and net gains (losses) on financial assets/liabilities at fair value through profit or loss	21,697	16,945	14,256	4,752	28	2,689	19

Breakdown by corporate division:¹
Corporate Bank	5,065	3,720	2,666	1,344	36	1,055	40
Investment Bank	8,102	8,265	6,891	(163)	(2)	1,374	20
Private Bank	6,382	6,612	4,847	(230)	(3)	1,765	36
Asset Management	(11)	(250)	246	239	(95)	(496)	N/M
Corporate & Other	2,160	(1,402)	(393)	3,562	N/M	(1,009)	N/M
Total net interest income and net gains (losses) on financial assets/liabilities at fair value through profit or loss	21,697	16,945	14,256	4,752	28	2,689	19

N/M – Not meaningful

Prior year’s comparatives aligned to presentation in the current year

¹ This breakdown reflects net interest income and net gains (losses) on financial assets/liabilities at fair value through profit or loss; for a discussion of the corporate divisions’ total revenues by product please refer to Note 4 “Business Segments and related information” of this report

	Deutsche Bank
	Annual Report 2023 on Form 20-F

2023

Total net interest income and net gains (losses) on financial assets/liabilities at fair value through profit or loss were € 21.7 billion in 2023, compared to € 16.9 billion in 2022, an increase of € 4.8 billion. This impact was largely attributable to positive impacts from interest rate hedges as well as an overall increase in net interest income. In the Corporate Bank, total net interest income and net gains (losses) on financial assets/liabilities at fair value through profit or loss increased by € 1.3 billion, primarily due to higher net interest income driven by an improved interest rate environment and continued pricing discipline. Total net interest income and net gains (losses) on financial assets/liabilities at fair value through profit or loss in Investment Bank decreased by € 0.2 billion due to lower net interest income, partly offset by mark-to-market impacts on derivatives in FIC Sales & Trading. Total net interest income and net gains (losses) on financial assets/liabilities at fair value through profit or loss in the Private Bank decreased by € 0.2 billion compared to prior year, driven by mark-to-market impacts from hedge activities, with an offsetting effect in other income, partly offset by higher interest income from an improved interest rate environment. The overall movement was supported by positive impacts in Corporate & Other amounting to approximately € 3.6 billion, including benefits from interest rate hedges, as well as in Asset Management of € 0.2 billion, mainly from a more favorable change in the fair value of guarantees.

2022

Total net interest income and net gains (losses) on financial assets/liabilities at fair value through profit or loss were € 16.9 billion in 2022, compared to € 14.3 billion in 2021, an increase of € 2.7 billion. This was primarily due to higher net interest income driven by an improved interest rate environment and solid underlying business performance. Total net interest income and net gains (losses) on financial assets/liabilities at fair value through profit or loss increased by € 1.8 billion in Private Bank. This impact was largely attributable to higher mark-to-market gains from hedge activities which had an offsetting effect in other income. Higher interest rates and continued business growth also had a positive impact on the year-on-year increase; these were also the main drivers for the increase in Corporate Bank by € 1.1 billion. Total net interest income and net gains (losses) on financial assets/liabilities at fair value through profit or loss in Investment Bank increased by € 1.4 billion due to higher positive mark-to-market impacts on derivatives in FIC Sales & Trading driven by the ongoing heightened market activity and strong clients flows. These overall positive effects were partially offset by negative impacts of € 1.0 billion in Corporate & Other, mainly from valuation and timing differences on derivatives and interest rate hedges, as well as in Asset Management of € 0.5 billion, mainly from a less favorable change in the fair value of guarantees.

Provision for credit losses

2023

Provision for credit losses was € 1.5 billion in 2023, up from € 1.2 billion in 2022 or 31 basis points of average loans reflecting the continued challenging macro-economic and interest rate conditions for parts of the credit portfolio during the year. In particular, the Commercial Real Estate sector, and specifically the office sector, was affected by a post-COVID-19-pandemic driven change in demand and came under further pressure from interest rate increases, which led to higher refinancing risks. Provision for non-performing loans related to Stage 3 was € 1.5 billion, spread across various regions and segments, including a notable share of € 400 million related to Commercial Real Estate, especially affecting the Investment Bank. Stage 1 and Stage 2 provision for performing loans was a release of € 33 million, driven by an improved macro-economic outlook compared to 2022 and benefits from model-related changes.

2022

Provision for credit losses was € 1.2 billion in 2022, up from € 515 million in 2021. The year on year development reflected more challenging macroeconomic conditions during most of 2022 against the backdrop of the war in Ukraine, while 2021 benefited from an economic recovery following the easing of COVID-19 restrictions. Provisions were 25 basis points of average loans. Provisions for non-performing loans related to Stage 3 was € 1.0 billion, spread across regions and segments. Stage 1 and Stage 2 provision for performing loans was € 204 million, driven by deteriorating macro-economic forecasts through most of the year.

The sections “Segment results of operations” and “Risk Report” provide further details on provision for credit losses.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Remaining noninterest income

in € m.				2023 increase (decrease) from 2022		2022 increase (decrease) from 2021
(unless stated otherwise)	2023	2022	2021	in € m.	in %	in € m.	in %
Commissions and fee income¹	9,206	9,838	10,934	(632)	(6)	(1,096)	(10)
Net gains (losses) on financial assets at fair value through other comprehensive income	(0)	(216)	237	216	(100)	(453)	N/M
Net gains (losses) on financial assets at amortized cost	(96)	(2)	1	(94)	N/M	(3)	N/M
Net income (loss) from equity method investments	(38)	152	98	(190)	N/M	54	56
Other income (loss)	387	346	13	40	12	333	N/M
Total remaining noninterest income	9,458	10,118	11,282	(660)	(7)	(1,164)	(10)

¹ includes:
Commissions and fees from fiduciary activities:
Commissions for administration	280	300	357	(19)	(6)	(57)	(16)
Commissions for assets under management	3,700	3,792	3,734	(93)	(2)	58	2
Commissions for other securities business	441	490	398	(49)	(10)	91	23
Total	4,421	4,582	4,489	(161)	(4)	92	2
Commissions, broker’s fees, mark-ups on securities underwriting and other securities activities:
Underwriting and advisory fees	1,105	1,283	2,162	(179)	(14)	(879)	(41)
Brokerage fees	366	540	752	(174)	(32)	(212)	(28)
Total	1,471	1,824	2,914	(353)	(19)	(1,091)	(37)
Fees for other customer services	3,314	3,432	3,530	(119)	(3)	(97)	(3)
Total commissions and fee income	9,206	9,838	10,934	(632)	(6)	(1,096)	(10)

N/M – Not meaningful

Prior year’s comparatives aligned to presentation in the current year

Commissions and fee income

2023

Commissions and fee income was € 9.2 billion in 2023, a decrease of € 632 million or 6% compared to 2022. The decrease was driven by lower intermediary fees and transactional revenues as well as changes in contractual conditions in the Private Bank and lower fee income in the Investment Bank primarily due to lower M&A activities. In addition, the decrease was also driven by lower management fees from unfavorable market conditions coupled with margin compression in Asset Management.

2022

Commissions and fee income was € 9.8 billion in 2022, a decrease of € 1.1 billion or 10% compared to 2021. The decrease was driven by significantly lower Origination & Advisory revenues in Investment Bank reflecting continued challenging industry environment, lower Leveraged Debt Capital Markets revenues and a materially reduced fee pool relative to the previous year. In addition, commission and fee income in Private Bank declined reflecting a more challenging macroeconomic environment. In Asset Management performance fees were significantly lower than the previous year due to the absence of a large Multi Asset performance fee reported in 2021. These were partly offset by an increase in commissions and fee income in Corporate Bank driven by solid underlying business performance.

Net gains (losses) on financial assets at fair value through other comprehensive income

2023

Net gains (losses) on financial assets at fair value through other comprehensive income were € (0) million in 2023 and € (216) million in 2022, with the result in the prior year driven by a sale of bonds and securities from the strategic liquidity reserve.

2022

Net gains (losses) on financial assets at fair value through other comprehensive income were € (216) million in 2022 and € 237 million in 2021, with the result in both periods driven by the sale of bonds and securities from the strategic liquidity reserve.

Net gains (losses) on financial assets at amortized cost

2023

Net gains (losses) on financial assets at amortized cost were € (96) million in 2023 compared to € (2) million in 2022, driven by realized losses on disposal of loans held in the hold to collect portfolio.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

2022

Net gains (losses) on financial assets at amortized cost were € (2) million in 2022 compared to € 1 million in 2021, driven by the hold-to-collect portfolio.

Net income (loss) from equity method investments

2023

Net income (loss) from equity method investments was € (38) million in 2023 compared to € 152 million in 2022, a decrease of € 190 million, mainly related to the downward valuation of the underlying loan assets in Huarong Rongde Asset Management Company Limited as well as a gain on exit in 2022 which did not repeat.

2022

Net income (loss) from equity method investments was € 152 million in 2022 compared to € 98 million in 2021, an increase of € 54 million, or 56%, related to lower impairments in Huarong Rongde Asset Management Company Limited in 2022 as compared to 2021.

Other income (loss)

2023

Other income (loss) was € 387 million in 2023 compared to € 346 million in 2022. The improvement was primarily related to gains in the hedging portfolios and the non-recurrence from gains on disposal of assets held for sale, including a gain from the sale of the Deutsche Bank Financial Advisors business in Italy, as well as from workout activities related to Sal. Oppenheim recognized in other revenues in the prior year. This was partly offset by an unfavorable impact from valuation adjustments on fair value of guarantees in Asset Management, which had a corresponding offset in net gains (losses) on financial assets/ liabilities at fair value through profit and loss.

2022

Other income (loss) was € 346 million in 2022 compared to € 13 million in 2021.The improvement was driven by a favorable impact from valuation adjustments on fair value of guarantees in Asset Management which had a corresponding offsetting effect in net gains (losses) on financial assets/liabilities at fair value through profit or loss, as well as from gain on disposal of assets held for sale, including gains from the sale of the Deutsche Bank Financial Advisors business in Italy and from workout activities related to Sal. Oppenheim recognized in other revenues. This was partly offset by a decrease in income in Private Bank driven by the contra-effect of the aforementioned positive impacts in net gains (losses) on financial assets/liabilities at fair value through profit or loss.

Noninterest expenses

in € m.				2023 increase (decrease) from 2022		2022 increase (decrease) from 2021
(unless stated otherwise)	2023	2022	2021	in € m.	in %	in € m.	in %
Compensation and benefits	11,131	10,712	10,418	418	4	294	3
General and administrative expenses¹	10,112	9,728	10,821	384	4	(1,093)	(10)
Impairment of goodwill and other intangible assets	233	68	5	165	N/M	64	N/M
Restructuring activities	220	(118)	261	338	N/M	(379)	N/M
Total noninterest expenses	21,695	20,390	21,505	1,305	6	(1,115)	(5)
N/M – Not meaningful

¹ includes:
Information Technology	3,755	3,680	4,321	76	2	(641)	(15)
Occupancy, furniture and equipment expenses	1,478	1,429	1,727	49	3	(298)	(17)
Regulatory, tax & insurance²	1,399	1,285	1,395	114	9	(110)	(8)
Professional services³	899	858	924	41	5	(66)	(7)
Banking Services and outsourced operations³	964	881	946	82	9	(64)	(7)
Market Data and Research services	374	378	347	(4)	(1)	31	9
Travel expenses	143	110	46	33	30	64	140
Marketing expenses	203	165	178	37	23	(13)	(7)
Other expenses⁴	899	943	938	(44)	(5)	5	0
Total general and administrative expenses	10,112	9,728	10,821	384	4	(1,093)	(10)

² Includes bank levy of € 528 million in 2023, € 762 million in 2022 and € 553 million in 2021

³ Prior years' comparatives aligned to presentation in the current year

⁴ Includes litigation related expenses of € 311 million in 2023, € 413 million in 2022 and € 466 million in 2021. For more details, please refer to Note 27 “Provisions” of this report

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Compensation and benefits

2023

Compensation and benefits increased by € 418 million or 4% to € 11.1 billion in 2023 compared to € 10.7 billion in 2022. The increase was driven mainly by wage growth, an increase in external workforce as well as an increase in severance costs resulting from the accelerated execution of the bank’s Global Hausbank strategy.

2022

Compensation and benefits increased by € 294 million or 3% to € 10.7 billion in 2022 compared to € 10.4 billion in 2021. The increase was driven primarily by adverse foreign exchange movements, with higher salary costs.

General and administrative expenses

2023

General and administrative expenses increased by € 384 million or 4% to € 10.1 billion in 2023 compared to € 9.7 billion in 2022. The increase was driven by higher expenses in information technology mainly relating to increased vendor and software costs as well as higher operational taxes. This was partly offset by lower litigation expenses which decreased by € 103 million, related to a release of litigation provision and a decrease in bank levies of € 235 million.

2022

General and administrative expenses decreased by € 1.1 billion or 10% to € 9.7 billion in 2022 compared to € 10.8 billion in 2021. The decrease was driven by a significant decline in transformation charges as the bank completed the transformation initiatives announced in 2019. Further reductions were across major cost categories, reflecting the bank’s continued cost reduction efforts. Litigation expenses decreased by € 53 million, partly related to a provision release related to the German Federal Court of Justice (BGH) ruling on pricing arrangements. The declines were partly offset by a year-on-year rise in bank levies of € 210 million.

Impairment of goodwill and other intangible assets

2023

Impairment of goodwill and other intangible assets was € 233 million relating to the impaired goodwill of Numis in the Investment Bank in 2023, compared to € 68 million relating to a historic acquisition of an unamortized intangible asset associated with U.S. mutual fund retail contracts in Asset Management in 2022.

2022

Impairment of goodwill and other intangible assets was € 68 million in 2022, relating to the aforementioned historic acquisition in Asset Management, compared to € 5 million in the Corporate Bank in 2021.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Restructuring

2023

Restructuring activities were charges of € 220 million in 2023 compared to a release of € (118) million in 2022. The charges were driven primarily by Private Bank in the context of the execution of strategic initiatives.

2022

Restructuring activities were a release of € (118) million in 2022 compared to charges of € 261 million in 2021. The development in both periods was driven primarily by Private Bank in the context of the execution of strategic objectives.

Income tax expense

2023

Income tax expense was € 1.5 billion in 2023, compared to an income tax benefit of € 107 million in the prior year. The effective tax rate in 2023 of 19% benefited from positive year end deferred tax asset valuation adjustments of € 1.0 billion, largely reflecting continuously strong performance in the UK.

2022

Income tax benefit in 2022 was € 107 million compared to an income tax expense of € 923 million in 2021. The effective tax rate in 2022 of (2)% benefited from a positive year end deferred tax asset valuation adjustment of € 1.4 billion, reflecting continued strong performance in Deutsche Bank’s U.S. operations.

Net profit (loss)

2023

Net profit in 2023 was € 6.5 billion, up 16% year on year, due to higher net interest income as well as noninterest revenues. These effects were partly offset by an increase in provision for credit losses

as well an increase in income tax expense, including the aforementioned year end deferred tax asset valuation adjustments.

2022

Net profit in 2022 was € 5.6 billion, compared to € 2.6 billion in the prior year. The increase in net profit was primarily driven by strong revenue performance across core businesses, reduced noninterest expenses and the aforementioned tax benefit from a year end deferred tax asset valuation adjustment. Partly offsetting was an increase in provision for credit losses.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Segment results of operations

The following section is a discussion of the results of the business segments. Please refer to Note 4 “Business Segments and related information” to the consolidated financial statements for information regarding:

– Changes in the format of the bank’s segment disclosure

– The framework of the bank’s management reporting systems

Deutsche Bank’s segment reporting follows the organizational structure as reflected in the Group’s internal management reporting systems, which are the basis for assessing the financial performance of the business segments and for allocating resources to them. The segmentation is based on the structure of the Group as of December 31, 2023. Prior years comparatives were aligned to the presentation in the current year.

	2023
in € m. (unless stated otherwise)	Corporate Bank	Investment Bank	Private Bank	Asset Management	Corporate & Other	Total Consolidated
Net revenues¹	7,716	9,160	9,575	2,383	2,321	31,155
Provision for credit losses	266	431	783	(1)	26	1,505
Noninterest expenses
Compensation and benefits	1,537	2,524	2,806	891	3,372	11,131
General and administrative expenses	2,934	4,136	4,742	934	(2,634)	10,112
Impairment of goodwill and other intangible assets	0	233	0	0	0	233
Restructuring activities	(4)	(3)	228	0	(1)	220
Total noninterest expenses	4,466	6,890	7,777	1,825	738	21,695
Noncontrolling interests	0	3	0	163	(166)	0
Profit (loss) before tax	2,984	1,836	1,015	396	1,724	7,955

Assets (in € bn)²	264	658	331	10	54	1,317
Loans (gross of allowance for loan losses, in € bn)	117	101	261	0	6	485
Additions to non-current assets	13	89	90	73	1,853	2,118
Deposits (in € bn)	289	18	308	0	10	625
Average allocated shareholders' equity	13,306	27,593	14,477	5,318	2,456	63,149

Risk-weighted assets (in € bn)	69	140	86	15	40	350
of which: operational risk RWA (in € bn)	6	22	8	3	19	57
Leverage exposure (in € bn)	307	546	339	10	39	1,240
Employees (full-time equivalent)	25,520	19,979	38,451	4,962	1,218	90,130

Post-tax return on average shareholders’ equity³	15.2%	3.8%	4.1%	4.9%	N/M	9.1%
Post-tax return on average tangible shareholders’ equity³	16.6%	4.0%	4.5%	11.3%	N/M	10.2%
Cost/income ratio⁴	57.9%	75.2%	81.2%	76.6%	N/M	69.6%


¹ includes:
Net interest income	5,113	3,013	6,160	(124)	1,960	16,122
Net income (loss) from equity method investments	(6)	(70)	(5)	42	2	(38)
² includes:
Equity method investments	91	413	84	420	5	1,013

N/M – Not meaningful

³ The post-tax return on average shareholders’ equity and average tangible shareholders’ equity at Group level reflects the reported effective tax rate for the Group, which was 19% for the year ended December 31, 2023; for the post-tax return on average shareholders’ equity and average tangible shareholders’ equity of the segments, the Group effective tax rate was adjusted to exclude the impact of permanent differences not attributed to the segments, so that the segment tax rates were 28% for the year ended December 31, 2023; for further information, please refer to “Supplementary Information (Unaudited): Non-GAAP Financial Measures” of this Annual Report

⁴ Noninterest expenses as a percentage of total net revenues, which are defined as net interest income before provision for credit losses plus noninterest income

	Deutsche Bank
	Annual Report 2023 on Form 20-F

	2022
in € m. (unless stated otherwise)	Corporate Bank	Investment Bank	Private Bank	Asset Management	Corporate & Other	Total Consolidated
Net revenues¹	6,337	10,016	9,153	2,608	(1,051)	27,063
Provision for credit losses	335	319	583	(2)	(9)	1,226
Noninterest expenses
Compensation and benefits	1,422	2,376	2,785	899	3,231	10,712
General and administrative expenses	2,786	4,075	4,176	883	(2,192)	9,728
Impairment of goodwill and other intangible assets	0	0	0	68	0	68
Restructuring activities	(19)	15	(113)	0	(2)	(118)
Total noninterest expenses	4,188	6,466	6,848	1,850	1,037	20,390
Noncontrolling interests	0	15	0	174	(190)	0
Profit (loss) before tax	1,814	3,217	1,722	584	(1,890)	5,447

Assets (in € bn)²	258	677	333	10	67	1,344
Loans (gross of allowance for loan losses, in € bn)	122	103	265	0	6	496
Additions to non-current assets	3	4	177	41	2,267	2,494
Deposits (in € bn)	289	16	317	0	7	629
Average allocated shareholders' equity	12,015	26,036	13,557	5,395	3,105	60,109

Risk-weighted assets (in € bn)	74	139	88	13	46	360
of which: operational risk RWA (in € bn)	5	23	8	3	19	58
Leverage exposure (in € bn)	321	530	344	9	36	1,240
Employees (full-time equivalent)	22,161	18,420	37,716	4,778	1,856	84,930

Post-tax return on average shareholders’ equity³	10.0%	8.0%	8.3%	7.4%	N/M	8.2%
Post-tax return on average tangible shareholders’ equity³	10.9%	8.4%	9.0%	17.1%	N/M	9.1%
Cost/income ratio⁴	66.1%	64.6%	74.8%	71.0%	N/M	75.3%


¹ includes:
Net interest income	3,628	3,467	5,223	(65)	1,730	13,983
Net income (loss) from equity method investments	4	50	27	66	6	152
² includes:
Equity method investments	90	501	99	415	20	1,124

N/M – Not meaningful

Prior years comparatives aligned to presentation in the current year

³ The post-tax return on average shareholders’ equity and average tangible shareholders’ equity at Group level reflects the reported effective tax rate for the Group, which was (2)% for the year ended December 31, 2022; for the post-tax return on average shareholders’ equity and average tangible shareholders’ equity of the segments, the Group effective tax rate was adjusted to exclude the impact of permanent differences not attributed to the segments, so that the segment tax rates were 28% for the year ended December 31, 2022; for further information, please refer to “Supplementary Information (Unaudited): Non-GAAP Financial Measures” of this Annual Report

⁴ Noninterest expenses as a percentage of total net revenues, which are defined as net interest income before provision for credit losses plus noninterest income

	Deutsche Bank
	Annual Report 2023 on Form 20-F

	2021
in € m. (unless stated otherwise)	Corporate Bank	Investment Bank	Private Bank	Asset Management	Corporate & Other	Total Consolidated
Net revenues¹	5,153	9,631	8,233	2,708	(186)	25,538
Provision for credit losses	(3)	104	446	5	(36)	515
Noninterest expenses
Compensation and benefits	1,447	2,197	2,808	822	3,145	10,418
General and administrative expenses	3,053	3,843	4,939	846	(1,862)	10,821
Impairment of goodwill and other intangible assets	5	0	0	0	0	5
Restructuring activities	42	47	173	2	(2)	261
Total noninterest expenses	4,547	6,087	7,920	1,670	1,281	21,505
Noncontrolling interests	0	(17)	0	223	(206)	0
Profit (loss) before tax	609	3,458	(133)	809	(1,225)	3,518

Assets (in € bn)²	246	616	310	10	142	1,325
Loans (gross of allowance for loan losses, in € bn)	122	93	254	0	7	477
Additions to non-current assets	17	6	149	32	1,733	1,939
Deposits (in € bn)	270	13	313	0	8	604
Average allocated shareholders' equity	11,101	25,281	13,041	5,128	1,987	56,537

Risk-weighted assets (in € bn)	65	141	85	14	46	352
of which: operational risk RWA (in € bn)	6	25	8	3	20	62
Leverage exposure (fully loaded, in € bn)³	300	530	321	11	62	1,125
Employees (full-time equivalent)	20,560	16,927	37,458	4,514	3,510	82,969

Post-tax return on average shareholders’ equity⁴	3.2%	9.0%	(1.5)%	11.0%	N/M	3.6%
Post-tax return on average tangible shareholders’ equity⁴	3.5%	9.4%	(1.7)%	25.8%	N/M	4.0%
Cost/income ratio⁵	88.2%	63.2%	96.2%	61.7%	N/M	84.2%


¹ includes:
Net interest income	2,605	3,332	4,601	(5)	584	11,117
Net income (loss) from equity method investments	3	(34)	40	81	9	98
² includes:
Equity method investments	72	462	180	349	29	1,091

N/M – Not meaningful

Prior years comparatives aligned to presentation in the current year

³ The leverage ratio exposure is calculated according to CRR as applicable at the reporting date; starting with September 30, 2020, the Group was allowed to exclude certain Euro-based exposures facing Eurosystem central banks from the leverage ratio exposure based on the ECB-decision (EU) 2020/1306 and EU 2021/1074; this exclusion applied until March 31, 2022; the segmental leverage exposures are presented without that exclusion

⁴The post-tax return on average shareholders’ equity and average tangible shareholders’ equity at Group level reflects the reported effective tax rate for the Group, which was 26% for the year ended December 31, 2021; for the post-tax return on average shareholders’ equity and average tangible shareholders’ equity of the segments, the Group effective tax rate was adjusted to exclude the impact of permanent differences not attributed to the segments, so that the segment tax rates were 28% for the year ended December 31, 2021; for further information, please refer to “Supplementary Information (Unaudited): Non-GAAP Financial Measures” of this Annual Report

⁵ Noninterest expenses as a percentage of total net revenues, which are defined as net interest income before provision for credit losses plus noninterest income

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Corporate Bank

				2023 increase (decrease) from 2022		2022 increase (decrease) from 2021
in € m. (unless stated otherwise)	2023	2022	2021	in € m.	in %	in € m.	in %
Net revenues
Corporate Treasury Services	4,366	3,821	3,072	545	14	749	24
Institutional Client Services	1,906	1,587	1,299	319	20	287	22
Business Banking	1,445	930	781	515	55	148	19
Total net revenues	7,716	6,337	5,153	1,379	22	1,185	23
Of which:
Net interest income	5,113	3,628	2,605	1,485	41	1,022	39
Commissions and fee income	2,328	2,356	2,204	(28)	(1)	151	7
Remaining income	275	354	343	(79)	(22)	11	3
Provision for credit losses	266	335	(3)	(68)	(20)	338	N/M
Noninterest expenses
Compensation and benefits	1,537	1,422	1,447	115	8	(26)	(2)
General and administrative expenses	2,934	2,786	3,053	148	5	(267)	(9)
Impairment of goodwill and other intangible assets	0	0	5	0	N/M	(5)	N/M
Restructuring activities	(4)	(19)	42	15	(77)	(61)	N/M
Total noninterest expenses	4,466	4,188	4,547	278	7	(358)	(8)
Noncontrolling interests	0	0	0	0	N/M	0	N/M
Profit (loss) before tax	2,984	1,814	609	1,169	64	1,205	198

Employees (front office, full-time equivalent)¹	7,859	7,444	7,441	415	6	3	0
Employees (business-aligned operations, full-time equivalent)¹	7,853	6,508	5,838	1,345	21	670	11
Employees (allocated central infrastructure, full-time equivalent)¹	9,808	8,209	7,282	1,599	19	927	13
Total employees (full-time equivalent)¹	25,520	22,161	20,560	3,359	15	1,600	8
Total assets (in € bn)^1,2	264	258	246	6	2	12	5
Risk-weighted assets (in € bn)¹	69	74	65	(5)	(7)	9	14
of which: operational risk RWA (in € bn)¹	6	5	6	0	5	(0)	(5)
Leverage exposure (in € bn)¹	307	321	300	(14)	(4)	21	7
Deposits (in € bn)¹	289	289	270	1	0	18	7
Loans (gross of allowance for loan losses, in € bn)¹	117	122	122	(5)	(4)	(1)	(1)
Cost/income ratio³	57.9%	66.1%	88.2%	N/M	(8.2)ppt	N/M	(22.1)ppt
Post-tax return on average shareholders' equity⁴	15.2%	10.0%	3.2%	N/M	5.2ppt	N/M	6.8ppt
Post-tax return on average tangible shareholders’ equity⁴	16.6%	10.9%	3.5%	N/M	5.7ppt	N/M	7.4ppt

N/M – Not meaningful

Prior year’s comparatives aligned to presentation in the current year

¹ As of year-end

² Segment assets represent consolidated view, i.e. the amounts do not include intersegment balances

³ Noninterest expenses as a percentage of total net revenues, which are defined as net interest income before provision for credit losses plus noninterest income

⁴ For the post-tax return on average shareholders’ equity and average tangible shareholders’ equity of the segments, the Group effective tax rate was adjusted to exclude the impact of permanent differences not attributed to the segments, so that the segment tax rates were 28% for the years 2023, 2022 and 2021; for further information, please refer to “Supplementary Information (Unaudited): Non-GAAP Financial Measures” of this Annual Report

2023

Profit before tax of the Corporate Bank was € 3.0 billion for the full year 2023, up from € 1.8 billion in 2022, driven by higher revenues and lower provision for credit losses, partly offset by higher noninterest expenses. Post-tax return on average shareholders’ equity was 15.2%, up from 10.0% in the prior year. Post-tax return on average tangible shareholders’ equity was 16.6%, up from 10.9% in the prior year. The cost/income ratio was 58%, down from 66% in 2022.

Full year net revenues were € 7.7 billion, 22% higher year on year, driven by increased interest rates and continued pricing discipline, while commission and fee income remained essentially flat. Deposit volume remained essentially flat, while loan volume lowered by € 5 billion, or 4%, due to a more selective balance sheet deployment and negative impact from FX movements.

All of the Corporate Bank’s businesses contributed to revenue growth. Corporate Treasury Services net revenues were € 4.4 billion, up 14% year on year, driven by increased interest rates coupled with essentially flat deposit volume. Institutional Client Services net revenues were € 1.9 billion, 20% higher year on year, benefitting from higher interest rates and higher deposit volume. Business Banking net revenues were € 1.4 billion, 55% higher year on year, reflecting higher interest rate and lagging deposit payouts in Germany supported by essentially flat business volumes.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Provision for credit losses in 2023 was € 266 million, or 23 basis points of average loans, compared to provisions of € 335 million, or 27 basis points of average loans, in 2022. The reduction reflects releases of Stage 1 and 2 provisions driven by improved macroeconomic outlook and model changes.

Noninterest expenses were € 4.5 billion, up 7% year on year, mainly due to increased nonoperating costs, internal service cost allocations and noncompensation direct costs.

2022

Profit before tax of the Corporate Bank was € 1.8 billion for the full year 2022, up from € 0.6 billion in 2021, driven by higher revenues and lower noninterest expenses, partly offset by increased provision for credit losses. Post-tax return on average shareholders’ equity was 10.0%, up from 3.2% in the prior year. Post-tax return on average tangible shareholders’ equity was 10.9%, up from 3.5% in the prior year. The cost/income ratio was 66%, down from 88% in 2021.

Full year net revenues were € 6.3 billion, 23% higher year on year. Revenue growth was driven by increased interest rates and continued pricing discipline, higher commission and fee income as well as deposit growth and favorable foreign exchange rate movements. Deposits grew by € 18 billion, or 7%, during the year while loan volume decreased by € 1 billion, or 1%.

All of the Corporate Bank’s businesses contributed to revenue growth. Corporate Treasury Services net revenues were € 3.8 billion, up 24% year on year, driven by increased interest rates across all markets, growth in commission and fee income and higher deposits. Institutional Client Services net revenues were € 1.6 billion, 22% higher year on year, benefitting from higher interest rates and favorable foreign exchange movements. Business Banking net revenues were € 930 million, 19% higher year on year, reflecting transition to a positive interest rate environment in Germany in the second half of 2022 and higher commission and fee income from account repricing.

Provision for credit losses was € 335 million in the year, or 27 basis points of average loans, reflecting the weakened macroeconomic environment, from essentially nil in the prior year.

Noninterest expenses were € 4.2 billion, down 8% year on year, as a positive contribution from noncompensation initiatives and lower nonoperating costs were partly offset by foreign exchange rate movements.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Investment Bank

				2023 increase (decrease) from 2022		2022 increase (decrease) from 2021
in € m. (unless stated otherwise)	2023	2022	2021	in € m.	in %	in € m.	in %
Net revenues
Fixed Income, Currency (FIC) Sales & Trading	7,974	8,935	7,063	(961)	(11)	1,871	26
Debt Origination	843	412	1,573	431	105	(1,161)	(74)
Equity Origination	102	101	544	1	1	(443)	(81)
Advisory	301	485	491	(184)	(38)	(6)	(1)
Origination & Advisory	1,246	998	2,608	249	25	(1,610)	(62)
Other	(60)	84	(40)	(144)	N/M	124	N/M
Total net revenues	9,160	10,016	9,631	(856)	(9)	385	4
Provision for credit losses	431	319	104	112	35	215	N/M
Noninterest expenses
Compensation and benefits	2,524	2,376	2,197	149	6	179	8
General and administrative expenses	4,136	4,075	3,843	61	1	232	6
Impairment of goodwill and other intangible assets	233	0	0	233	N/M	0	N/M
Restructuring activities	(3)	15	47	(18)	N/M	(32)	(68)
Total noninterest expenses	6,890	6,466	6,087	424	7	379	6
Noncontrolling interests	3	15	(17)	(12)	(79)	32	N/M
Profit (loss) before tax	1,836	3,217	3,458	(1,381)	(43)	(241)	(7)

Employees (front office, full-time equivalent)¹	4,940	4,334	4,212	606	14	122	3
Employees (business-aligned operations, full-time equivalent)¹	3,050	3,298	2,928	(248)	(8)	370	13
Employees (allocated central infrastructure, full-time equivalent)¹	11,989	10,788	9,787	1,201	11	1,001	10
Total employees (full-time equivalent)¹	19,979	18,420	16,927	1,559	8	1,493	9
Total assets (in € bn)^1,2	658	677	616	(18)	(3)	61	10
Risk-weighted assets (in € bn)¹	140	139	141	0	0	(1)	(1)
of which: operational risk RWA (in € bn)¹	22	23	25	(2)	(7)	(2)	(7)
Leverage exposure (in € bn)¹	546	530	530	17	3	(1)	(0)
Deposits (in € bn)¹	18	16	13	1	9	4	28
Loans (gross of allowance for loan losses, in € bn)¹	101	103	93	(2)	(2)	10	11
Cost/income ratio³	75.2%	64.6%	63.2%	N/M	10.7ppt	N/M	1.4ppt
Post-tax return on average shareholders’ equity⁴	3.8%	8.0%	9.0%	N/M	(4.2)ppt	N/M	(1.0)ppt
Post-tax return on average tangible shareholders’ equity⁴	4.0%	8.4%	9.4%	N/M	(4.3)ppt	N/M	(1.1)ppt

N/M – Not meaningful

Prior year’s comparatives aligned to presentation in the current year

¹ As of year end

² Segment assets represent consolidated view, i.e., the amounts do not include intersegment balances

³ Noninterest expenses as a percentage of total net revenues, which are defined as net interest income before provision for credit losses plus noninterest income

2023

Profit before tax in 2023 was € 1.8 billion, down € 1.4 billion, or 43% compared to 2022. This reflects a decline of profit before tax in FIC Sales & Trading revenues compared to a very strong prior year, higher costs driven by strategic investments into the business, including the acquisition of Numis, and increased Provision for credit losses. Post-tax return on average shareholders’ equity was 3.8%, down from 8.0% in the prior year. Post-tax return on average tangible shareholders’ equity was 4.0%, down from 8.4% in the prior year. The cost/income ratio in 2023 was 75%, compared to 65% in 2022.

Net revenues were € 9.2 billion, a decrease of € 856 million, or 9% year on year.

Revenues in FIC Sales & Trading were € 8.0 billion, down € 961 million, or 11% compared to 2022, which was the best FIC revenue performance in a decade. Revenues in Rates, Emerging Markets and Foreign Exchange were all significantly lower, reflecting reduced levels of market volatility and activity. Credit Trading revenues were significantly higher due to the improved performance of Credit Flow following investments into the business. Financing revenues were robust and essentially flat to the prior year.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Origination & Advisory revenues were € 1.2 billion, an increase of € 249 million, or 25% year on year. This was primarily driven by the non-recurrence of material leveraged lending markdowns in Leveraged Debt Capital Markets. Investment Grade debt revenues were lower, reflecting a decline in the industry fee pool (source: Dealogic). Advisory revenues were significantly lower due to reduced levels of announced deals coming into 2023. Equity Origination revenues were essentially flat to the prior year.

Other revenues were negative € 60 million, compared to positive € 84 million in 2022. The year on year decrease was materially driven by a loss of € 47 million relating to the impact of debt valuation adjustments on certain derivative liabilities versus a gain of € 49 million in the prior year.

Provision for credit losses was € 431 million, or 42 basis points of average loans, an increase of € 112 million year on year due to increased levels of stage 3 impairments, primarily in relation to Commercial Real Estate.

Noninterest expenses in 2023 were € 6.9 billion, an increase of € 424 million or 7% year on year, primarily driven by an impairment of Goodwill due to the Numis acquisition, as well as strategic investments made across the business and in line with the previously communicated strategy.

2022

Profit before tax was € 3.2 billion in 2022, a decrease of € 241 million versus a very strong prior year. Slightly higher revenues were more than offset by significantly higher provision for credit losses and slightly higher noninterest expenses. Post-tax return on average shareholders’ equity was 8.0%, down from 9.0% in the prior year. Post-tax return on average tangible shareholders’ equity was 8.4%, down from 9.4% in the prior year. The cost/income ratio in 2022 was 65%, compared to 63% in 2021.

Net revenues were € 10.0 billion in 2022, an increase of € 385 million, or 4% compared to 2021.

Revenues in FIC Sales & Trading were € 8.9 billion, an increase of € 1.9 billion, or 26%, versus the prior year, with strong year on year growth across the majority of the franchise. Rates, Foreign Exchange and Emerging Markets revenues were all significantly higher, reflecting heightened levels of market activity, increased client flows and disciplined risk management. Financing revenues were higher, driven primarily by higher net interest income, as a result of increased lending activity. Revenues in Credit Trading were significantly lower due to the non-recurrence of the contribution from a concentrated distressed credit position in the prior year and a challenging market environment.

Origination & Advisory net revenues were € 1.0 billion, a decrease of € 1.6 billion, or 62%, compared to the prior year. Debt Origination revenues were € 412 million, significantly lower than the prior year driven principally by Leveraged Debt Capital Markets, where revenues were impacted by a material decline in the industry fee pool and loan markdowns, which were seen across the industry. Investment Grade debt revenues were also lower, however decreased by less than the industry average (source: Dealogic). Equity Origination revenues of € 101 million were significantly lower, reflecting a material decline in primary equity issuance during the year. Advisory revenues of € 485 million were essentially flat to 2021, in a fee pool that was down approximately 15% (source: Dealogic).

Other revenues were positive € 84 million, compared to negative € 40 million in 2021. The year on year increase was materially driven by a gain of € 49 million relating to the impact of debt valuation adjustments on certain derivative liabilities versus a loss of € 28 million in 2021. Additionally, 2021 was negatively impacted by the reversal of previously recorded Collateralized Loan Obligation hedge gains, which had resulted from the release of underlying provision for credit losses. These did not re-occur in 2022.

Provision for credit losses was € 319 million, or 32 basis points of average loans, an increase of € 215 million versus prior year, primarily driven by a weakened macroeconomic environment whilst the prior year benefited from a post COVID-19 recovery.

Noninterest expenses in 2022 were € 6.5 billion, an increase of € 379 million or 6% compared to prior year, reflecting the impact of foreign exchange translation and increased bank levies.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Private Bank

				2023 increase (decrease) from 2022		2022 increase (decrease) from 2021
in € m. (unless stated otherwise)	2023	2022	2021	in € m.	in %	in € m.	in %
Net revenues:
Private Bank Germany	6,070	5,325	5,006	745	14	319	6
International Private Bank	3,505	3,828	3,226	(322)	(8)	601	19
Premium Banking	986	942	934	44	5	8	1
Wealth Management & Bank for Entrepreneurs	2,520	2,886	2,292	(366)	(13)	593	26
Total net revenues	9,575	9,153	8,233	422	5	920	11
of which:
Net interest income	6,160	5,223	4,601	937	18	622	14
Commissions and fee income	2,852	3,155	3,206	(303)	(10)	(51)	(2)
Remaining income	563	775	426	(212)	(27)	349	82
Provision for credit losses	783	583	446	201	34	137	31
Noninterest expenses:
Compensation and benefits	2,806	2,785	2,808	21	1	(22)	(1)
General and administrative expenses	4,742	4,176	4,939	566	14	(764)	(15)
Impairment of goodwill and other intangible assets	0	0	0	0	N/M	0	N/M
Restructuring activities	228	(113)	173	341	N/M	(285)	N/M
Total noninterest expenses	7,777	6,848	7,920	929	14	(1,072)	(14)
Noncontrolling interests	0	0	0	(0)	(12)	0	N/M
Profit (loss) before tax	1,015	1,722	(133)	(707)	(41)	1,855	N/M

Employees (front office, full-time equivalent)¹	20,599	21,092	21,973	(492)	(2)	(881)	(4)
Employees (business-aligned operations, full-time equivalent)¹	5,637	5,816	6,060	(179)	(3)	(243)	(4)
Employees (allocated central infrastructure, full-time equivalent)¹	12,215	10,808	9,426	1,407	13	1,382	15
Total employees (full-time equivalent)¹	38,451	37,716	37,458	735	2	258	1
Total assets (in € bn)^1,2	331	333	310	(2)	(1)	22	7
Risk-weighted assets (in € bn)¹	86	88	85	(1)	(2)	2	3
of which: operational risk RWA (in € bn)¹	8	8	8	0	0	0	1
Leverage exposure (in € bn)¹	339	344	321	(6)	(2)	24	7
Deposits (in € bn)¹	308	317	313	(10)	(3)	4	1
Loans (gross of allowance for loan losses, in € bn)¹	261	265	254	(4)	(1)	10	4
Assets under Management (in € bn)^1,3	559	518	554	40	8	(36)	(6)
Net flows (in € bn)	29	30	30	(1)	(4)	(0)	(1)
Cost/income ratio⁴	81.2%	74.8%	96.2%	N/M	6.4ppt	N/M	(21.4)ppt
Post-tax return on average shareholders' equity⁵	4.1%	8.3%	(1.5)%	N/M	(4.2)ppt	N/M	9.8ppt
Post-tax return on average tangible shareholders’ equity⁵	4.5%	9.0%	(1.7)%	N/M	(4.6)ppt	N/M	10.7ppt

N/M – Not meaningful

Prior year’s comparatives aligned to presentation in the current year

¹ As of year-end

² Segment assets represent consolidated view, i.e. the amounts do not include intersegment balances

³ The Group defines assets under management as (a) assets held on behalf of customers for investment purposes and/or (b) client assets that are managed by the bank; assets under management are managed on a discretionary or advisory basis, or these assets are deposited with the bank; deposits are considered assets under management if they serve investment purposes; in the Private Bank Germany and Premium Banking, this includes term deposits and savings deposits; in Wealth Management & Bank for Entrepreneurs, it is assumed that all customer deposits are held with the bank primarily for investment purposes; in instances in which Private Bank distributes investment products qualifying as assets under management which are managed by DWS these are reported as assets under management for Private Bank and for Asset Management (DWS) because they are two distinct, independent qualifying services

⁴ Noninterest expenses as a percentage of total net revenues, which are defined as net interest income before provision for credit losses plus noninterest income

2023, 2022 and 2021; for further information, please refer to “Supplementary Information (Unaudited): Non-GAAP Financial Measures” of this Annual Report

2023

Private Bank recorded a profit before tax of € 1.0 billion in 2023, compared to € 1.7 billion in the prior year, a decline of 41%. The year-on-year development reflected significant nonoperating costs and revenue items. Nonoperating costs were € 468 million in 2023, compared to a benefit of € 147 million in 2022. Furthermore, 2022 revenues included € 430 million in specific items which did not recur in 2023. These items impacted key ratios, with the cost/income ratio rising to 81%, from 75% in the prior year, while post-tax return on average shareholders’ equity declined to 4.1%, from 8.3% in 2022 and post-tax return on average tangible shareholders’ equity declined to 4.5%, from 9.0% in the prior year. Excluding nonoperating cost and specific revenue items, profit before tax would have been up 30% year on year.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Net revenues were € 9.6 billion, up 5% year on year, or up 10% if adjusted for the non-recurrence of the aforementioned € 430 million of specific items from last year. These included a gain of approximately € 310 million from the sale of the Deutsche Bank Financial Advisors business in Italy, and positive impacts from Sal. Oppenheim workout activities. Revenue growth was driven by higher net interest income from deposit products, partly offset by lower fee income and lower loan revenues in a rising interest rate environment. The Private Bank attracted net inflows into assets under management of € 29 billion in 2023, with net inflows in both investment products and deposits. Loan development reflected lower client demand, mainly in mortgage loans in Germany and client deleveraging in APAC.

In Private Bank Germany, net revenues grew by 14% to € 6.1 billion as higher net interest income from deposit products more than offset impacts from lower fee income due to changes in contractual and regulatory conditions.

In the International Private Bank, net revenues were € 3.5 billion, down 8% year on year, or up 5% if adjusted for the aforementioned impact of specific items, from non-recurring revenues of approximately € 50 million following the business divestiture in Italy. Higher deposit revenues were offset by lower loan and investment revenues mainly in the APAC region.

Assets under management in the Private Bank were € 559 billion at year end, up € 40 billion in the year. The increase was mainly driven by net inflows of € 29 billion and by a € 19 billion beneficial impact from higher market levels partly offset by € 4 billion negative impact from foreign exchange rate movements.

Provision for credit losses was € 783 million, or 30 basis points of average loans, compared to € 583 million, or 22 basis points of average loans in the prior year. The increase mainly reflected a more difficult macroeconomic environment, higher impacts of single name losses in the International Private Bank and effects from temporary operational backlog related to the Postbank IT migration, while provision for credit losses in 2022 benefited from releases following sales of non-performing loans. The development of the overall portfolio continued to reflect the high quality of the loan book, especially in the retail businesses, and ongoing tight risk discipline.

Noninterest expenses were € 7.8 billion, up 14% year on year, driven predominantly by the aforementioned € 468 million in nonoperating costs, including restructuring and severance of € 346 million and litigation charges of € 123 million, compared to releases of nonoperating costs of € 147 million in 2022. Adjusted costs, which exclude these items, were up 4%, mainly reflecting investments in Group control functions, strategic initiatives, higher internal cost allocations, Postbank service remediation and inflation impacts. These were partly mitigated by continued savings from transformation programs and reduced regulatory charges.

2022

Private Bank recorded a profit before tax of € 1.7 billion in 2022 compared to a loss of € 133 million in the prior year, the highest profit before tax since the formation of Private Bank in 2019. Post-tax return on average shareholders’ equity was 8.3%, up from negative 1.5% in 2021, with post-tax return on average tangible shareholders’ equity rose to 9.0%, up from negative 1.7% in the prior year. The cost/income ratio improved to 75%, down from 96% in the prior year, reflecting growth of 11% in revenues combined with a reduction of 14% in noninterest expenses.

Net revenues grew to € 9.2 billion, up 11% year on year. The increase partly reflected higher specific revenue items, mainly a gain of approximately € 310 million from the sale of the Deutsche Bank Financial Advisors business in Italy, as well as the positive impact of reduced forgone revenues related to the 2021 German Federal Court of Justice (BGH) ruling on pricing agreements. Adjusted for these impacts, net revenues grew by 6% year on year, driven by higher net interest income, foreign exchange rate movements and continued business growth. Business growth was € 41 billion in 2022 and reflected net inflows into assets under management of € 30 billion, including net inflows into investment products of € 25 billion and deposits of € 5 billion, as well as net new client loans of € 11 billion.

Private Bank Germany generated net revenues of € 5.3 billion, up 6% year on year, partly reflecting the reduction in forgone revenues from the BGH ruling. Adjusted for this impact, revenues were up 4% as higher net interest income from deposit products more than offset the impacts of lower loan revenues and fee income in a more challenging macro-economic environment.

In International Private Bank, net revenues were € 3.8 billion, up 19% year on year, and up 9% if adjusted for the aforementioned gain on sale, and for Sal. Oppenheim workout activities. Revenue growth was mainly attributable to higher deposit revenues due to interest rate increases, continued loan book expansion and positive foreign exchange rate movements. Revenues from investment products benefitted from net inflows but were also impacted by a more challenging market environment. International Private Bank attracted net new volumes of € 29 billion across loans and assets under management in the full year, the highest since its formation.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Assets under management in Private Bank declined by € 36 billion to € 518 billion at year end. This development reflected € 56 billion in negative impacts from market developments and a € 15 billion disposal net effect after the sale of the Financial Advisors business in Italy, partly offset by € 30 billion net inflows and a € 6 billion positive impact from foreign exchange rate movements.

Provision for credit losses was € 583 million, or 22 basis points of average loans, partly driven by certain single exposures in the international franchise. Excluding these, the development of the overall portfolio continued to reflect the high quality of the loan book and ongoing tight risk discipline. This compares to € 446 million provision for credit losses in the prior year, which benefitted from a more stable macroeconomic environment.

Noninterest expenses were € 6.8 billion, a reduction of 14% year on year. This development reflected a positive impact from the release of litigation provisions recorded in the prior year related to the BGH ruling, lower restructuring expenses in the context of the execution of strategic objectives and a year-on-year reduction in adjusted costs of 7%. The latter was driven by incremental savings from transformation initiatives including workforce reductions and the closure of more than 170 branches. Ongoing cost management and lower internal service cost allocations also contributed to the reduction in adjusted costs. These effects were partly offset by a negative impact from foreign exchange rate movements.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Asset Management

				2023 increase (decrease) from 2022		2022 increase (decrease) from 2021
in € m. (unless stated otherwise)	2023	2022	2021	in € m.	in %	in € m.	in %
Net revenues
Management fees	2,314	2,458	2,370	(143)	(6)	88	4
Performance and transaction fees	128	125	212	2	2	(86)	(41)
Other	(59)	24	126	(84)	N/M	(102)	(81)
Total net revenues	2,383	2,608	2,708	(225)	(9)	(100)	(4)
Provision for credit losses	(1)	(2)	5	1	(50)	(6)	N/M
Noninterest expenses
Compensation and benefits	891	899	822	(8)	(1)	77	9
General and administrative expenses	934	883	846	50	6	37	4
Impairment of goodwill and other intangible assets	0	68	0	(68)	N/M	68	N/M
Restructuring activities	0	0	2	(0)	(15)	(2)	(95)
Total noninterest expenses	1,825	1,850	1,670	(26)	(1)	180	11
Noncontrolling interests	163	174	223	(12)	(7)	(49)	(22)
Profit (loss) before tax	396	584	809	(188)	(32)	(225)	(28)

Employees (front office, full-time equivalent)¹	2,023	2,024	1,913	(2)	(0)	111	6
Employees (business-aligned operations, full-time equivalent)¹	2,363	2,258	2,159	105	5	100	5
Employees (allocated central infrastructure, full-time equivalent)¹	576	495	442	81	16	53	12
Total employees (full-time equivalent)¹	4,962	4,778	4,514	185	4	264	6
Total assets (in € bn)^1,2	10	10	10	0	2	(0)	(2)
Risk-weighted assets (in € bn)¹	15	13	14	2	18	(2)	(11)
of which: operational risk RWA (in € bn)¹	3	3	3	0	2	0	2
Leverage exposure (in € bn)¹	10	9	11	0	3	(1)	(11)
Assets under Management (in € bn)^1,3	896	821	928	75	9	(106)	(11)
Net flows (in € bn)	28	(20)	48	48	N/M	(68)	N/M
Cost/income ratio⁴	76.6%	71.0%	61.7%	N/M	5.6ppt	N/M	9.3ppt
Post-tax return on average shareholders' equity⁵	4.9%	7.4%	11.0%	N/M	(2.5)ppt	N/M	(3.6)ppt
Post-tax return on average tangible shareholders’ equity⁵	11.3%	17.1%	25.8%	N/M	(5.9)ppt	N/M	(8.7)ppt

N/M – Not meaningful

Prior year’s comparatives aligned to presentation in the current year

¹ As of year end

² Segment assets represent consolidated view, i.e., the amounts do not include intersegment balances

⁴ Noninterest expenses as a percentage of total net revenues, which are defined as net interest income before provision for credit losses plus noninterest income

⁵ For the post-tax return on average shareholders’ equity and average tangible shareholders’ equity of the segments, the Group effective tax rate was adjusted to exclude the impact of permanent differences not attributed to the segments, so that the segment tax rates were 28% for the years 2023, 2022 and 2021; for further information, please refer to “Supplementary Information (Unaudited): Non-GAAP Financial Measures” of this Annual Report

2023

Profit before tax was € 396 million, down 32%, mainly driven by lower revenues. Post-tax return on average shareholders’ equity was 4.9%, down from 7.4% in the prior year. Post-tax return on average tangible shareholders’ equity was 11.3%, down from 17.1% in the prior year. The cost/income ratio was 77%, up from 71% in 2022.

Net revenues in 2023 were € 2.4 billion, down 9% compared to 2022, resulting from significantly lower other revenues driven by higher funding costs and lower investment income, as well as slightly lower management fees due to negative market developments, the composition of the net inflows in Alternatives and margin compression in other product classes. Performance and transaction fees were essentially flat compared to full year 2022.

Noninterest expenses were € 1.8 billion in 2023, down 1%. Adjusted costs increased by 3%, mainly due to higher IT costs to support transformation and higher banking servicing costs driven by a rise in assets under management in the Passive business, while compensation and benefits remained essentially flat. Non-operating costs were significantly lower due to a € 68 million impairment of an unamortized intangible asset related to U.S. mutual fund retail contracts in the prior year.

Net flows were positive € 28 billion, primarily in Passive, Cash and Multi Assets products. This was partly offset by net outflows in Equity and Systematic & Quantitative Investments (SQI), while net flows in Alternatives and Fixed Income being essentially flat. ESG products attracted net inflows of € 5 billion in 2023 primarily into Xtrackers.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Assets under Management increased by € 75 billion, or 9%, to € 896 billion during 2023, mainly driven by positive market developments and net inflows, while foreign exchange rate movements had a negative impact.

The following table provides the development of assets under management during 2023, broken down by product type as well as the respective management fee margins:

in € bn.	Active Equity	Active Fixed Income	Active Multi Asset	Active SQI	Active Cash	Passive	Alternatives	Assets under management
Balance as of December 31, 2022	99	194	68	64	80	199	118	821
Inflows	13	37	15	10	608	93	14	788
Outflows	(15)	(36)	(11)	(11)	(602)	(71)	(13)	(760)
Net Flows	(2)	0	4	(2)	6	21	0	28
FX impact	(1)	(3)	(0)	(0)	(2)	(4)	(2)	(12)
Performance	11	12	3	5	1	31	(5)	57
Other	0	0	1	(1)	0	0	0	1
Balance as of December 31, 2023	107	204	76	66	85	247	111	896
Management fee margin (in bps)	69	11	30	31	4	17	47	27

2022

Profit before tax was € 584 million, down 28%, mainly driven by significantly lower performance fees and other income, and an impairment of intangibles assets. Adjusted for restructuring and severance expenses and impairments of goodwill and other intangible assets, profit before tax was € 689 million, down 17%. Post-tax return on average shareholders’ equity was 7.4%, down from 11.0% in the prior year. Post-tax return on average tangible shareholders’ equity was 17.1%, down from 25.8% in the prior year. The cost/income ratio was 71%, up from 62% in 2021.

Net revenues for 2022 were € 2.6 billion, down 4%, as higher management fees were more than offset by significantly lower performance fees, reflecting the non-recurrence of a performance fee of € 89 million from an Active Asset fund recognized in 2021, and significantly lower other revenues.

Noninterest expenses were € 1.8 billion in 2022, up 11%. Adjusted costs increased by 5%, mainly due to higher compensation and benefits driven by a rise in headcount to support transformation and growth. Non-operating costs include a € 68 million impairment of an unamortized intangible asset related to U.S. mutual fund retail contracts. The cost/income ratio was 71%, up 9 percentage points compared to the prior year.

Net flows were negative € 20 billion, primarily in lower margin products Fixed Income, Cash and Passive, impacted by industry-wide pressure on flows. This was partly offset by net inflows in higher-margin products Multi Asset and Alternatives. ESG products attracted net inflows of € 1 billion in 2022 despite the adverse environment.

Assets under Management decreased by € 106 billion, or 11%, to € 821 billion during 2022, mainly driven by negative market developments and net outflows, while foreign exchange rate movements had a positive impact.

The following table provides the development of assets under management during 2022, broken down by product type as well as the respective management fee margins:

in € bn.	Active Equity	Active Fixed Income	Active Multi Asset	Active SQI	Active Cash	Passive	Alternatives	Assets under management
Balance as of December 31, 2021	116	227	70	77	84	238	115	928
Inflows	16	39	16	10	562	81	17	741
Outflows	(17)	(51)	(10)	(11)	(568)	(88)	(16)	(761)
Net Flows	(1)	(12)	6	(0)	(6)	(7)	1	(20)
FX impact	2	7	0	0	2	7	4	22
Performance	(18)	(28)	(8)	(13)	0	(38)	(2)	(108)
Other	(0)	1	0	(0)	(0)	(1)	0	0
Balance as of December 31, 2022	99	194	68	64	80	199	118	821
Management fee margin (in bps)	71	12	31	29	3	18	50	28

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Corporate & Other

				2023 increase (decrease) from 2022		2022 increase (decrease) from 2021
in € m. (unless stated otherwise)	2023	2022	2021	in € m.	in %	in € m.	in %
Net revenues	2,321	(1,051)	(186)	3,372	N/M	(866)	N/M
Provision for credit losses	26	(9)	(36)	35	N/M	27	(76)
Noninterest expenses
Compensation and benefits	3,372	3,231	3,145	141	4	86	3
General and administrative expenses	(2,634)	(2,192)	(1,862)	(441)	20	(331)	18
Impairment of goodwill and other intangible assets	0	0	0	0	N/M	0	N/M
Restructuring activities	(1)	(2)	(2)	1	(40)	0	(22)
Total noninterest expenses	738	1,037	1,281	(299)	(29)	(244)	(19)
Noncontrolling interests	(166)	(190)	(206)	24	(12)	16	(8)
Profit (loss) before tax	1,724	(1,890)	(1,225)	3,614	N/M	(665)	54

Employees (C&O, net, full-time equivalent)¹	1,218	1,856	3,510	(638)	(34)	(1,654)	(47)
Employees (central infrastructure allocated to businesses, full-time equivalent)¹	34,588	30,300	26,937	4,288	14	3,363	12
Total Employees (full-time equivalent)¹	35,806	32,156	30,447	3,650	11	1,709	6
Risk-weighted assets (in € bn)¹	40	46	46	(6)	(13)	(0)	(0)
Leverage exposure (in € bn)¹	39	36	62	3	7	(25)	(41)

N/M – Not meaningful

Prior year’s comparatives aligned to presentation in the current year

¹ As of year-end

2023

Corporate & Other reported a profit before tax of € 1.7 billion in 2023 compared to a loss before tax of € 1.9 billion in 2022, primarily reflecting higher revenues.

Net revenues were positive € 2.3 billion in 2023, compared to negative € 1.1 billion in 2022. Revenues related to valuation and timing differences were positive € 3.1 billion in 2023, reflecting gains on portfolio hedges of interest rate risk, where fair-value hedge accounting cannot be applied under IFRS as issued by the IASB. Net revenues relating to funding and liquidity were negative € 242 million in 2023, versus negative € 311 million in 2022.

Noninterest expenses were € 738 million in 2023, a reduction of € 299 million, or 29%, compared to 2022. The reduction was primarily driven by positive € 37 million litigation releases in 2023, compared to a charge of € 261 million in 2022. Expenses associated with shareholder activities as defined in the OECD Transfer Pricing guidelines not allocated to the business divisions were € 582 million in 2023, versus € 510 million in 2022.

Noncontrolling interests are deducted from the profit before tax of the divisions and reversed in Corporate & Other. These amounted to € 166 million in 2023, compared to € 190 million in 2022, mainly related to DWS.

2022

Corporate & Other reported a loss before tax of € 1.9 billion in 2022 compared to a loss before tax of € 1.2 billion in 2021, primarily reflecting more-negative net revenues.

Net revenues were negative € 1.1 billion in 2022, compared to negative € 186 million in 2021. Revenues related to valuation and timing differences were negative € 267 million in 2022, compared to positive € 286 million in 2021. Net revenues relating to funding and liquidity were negative € 311 million in 2022, versus negative € 242 million in 2021.

Noninterest expenses were € 1.0 billion in 2022, compared to € 1.3 billion in 2021, a reduction of 19% year-on-year. This reduction was primarily driven by legacy portfolios, reflecting lower internal service charges and a decline in direct compensation and noncompensation costs. Expenses associated with shareholder activities as defined in the OECD Transfer Pricing guidelines not allocated to the business divisions were € 510 million in 2022, versus € 460 million in 2021.

Noncontrolling interests are deducted from the profit before tax of the divisions and reversed in Corporate & Other. These amounted to € 190 million in 2022, compared to € 206 million in 2021, mainly related to DWS.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Financial Position

Assets

in € m. (unless stated otherwise)	Dec 31, 2023	Dec 31, 2022	Absolute Change	Change in %
Cash, central bank and interbank balances	184,556	186,091	(1,535)	(1)
Central bank funds sold, securities purchased under resale agreements and securities borrowed	14,764	11,478	3,286	29
Financial assets at fair value through profit or loss	465,273	482,545	(17,272)	(4)
Of which: Trading assets	125,275	92,867	32,408	35
Of which: Positive market values from derivative financial instruments	251,877	299,856	(47,979)	(16)
Of which: Non-trading financial assets mandatory at fair value through profit and loss	88,047	89,654	(1,608)	(2)
Financial assets at fair value through other comprehensive income	35,546	31,675	3,871	12
Loans at amortized cost	479,353	491,175	(11,822)	(2)
Remaining assets	137,774	141,252	(3,478)	(2)
Of which: Brokerage and securities related receivables	72,566	71,250	1,317	2
Total assets	1,317,266	1,344,217	(26,951)	(2)

Liabilities and Equity

in € m. (unless stated otherwise)	Dec 31, 2023	Dec 31, 2022	Absolute Change	Change in %
Deposits	625,486	629,183	(3,697)	(1)
Central bank funds purchased, securities sold under repurchase agreements and securities loaned	3,042	585	2,456	N/M
Financial liabilities at fair value through profit or loss	366,494	388,138	(21,644)	(6)
Of which: Trading liabilities	44,005	50,616	(6,611)	(13)
Of which: Negative market values from derivative financial instruments	238,278	282,418	(44,140)	(16)
Of which: Financial liabilities designated at fair value through profit or loss	83,727	54,634	29,092	53
Other short-term borrowings	9,620	5,122	4,498	88
Long-term debt	119,390	131,525	(12,135)	(9)
Remaining liabilities	116,903	117,522	(619)	(1)
Of which: Brokerage and securities related payables	81,539	82,711	(1,173)	(1)
Total liabilities	1,240,935	1,272,076	(31,141)	(2)
Total equity	76,330	72,141	4,190	6
Total liabilities and equity	1,317,266	1,344,217	(26,951)	(2)

Movements in Assets and Liabilities

As of December 31, 2023, the total balance sheet of € 1.3 trillion was essentially flat compared to year-end 2022.

Trading assets increased by € 32.4 billion, mainly due to increased exposure in government securities from higher client flows and desk positioning in relation to the current environment. Corresponding liabilities decreased by € 6.6 billion, primarily driven by decreased short positions in government bonds in Europe rates business.

Positive and negative market values of derivative financial instruments decreased by € 48.0 billion and € 44.1 billion, respectively, driven by foreign exchange products primarily due to the weakening of the U.S. dollar against the euro and de-risking.

The decline was also observed in interest rate products due to moves in interest rate curves.

Loans at amortized cost decreased by € 11.8 billion, primarily driven by lower demand and continued selective balance sheet deployment in the Corporate Bank as well as lower mortgage origination in the Private Bank.

Financial liabilities designated at fair value through profit or loss increased by € 29.1 billion, mainly attributable to an increase in securities sold under repurchase agreements as a result of increased secured funding of trading inventory and client activities; as well as an increase in long term debt driven by new issuances in FIC business in the Investment Bank.

Other short-term borrowings increased by € 4.5 billion, mainly driven by newly issued commercial paper.

Long term debt at amortized cost decreased by € 12.1 billion as a result of prepayment of TLTRO and matured issuances, which were partly offset by new issuances during the year.

The overall movement of the balance sheet included a decrease of € 18.6 billion due to foreign exchange rate movements, mainly driven by a weakening of the U.S. dollar versus the euro. The effects from foreign exchange rate movements are embedded in the movement of the balance sheet line items discussed in this section.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Liquidity

Total High Quality Liquid Assets (HQLA) as defined by the Commission Delegated Regulation (EU) 2015/61 and amended by Regulation (EU) 2018/1620 remained flat at € 219 billion for both December 31, 2023 and December 31, 2022. This is primarily due to the repayment of TLTRO liabilities offset by business portfolio movements. The Group maintains additional highly liquid central bank eligible assets, not qualifying as HQLA or subject to transfer restrictions under the HQLA definition. These additional liquid assets were € 42 billion, such that the Group’s total Liquidity Reserves were € 261 billion as at the end of December 31, 2023. As at the end of December 31, 2022 these additional liquid assets were € 37 billion, such that the Group’s total Liquidity Reserves were € 256 billion. The Liquidity Coverage Ratio was 140% at the end fourth quarter of 2023, a surplus to regulatory requirements of € 62 billion as compared to 142% as at the end of fourth quarter of 2022, a surplus to regulatory requirements of € 64 billion.

Equity

Total equity as of December 31, 2023, was € 76.3 billion compared to € 72.1 billion as of December 31, 2022, an increase of € 4.2 billion. This change was driven by a number of factors including the profit attributable to Deutsche Bank shareholders and additional equity components reported for the period of € 6.3 billion and treasury shares distributed under share-based compensation plans of € 407 million. Further contributing factors include unrealized net gains on accumulated other comprehensive income, mainly on derivatives hedging cash flows of € 592 million, net of tax, as well as attributable to financial assets at fair value through other comprehensive income of € 264 million, net of tax. These were partially offset by negative impacts from foreign currency translation of € 1.1 billion, net of tax, primarily resulting from the weakening of the U.S. dollar against the Euro, net purchases of treasury shares of € 857 million, coupons paid on additional equity components of € 498 million as well as cash dividends paid to Deutsche Bank shareholders of € 610 million. Further contributing factors include remeasurement losses related to defined benefit plans of € 148 million, net of tax, a net change in share awards for the period of € 94 million and cash dividends paid to noncontrolling interests of € 100 million.

On February 28, 2023, Deutsche Bank cancelled 26.5 million of its common shares, concluding its 2022 share buyback program. The cancellation reduced the nominal value of the shares by € 68 million. The cancelled shares had been held in common shares in treasury, at their acquisition cost of € 300 million. The difference between the common shares at cost and their nominal value has reduced additional paid-in capital by € 232 million. The shares had already been deducted from the reported total equity on December 31, 2022. Therefore, the cancellation did not reduce the reported total equity in 2023.

On July 25, 2023, the Management Board of Deutsche Bank AG decided to initiate the 2023 share buyback program of up to € 450 million. The share buyback program started on August 2, 2023 and ended on December 8, 2023. In this period Deutsche Bank repurchased 45.5 million common shares. The repurchase of these shares has reduced the reported total equity by € 450 million as of December 31, 2023.

Own Funds

Deutsche Bank’s CRR/CRD Common Equity Tier 1 capital as of December 31, 2023 remains materially flat at € 48.1 billion, compared to December 31, 2022. The Risk-weighted assets (RWA) decreased by € 10.3 billion to € 349.7 billion as of December 31, 2023, compared to € 360.0 billion as of December 31, 2022. The CET 1 capital ratio increased to 13.7% on December 31, 2023, from 13.4% on December 31, 2022, as a result of a decrease in RWA.

The Bank’s Tier 1 capital as of December 31, 2023, amounted to € 56.4 billion, consisting of a CET 1 capital of € 48.1 billion and Additional Tier 1 capital of € 8.3 billion. The Tier 1 capital was € 0.2 billion lower than at the end of 2022, driven by a decrease in AT1 capital. The Tier 1 capital ratio as of December 31, 2023, increased to 16.1% compared to 15.7% as of December 31, 2022.

Total capital as of December 31, 2023 amounted to € 65.0 billion compared to € 66.1 billion at the end of 2022. The Total capital decrease was driven by a decrease in Tier 1 capital of € 0.2 billion and a decrease in Tier 2 capital of € 0.9 billion since year end 2022. The Total capital ratio as of December 31, 2023, increased to 18.6% compared to 18.4% as of December 31, 2022.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Liquidity and capital resources

For a detailed discussion of the bank’s liquidity risk management, please see the Risk Report in this annual report.

Tabular Disclosure of Contractual Obligations

Cash payment requirements outstanding as of December 31, 2023.

Contractual obligations					Payment due by period
in € m.	Total	Less than 1 year	1–3 years	3–5 years	More than 5 years
Long-term debt obligations¹	135,540	34,999	39,785	28,897	31,859
Trust preferred securities^1,2	307	307	0	0	0
Long-term financial liabilities designated at fair value through profit or loss³	10,810	2,170	2,874	3,742	2,024
Future cash outflows not reflected in the measurement of Lease liabilities⁴	4,922	14	225	364	4,318
Lease liabilities¹	5,981	834	908	908	3,331
Purchase obligations	4,388	835	1,072	1,645	836
Long-term deposits¹	24,033	0	10,218	3,189	10,627
Other long-term liabilities	233	155	13	5	60
Total	186,215	39,314	55,095	38,751	53,054

¹ Includes interest payments

² Contractual payment date or first call date

³ Long-term debt and long-term deposits designated at fair value through profit or loss

⁴ For further detail please refer to Note 22 “Leases”

Purchase obligations for goods and services include future payments for, among other things, information technology services and facility management. Some figures above for purchase obligations represent minimum contractual payments and actual future payments may be higher. Long-term deposits exclude contracts with a remaining maturity of less than one year. Under certain conditions future payments for some long-term financial liabilities designated at fair value through profit or loss may occur earlier. See the following notes to the consolidated financial statements for further information: Note 5 “Net Interest Income and Net Gains (Losses) on Financial Assets/Liabilities at Fair Value through Profit or Loss”, Note 22 “Leases”, Note 26 “Deposits” and Note 30 “Long-Term Debt and Trust Preferred Securities”.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Introduction

Disclosures in line with IFRS 7

The following Risk Report provides qualitative and quantitative disclosures about credit, market and other risks in line with the requirements of International Financial Reporting Standard 7 (IFRS 7) Financial Instruments: Disclosures. It also considers the underlying classification and measurement and impairment requirements in IFRS 9 with further details to be found in the “Credit Risk Management and Asset quality” section, in the “Asset quality” section, in the “Credit risk mitigation” section and in Note 1 “Material accounting policies and critical accounting estimates” to the consolidated financial statements. Information which forms part of and is incorporated by reference into the financial statements of this report is marked by a light blue shading throughout this Risk Report.

Since June 30, 2020, the Group applies the transitional arrangements in relation to IFRS 9 as provided in the current CRR/CRD for all CET1 measures.

Disclosures according to Pillar 3 of the Basel III Capital Framework

Deutsche Bank’s disclosures according to Pillar 3 of the Basel 3 Capital Framework, which are implemented in the European Union by the Regulation (EU) No 575/2013 on prudential requirements for credit institutions (Capital Requirements Regulation or CRR), including recent amendments; and supported by the EBA guideline “Final draft implementing technical standards on public disclosures by institutions of the information referred to in Titles II and III of Part Eight of Regulation (EU) No 575/2013“ and related guidelines applicable to Pillar 3 disclosures, are published in the Group’s Pillar 3 Report, which can be found on Deutsche Bank’s website.

Disclosures according to principles and recommendations of the Enhanced Disclosure Task Force

In 2012 the Enhanced Disclosure Task Force (EDTF) was established as a private sector initiative under the auspices of the Financial Stability Board (FSB), with the primary objective to develop fundamental principles for enhanced risk disclosures and to recommend improvements to existing risk disclosures. Deutsche Bank adheres to the disclosure recommendations in this Risk Report and also in its Pillar 3 report.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Risk and capital overview

Key risk metrics

The following section provides qualitative and quantitative disclosures about credit, market, liquidity and other risk metrics and its developments within the twelve months ended December 31, 2023. Disclosures according to Pillar 3 of the Basel III Capital Framework, which are implemented in the European Union by the Capital Requirements Regulation (CRR) and supported by EBA Implementing Technical Standards or the EBA Guideline, will be published in the Group’s separate Pillar 3 report.

The following selected key risk ratios and corresponding metrics form part of the bank’s holistic risk management across individual risk types. The Common Equity Tier 1 ratio, Economic Capital Adequacy ratio, Leverage ratio, Total Loss Absorbing Capacity, Minimum Requirement for Own Funds and Eligible Liabilities, Liquidity Coverage Ratio, Stressed Net Liquidity Position and Net Stable Funding Ratio serve as high-level metrics and are fully integrated across strategic planning, risk appetite framework, stress testing and recovery and resolution planning practices, which are reviewed and approved by the Management Board at least annually.

Common Equity Tier 1 (CET1) Ratio
31.12.2023		13.7%
31.12.2022		13.4%

Economic Capital Adequacy (ECA) Ratio
31.12.2023		205%
31.12.2022		239%

Leverage Ratio
31.12.2023		4.5%
31.12.2022		4.6%

Total loss absorbing capacity (TLAC)
31.12.2023 (Risk Weighted Asset based)		32.6%
31.12.2023 (Leverage Exposure based)		9.2%
31.12.2022 (Risk Weighted Asset based)		32.2%
31.12.2022 (Leverage Exposure based)		9.3%

Liquidity Coverage Ratio (LCR)
31.12.2023		140%
31.12.2022		142%

Risk-Weighted Assets (RWA)
31.12.2023		€ 349.7 bn
31.12.2022		€ 360.0 bn

Economic Capital (EC)
31.12.2023		€ 23.3 bn
31.12.2022		€ 20.9 bn

Leverage Exposure
31.12.2023		€ 1,240 bn
31.12.2022		€ 1,240 bn

Minimum requirement for own funds and eligible liabilities (MREL)
31.12.2023		35.2%
31.12.2022		34.4%



Stressed Net Liquidity Position (sNLP)
31.12.2023		€ 57.7 bn
31.12.2022		€ 48.1 bn

Net Stable Funding Ratio (NSFR)
31.12.2023		121%
31.12.2022		120%

Deutsche Bank regularly assesses the potential impacts of risks on its balance sheet and profitability through portfolio reviews and stress tests. Stress tests are also used to test the resilience of Deutsche Bank’s strategic plans. The results of these tests indicate that the currently available capital and liquidity reserves, in combination with available mitigation measures, are sufficient to withstand periods of potential stress.

The Group concludes that the risks, as described above or in the following sections, to which Deutsche Bank is exposed to, including potential impacts on its business strategy, provide a true and fair picture of its risk profile.

For further details please refer to sections “Risk profile”, “Risk appetite and capacity”, “Risk and capital plan”, “Stress testing”, “Recovery and resolution planning”, “Risk and capital management”, “Capital, leverage ratio, TLAC and MREL”, “Liquidity coverage ratio”, and “Stress testing and scenario analysis”.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Risk profile

Deutsche Bank’s mix of business activities results in diverse risk taking. The Group measures key risks inherent to the respective business models through the total economic capital metric, which captures the business division’s risk profile and considers cross-risk effects at group level.

Corporate Bank’s risk profile mainly arises from the products and services offered in Corporate Treasury Services (including Trade Finance, Lending and Corporate Cash Management), Strategic Corporate Lending and Business Banking. Economic capital demand in these segments arises largely from credit risk.

Investment Bank’s risk profile is dominated by its financing and trading activities, which give rise to all major risk types. Credit risk in the Investment Bank is broadly distributed across business units but most prominent in Fixed Income & Currencies and Leveraged Debt Capital Markets. Market risk arises mainly from trading and market making activities.

Private Bank’s risk profile comprises credit risks from business with German and international retail clients, business clients and wealth management clients as well as non-trading market risks from investment risk, modelling of client deposits and credit spread risk.

Asset Management, as a fiduciary asset manager, invests money on behalf of clients. As such, the main risk drivers are non-financial. The economic capital demand for market risk is mainly driven by non-trading market risks, which arise from guaranteed products and co-investments in the funds.

Corporate & Other’s risk profile embeds a range of different risk drivers including those pertaining to Treasury, certain corporate items, and legacy portfolios. The economic capital demand mainly comprises of non-trading market risk from interest rate risk in Treasury, structural foreign exchange risk, pension risk and equity compensation risk, credit risk from Treasury’s investments, strategic risk from tax-related risks and software asset risks and operational risk from legacy portfolios.

The table below shows Deutsche Bank’s overall risk position as measured by the economic capital demand calculated for credit, market, operational and strategic risk for the dates specified. Deutsche Bank’s overall economic risk position also considers diversification benefits across risk types.

Risk profile of Deutsche Bank’s business divisions as measured by economic capital

	Dec 31, 2023
in € m. (unless stated otherwise)	Corporate Bank	Investment Bank	Private Bank	Asset Management	Corporate & Other	Total	Total (in %)
Credit risk	2,612	4,395	2,182	48	2,639	11,875	51
Market risk	801	2,009	1,346	217	3,955	8,328	36
Operational risk	445	1,729	613	278	1,507	4,572	20
Strategic risk	0	0	0	0	1,874	1,874	8
Diversification benefit¹	(460)	(1,197)	(589)	(130)	(1,009)	(3,385)	(15)
Total EC	3,399	6,936	3,551	413	8,967	23,265	100
Total EC in %	15	30	15	2	39	100	N/M

¹ Diversification benefit across credit, market, operational and strategic risk

	Dec 31, 2022
in € m. (unless stated otherwise)	Corporate Bank	Investment Bank	Private Bank	Asset Management	Corporate & Other	Total	Total (in %)
Credit risk	2,760	4,259	2,344	53	2,386	11,802	56
Market risk	343	1,177	662	180	3,994	6,355	30
Operational risk	424	1,852	611	273	1,507	4,668	22
Strategic risk	0	0	0	0	1,854	1,854	9
Diversification benefit¹	(440)	(1,308)	(543)	(162)	(1,325)	(3,778)	(18)
Total EC	3,088	5,980	3,073	344	8,416	20,900	100
Total EC in %	15	29	15	2	40	100	N/M

¹ Diversification benefit across credit, market, operational and strategic risk

² Prior year’s comparatives aligned to presentation in the current year

	Deutsche Bank
	Annual Report 2023 on Form 20-F

As of December 31, 2023, Deutsche Bank’s economic capital demand amounted to € 23.3 billion, which was € 2.4 billion or 11% higher than € 20.9 billion economic capital demand as of December 31, 2022. This was driven by an increase in market risk economic capital demand and a lower diversification benefit across risk types, which was partly offset by a decrease in economic capital demand for operational risk.

The economic capital demand for market risk totaled to € 8.3 billion as of December 31, 2023, which was € 2.0 billion or 31% higher compared to year-end 2022.

The increase was mainly driven by the annual recalibration of the model’s distribution parameters, a reduction in net short credit spread exposure arising from the Group’s defined benefit pension plan assets, an increase in trading inventory to support market making and client flow in the Global Rates and Credit Trading businesses within the Investment Bank and a

change in behavioral modelling assumptions of client deposits within the Private Bank.

The inter-risk diversification benefit of the economic capital demand across credit, market, operational and strategic risk totaled to € 3.4 billion as of December 31, 2023, which was € 0.4 billion or 10% lower compared to year-end 2022. This decrease was mainly driven by the introduction of a compensating control for a shortcoming in the modeling of the operational risk distribution within the diversification calculation.

The operational risk economic capital usage totaled to € 4.6 billion as of December 31, 2023, which was € 0.1 billion or 2% lower than the € 4.7 billion economic capital usage as of December 31, 2022. In line with the development of the Group’s RWA for operational risk, the decrease was mainly driven by a more favorable development of Deutsche Bank´s internal loss profile feeding into the capital model. A detailed description is provided in section “Operational risk management”.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Risk and capital framework

Risk management principles

Deutsche Bank’s business model inherently involves taking risks. Risks can be financial and non-financial and include on and off-balance sheet risks. Deutsche Bank’s objective is to create sustainable value in the interests of the company taking into consideration shareholders, employees and other company related stakeholders. The risk management framework contributes to this by aligning planned and actual risk taking with risk appetite as expressed by the Management Board, while being in line with available capital and liquidity.

Deutsche Bank’s risk management framework consists of various components, which include the established internal control mechanisms. Principles and standards are set for each component:

– Organizational structures must follow the Three Lines of Defense (“3LoD”) model with a clear definition of roles and responsibilities for all risk types

– The 1st Line of Defense (“1st LoD”) refers to those roles in the Bank whose activities generate risks, whether financial or non-financial, and who own and are accountable for these risks. The 1st LoD manages these risks within the defined risk appetite, establishes an appropriate risk governance and risk culture, and adheres to the risk type frameworks defined by the 2nd Line of Defense (“2nd LoD”)

– The 2nd LoD refers to the roles in the Bank who define the risk management framework for a specific risk type. The 2nd LoD independently assesses and challenges the implementation of the risk type framework and adherence to the risk appetite, and acts as an advisor to the 1st LoD on how to identify, assess and manage risks.

– The 3rd Line of Defense (“3rd LoD”) is Group Audit, which is accountable for providing independent and objective assurance on the adequacy of the design, operating effectiveness and efficiency of the risk management system and systems of internal control

– Every employee must act as a risk manager consistent with the bank’s risk appetite, risk management standards and values

– The Management Board approved risk appetite must be cascaded and adhered to across all dimensions of the Group, with appropriate consequences in the event of a breach

– Risks must be identified and assessed

– Risks must be actively managed including appropriate risk mitigation and effective internal control systems

– Risks must be measured and reported using accurate, complete and timely data using approved models

– Regular stress tests must be performed against adverse scenarios and appropriate crisis response planning must be established

The Group promotes a strong risk culture where every employee must fully understand and take a holistic view of the risks which could result from their actions, understand the consequences and manage them appropriately against the risk appetite of the bank. The bank expects employees to exhibit behaviors that support a strong risk culture in line with the bank’s Code of Conduct. To promote this, Deutsche Bank’s policies require that risks taken (including against risk appetite) must be taken into account during the bank’s performance assessment and compensation processes. This expectation continues to be reinforced through communications campaigns and mandatory training courses for all DB employees. In addition, Management Board members and senior management frequently communicate the importance of a strong risk culture to support a consistent tone from the top.

Deutsche Bank’s risk management and internal control system is described in more detail in Deutsche Bank’s Pillar 3 report (specifically in the section “Risk management objectives and policies, Enterprise Risk”). The risk management and internal control system also covers sustainability-related objectives (as outlined in the Non-Financial Report 2023, specifically in the chapters “Sustainability strategy and implementation” and “Climate risk”).

The Management Board is of the opinion that a risk management framework and internal control system has been established which is, in its entirety, appropriate and effective for the bank’s business model and risk profile.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Risk governance

Deutsche Bank’s operations throughout the world are regulated and supervised by relevant authorities in each of the jurisdictions in which the bank conducts business. Such regulation focuses on licensing, capital adequacy, liquidity, risk concentration, conduct of business as well as organizational and reporting requirements. The European Central Bank (ECB) in connection with the competent authorities of EU countries which joined the Single Supervisory Mechanism via the Joint Supervisory Team act in cooperation as Deutsche Bank’s primary supervisors to monitor the bank’s compliance with the German Banking Act and other applicable laws and regulations.

Several layers of management provide cohesive risk governance:

– Deutsche Bank’s Supervisory Board is informed regularly on the risk situation, risk management and risk controlling, including reputational risk related items as well as material litigation cases; it has formed various committees to handle specific topics (for a detailed description of these committees, please see the “Report of the Supervisory Board”, as well as chapter “Supervisory Board” in the “Corporate Governance Report”)

– At the meetings of the Risk Committee, the Management Board reports on current and forward-looking risk exposures, portfolios, on risk appetite and strategy and on matters deemed relevant for the assessment and oversight of the risk situation of Deutsche Bank AG; it also reports on loans requiring a Supervisory Board resolution pursuant to law or the Articles of Association; the Risk Committee advises on issues related to the overall risk appetite, aggregate risk position and the risk strategy and keeps the Supervisory Board informed of its activities

– The Regulatory Oversight Committee, among other responsibilities, monitors the Management Board’s measures that promote the company’s compliance with legal requirements, authorities’ regulations and the company’s own policies; it also reviews the bank’s codes of conduct and ethics as well as its policy framework, and, upon request, supports the Risk Committee in monitoring and analyzing the bank’s legal and reputational risks; the Management Board informs the committee about contacts with regulators with a significant relevance for the business activity

– The Audit Committee, among other matters, supports the Supervisory Board in monitoring the effectiveness of the risk management system, particularly the internal control system and the internal audit system, as well as the Management Board’s remediation of deficiencies identified

– The Management Board is responsible for managing Deutsche Bank Group in accordance with the law, the Articles of Association and its Terms of Reference with the objective of creating sustainable value in the interest of the company, thus taking into consideration the interests of the shareholders, employees and other company related stakeholders; the Management Board is responsible for ensuring a proper business organization, encompassing appropriate and effective risk management, as well as compliance with legal requirements and internal guidelines; the Management Board established the Group Risk Committee as the central forum for review and decision on material risk and capital-related topics; the Group Risk Committee generally meets once a week; it has delegated some of its duties to individuals and sub-committees; the Group Risk Committee and its sub-committees are described in more detail below

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Risk management governance structure of the Deutsche Bank Group

'Please unpack the Result.zip and reopen this file.'

The following functional committees are central to the management of risk at Deutsche Bank:

–

The Group Risk Committee has various duties and dedicated authority, including approval of new or changed material risk and capital models and review of the inventory of risks, high-level risk portfolios, risk exposure developments, and internal and regulatory Group-wide stress testing results; in addition, the Group Risk Committee reviews and recommends items for Management Board approval, such as key risk management principles, the Group risk appetite statement, the Group recovery plan and the contingency funding plan, over-arching risk appetite parameters, and recovery and escalation indicators; the Group Risk Committee also supports the Management Board during Group-wide risk and capital planning processes

– The Non-Financial Risk Committee oversees, governs and coordinates the management of non-financial risks in Deutsche Bank Group and establishes a cross-risk and holistic perspective of the key non-financial risks of the Group, including conduct and financial crime risk; it is tasked to define the non-financial risk appetite tolerance framework, to monitor and control the effectiveness of the non-financial risk operating model (including interdependencies between business divisions and control functions), and to monitor the development of emerging non-financial risks relevant for the Group

– The Group Reputational Risk Committee is responsible for the oversight, governance and coordination of reputational risk management and provides for a look-back and a lessons learnt process; matters are referred to the Group Reputational Risk Committee in exceptional circumstances – this may be the case if a matter is declined by the Regional Reputational Risk Committee and appealed by the business division, or if the Regional Reputational Risk Committee cannot reach a two-thirds majority decision; it provides guidance on Group-wide reputational risk matters, including communication of sensitive topics, to the appropriate levels of Deutsche Bank Group; the Regional Reputational Risk Committees which are sub-committees of the Group Reputational Risk Committee, are responsible for the oversight, governance and coordination of the management of reputational risk in the respective regions on behalf of the Management Board

– The Enterprise Risk Committee has been established with a mandate to focus on enterprise-wide risk trends, events and cross-risk portfolios, bringing together risk experts from various risk disciplines; as part of its mandate, the Enterprise Risk Committee approves the group risk inventory, certain country and industry threshold increases, and scenario design outlines for more severe group-wide stress tests as well as reverse stress tests; it reviews group-wide stress test results in accordance with risk appetite, reviews the risk outlook, emerging risks and topics with enterprise-wide risk implications; it oversees the climate and environmental risk framework

– The Product Governance Committee has the mandate to ensure that there is appropriate oversight, governance and coordination of product governance in the Group by establishing a cross-risk and holistic perspective of key financial and non-financial risks associated with products and transactions throughout the lifecycle

	Deutsche Bank
	Annual Report 2023 on Form 20-F

– The Financial Resource Management Council is an ad-hoc governance body, chaired by the Chief Financial Officer and the Chief Risk Officer, with delegated authority from the Management Board, to oversee financial crisis management at the bank; the Financial Resource Management Council provides a single forum to oversee execution of both the contingency funding plan and the Group recovery plan; the council recommends upon mitigating actions to be taken in a time of anticipated or actual capital or liquidity stress; specifically, the Financial Resource Management Council is tasked with analyzing the bank’s capital and liquidity position, in anticipation of a stress scenario recommending proposals for capital and liquidity related matters and overseeing the execution of decisions

– The Group Asset & Liability Committee has been established by the Management Board with the mandate to optimize the sourcing and deployment of the bank’s balance sheet and financial resources within the overarching risk appetite set by the Management Board

Deutsche Bank’s Chief Risk Officer, who is a member of the Management Board, has Group-wide, supra-divisional responsibility for establishing a risk management framework with appropriate identification, measurement, monitoring, mitigation and reporting of liquidity, credit, market, enterprise, model and non-financial risks (including operational and reputational); however, frameworks for certain risks are established by other functions as per the business allocation plan.

The Chief Risk Officer has direct management responsibility for the Chief Risk Office function. Risk management and control duties in the Chief Risk Office function are generally assigned to specialized risk management units focusing on the management of

– Specific risk types

– Risks within a specific business

– Risks in a specific region.

These specialized risk management units generally handle the following core tasks:

– Foster consistency with the risk appetite set by the Management Board and applied to business divisions and their business units

– Determine and implement risk and capital management policies, procedures and methodologies that are appropriate to the businesses within each division

– Establish and approve risk limits

– Conduct periodic portfolio reviews to keep the portfolio of risks within acceptable parameters

– Develop and implement risk and capital management infrastructures and systems that are appropriate for each division

Chief Risk Officers for each business division as well as each region, having a holistic view of the respective business, challenge and influence the divisional and regional strategies, risk awareness and ownership as well as their adherence to risk appetite.

While operating independently from each other and the business divisions, the Finance and Risk functions have the joint responsibility to quantify and verify the risk that the bank assumes.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Risk appetite and capacity

Risk appetite expresses the aggregate level and types of risk that Deutsche Bank is willing to assume to achieve strategic objectives, as defined by a set of quantitative metrics and qualitative statements. Risk capacity is defined as the maximum level of risk that can be assumed given Deutsche Bank’s capital and liquidity base, risk management and control capabilities, and regulatory constraints.

Risk appetite is an integral element in business planning processes via risk strategy and plan, to promote the appropriate alignment of risk, capital and performance targets, while at the same time considering risk capacity and appetite constraints from both financial and non-financial risks. Compliance of the plan with risk appetite and capacity is also tested under stressed market conditions. Top-down risk appetite serves as the limit for risk-taking for the bottom-up planning from the business functions.

The Management Board reviews and approves risk appetite and capacity on an annual basis, or more frequently in the event of unexpected changes to the risk environment, with the aim of ensuring that they are consistent with the Group’s strategy, business and regulatory environment and stakeholders’ requirements.

In order to determine risk appetite and capacity, different group level triggers and thresholds on a forward-looking basis are set and the escalation requirements for further action are defined. Deutsche Bank assigns risk metrics that are sensitive to the material risks to which Deutsche Bank is exposed and which function as indicators of financial health. In addition to that, the risk and recovery management framework is linked with the risk appetite framework.

Reports relating to risk profile as compared to Deutsche Bank’s risk appetite and strategy and the monitoring thereof are presented regularly up to the Management Board. In the event that desired risk appetite is breached, a predefined escalation governance matrix is applied so these breaches are highlighted to the appropriate governance bodies.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Risk and capital plan

Strategic and capital plan

Deutsche Bank conducts annually an integrated strategic planning process which lays out the development of our future strategic direction for the Group and for the business areas. The strategic plan aims to create a holistic perspective on capital, funding and risk under risk-return considerations. This process translates long-term strategic targets into measurable short- to medium-term financial targets and enables intra-year performance monitoring and management. Thereby the Group aims to identify growth options by considering the risks involved and the allocation of available capital resources to drive sustainable performance. Risk-specific portfolio strategies complement this framework and allow for an in-depth implementation of the risk strategy on portfolio level, addressing risk specifics including risk concentrations.

The strategic planning process consists of two phases: a top-down target setting and a bottom-up substantiation.

In a first phase – the top-down target setting – Deutsche Bank’s key targets for profit and loss (including revenues and costs), capital supply, capital demand as well as leverage, funding and liquidity are defined and discussed for the group and the key business areas. In this process step, the targets for the next five years are based on the global macro-economic outlook and the expected regulatory framework. Subsequently, the targets are challenged and approved by the Management Board.

In a second phase, the top-down targets are substantiated bottom-up by detailed business unit plans, which consist of a month by month operative plan for year one; years two and three are planned per quarter and years four and five are annual plans. The proposed bottom-up plans are reviewed and challenged by Finance and Risk and are discussed individually with the respective business heads. Thereby, the specifics of the business are considered, and concrete targets decided in line with the bank’s strategic direction. The bottom-up phase includes the preparation of plans for key legal entities to review local risk and capitalization levels. Stress tests complement the strategic plan to consider the resilience of the plan against adverse market conditions.

The resulting Strategic and Capital Plan is presented to the Management Board for discussion and approval. The final plan is furthermore presented to the Supervisory Board.

The Strategic and Capital Plan is designed to support the Groups’ vision of being a leading German bank with strong European roots and a global network and aims to ensure:

– Balanced risk adjusted performance across business areas and units

– High risk management standards with focus on risk concentrations

– Compliance with regulatory requirements

– Strong capital and liquidity position

– Stable funding and liquidity strategy allowing for business planning within the liquidity risk appetite and regulatory requirements

The Strategic and Capital Planning process allows us to:

– set earnings and key risk and capital adequacy targets considering the bank’s strategic focus and business plans

– assess our capital adequacy with regard to internal and external requirements (i.e., economic capital and regulatory capital)

– apply appropriate stress test analyses’ to assess the impact on capital demand, capital supply and liquidity

All externally communicated financial targets are monitored on an ongoing basis in appropriate management committees. Any projected shortfall versus targets is discussed together with potential mitigating strategies with the aim to ensure that we remain on track to achieve our targets. Amendments to the strategic and capital plan must be approved by the Management Board. Achieving our externally communicated solvency targets ensures that we also comply with the solvency ratio related

Group Supervisory Review and Evaluation Process (SREP) requirements as articulated by our home supervisor.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

In December 2022, the ECB informed Deutsche Bank of its decision effective January 1, 2023, that the bank’s Pillar 2 requirement changed compared to 2022. This results in ECB’s Pillar 2 requirement to 2.70% of RWA. As of December 31, 2023, Deutsche Bank needs to maintain on a consolidated basis a CET 1 ratio of at least 11.16%, a Tier 1 ratio of at least 13.17% and a Total Capital ratio of at least 15.84%. The CET 1 requirement comprises the Pillar 1 minimum capital requirement of 4.50%, the Pillar 2 requirement (SREP add-on) of 1.52%, the capital conservation buffer of 2.50%, the countercyclical buffer of 0.45% and the systemic risk buffer of 0.19% (both subject to changes throughout the year) as well as the higher of our G-SII/O-SII buffer of 2.00%. Correspondingly, the Tier 1 capital requirement includes additionally a Tier 1 minimum capital requirement of 1.50% plus a Pillar 2 requirement of 0.51%, and the Total Capital requirement includes further a Tier 2 minimum capital requirement of 2.00% and a Pillar 2 requirement of 0.68%. Also, following the results of the 2023 SREP, the ECB communicated to Deutsche Bank an individual expectation to hold a further Pillar 2 CET 1 capital add-on, commonly referred to as the Pillar 2 guidance. The capital add-on pursuant to the Pillar 2 guidance is separate from and in addition to the Pillar 2 requirement. The ECB has stated that it expects banks to meet the Pillar 2 guidance although it is not legally binding, and failure to meet the Pillar 2 guidance does not lead to automatic restrictions of capital distributions.

On December 11, 2023, Deutsche Bank was informed by the ECB of its decision regarding prudential minimum capital requirements for 2024 that applies from January 1, 2024, onwards, following the results of the 2023 SREP. The decision set ECB’s Pillar 2 requirement to 2.65% of RWA, effective as of January 1, 2024, of which at least 1.49% must be covered by CET 1 capital and 1.99% by Tier 1 capital.

Internal capital adequacy assessment process

Deutsche Bank’s internal capital adequacy assessment process (ICAAP) consists of several well-established components which ensure that Deutsche Bank maintains sufficient capital to cover the risks to which the bank is exposed on an ongoing basis:

– Risk identification and assessment: The risk identification process forms the basis of the ICAAP and results in an inventory of risks for the Group; all risks identified are assessed for their materiality; further details can be found in section “Risk identification and assessment”

– Capital demand/risk measurement: Risk measurement models are applied to quantify the regulatory and economic capital demand which is required to cover all material risks except for those which cannot be adequately limited by capital e.g. liquidity risk; further details can be found in sections “Risk profile” and “Capital, Leverage Ratio, TLAC and MREL”

– Capital supply: Capital supply quantification refers to the definition of available capital resources to absorb unexpected losses; further details can be found in sections “Capital, Leverage Ratio, TLAC and MREL” and “Economic Capital Adequacy”

– Risk appetite: Deutsche Bank has established a set of qualitative statements, quantitative metrics and thresholds which express the level of risk that Deutsche Bank is willing to assume to achieve strategic objectives; threshold breaches are subject to a dedicated governance framework triggering management actions aimed to safeguard capital adequacy; further details can be found in sections “Risk appetite and capacity” and “Key risk metrics”

– Capital planning: The risk appetite thresholds for capital adequacy metrics constitute boundaries which have to be met in the capital plan to safeguard capital adequacy on a forward-looking basis; further details can be found in section “Strategic and capital plan”

– Stress testing: Capital plan figures are also considered under various stress test scenarios to prove resilience and overall viability of the bank; regulatory and economic capital adequacy metrics are also subject to regular stress tests throughout the year to constantly evaluate Deutsche Bank’s capital position in hypothetical stress scenarios and to detect vulnerabilities under stress; further details can be found in section “Stress testing”

– Capital adequacy assessment: Although capital adequacy is constantly monitored throughout the year, the ICAAP concludes with a dedicated annual capital adequacy statement (CAS); the assessment consists of a Management Board statement about Deutsche Bank’s capital adequacy, which is linked to specific conclusions and management actions to be taken to safeguard capital adequacy on a forward-looking basis

As part of its ICAAP, Deutsche Bank distinguishes between a normative and economic internal perspective. The normative internal perspective refers to a multi-year assessment of the ability to fulfil all capital-related legal requirements and supervisory demands on an ongoing basis under a baseline and adverse scenario. The economic internal perspective refers to an internal process using internal economic capital demand models and an internal economic capital supply definition. Both perspectives focus on maintaining the continuity of Deutsche Bank on an ongoing basis.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Stress testing

Deutsche Bank has implemented a stress test framework to satisfy internal as well as external stress test requirements. The internal stress tests are based on in-house developed methods and inform a variety of risk management use cases (risk type specific as well as cross risk). Internal stress tests form an integral part of Deutsche Bank’s risk management framework complementing traditional risk measures. The cross-risk stress test framework, the Group Wide Stress Test Framework (GWST), serves a variety of bank management processes, in particular the strategic planning process, the ICAAP, the risk appetite framework and capital allocation. Capital plan stress testing is performed to assess the viability of the bank’s capital plan in adverse circumstances and to demonstrate a clear link between risk appetite, business strategy, capital plan and stress testing. The regulatory stress tests, e.g. the EBA stress test and the US-based CCAR (Comprehensive Capital Analysis and Review) stress tests, are strictly following the processes and methodologies as prescribed by the regulatory authorities.

Deutsche Bank’s internal stress tests are performed on a regular basis in order to assess the impact of severe economic downturns as well as adverse bank-specific events on the bank’s risk profile and financial position. The bank’s stress testing framework comprises regular sensitivity-based and scenario-based approaches addressing different severities and regional hotspots. All material risk types are included in the stress testing activities. These activities are complemented by portfolio- and country-specific downside analysis as well as further regulatory requirements, such as annual reverse stress tests and additional stress tests requested by regulators on group or legal entity level. The applied methodologies undergo regular scrutiny from Deutsche Bank’s internal validation team (Model Risk Management) to ensure they correctly capture the impact of a given stress scenario.

The initial phase of Deutsche Bank’s cross-risk stress test consists of defining a macroeconomic downturn scenario by ERM Risk Research in cooperation with business specialists through a formal governance forum, the Scenario Design Council. ERM Risk Research monitors the political and economic developments around the world and maintains a macro-economic heat map that identifies potentially harmful scenarios. Based on quantitative models and expert judgments, economic parameters such as foreign exchange rates, interest rates, GDP growth or unemployment rates are set accordingly and define the narrative under which the bank’s solvency position is assessed. The scenario parameters are translated into specific risk drivers by subject matter experts in the risk units. Based on the bank’s internal model framework for stress testing, the following major metrics are calculated under stress: risk-weighted assets, impacts on profit and loss and economic capital by risk type. These results are aggregated at the Group level, and key metrics such as the CET 1 ratio, ECA ratio, MREL ratio and Leverage Ratio under stress are derived. Stress impacts on the Liquidity Coverage Ratio (LCR) and other Liquidity indicators are also considered. The time-horizon of internal stress tests is between one and five years, depending on the use case and scenario assumptions. The Stress Test Council (STC) reviews the final stress results followed by selected presentations to the Enterprise Risk Committee (ERC). After comparing these results against the bank’s defined risk appetite, the ERC also discusses specific mitigation actions to remediate the stress impact in alignment with the overall strategic and capital plan if certain limits are breached. The results also feed into the recovery planning which is crucial for the recoverability of the bank in times of crisis. The outcome is presented to senior management up to the Management Board to raise awareness on the highest level as it provides key insights into specific business vulnerabilities and contributes to the overall risk profile assessment of the bank.

The group wide stress tests performed in 2023 indicated that the bank’s capitalization together with available mitigation measures as defined in the Group Recovery Plan is adequate to reach the internally set stress exit levels.

The cross-risk reverse stress test leverages the GWST framework and is typically performed annually in order to challenge Deutsche Bank’s business model by determining scenarios which would cause the bank to become unviable. Such a reverse stress test is based on a hypothetical macroeconomic scenario enriched by idiosyncratic events based on the top risks monitored by each risk type. Comparing the non-viability scenario to the current economic environment, the probability of occurrence of such a hypothetical stress scenario is considered to be extremely low. Given this, it is the bank’s view that its business continuity is not at risk.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

As required by ECB, the bank has performed multi-year stress tests as part of the annual strategic planning process for 2023 using two adverse heatmap scenarios, namely a “EU led hard landing scenario” and a “Higher for longer interest rates” scenario.

In addition to the GWST that includes all material risk types and major revenue streams, Deutsche Bank has individual stress test programs in place for all relevant risk metrics in line with regulatory requirements. The relevant stress test programs are described in the sections about the individual risk management methods.

Deutsche Bank also took part in two major regulatory stress tests performed in 2023 i.e. the bi-annual European EBA stress test as well as the US-based CCAR stress test, as implemented pursuant to the U.S. Dodd-Frank Act. The outcome of the EBA stress test is feeding into the SREP process for Deutsche Bank. In the CCAR context, the Federal Reserve (FRB) disclosed the stress capital depletion for DB USA Corporation and DWS USA Corporation; this showed that each entity remains very well-capitalized even after withstanding a hypothetical severe stress environment.

Also in 2023, the bank ran an internal climate transition risk stress test across its global portfolios focusing on a near-term time horizon (three years) under severe assumption of a front-loaded disorderly transition. The results of the stress test are integrated into relevant processes, including risk appetite, business planning and ICAAP.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Risk measurement and reporting systems

Overview

Deutsche Bank’s risk measurement systems support regulatory reporting and external disclosures, as well as internal management reporting across all risk types. The risk infrastructure incorporates the relevant legal entities and business divisions and provides the basis for reporting on risk positions, capital adequacy and limit, threshold, or target utilization to the relevant functions on a regular and ad-hoc basis. Established units within the CFO and CRO function assume responsibility for measurement, analysis and reporting of risk while promoting sufficient quality and integrity of risk-related data and consider, where relevant, the principles for effective risk data aggregation and risk reporting as per the Basel Committee on Banking Supervision's regulation number 239 (“BCBS 239”). The Group’s risk management systems are reviewed by Group Audit following a risk-based audit approach.

Deutsche Bank’s reporting is an integral part of Deutsche Bank’s risk management framework and as such aligns with the organizational setup by delivering consistent information on Group level and for material legal entities as well as breakdowns by risk types, business division and material business units.

The following principles guide Deutsche Bank’s “risk measurement and reporting” practices:

– Deutsche Bank monitors risks taken against risk appetite and risk-reward considerations on various levels across the Group, e.g. Group, business divisions, material business units, material legal entities, risk types, material asset classes, portfolio and counterparty levels

– Risk reporting is required to be accurate, clear, useful and complete and must convey reconciled and validated risk data to communicate information in a concise manner to ensure, across material Financial and Non-Financial Risks, the bank’s risk profile is clearly understood

– Senior risk committees, such as the Enterprise Risk Committee and the Group Risk Committee, as well as the Management Board who are responsible for risk and capital management receive regular reporting (as well as ad-hoc reporting as required)

– Dedicated teams within Deutsche Bank proactively manage material Financial and Non-Financial Risks and must ensure that required management information is in place to enable proactive identification and management of risks and avoid undue concentrations within a specific Risk Type and across risks (Cross-Risk view)

In applying the previously mentioned principles, Deutsche Bank maintains a common basis for all risk reports and aims to minimize segregated reporting efforts to allow Deutsche Bank to provide consistent information, which only differs by granularity and audience focus.

Key risk metrics

The Bank identifies a large number of metrics within its risk measurement systems which support regulatory reporting and external disclosures, as well as internal management reporting across risks and for material risk types. Deutsche Bank designates a subset of those as “Key Risk Metrics” that represent the most critical ones for which the Bank places an appetite, limit, threshold or target at Group level and / or are reported routinely to senior management for discussion or decision making. The identified Key Risk Metrics include Capital Adequacy and Liquidity metrics; further details can be found in the section “Key risk metrics”.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Key risk reports

While a large number of reports are used across the Bank, Deutsche Bank designates a subset of these as “Key Risk Reports” that are critical to support Deutsche Bank’s Risk Management Framework through the provision of risk information to senior management and therefore enable the relevant governing bodies to monitor, steer and control the Bank’s risk taking activities effectively. To ensure that Key Risk Reports meet recipients’ requirements, report producing functions regularly check whether the Key Risk Reports are clear and useful.

The main reports on risk and capital management that are used to provide Deutsche Bank’s central governance bodies with information relating to the Group risk profile are the following:

– The monthly Risk and Capital Profile report is a Cross-Risk report, provides a comprehensive view of Deutsche Bank’s risk profile and is used to inform the ERC, the Group Risk Committee as well as the Management Board and subsequently the Risk Committee of the Supervisory Board; the Risk and Capital Profile includes Risk Type specific and Business-Aligned overviews and Enterprise-wide risk topics; it also includes updates on Key Group Risk Appetite Metrics and other Key Portfolio Risk Type Control Metrics as well as updates on Key Risk Developments, highlighting areas of particular interest with updates on corresponding risk management strategies

– The Weekly Risk Report is a weekly briefing covering high-level topical issues across key risk areas and is submitted every Friday to the Members of the Enterprise Risk Committee, the Group Risk Committee and the Management Board and subsequently to the Members of the Risk Committee of the Supervisory Board; the Weekly Risk Report is characterized by the ad-hoc nature of its commentary as well as coverage of themes and focuses on more volatile risk metrics

– Deutsche Bank runs several Group-wide macroeconomic stress tests. A monthly Risk Appetite scenario serves the purpose to set and regularly monitor the bank’s stress loss appetite; in addition, there are topical scenarios which are reported to and discussed in the Enterprise Risk Committee and escalated to the Group Risk Committee if deemed necessary; the stressed key performance indicators are benchmarked against the Group Risk Appetite thresholds

While the above reports are used at a Group level to monitor and review the risk profile of Deutsche Bank holistically, there are other, supplementing standard and ad-hoc management reports, including for Risk Types or Focus Portfolios, which are used to monitor and control the risk profile.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Recovery and resolution planning

In the EU, the Single Resolution Mechanism Regulation (SRM Regulation) and the Bank Recovery and Resolution Directive (BRRD) aim at reducing the likelihood of another financial crisis, enhance the resilience of institutions under stress, and eventually support the long-term stability of the financial systems without exposing taxpayers’ money to losses.

In line with the provisions of the SRM Regulation and the BRRD (which were mainly implemented in Germany by the German Recovery and Resolution Act (Sanierungs- und Abwicklungsgesetz, SAG)), Deutsche Bank maintains a recovery and resolution planning framework designed to identify and manage the impact of adverse events in a timely and coordinated manner.

The bank maintains a Group recovery plan specifying measures to restore the financial position following a significant deterioration of its financial situation. The Group recovery plan is updated at least annually and approved by the Management Board.

The Group resolution plan on the other hand is prepared by the resolution authorities, rather than by the bank itself. Deutsche Bank works closely with the Single Resolution Board and the Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin) who establish the Group resolution plan for Deutsche Bank, which is currently based on a single point of entry bail-in as the preferred resolution strategy. Under the single point of entry bail-in strategy, the parent entity Deutsche Bank AG would be recapitalized through a write-down and/or conversion to equity of capital instruments (Common Equity Tier 1, Additional Tier 1, Tier 2) and other eligible liabilities in order to stabilize the Group. Within one month after the application of the bail-in tool to recapitalize an institution, the BRRD (as implemented in the SAG) requires such institution to prepare a business reorganization plan, addressing the causes of failure and aiming to restore the institution's long-term viability. To further support and improve operational continuity of the bank for resolution planning purposes, Deutsche Bank has completed additional preparations, such as adding termination stay clauses into client financial agreements governed by non-EU law and including continuity provisions into key service agreements. Financial contracts and service agreements governed by EU law are already covered by statutory laws which prevent termination solely due to any resolution measure.

The BRRD requires banks in EU member states to maintain minimum requirements for own funds and eligible liabilities to make resolution credible by establishing sufficient loss absorption and recapitalization capacity. Apart from MREL-requirements, Deutsche Bank, as a global systemically important bank, is subject to global minimum standards for Total Loss-Absorbing Capacity, which set out strict requirements for the amount and eligibility of instruments to be maintained for bail-in purposes. In particular, TLAC instruments must be subordinated (including so-called senior non-preferred debt, but also in the form of regulatory capital instruments) to other senior liabilities. This ensures that a bail-in would be applied first to equity and TLAC instruments, which must be exhausted before a bail-in may affect other senior (preferred) liabilities such as senior preferred plain vanilla bonds, debt instruments that are structured, deposits and derivatives.

In the United States, Deutsche Bank AG is required under Title I of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the Dodd-Frank Act), as amended, to prepare and submit to the Federal Reserve Board and the Federal Deposit Insurance Corporation (FDIC) either a full or targeted resolution plan (the U.S. Resolution Plan) on a timeline prescribed by such agencies. The U.S. Resolution Plan must demonstrate that the Deutsche Bank AG has the ability to execute and implement a strategy for the orderly resolution of its designated U.S. material entities and operations. For foreign-based companies subject to these resolution planning requirements such as Deutsche Bank AG, the U.S. Resolution Plan relates only to subsidiaries, branches, agencies and businesses that are domiciled in or whose activities are carried out in whole or in material part in the United States. Deutsche Bank’s U.S. Resolution Plan describes the single point of entry strategy for Deutsche Bank’s U.S. material entities and operations and prescribes that DB USA Corporation, one of the bank’s intermediate holding companies, would provide liquidity and capital support to its U.S. material entity subsidiaries and ensure their solvent wind-down outside of applicable resolution proceedings.

Deutsche Bank filed its first ‘targeted’ U.S. Resolution Plan on December 17, 2021, which described the core elements of Deutsche Bank’s U.S. resolution strategy, such as capital, liquidity, and recapitalization strategies, as well as how Deutsche Bank has integrated lessons learned from its response to the COVID-19 pandemic into its resolution planning process. On December 16, 2022, the Federal Reserve Board and the FDIC (Agencies) announced the results of their review of Deutsche Bank’s 2021 U.S. Resolution Plan, as well as those of other banks, and did not find any shortcomings or deficiencies in Deutsche Bank’s plan. In their feedback letter to Deutsche Bank, the agencies noted areas where further progress will help improve resolvability. Proposed guidance was also issued in August 2023 by the Agencies which will amend resolution planning requirements for certain foreign filers, including Deutsche Bank. Deutsche Bank’s next full resolution plan submission is due to be filed by March 31, 2025.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Risk and Capital Management

Capital management

Deutsche Bank’s Treasury function manages solvency, capital adequacy, leverage, and bail-in capacity ratios at Group level and locally in each region, as applicable. Treasury implements Deutsche Bank’s capital strategy, which itself is developed by the Group Risk Committee and approved by the Management Board. Treasury, directly or through the Group Asset and Liability Committee, manages, among other things, issuance and repurchase of shares and capital instruments, hedging of capital ratios against foreign exchange swings, setting capacities for key financial resources, the design of shareholders’ equity allocation, and regional capital planning. The bank is fully committed to maintaining Deutsche Bank’s sound capitalization both from an economic and regulatory perspective considering both book equity based on IFRS accounting standards, regulatory and economic capital as well as specific capital requirements from rating agencies. The bank continuously monitors and adjusts Deutsche Bank’s overall capital demand and supply to always achieve an appropriate balance.

Treasury manages the issuance and repurchase of capital instruments, namely Common Equity Tier 1, Additional Tier 1 and Tier 2 capital instruments as well as TLAC/MREL eligible debt instruments. Treasury constantly monitors the market for liability management trades. Such trades represent a countercyclical opportunity to create Common Equity Tier 1 capital by buying back Deutsche Bank’s issuances below par.

Treasury manages the sensitivity of Deutsche Bank’s CET 1 ratio and capital towards swings in foreign currency exchange rates against the euro. For this purpose, Treasury develops and executes suitable hedging strategies within the constraints of a Management Board approved Risk Appetite. Capital invested into Deutsche Bank’s foreign subsidiaries and branches is either not hedged, partially hedged or fully hedged. Thereby, Treasury aims to balance effects from foreign exchange rate movements on capital, capital deduction items and risk weighted assets in foreign currency. In addition, Treasury also accounts for associated hedge cost and implications on market risk weighted assets.

Resource limit setting

Usage of key financial resources is influenced through the following governance processes and incentives.

Target resource capacities are reviewed in Deutsche Bank’s annual strategic plan in line with Deutsche Bank’s CET 1 and Leverage Ratio ambitions. As a part of Deutsche Bank’s quarterly process, the Group Asset and Liability Committee approves divisional resource limits for total capital demand (defined as the sum of RWA and certain RWA equivalents of Capital Deduction Items and certain RWA equivalents of Capital Buffer Requirements items) and leverage exposure that are based on the strategic plan but adjusted for market conditions and the short-term outlook. Limits are enforced through a close monitoring process and an excess charging mechanism.

Overall regulatory capital requirements are principally driven by either Deutsche Bank’s CET 1 ratio (solvency) or leverage ratio (leverage) requirements, whichever is the more binding constraint. For the internal capital allocation, the combined contribution of each segment to the Group’s Common Equity Tier 1 ratio, the Group’s Leverage ratio and the Group’s Capital Loss under Stress are weighted to reflect their relative importance and level of constraint to the Group. Contributions to the Common Equity Tier 1 ratio and the Leverage ratio are measured through RWA and Leverage Ratio Exposure (LRE). The Group’s Capital Loss under Stress is a measure of the Group’s overall economic risk exposure under a defined stress scenario. Goodwill, other intangible assets, and business-related regulatory capital deduction items included in total capital demand are directly allocated to the respective segments, supporting the calculation of the allocated tangible shareholders equity and the respective rate of return.

Most of Deutsche Bank’s subsidiaries and several of Deutsche Bank’s branches are subject to legal and regulatory capital requirements. In developing, implementing, and testing Deutsche Bank’s capital and liquidity position, the bank fully takes such legal and regulatory requirements into account. Any material capital requests of Deutsche Bank’s branches and subsidiaries across the globe are presented to and approved by the Group Investment Committee prior to execution.

Further, Treasury is a member of Deutsche Bank’s Pensions Committee and represented in relevant Investment Committees overseeing the management of the assets of the largest Deutsche Bank pension funds in Germany. These investment committees set the investment strategy for these funds in line with the bank’s investment objective to protect the capital base and distribution capacity of the bank.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Credit Risk Management and Asset Quality

Credit risk framework

Credit risk arises from all transactions where actual, contingent or potential claims against any counterparty, borrower, obligor or issuer (which Deutsche Bank refers to collectively as “counterparties”) exist, including those claims that Deutsche Bank plans to distribute. It captures the risk of loss because of a deterioration of a counterparty’s creditworthiness or the failure of a counterparty to meet the terms of any contract with Deutsche Bank or otherwise perform as agreed.

Based on the Risk Type Taxonomy, credit risk is grouped into four material categories, namely default/migration risk, transaction/settlement risk (exposure risk), mitigation risk and credit concentration risk. This is complemented by a regular risk identification and materiality assessment.

– Default/migration risk as the main element of credit risk, is the risk that a counterparty defaults on its payment obligations or experiences material credit quality deterioration increasing the likelihood of a default

– Transaction/settlement risk is the risk that arises from any existing, contingent or potential future positive exposure

– Mitigation risk is the risk of higher losses due to risk mitigation measures not performing as anticipated

– Credit concentration risk is the risk of an adverse development in a specific single counterparty, country, industry or product leading to a disproportionate deterioration in the risk profile of Deutsche Bank’s credit exposures to that counterparty, country, industry or product

Deutsche Bank manages its credit risk using the following philosophy and principles:

– Credit Risk is only accepted:

– for adopted clients

– after completed appropriate due diligence led by the respective origination teams as 1st LoD

– New products and changes to existing products have to be assessed within DB Group’s new product approval (NPA) framework

– If a Rating has been assigned in line with agreed and approved processes

– If all credit relevant exposures are correctly reflected in the relevant risk systems

– If plans for an orderly termination of the risk positions have been considered

– Credit Risk is assumed within the applicable Risk Appetite limits set for divisions, countries, industries, etc.

– P&L responsibility for credit exposures is owned by the originating Group Division

– Risk taken needs to be adequately compensated

– Risk must be continuously monitored and managed across 1st and 2nd LoD

– Credit standards are applied consistently across all Group Divisions in order to maintain a favorable risk profile in line with the Risk Appetite

– Collateral or other risk mitigating, hedging or rating transfer instruments, which can be an alternative source of repayment do not substitute for underwriting standards and a thorough assessment of the debt service ability of a counterparty has to be performed during the credit process; essentially rating transfer instruments are supporting documents (e.g., comfort letters or parental guarantees) helping the debtor to prevent a default; consequently, this effect can be considered in the Probability of Default

– Deutsche Bank strives to adequately secure, guarantee or hedge outright cash risk and longer tenor-exposures; this approach does usually not include lower risk short-term transactions and facilities supporting specific trade finance or other lower risk products where the margin allows for adequate loss coverage

– Deutsche Bank measures and consolidates globally all exposure and facilities to the same Obligor; a Key Contact Person (KCP) within a Credit Team is assigned to each group of connected clients (Obligor) to globally co-ordinate the Credit Risk process for the respective obligor

– Deutsche Bank has established within Credit Risk Management – where appropriate – specialized teams for deriving internal client ratings, analyzing and approving transactions or covering workout clients; for transaction approval purposes, structured credit risk management teams are aligned to the respective products or specific risks to ascertain adequate product expertise

– Where required, Deutsche Bank has established processes to manage credit exposures at a legal entity or regional level

– To meet the requirements of Article 190 CRR, Deutsche Bank has allocated the various control requirements for the credit processes to 2nd LoD units best suited to perform such controls

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Measuring Credit Risk

Credit risk is measured by credit rating, regulatory and internal capital demand and other key components like credit limits as mentioned below.

The credit rating is an essential part of the bank’s underwriting and credit process and provides – amongst others – a cornerstone for risk appetite determination on an individual counterparty level, credit decision and transaction pricing as well the determination of regulatory capital demand for credit risk. Each counterparty must be rated, and each rating has to be reviewed at least annually supported by ongoing monitoring of counterparties. A credit rating is a prerequisite for any credit limit established/ approved. For each credit rating, the appropriate rating approach has to be applied and the derived credit rating has to be established in the relevant systems. Specific rating approaches have been established to best reflect the respective characteristics of exposure classes, including specific product types, central governments and central banks, institutions, corporates and retail.

Counterparties in the bank’s non-retail portfolios are rated by Deutsche Bank’s independent Credit Risk Management function partly using automated Rating systems. Given the largely homogeneous nature of the retail portfolio, counterparty creditworthiness and ratings are predominately derived by utilizing an automated decision engine. Country risk-related ratings are provided by Enterprise Risk Management (ERM) Risk Research.

Deutsche Bank’s rating analysis is based on a combination of qualitative and quantitative factors. When rating a counterparty Deutsche Bank applies in-house assessment methodologies, scorecards and the bank’s 21-grade rating scale for evaluating the creditworthiness of the bank’s counterparties.

Changes to existing credit models and introduction of new models are approved by the Regulatory Credit Risk Model Committee (RCRMC) chaired by the Head of Credit Risk Management before the models are used for credit decisions and capital calculation for the first time or before they are significantly changed. Separately, for all model changes and for new models an approval by Model Risk Management is required. Proposals with high impact are recommended for approval to the Group Risk Committee. Furthermore, regulatory approval may also be required. The model validation is performed independently of model development by Model Risk Management. The results of the regular validation processes as stipulated by internal policies are brought to the attention of the RCRMC, even if the validation results do not lead to a change.

Deutsche Bank measures risk-weighted assets to determine the regulatory capital demand for credit risk using “advanced”, “foundation” and “standard” approaches of which “advanced” and “foundation” approaches are approved by the bank’s regulator.

The advanced Internal Ratings Based Approach (IRBA) is the most sophisticated approach available under the regulatory framework for credit risk and allows Deutsche Bank to make use of the bank’s internal credit rating models as well as internal estimates of specific further risk parameters. These methods and parameters represent long-used key components of the internal risk measurement and management process supporting the credit approval process, the economic capital and expected loss calculation and the internal monitoring and reporting of credit risk. The relevant parameters include the probability of default (PD), the loss given default (LGD) and the maturity (M) driving the regulatory risk-weight and the credit conversion factor (CCF) as part of the regulatory exposure at default (EAD) estimation. For the majority of derivative counterparty exposures as well as securities financing transactions (SFT), Deutsche Bank makes use of the internal model method (IMM) in accordance with CRR to calculate EAD. For most of the bank’s internal rating systems more than seven years of historical information is available to assess these parameters. Deutsche Bank’s internal rating methodologies aim at point-in-time rather than a through-the-cycle rating, but in line with regulatory solvency requirements, they are calibrated based on long-term averages of observed default rates.

The foundation IRBA is an approach available under the regulatory framework for credit risk allowing institutions to make use of their internal rating methodologies while using pre-defined regulatory values for all other risk parameters. Parameters subject to internal estimates include the PD while the LGD and the CCF are defined in the regulatory framework. Foundation IRBA remains in place for some exposures stemming from ex-Postbank.

Deutsche Bank applies the standardized approach to a subset of its credit risk exposures. The standardized approach measures credit risk either pursuant to fixed risk weights, which are predefined by the regulator, or through the application of external ratings. Deutsche Bank assigns certain credit exposures permanently to the standardized approach in accordance with Article 150 CRR. These are predominantly exposures to the Federal Republic of Germany and other German public sector entities as well as exposures to central governments of other European Member States that meet the required conditions. These exposures make up the majority of the exposures carried in the standardized approach and receive predominantly a risk weight of zero percent. For internal purposes, however, these exposures are subject to an internal credit assessment and fully integrated in the risk management and economic capital processes.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

In addition to the above-described regulatory capital demand, Deutsche Bank determines the internal capital demand for credit risk via an economic capital model.

Deutsche Bank calculates economic capital for the default risk, country risk and settlement risk as elements of credit risk. In line with the bank’s economic capital framework, economic capital for credit risk is set at a level to absorb with a probability of 99.9% very severe aggregate unexpected losses within one year. Deutsche Bank’s economic capital for credit risk is derived from the loss distribution of a portfolio via Monte Carlo Simulation of correlated rating migrations. The loss distribution is modeled in two steps. First, individual credit exposures are specified based on parameters for the probability of default, exposure at default and loss given default. In a second step, the probability of joint defaults is modeled through the introduction of economic factors, which correspond to geographic regions and industries. The simulation of portfolio losses is then performed by an internally developed model, which takes rating migration and maturity effects into account. Effects due to wrong-way derivatives risk (i.e., the credit exposure of a derivative in the default case is higher than in non-default scenarios) are modeled by applying the bank’s own alpha factor when deriving the exposure at default for derivatives and securities financing transactions under the CRR. Deutsche Bank allocates expected losses and economic capital derived from loss distributions down to transaction level to enable management on transaction, customer and business level.

Besides the credit rating, as a key component for managing the bank’s credit portfolio, including individual transaction approval and the setting of risk appetite, Deutsche Bank establishes credit limits for all credit exposures. Credit limits set forth maximum credit exposures Deutsche Bank is willing to assume over specified periods. In determining the credit limit for a counterparty, Deutsche Bank considers the counterparty’s credit quality above others by reference to its internal credit rating. Credit limits and credit exposures are both measured on a gross and net basis where net is derived by deducting appropriate hedges and certain collateral from respective gross figures. For derivatives, Deutsche Bank looks at current market values and the potential future exposure over the relevant time horizon, which is based upon the bank’s legal agreements with the counterparty.

IFRS 9 Impairment

In the following chapter, the Group provides an overview of the IFRS 9 impairment framework and how it is embedded into Deutsche Bank‘s credit risk management activities. The disclosure provides a description of the Group‘s IFRS 9 model and methodology, changes implemented in 2023 as well as key model assumptions. This chapter also highlights novel risks in focus in 2023 and how Deutsche Bank assessed impact of these latest developments on its ECL calculations, and in particular, how the model properly takes into account the impacts of the uncertainties noted in 2023 and at year end, along with the impact from reasonable changes in the Group’s key model assumptions.

These credit risk management activities and assessments are embedded in the bank’s overall control and governance framework for credit risk which includes the estimation of expected credit losses under IFRS 9 and the governance around the models used. These activities include, but are not limited to, regular emerging risk reviews as well as portfolio deep dives, day to day risk management on the level of individual borrowers, as well as regular model validations. Further explanations are provided regarding management overlays applied to the credit loss allowance, how reviews of relevant assumptions and inputs to the ECL calculation are performed and how as part of the model reviews, potential model imprecision and whether any overlays were necessary, are assessed. The Group also presents background on management overlays recorded at the end of 2022, throughout 2023 and at the end of 2023. To provide additional transparency on the impact of reasonable changes to the key assumptions, model sensitivities are presented in a separate section which concludes with the key drivers for the IFRS 9 model results.

Description of IFRS 9 model and methodology

The impairment requirements of IFRS 9 apply to all credit exposures that are measured at amortized cost or fair value through other comprehensive income and to off balance sheet lending commitments, such as loan commitments and financial guarantees. For purposes of the bank’s impairment approach, the Group refers to these instruments as financial assets.

The Group determines its allowance for credit losses in accordance with IFRS 9 as follows:

– Stage 1 reflects financial assets where it is assumed that credit risk has not increased significantly after initial recognition

– Stage 2 contains all financial assets, that are not defaulted, but have experienced a significant increase in credit risk since initial recognition

– Stage 3 consists of financial assets which deemed to be in default in accordance with Deutsche Bank’s policies, which are based on the Capital Requirements Regulation (CRR) Article 178. The Group defines these financial assets as impaired, non-performing and defaulted

– Significant increase in credit risk is determined using quantitative and qualitative information based on the Group’s historical experience, credit risk assessment and forward-looking information

– Purchased or Originated Credit-Impaired (POCI) financial assets are assets where at the time of initial recognition, there is objective evidence of impairment and the Group purchased at a discount.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

The IFRS 9 impairment approach is an integral part of the Group’s credit risk management procedures. The estimation of expected credit loss (ECL) is either performed via the automated, parameter based ECL calculation using the Group’s ECL model or determined by credit officers. In both cases, the calculation takes place for each financial asset individually. Similarly, the determination of the need to transfer between stages is made on an individual asset basis. The Group’s ECL model is used to calculate the allowance for credit losses for all financial assets in Stage 1 and Stage 2, as well as for Stage 3 in the homogeneous portfolio (i.e., retail and small business loans with similar credit risk characteristics). For financial assets in the bank’s non-homogeneous portfolio in Stage 3 and for POCI assets, the allowance for credit losses is determined individually by credit officers.

The Group uses three main components to measure ECL. These are Probability of Default (PD), Loss Given Default (LGD) and Exposure at Default (EAD). The Group leverages existing parameters used for determination of capital demand under the Basel Internal Ratings Based Approach (IRBA) and internal risk management practices as much as possible to calculate ECL. These parameters are adjusted where necessary to comply with IFRS 9 requirements (e.g., use of point in time ratings and removal of downturn add-ons in the regulatory parameters). Incorporating forecasts of future economic variables into the measurement of ECL influences the allowance for credit losses. In order to calculate lifetime ECL, the Group’s calculation derives the corresponding lifetime PDs from migration matrices that reflect economic forecasts.

In July 2023, the Group completed the migration of Postbank clients into the IT systems of Deutsche Bank, which resulted in a Group-wide alignment of the IFRS 9 impairment model and methodologies, while specific models previously applied for Postbank were decommissioned. This change in estimate resulted in an immaterial net increase in the Group’s allowance for credit losses.

In September 2023, the Group received approval from authorities to align the Probability of Default (PD) model for large corporates and leveraged lending with regulatory requirements. The model is used for the determination of capital demand under the Basel Internal Ratings Based Approach, for internal risk management practices and is leveraged for IFRS 9 ECL purposes. The related change in estimate reduced the Group’s ECL as of September 30, 2023, by € 101 million.

Stage determination and significant increase in credit risk

At initial recognition, financial assets are reflected in Stage 1, unless the financial assets are POCI. If there is a significant increase in credit risk, the financial asset is transferred to Stage 2. A significant increase in credit risk is determined by using rating-related and process-related indicators. The transfer of financial assets to Stage 3 is based on the status of the borrower being in default. If a borrower is in default, all financial assets of the borrower are transferred to Stage 3.

Rating-related Stage 2 indicators: The Group compares a borrower’s lifetime PD at the reporting date with lifetime PD expectations at the date of initial recognition to determine if there has been a significant change in the borrower’s PDs and consequently to any of the borrower’s transaction in the scope of IFRS 9 impairment. Based on historically observed migration behavior and a sampling of different economic scenarios, a lifetime PD distribution is obtained. A quantile of this distribution, which is defined for each counterparty class, is chosen as the lifetime PD threshold. If the remaining lifetime PD of a transaction according to current expectations exceeds this threshold, the financial asset is deemed to have incurred a significant increase in credit risk and is transferred to Stage 2. The quantiles used to define Stage 2 thresholds are determined using expert judgment, are reviewed annually and have not changed since implementation of IFRS 9. The thresholds applied vary depending on the original credit quality of the borrower, elapsed lifetime, remaining lifetime and counterparty class. Management believes that the defined approach and quantiles represent a meaningful indicator that a financial asset has incurred a significant increase in credit risk.

Process-related Stage 2 indicators are derived via the use of existing risk management indicators, which in the bank’s view represent situations where the credit risk of financial assets has significantly increased. These include borrowers being added to the Group’s watchlist, being transferred to workout status, payments being 30 days or more past due or being in forbearance. As long as the condition for one or more of the process-related or rating-related indicators is fulfilled and the borrower of the financial asset has not met the definition of default, the asset will remain in Stage 2. If the Stage 2 indicators are no longer fulfilled and the financial asset has not defaulted, the financial asset transfers back to Stage 1. In case of performing forborne financial assets, the probation period is two years before the financial asset is reclassified to Stage 1, which is aligned with regulatory guidance.

If the borrower defaults, all transactions of the borrower are allocated to Stage 3. If, at a later date, the borrower is no longer in default, the curing criteria according to regulatory guidance is applied (including probation periods), which are at least three months or one year in case of distressed restructurings. Once the regulatory cure period or criteria has been met, the borrower will cease to be classified as defaulted and will be transferred back to Stage 2 or Stage 1.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

The ECL calculation for Stage 3 distinguishes between transactions in the homogeneous and non-homogenous portfolios, as well as POCI financial assets. For transactions that are in Stage 3 and in a homogeneous portfolio, the Group uses a parameter-based automated approach to determine the credit loss allowance per transaction. For these transactions, the LGD parameters are to a large extent modelled to be time-dependent, i.e., consider the declining recovery expectation as time elapses after default. The allowance for credit losses for financial assets in the bank’s non-homogeneous portfolios in Stage 3, as well as for POCI assets are determined by credit officers and have to be approved along an established authority grid up to and including the Management Board. This allows credit officers to consider currently available information and recovery expectations specific to the borrowers and the financial assets at the reporting date.

Estimation techniques for key input factors

The first key input factor in the Group ECL calculation is the one-year PD for borrowers which is derived from the bank’s internal rating systems. The Group assigns a PD to each borrower credit exposure based on a 21-grade master rating scale for all of the Group’s exposure.

The borrower ratings assigned are derived based on internally developed rating models which specify consistent and distinct customer-relevant criteria and assign a rating grade based on a specific set of criteria as given for a certain customer. The set of criteria is generated from information sets relevant for the respective customer segments including general customer behavior, financial and external data (e.g., credit bureau). The methods in use range from statistical scoring models to expert-based models taking into account the relevant available quantitative and qualitative information. Expert-based models are usually applied for borrowers in the exposure classes “Central governments and central banks”, “Institutions” and “Corporates” with the exception of those “Corporates” for which a sufficient data basis is available for statistical scoring models. For the latter, as well as for the retail segment, statistical scoring or hybrid models combining both approaches are commonly used. Quantitative rating methodologies are developed based on applicable statistical modelling techniques, such as logistic regression.

One-year PDs are extended to multi-year PD curves using through-the-cycle matrices and macroeconomic forecasts. Based on economic scenarios centered around the macroeconomic baseline forecast, through-the-cycle matrices are first transformed into point-in-time rating migration matrices, typically for a two-year period. The calculation of the point-in-time matrices leverages a link between macroeconomic variables and the default and rating behavior of borrowers, which is derived from historical macroeconomic variables (MEVs) and rating time series through regression techniques. In a final step, multi-year PD curves are derived from point-in-time rating migration matrices for periods where reasonable and supportable forecasts are available and extrapolated based on through-the-cycle rating migration matrices beyond those periods.

The second key input factor into the ECL calculation is the LGD parameter, which is defined as the likely loss intensity in case of a borrower’s default. It provides an estimation of the exposure that cannot be recovered in a default event and therefore captures the severity of a loss. Conceptually, LGD estimates are independent of a borrower’s probability of default. The LGD models applied in Stages 1 and 2, which are based on regulatory LGD models, but adjusted for IFRS 9 requirements (i.e., removal of downturn-add-on and removal of indirect costs of workout), ensure that the main drivers for losses (i.e., different levels and quality of collateralization and customer or product types or seniority of facility) are reflected as risk drivers in LGD estimates. In the bank’s LGD models, the Group assigns collateral type specific LGD parameters to the collateralized exposure (collateral value after application of haircuts). The LGD setting for defaulted homogeneous portfolios are partially dependent on time after default and are either calibrated based on the Group’s multi-decade loss and recovery experience using statistical methods or for less significant portfolios certain LGD model input parameters (e.g., cure rates) are determined by expert judgement.

The third key input factor is the exposure at default over the lifetime of a financial asset which is modelled taking into account expected repayment profiles (e.g., linear amortization, annuities, bullet loan structures). Prepayment options are modelled for some portfolios. The bank applies specific credit conversion factors (CCFs) in order to calculate an EAD value. Conceptually, the EAD is defined as the expected amount of the credit exposure to a borrower at the time of its default. In instances where a transaction involves an unused limit, a percentage share of this unused limit is added to the outstanding amount in order to appropriately reflect the expected outstanding amount in case of a borrower’s default. This reflects the assumption that for commitments, the utilization at the time of default might be higher than the current outstanding balance. In case a transaction involves an additional contingent component (i.e., guarantees) a further percentage share is applied as part of the CCF model in order to estimate the amount of guarantees drawn in case of default. The calibrations of such parameters are based on internal historical data and are either based on empirical analysis or supported by expert judgement and consider borrower and product type specifics. Where supervisory CCF values need to be applied for regulatory purposes, internal estimates are used for IFRS 9.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Expected lifetime

IFRS 9 requires the determination of lifetime ECL for which the expected lifetime of a financial asset is a key input factor. Lifetime ECL represent default events over the expected life of a financial asset. The Group measures ECL considering the risk of default over the maximum contractual period (including any borrower’s extension options) over which the Group is exposed to credit risk.

Retail overdrafts, credit card facilities and certain corporate revolving facilities typically include both a loan and an undrawn commitment component. The expected lifetime of such on-demand facilities exceeds their contractual life as they are typically cancelled only when the Group becomes aware of an increase in credit risk. The expected lifetime is estimated by taking into consideration historical information and the Group’s credit risk management actions such as credit limit reductions and facility cancellation. Where such facilities are subject to an individual review by credit risk management, the lifetime for calculating ECL is 12 months. For facilities not subject to individual review by credit risk management, the bank applies a lifetime for calculating ECL of 24 months.

Interest rate used in the IFRS 9 model

In the context of the ECL calculation, the Group applies in line with IFRS 9 an approximation of the effective interest rate (EIR), which is usually the contractual interest rate. The contractual interest rate is deemed to be an appropriate approximation, as the interest rate is consistently used in the ECL model, interest recognition and for discounting of the ECL and does not materially differ from the EIR.

Consideration of collateralization in IFRS 9 Expected Credit Loss calculation

The ECL model projects the level of collateralization for each point in time in the life of a financial asset. At the reporting date, the model uses the existing collateral distribution process applied in Deutsche Bank’s economic capital model. In this model, the liquidation value of each eligible collateral is allocated to relevant financial assets to distinguish between collateralized and uncollateralized parts of each financial asset. In the ECL calculation, the Group subsequently applies the aforementioned LGDs for secured and unsecured exposures to derive the ECL for the secured and unsecured part of the exposure separately.

For personal collateral (e.g., guarantees), the ECL model assumes that the relative level of collateralization remains stable over time. In the case of an amortizing loan, the outstanding exposure and collateral values decrease together over time. For physical collateral (e.g., real estate property), the ECL shall assume that the absolute collateral value remains constant. In case of an amortizing loan, the collateralized part of the exposure increases over time and the loan-to-value decreases accordingly.

Certain financial guarantee contracts are integral to the financial assets guaranteed. In such cases, the financial guarantee is considered as collateral for the financial asset and the benefit of the guarantee is used to mitigate the ECL of the guaranteed financial asset.

Forward looking information

Under IFRS 9, the allowance for credit losses is based on reasonable and supportable forward-looking information available without undue cost or effort, which takes into consideration past events, current conditions and forecasts of future economic conditions.

To incorporate forward looking information into the Group’s allowance for credit losses, the bank uses two key elements:

– As its base scenario, the Group uses external survey-based macroeconomic forecasts (e.g., consensus views on GDP and unemployment rates); in addition, the scenario expansion model, which has been initially developed for stress testing, is used for forecasting macroeconomic variables that are not covered by external consensus data; all forecasts are assumed to reflect the most likely development of the respective variables; the Group regularly updates its forecasts for macro-economic factors during the quarter and reviews aspects of potential model imprecision (e.g., MEV parameters outside the historic range used for model calibration, if not already included in the model) as part of an MEV monitoring framework to assess if an overlay is required

– Statistical techniques are then applied to transform the base scenario projections into a probability distribution of the macroeconomic variables; these scenarios specify deviations from the baseline forecasts; the scenario distribution is then used for deriving multi-year PD curves for different rating and counterparty classes, which are applied in the ECL calculation and in the identification of significant deterioration in credit quality of financial assets as described above in the rating-related Stage 2 indicators

	Deutsche Bank
	Annual Report 2023 on Form 20-F

The Group's Risk and Finance Credit Loss Provision Forum monitors the impact of forward-looking information, including the latest macroeconomic variables, on a quarterly basis and determines if any additional overlays are required. Although interest rates and inflation are not separately included in the MEVs, the economic impact of these risks is reflected in GDP growth rates, unemployment, equities and credit spreads as higher rates and inflation filter through these forecasts. As of December 31, 2023, the consensus data applied in the ECL model was deemed to have reflected the latest macroeconomic developments and after considering all relevant uncertainties in the MEVs no additional overlays were required.

As described earlier, the Group’s approach to reflect macroeconomic variables in the calculation of ECLs is to incorporate forecasts for the next two years, using eight discrete quarterly observations. After the period of eight quarters, the Group constructs forecasts based on macro-economic variables and its historic trends.

The tables below contain the macroeconomic variables included in the application of forward-looking information in the IFRS 9 model as of December 31, 2023, and as of December 31, 2022.

Forward-looking information applied

	December 31, 2023¹ ²
	Year 1 (4 quarter avg)	Year 2 (4 quarter avg)
Commodity - Gold	1,957.34	1,958.16
Commodity - WTI	82.52	83.56
Credit - CDX Emerging Markets	195.16	192.83
Credit - CDX High Yield	451.57	466.40
Credit - CDX IG	70.04	72.12
Credit - High Yield Index	4.05	4.19
Credit - ITX Europe 125	73.09	72.21
Equity - MSCI Asia	1,293	1,297
Equity - Nikkei	33,188	34,051
Equity - S&P500	4,514	4,621
GDP - Developing Asia	4.94%	4.37%
GDP - Emerging Markets	4.08%	4.01%
GDP - Eurozone	0.13%	1.08%
GDP - Germany	0.12%	1.30%
GDP - Italy	0.33%	1.03%
GDP - USA	1.75%	1.31%
Real Estate Prices - US CRE Index	353.41	347.99
Unemployment - Eurozone	6.67%	6.64%
Unemployment - Germany	3.12%	3.13%
Unemployment - Italy	7.75%	7.68%
Unemployment - Japan	2.58%	2.42%
Unemployment - Spain	11.96%	11.67%
Unemployment - USA	4.19%	4.40%

¹ MEV as of December 6, 2023, which barely changed until December 29, 2023

² Year 1 equals fourth quarter of 2023 to third quarter of 2024, Year 2 equals fourth quarter of 2024 to third quarter of 2025

	Deutsche Bank
	Annual Report 2023 on Form 20-F

	December 31, 2022¹ ²
	Year 1 (4 quarter avg)	Year 2 (4 quarter avg)
Commodity - Gold	1,745.84	1,797.74
Commodity - WTI	90.19	88.79
Credit - CDX Emerging Markets	260.99	239.03
Credit - CDX High Yield	489.77	476.53
Credit - CDX IG	85.33	84.94
Credit - High Yield Index	4.46	4.31
Credit - ITX Europe 125	101.26	96.50
Equity - MSCI Asia	1,178	1,176
Equity - Nikkei	28,427	29,287
Equity - S&P500	3,933	4,011
GDP - Developing Asia	3.95%	4.60%
GDP - Emerging Markets	3.31%	3.94%
GDP - Eurozone	0.87%	0.53%
GDP - Germany	(0.26)%	1.00%
GDP - Italy	0.32%	0.68%
GDP - USA	0.62%	0.61%
Real Estate Prices - US CRE Index	352.41	343.97
Unemployment - Eurozone	7.03%	7.15%
Unemployment - Germany	3.22%	3.33%
Unemployment - Italy	8.24%	8.53%
Unemployment - Japan	2.56%	2.42%
Unemployment - Spain	13.06%	12.98%
Unemployment - USA	4.05%	4.75%

¹ MEV as of December 12, 2022, which barely changed until December 30, 2022

² Year 1 equals fourth quarter of 2022 to third quarter of 2023, Year 2 equals fourth quarter of 2023 to third quarter of 2024

Focus areas in 2023

Deutsche Bank’s macroeconomic environment in 2023 was characterized by the persistently high inflation which drove further monetary tightening, risks of a higher-for-longer interest rate environment and generally tighter financial conditions in the major advanced economies. Towards the end of the year, evidence of waning inflation pressure led to a repricing of market expectations with respect to earlier and more significant central bank rate cuts in 2024 accompanied by an easing of financial conditions. In addition, there were episodes of significant market volatility particularly around selective failures and/or restructurings in the U.S. and European banking sector as well as increasing pressure on the Commercial Real Estate (CRE) market, particularly in the U.S. office sector.

To ensure that Deutsche Bank’s ECL model was taking into account the uncertainties in the macroeconomic environment throughout 2023, the Group reviewed emerging risks to assess its potential downside and to manage the bank’s credit strategy and risk appetite on an ongoing basis. Overall, Deutsche Bank believes the actions taken as a result of these reviews were designated to ensure the bank was adequately provisioned for its expected credit losses as of December 31, 2023.

Commercial Real Estate

CRE markets continue to face headwinds due to the impacts of higher interest rates, decreasing market liquidity combined with tightened lending conditions, and structural changes in the office sector.

The market stress has been more pronounced in the U.S. where property price indices point to a greater decline of CRE asset values from recent peaks compared to Europe and APAC. Similarly, within the office segment, the market weakness is most evident in the U.S., reflected in subdued leasing activity and higher vacancy rates compared to Europe.

In the current environment, the main risk for the portfolio is refinancing risk. CRE loans often have a significant portion of their principal amount payable at maturity. Under current market conditions, borrowers may have difficulty obtaining a new loan to repay the maturing debt or fulfil conditions to extend the loan. The Group is closely monitoring its CRE portfolio for indications of elevated refinancing risk.

Amidst interest rate hikes commencing in 2022 and real estate market stress increasing, the Group has proactively worked with borrowers to address upcoming maturities to establish terms for loan amendments and extensions (e.g. extensions of terms) which in many cases, are classified as forbearance triggering Stage 2 classification under IFRS, but are not always modifications according under IFRS. However, in certain cases, no agreement can be reached on loan extensions or loan amendments, and the borrower’s inability to obtain refinancing leads to a default. This has resulted in higher Stage 3 ECL for 2023 compared to 2022, and there is continued uncertainty with respect to future defaults and the timing of a recovery in the CRE markets.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

The CRE portfolio consists of lending arrangements originated across various parts of the Group and client segments. The Group’s CRE portfolio under the Group’s CRE definition includes exposures reported under the Main Credit Exposure Categories by Industry Sectors for Real Estate Activities NACE but also exposures reported under other NACE classifications including Financial and Insurance Activities.

Within the CRE portfolio, the Group differentiates between recourse and non-recourse financing. Recourse CRE financings typically have a lower inherent risk profile based on recourse to creditworthy entities or individuals, in addition to mortgage collateral. Recourse CRE exposures range from secured recourse lending for business or commercial properties to property companies, Wealth Management clients, as well as other private and corporate clients.

Non-recourse financings rely on sources of repayment that are typically limited to the cash flows generated by the financed property and the ability to refinance such loans may be constrained by the underlying property value and income stream generated by such property at the time of refinancing.

The entire CRE loan portfolio is subject to periodic stress testing under Deutsche Bank’s Group Wide Stress Test Framework. In addition, Deutsche Bank uses bespoke portfolio stress testing for certain sub-segments of the CRE loan portfolio to obtain a more comprehensive view of potential downside risks. For the year ending December 31, 2023, the Group performed a bespoke portfolio stress test on a subset of the non-recourse financing portfolio deemed higher risk based on its heightened sensitivity to current CRE market stress factors, including higher interest rates, declining collateral values and elevated refinancing risk due to loan structures with a high proportion of their outstanding principal balance payable at maturity.

As of December 31, 2023, the non-recourse portfolio subject to bespoke portfolio stress testing, also referred to as the higher risk CRE portfolio or the stress-tested CRE portfolio, amounted to € 31.2 billion of the € 38.2 billion non-recourse CRE portfolio, excluding only sub-portfolios with less impacted risk drivers such as data centers and municipal social housing, which benefit from strong underlying demand fundamentals. The reduction in the non-recourse CRE portfolio and stress-tested CRE portfolio since December 31, 2022 was € 0.7 billion and € 1.2 billion, respectively, mainly driven by paydowns and loan sales. The reduction in the non-recourse CRE portfolio in comparison to the stress-tested CRE portfolio was lower, as selective originations continued in the aforementioned lower risk non-recourse CRE sub-portfolios such as data centers and municipal social housing.

The following table provides an overview of the Group’s Real Estate Activities and other industry sectors (NACE) contributing to Deutsche Bank’s non-recourse and stress-tested CRE portfolio as of December 31, 2023, and December 31, 2022, respectively.

Overview of CRE portfolio

	Dec 31, 2023		Dec 31, 2022
in € m.	Gross Carrying Amount¹	Allowance for Credit Losses²	Gross Carrying Amount¹	Allowance for Credit Losses²
Real Estate Activities³	49,267	460	47,973	236
thereof: non-recourse	25,073	382	24,832	147
thereof: stress-tested portfolio	21,331	364	22,144	135
Other industry sectors³ non-recourse	13,119	225	14,037	189
thereof: stress-tested portfolio	9,879	114	10,242	101
Total non-recourse CRE portfolio	38,192	606	38,869	336
thereof: stress-tested portfolio	31,210	478	32,386	236

¹ Loans at amortized cost

² Allowance for credit losses do not include allowance for country risk

³ Industry sector by NACE (Nomenclature des Activités Économiques dans la Communauté Européenne) code

The following table shows the non-recourse CRE portfolio by IFRS 9 stages as well as provision for credit losses recorded as of December 31, 2023, and December 31, 2022.

Non-recourse CRE portfolio

	Dec 31, 2023	Dec 31, 2022
in € m.	Gross Carrying Amount¹	Gross Carrying Amount¹
Exposure by stages
Stage 1	27,325	31,892
Stage 2	7,661	5,233
Stage 3	3,206	1,744
Total	38,192	38,869

	2023	2022
Provision for Credit Losses²	445	128

¹ Loans at amortized cost

² Provision for Credit Losses do not include country risk provisions

	Deutsche Bank
	Annual Report 2023 on Form 20-F

The year on year increase in Stage 2 and Stage 3 exposures is reflective of the deterioration in CRE markets leading to increased loans added to the watchlist and forbearance measures as well as increasing defaults.

The following table shows the stress-tested CRE portfolio by IFRS 9 stages, region, property type and average weighted loan to value (LTV) as well as provision for credit losses recorded for the year ended December 31, 2023, and December 31, 2022, respectively.

Stress-tested CRE portfolio

	Dec 31, 2023	Dec 31, 2022
in € m.	Gross Carrying Amount¹	Gross Carrying Amount¹
Exposure by stages
Stage 1	21,568	26,199
Stage 2	6,889	5,046
Stage 3	2,753	1,141
Total	31,210	32,386

thereof:
North America	56%	57%
Western Europe (including Germany)	36%²	36%
Asia/Pacific	7%	7%

thereof: offices	42%	41%
North America	23%	22%
Western Europe (including Germany)	17%³	15%
Asia/Pacific	2%	3%
thereof: residential	14%	12%
thereof: hospitality	10%	11%
thereof: retail	9%	9%

Weighted average LTV, in %
Investment Bank	66%	62%
Corporate Bank	53%	53%
Other Business	68%	56%

	2023	2022
Provision for Credit Losses⁴	388	103
thereof: North America	298	87

¹ Loans at amortized cost

² Germany accounts for ca 7 % of the total stress-tested CRE portfolio

³ Office loans in Germany account for 4 % of total office loans in the stress-tested CRE portfolio

⁴ Provision for Credit Losses do not include country risk provisions

The average LTV in the U.S. office loan segment was 81 % as of December 31, 2023, versus 60 % as of December 31, 2022. LTV calculations are based on latest externally appraised values which are additionally subject to regular interim internal adjustments. While the Group is updating CRE collateral values where applicable, such values and their underlying assumptions are subject to a higher degree of fluctuation and uncertainty in the current environment of heightened market volatility and reduced market liquidity. A continuation of the current stressed market conditions could have a further adverse impact on commercial real estate property values and LTV ratios.

Stage classification and provisioning levels are primarily based on the Group’s assessment of a borrower’s ability to generate recurring cash flows, its ability to obtain refinancing at the loan’s maturity, and an assessment of the financed property’s collateral value. Deutsche Bank actively monitors these factors for potential signs of deterioration to ensure timely adjustment of the borrower’s loan classifications. When a loan is deemed to be impaired, the Group calculates required credit loss provisions using multiple potential scenarios for loan resolution, weighted by their expected probabilities and taking into account information available at that point. Such assessments are inherently subjective with respect to scenario weightings and subject to various assumptions, including future cash flows generated by a property and potential property liquidation proceeds. These assumptions are subject to uncertainties which are exacerbated in the current volatile market environment such that deviating developments to initial assumptions could have a material future impact on calculated provisions. Additional uncertainty exists within the office sector due to the uncertain long-term impact of remote working arrangements on demand for office space.

Given the near-term outlook for interest rates, the Group expects stressed market conditions to continue into 2024 which could result in further deterioration of asset quality and higher credit loss provisions, which is reflected in the communicated guidance on credit loss provisions for 2024.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Since the onset of the CRE market deterioration, the Group aims to assess the downside risk of additional credit losses in its

higher risk non-recourse portfolio through a temporary bespoke stress testing focused on stressing property values as main driver of loss severity. Stressed values are derived by applying an observed peak-to-trough market index decline (a commercial property value market index to the appraised values) plus an additional haircut, differentiated by property type and region. Implying a liquidation scenario, the stress analysis assumes a loss to occur on a loan when the stressed property value is less than the outstanding loan balance, i.e., the stress LTV beyond 100 %. For the stress analysis performed as of December 31, 2023, the Group applied haircuts ranging from 3 %-18 % on top of the observed peak-to-trough market index decline for each property type. Driven by further deterioration of market conditions especially in the U.S. office sector, the index decline in the fourth quarter increased further compared to the prior quarter.

Based on the stress test assumptions and utilizing the December 31, 2023, stress-tested CRE portfolio of € 31.2 billion as jump-off point, the stress scenario could result in approximately € 1.1 billion of credit losses over multiple years based on the respective maturity profile. The stress loss is reported gross of allowance, however, it should be noted that it covers a portfolio, where the Group has already a credit loss allowance in place. Nevertheless, the stress loss under a liquidation scenario could exceed the current ECL estimate.

The bespoke stress test has numerous limitations, including but not limited to lack of differentiation based on individual asset performance, specific location or asset desirability, all of which could have a material impact on potential stress losses. Furthermore, calculated stress losses are sensitive to potential further deterioration of peak-to-trough index values and assumptions about incremental haircuts, incremental stress loss can therefore change going forward. Changes in underlying assumptions could lead to a wider range of stress results and hence the Group's bespoke stress approach is one of multiple scenarios.

Based on currently available information, Deutsche Bank believes that the ECL estimate related to the Group’s CRE portfolio is within reasonable ranges, requires no additional corrective measure and thus represents the bank’s best estimate. However, the Group remains highly selective around new business, focusing on more resilient property types such as industrial or logistics.

Overall Assessment of ECL’s

To ensure that Deutsche Bank’s ECL model accounted for the uncertainties in the macroeconomic environment throughout 2023, the Group continued to review emerging risks, assessed potential baseline and downside impacts and required actions to manage the bank’s credit strategy and risk appetite. The outcome of these reviews concluded that the bank adequately provisioned for its expected credit losses as of December 31, 2023, and December 31, 2022.

Results from the above reviews and development of key portfolio indicators are regularly discussed at the Credit Risk Appetite and Management Forum and Group Risk Committee. Where necessary, actions and measures are taken to mitigate the risks. Client ratings are regularly reviewed to reflect the latest macroeconomic developments and where potentially significant risks are identified clients are moved to the watchlist (Stage 2), forbearance measures may be negotiated, and credit limits and collateralization are reviewed. Overall, the Group believes that based on its day-to-day risk management activities and regular reviews of emerging risks it has adequately provided for its ECL.

However, the section below further considers whether any additional overlays were required as of year end 2023.

Management overlays applied to the IFRS 9 model output

The Group regularly reviews the IFRS 9 methodology and processes, key inputs into the ECL calculation and discusses upcoming model changes, potential model imprecisions or other estimation uncertainties, for example in the macroeconomic environment to determine if any material overlays are required.

In 2023, the € 92 million

overlay related to parameter recalibrations required due to the new definition of default has been released (which at first application led to a decrease of Allowance for Credit Losses). This overlay was introduced in 2021, when the Group implemented the new definition of default which is the trigger for Stage 3. The implementation of the new definition of default mainly affected the Private Bank, where the Stage 3 population in homogeneous portfolios increased. As the change in definition does not materially impact the total loss expectation of these portfolios, this change resulted in an overstatement of Stage 3 provisions as related PD and LGD parameters were not updated in the model.

The envisaged PD and LGD recalibrations took place in the second half of 2023 after additional empirical data was available to enable the statistical recalibration and led to the expected parameter updates. The overall

net recalibration effect including offsetting impact from the release of the overlay amounted to € 15 million.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

For year end 2022, the Group recorded overlays amounting to € (92) million in total (which led to a decrease of Allowance for Credit Losses) versus € 84 million for year end 2023 (which led to an increase of Allowance for Credit Losses), mainly in relation to envisaged ECL model changes planned for implementation in the second quarter of 2024.

In assessing whether the Group requires any additional overlays, it regularly reviews for evolving or emerging risks, especially in the current geopolitical environment. Similar to the measures included above in the Focus areas in 2023, these measures include client surveys and interviews, along with analysis of portfolios across businesses, regions and sectors. In addition, the Group regularly reviews and validates key model inputs and assumptions (including those in feeder models) and ensures where expert judgement is applied, it is in line with the Group’s risk management framework. As of December 31, 2023, the Group did not identify any model weaknesses that would require an additional overlay, except for the ECL model related changes, for which overlays have been recorded.

Model sensitivity

The Group has identified three key model assumptions included in the IFRS 9 model. These include forward looking macroeconomic variables, the quantitative criteria for determining if a borrower has incurred a significant increase in credit risk and transferred to Stage 2, and the LGD setting on homogenous portfolios in Stage 3. Below the bank provides sensitivity analysis on the potential impact if these key assumptions applied in the ECL model were to deviate from the bank’s base case expectations.

Macroeconomic variables

The sensitivity of the ECL model with respect to potential changes in projections for key MEVs is shown in the tables below, which provides ECL impacts for Stages 1 and 2 from one sigma downward and upward shifts applied separately to each group of MEV as of December 31, 2023, and December 31, 2022. A sigma shift is a standard deviation used in statistics and probability calculations and is a measure of the dispersion of the values of a random variable. Each of these groups consists of MEVs from the same category:

– GDP growth rates: includes USA, Eurozone, Germany, Italy, Developing Asia, Emerging Markets

– Unemployment rates: includes USA, Eurozone, Germany, Italy, Japan, Spain

– Equities: S&P500, Nikkei, MSCI Asia

– Credit spreads: ITX Europe 125, High Yield Index, CDX IG, CDX High Yield, CDX Emerging Markets

– Real Estate: Commercial Real Estate Price Index

– Commodities: WTI oil price, Gold price

Although interest rates and inflation are not separately included in the MEVs above, the economic impact of these risks is reflected in other macroeconomic variables, such as GDP growth rates, unemployment, equities and credit spreads as higher rates and inflation would filter through these forecasts and be included in the ECL model and sensitivity analysis below.

In addition, the sensitivity analysis only includes the impact of the aggregated MEV group (i.e., potential correlation between different MEV groups or the impact of management overlays is not taken into consideration). ECLs for Stage 3 are not affected and not reflected in the following tables as its calculation is independent of the macroeconomic scenarios.

Sensitivity impact is lower as of December 31, 2023, compared to December 31, 2022, due to portfolio changes and minor improvements of base MEV projections which the analyses were based on.

IFRS 9 – Sensitivities of forward-looking information applied on Stage 1 and Stage 2 – Group Level

	December 31, 2023
	Upward sensitivity		Downward sensitivity
	Upward shift	ECL impact in € m.	Downward shift	ECL impact in € m.
GDP growth rates	1pp	(80.4)	(1)pp	88.9
Unemployment rates	(0.5)pp	(43.1)	0.5pp	45.9
Real estate prices²	5%	(5.9)	(5)%	6.2
Equities	10%	(9.0)	(10)%	12.2
Credit spreads	(40)%	(20.5)	40%	22.8
Commodities¹	10%	(8.5)	(10)%	9.2

¹ Here the sign of the shift applies to oil prices changes. Gold price changes have the opposite sign. 1pp (percentage point), e.g., GDP shifts from 3% to 4% // 1% (percentage change), e.g., Real estate price shifts from 100 to 101

² For a more severe stress test relating to the CRE portfolio that also takes into consideration existing and potential exposure in Stage 3 reference is made to the section on Commercial Real Estate above

	Deutsche Bank
	Annual Report 2023 on Form 20-F

	December 31, 2022
	Upward sensitivity		Downward sensitivity
	Upward shift	ECL impact in € m.	Downward shift	ECL impact in € m.
GDP growth rates	1pp	(83.3)	(1)pp	101.4
Unemployment rates	(0.5)pp	(40.8)	0.5pp	58.0
Real estate prices	5%	(5.6)	(5)%	6.0
Equities	10%	(15.8)	(10)%	19.6
Credit spreads	(40)%	(37.9)	40%	42.6
Commodities	10%	(14.8)	(10)%	15.6

At the divisional level, the sensitivity analysis below was performed for the year ended December 31, 2023, and 2022, respectively, and revealed GDP growth rates, credit spreads and commodities prices to be the dominant factors for the Investment Bank, whereas the model sensitivity for the Corporate Bank and Private Bank is mainly associated with changes in GDP growth rates and unemployment rates. The model sensitivity table for the Private Bank shows GDP growth rates and unemployment rates only, as the key MEVs relevant to the underlying portfolios.

IFRS 9 – Sensitivities of forward-looking information applied on Stage 1 and Stage 2 - Corporate Bank

	December 31, 2023
	Upward sensitivity		Downward sensitivity
	Upward shift	ECL impact in € m.	Downward shift	ECL impact in € m.
GDP growth rates	1pp	(18.1)	(1)pp	20.7
Unemployment rates	(0.5)pp	(10.4)	0.5pp	11.0
Real estate prices²	5%	(1.5)	(5)%	1.6
Credit spreads	(40)%	(3.8)	40%	4.4
Commodities¹	10%	(2.6)	(10)%	2.9

¹Here the sign of the shift applies to oil prices changes. Gold price changes have the opposite sign.

	December 31, 2022
	Upward sensitivity		Downward sensitivity
	Upward shift	ECL impact in € m.	Downward shift	ECL impact in € m.
GDP growth rates	1pp	(21.7)	(1)pp	24.6
Unemployment rates	(0.5)pp	(12.2)	0.5pp	14.0
Real estate prices	5%	(1.1)	(5)%	1.1
Credit spreads	(40)%	(7.5)	40%	9.1
Commodities	10%	(4.3)	(10)%	4.6

IFRS 9 – Sensitivities of forward-looking information applied on Stage 1 and Stage 2 - Investment Bank

	December 31, 2023
	Upward sensitivity		Downward sensitivity
	Upward shift	ECL impact in € m.	Downward shift	ECL impact in € m.
GDP growth rates	1pp	(30.6)	(1)pp	33.5
Unemployment rates	(0.5)pp	(6.7)	0.5pp	7.5
Real estate prices²	5%	(4.0)	(5)%	4.2
Equities	10%	(3.3)	(10)%	4.4
Credit spreads	(40)%	(13.6)	40%	14.7
Commodities¹	10%	(5.5)	(10)%	5.9

¹Here the sign of the shift applies to oil prices changes. Gold price changes have the opposite sign.

	December 31, 2022
	Upward sensitivity		Downward sensitivity
	Upward shift	ECL impact in € m.	Downward shift	ECL impact in € m.
GDP growth rates	1pp	(35.3)	(1)pp	36.9
Unemployment rates	(0.5)pp	(5.3)	0.5pp	6.1
Real estate prices	5%	(4.5)	(5)%	4.8
Equities	10%	(5.8)	(10)%	7.3
Credit spreads	(40)%	(26.3)	40%	28.5
Commodities	10%	(9.8)	(10)%	10.3

	Deutsche Bank
	Annual Report 2023 on Form 20-F

IFRS 9 – Sensitivities of forward-looking information applied on Stage 1 and Stage 2 - Private Bank

	December 31, 2023
	Upward sensitivity		Downward sensitivity
	Upward shift	ECL impact in € m.	Downward shift	ECL impact in € m.
GDP growth rates	1pp	(24.4)	(1)pp	26.3
Unemployment rates	(0.5)pp	(22.4)	0.5pp	23.3

	December 31, 2022
	Upward sensitivity		Downward sensitivity
	Upward shift	ECL impact in € m.	Downward shift	ECL impact in € m.
GDP growth rates	1pp	(21.8)	(1)pp	34.5
Unemployment rates	(0.5)pp	(20.7)	0.5pp	34.9

Impact of lifetime expected credit losses for Stage 1 borrowers

As described above, the Group uses a mixture of quantitative and qualitative criteria to determine significant increase in credit risk which require, for affected borrowers, a move to lifetime ECL (Stage 2). If for all Stage 1 borrowers Deutsche Bank were to record lifetime expected credit losses, the Group’s allowance for credit losses amounting to € 5.7 billion as of December 31, 2023 and € 5.6 billion as of December 31, 2022 would increase by approximately 38 % as of year end 2023 and as of year-end 2022, respectively.

Stage 3 LGD setting

The Group’s allowance for credit losses in Stage 3 for the homogeneous portfolios amounts to € 2.2 billion as of December 31, 2023 and € 1.9 billion as of December 31, 2022. The key driver in determining the ECL provision is the loss given default estimate, which differs by individual portfolios. Loss given default is influenced by recovery rates, proceeds from the sale of collateral, and cure rates. Some of the drivers for different portfolios include elements of expert judgment and in particular on expected cure rates. If the LGD for all homogeneous portfolios were to increase by 1%, then Stage 3 ECL would increase as of December 31, 2023 by approximately € 22 million (thereof € 14 million in Germany, € 5 million in Italy and € 2 million in Spain), and by approximately € 19 million as of December 31, 2022 (thereof € 11 million in Germany, € 5 million in Italy and € 2 million in Spain).

IFRS 9 model results

In 2023, provision for credit losses was € 1.5 billion, compared to € 1.2 billion recorded for the year ended 2022. The increase is reflecting an overall weakened macroeconomic environment with only slow recovery of the main economies after Russia’s invasion of Ukraine in 2022 as well as increased challenges for the Commercial Real Estate sector especially in the office space which was already affected by a post-Covid driven change in demand. This sector came under further pressure by monetary measures imposed by the central banks in reply to increased inflation which subsequently led to increased refinancing risks.

The total provisions in 2023 include a € 51 million release related to clients in Russia and Ukraine as a result of successful de-risking activities compared to a € 114 million increase in 2022.

In 2023, € 33 million releases of provision for credit losses related to Stage 1 and 2 and € 1.5 billion new provision for credit losses to Stage 3, this compares to € 204 million provisions of Stage 1 and 2 provisions and € 1.0 billion in Stage 3 in 2022. The reduction of Stage 1 and 2 provisions was primarily driven by the improvement and stabilization of macroeconomic parameters after the macroeconomic outlook significantly deteriorated in 2022 following Russia’s invasion of Ukraine as well as benefits from a one-time model change. The increase of Stage 3 provisions was affecting all businesses but primarily the Private Bank and the Investment Bank.

Corporate Bank recorded provision for credit losses of € 266 million in 2023 versus a € 335 million in 2022. The year on year decrease was primarily driven by Stage 1 and 2 releases in 2023 compared to charges observed in 2022 following an improved macro-economic outlook and benefits from model related changes. This was partly offset by moderately higher Stage 3 provisions compared to the prior year across various portfolios. The Investment Bank recorded an increase of provision for credit losses of € 431 million in 2023 versus € 319 million in 2022. The increase was mainly driven by an increased number of impairments primarily in Commercial Real Estate. The Private Bank recorded an increase of provisions for credit losses of € 783 million in 2023 versus € 583 million reported in 2022. The increase was mainly driven by Stage 3 provisions in the first quarter of 2023 due to single name cases in Wealth Management and in the fourth quarter 2023 due to the reversal of the € 92 million overlay related to parameter recalibrations required due to the new definition of default introduced in 2021.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

The amounts recognized in the allowance for credit losses in relation to climate-related risks are deemed to be immaterial at the end of December 31, 2022, and as of December 31, 2023.

For details on the Group’s accounting policy related to IFRS 9 Impairment, please refer to Note 1 - Material accounting policies and critical accounting estimates of the consolidated financial statements.

Exposure to Russia

Deutsche Bank continues to have limited exposure to Russia. The following table provides an overview of total Russian exposures, including overnight deposits with the Central Bank of Russia in the amount of € 0.6 billion as of December 31, 2023 (€ 0.8 billion as of December 31, 2022) and other receivables, which are subject to IFRS 9 impairment, and correspondent allowance for credit losses by stages as of December 31, 2023, and December 31, 2022.

Breakdown of total exposure and allowance for credit losses by stages

	Dec 31, 2023			Dec 31, 2022
in € m.	Total Exposure	Allowance for Credit Losses¹	Total collateral and guarantees	Total Exposure	Allowance for Credit Losses¹	Total collateral and guarantees
Stage 1	93	0	24	209	0	59
Stage 2	797	4	270	1,182	10	375
Stage 3	325	16	261	336	68	152
Total	1,215	20	555	1,726	79	586

¹ Allowance for credit losses do not include allowance for country risk amounting to € 3 million as of December 31, 2023 and € 11 million as of December 31, 2022

Total exposure of € 1.2 billion (€ 1.7 billion as of December 31, 2022) consists of € 0.5 billion (€ 0.8 billion as of December 31, 2022) loan exposure to Russia, € 26 million (€ 78 million as of December 31, 2022) of undrawn commitments and € 0.6 billion (€ 0.8 billion as of December 31, 2022) of unsecured overnight deposits in Rubles with the Central Bank of Russia (which continues to be reflected in Stage 2 as of December 31, 2023); the residual unsecured exposure, excluding the unsecured overnight deposits in Rubles with the Central Bank of Russia, is mainly driven by loans with large Russian companies. Not included in these exposures are Deutsche Bank’s interests in its Russian consolidated entities. This disclosure should be read in conjunction with the section “Risk Factors” in this report.

Asset Quality

The Asset Quality section under IFRS 9 describes the quality of debt instruments subject to impairment, which under IFRS 9 consist of debt instruments measured at amortized cost, financial instruments at fair value through other comprehensive income (FVOCI) as well as off balance sheet lending commitments such as loan commitments and financial guarantees (hereafter collectively referred to as “Financial Assets”).

Overview of financial assets subject to impairment

The following tables provide an overview of the exposure amount and allowance for credit losses by financial asset class broken down into stages as per IFRS 9 requirements.

Overview of financial assets subject to impairment

	Dec 31, 2023					Dec 31, 2022
in € m.	Stage 1	Stage 2	Stage 3	Stage 3 POCI	Total	Stage 1	Stage 2	Stage 3	Stage 3 POCI	Total
Amortized cost¹
Gross carrying amount	692,091	55,704	12,799	806	761,400	729,021	45,335	11,379	1,041	786,776
Allowance for credit losses²	447	680	3,960	198	5,285	533	626	3,656	180	4,995
of which Loans
Gross carrying amount	418,311	52,834	12,576	806	484,527	440,556	43,711	10,686	1,027	495,979
Allowance for credit losses²	424	673	3,874	198	5,170	507	619	3,491	174	4,790

Fair value through OCI
Fair value	34,424	1,076	46	0	35,546	31,123	482	70	0	31,675
Allowance for credit losses	13	13	22	0	48	14	12	43	0	69

Off-balance sheet
Notional amount	292,747	23,778	2,282	8	318,814	296,062	18,478	2,625	8	317,173
Allowance for credit losses³	117	88	187	0	393	144	97	310	0	551

¹ Financial assets at amortized cost consist of: loans at amortized cost, cash and central bank balances, Interbank balances (w/o central banks), central bank funds sold and securities purchased under resale agreements, securities borrowed and certain subcategories of other assets

² Allowance for credit losses do not include allowance for country risk amounting to € 4 million as of December 31, 2023 and € 14 million as of December 31, 2022

³ Allowance for credit losses do not include allowance for country risk amounting to € 9 million as of December 31, 2023 and € 9 million as of December 31, 2022

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Financial assets at amortized cost

The following tables provide an overview of development of financial assets at amortized cost and related allowance for credit losses in each of the relevant reporting periods broken down into stages as per IFRS 9 requirements.

Development of exposures in the current reporting period

	Dec 31, 2023
	Gross carrying amount
in € m.	Stage 1	Stage 2	Stage 3	Stage 3 POCI	Total
Balance, beginning of year	729,021	45,335	11,379	1,041	786,776
Movements in financial assets including new business and credit extensions	15,413	10,074	2,498	99	28,084
Transfers due to changes in creditworthiness	(4,513)	3,111	1,402	-	0
Changes due to modifications that did not result in derecognition	0	8	(40)	0	(32)
Changes in models
Financial assets that have been derecognized during the period	(41,331)	(2,182)	(2,397)	(315)	(46,226)
Recovery of written off amounts	0	0	93	0	93
Foreign exchange and other changes	(6,499)	(641)	(136)	(18)	(7,295)
Balance, end of reporting period	692,091	55,704	12,799	806	761,400

Financial assets at amortized cost subject to impairment decreased by € 25 billion or 3 % in 2023, driven by Stage 1:

– Stage 1 exposures declined by € 37 billion or 5 % , primarily due to a reduction in cash and central bank balances and loans at amortized cost.

– Stage 2 exposures increased by € 10 billion or 23 % across business divisions, largely driven by loans at amortized cost.

– Stage 3 exposures went up by € 1 billion or 10 % in 2023, mainly driven by new defaults of single large clients in Private Bank as well as within the CRE portfolio in Investment Bank.

Development of exposures in the previous reporting period

	Dec 31, 2022
	Gross carrying amount
in € m.	Stage 1	Stage 2	Stage 3	Stage 3 POCI	Total
Balance, beginning of year	711,021	40,653	11,326	1,297	764,298
Movements in financial assets including new business and credit extensions	113,427	5,554	923	(1)	119,902
Transfers due to changes in creditworthiness	(2,101)	666	1,435	0	0
Changes due to modifications that did not result in derecognition	0	(0)	(6)	0	(6)
Changes in models	0	0	0	0	0
Financial assets that have been derecognized during the period	(103,660)	(2,177)	(2,583)	(258)	(108,679)
Recovery of written off amounts	0	0	68	3	71
Foreign exchange and other changes	10,334	639	216	0	11,189
Balance, end of reporting period	729,021	45,335	11,379	1,041	786,776

Financial assets at amortized cost subject to impairment increased by € 22 billion or 3 % in 2022, largely driven by Stage 1:

– Stage 1 exposures increased by € 18 billion or 3 % , primarily due to the increases in loans at amortized cost in Investment Bank and Private Bank as well as in debt securities held to collect, partly offset by a reduction in central bank balances.

– Stage 2 exposures increased by € 5 billion or 12 % , largely driven by loans at amortized cost in Private Bank due to the deterioration of the macroeconomic environment.

– Stage 3 exposures slightly decreased by € 203 million or 2 % in 2022, driven by reductions in Private Bank and the POCI loan portfolio. This was partly offset by an increase in Corporate Bank due to new defaults.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Development of allowance for credit losses in the current reporting period

	Dec 31, 2023
	Allowance for Credit Losses²
in € m.	Stage 1	Stage 2	Stage 3	Stage 3 POCI⁴	Total
Balance, beginning of year	533	626	3,656	180	4,995
Movements in financial assets including new business and credit extensions	(195)	294	1,647	32	1,778
Transfers due to changes in creditworthiness	170	(150)	(20)	N/M	0
Changes due to modifications that did not result in derecognition	N/M	N/M	N/M	N/M	N/M
Changes in models	(57)^-	(53)	0	0	(110)
Financial assets that have been derecognized during the period³	0	0	(1,145)	(52)	(1,197)
Recovery of written off amounts	0	0	93	0	93
Foreign exchange and other changes	(3)	(38)	(271)	38	(273)
Balance, end of reporting period	447	680	3,960	198	5,285
Provision for Credit Losses excluding country risk^¹	(83)	92	1,627	32	1,668

¹ Movements in financial assets including new business, transfers due to changes in creditworthiness and changes in models add up to Provision for Credit Losses excluding country risk

² Allowance for credit losses does not include allowance for country risk amounting to € 4 million as of December 31, 2023

³ This position includes charge offs of allowance for credit losses

⁴ The total amount of undiscounted expected credit losses at initial recognition on financial assets that are purchased or originated credit-impaired initially recognized during the reporting period was € 0 million in 2023 and € 46 million in 2022

Allowance for credit losses for financial assets at amortized cost subject to impairment increased by € 291 million or 6 % in 2023, driven by Stage 3:

– Stage 1 allowances decreased by € 86 million or 16 % across business divisions, driven by non-recurring positive ECL model changes and an improved macroeconomic outlook.

– Stage 2 allowances increased by € 54 million or 9 % across business divisions, due to the aforementioned overlays mainly related to envisaged ECL model changes (Forward Looking Information on LGDs), which led to an increase of Allowance for Credit Losses.

– Stage 3 allowances increased by € 323 million or 8 % , mainly driven by the new provisions and the release of the existing overlay related to parameter recalibrations required due to the new definition of default in Private Bank (which at first application led to a decrease of Allowance for Credit Losses), as mentioned above.

The Group’s Stage 3 coverage ratio (defined as allowance for credit losses in Stage 3 (excluding POCI) as a percentage of financial assets at amortized cost in Stage 3 (excluding POCI)) amounted to 31 % in the current fiscal year, compared to 32 % in the prior year.

Due to the non-recurring positive ECL model changes, net transfers into Stage 1 due to changes in creditworthiness increased in 2023 on a year-over-year basis. Net outflows from Stage 2 due to changes in creditworthiness increased in 2023, which was mainly due to the improved macroeconomic environment, as mentioned above.

In 2023, net outflows from Stage 3 (excluding POCI) increased compared to 2022. The immaterial amount of net outflows from Stage 3 due to creditworthiness in 2023 resulted from a release of an overlay, as mentioned above.

Development of allowance for credit losses in the previous reporting period

	Dec 31, 2022
	Allowance for Credit Losses²
in € m.	Stage 1	Stage 2	Stage 3	Stage 3 POCI⁴	Total
Balance, beginning of year	440	532	3,740	182	4,895
Movements in financial assets including new business and credit extensions	(32)	204	887	22	1,081
Transfers due to changes in creditworthiness	122	(121)	(0)	N/M	0
Changes due to modifications that did not result in derecognition	N/M	N/M	N/M	N/M	N/M
Changes in models	0	0	0	0	0
Financial assets that have been derecognized during the period³	0	0	(1,014)	(28)	(1,043)
Recovery of written off amounts	0	0	68	3	71
Foreign exchange and other changes	2	12	(25)	1	(10)
Balance, end of reporting period	533	626	3,656	180	4,995
Provision for Credit Losses excluding country risk¹	90	82	886	22	1,081

¹ Movements in financial assets including new business, transfers due to changes in creditworthiness and changes in models add up to Provision for Credit Losses excluding country risk

² Allowance for credit losses does not include allowance for country risk amounting to € 14 million as of December 31, 2022

³ This position includes charge offs of allowance for credit losses

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Allowance for credit losses for financial assets at amortized cost subject to impairment

increased by € 100 million or 2 % in 2022, driven by Stages 1 and 2:

– Stage 1 allowances increased by € 93 million or 21 % , driven by a deteriorating macroeconomic environment.

– Stage 2 allowances increased by € 94 million or 18 % due to a deterioration of the macroeconomic outlook.

– Stage 3 allowances decreased by € 87 million or 2 % , mainly driven by reductions due to non-performing portfolio sales in Private Bank, which were partly offset by new provisions in Investment Bank and Corporate Bank.

Financial assets at amortized cost by business division

	Dec 31, 2023
	Gross Carrying Amount¹					Allowance for Credit Losses
in € m.	Stage 1	Stage 2	Stage 3	Stage 3 POCI	Total	Stage 1	Stage 2	Stage 3	Stage 3 POCI	Total
Corporate Bank	105,812	13,706	2,812	0	122,329	67	110	876	0	1,053
Investment Bank	150,562	13,309	3,127	806	167,804	119	108	536	198	962
Private Bank	233,744	26,815	6,400	0	266,960	249	445	2,497	0	3,191
Asset Management	1,224	8	0	0	1,232	(0)	0	0	0	(0)
Corporate & Other	200,749	1,866	460	0	203,075	11	16	51	0	79
Total	692,091	55,704	12,799	806	761,400	447	680	3,960	198	5,285

¹ Gross Carrying Amount numbers per business division are reported after a reallocation of cash balances from business divisions to Corporate & Other.

	Dec 31, 2022
	Gross Carrying Amount¹					Allowance for Credit Losses
in € m.	Stage 1	Stage 2	Stage 3	Stage 3 POCI	Total	Stage 1	Stage 2	Stage 3	Stage 3 POCI	Total
Corporate Bank	114,983	11,030	2,879	0	128,892	91	99	963	0	1,153
Investment Bank	164,443	10,288	2,375	1,041	178,147	145	89	491	180	904
Private Bank	243,896	22,609	5,870	0	272,375	283	433	2,167	0	2,883
Asset Management	1,861	49	0	0	1,910	0	0	0	0	0
Corporate & Other²	203,838	1,359	255	0	205,453	14	5	35	0	54
Total	729,021	45,335	11,379	1,041	786,776	533	626	3,656	180	4,995

¹ Gross Carrying Amount numbers per business division are reported after a reallocation of cash balances from business divisions to Corporate & Other

² Prior year’s comparatives aligned to presentation in the current year

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Financial assets at amortized cost by industry sector

The below table provides an overview of the Group’s asset quality by industry and is based on the NACE code of the counterparty. NACE (Nomenclature des Activités Économiques dans la Communauté Européenne) is a standard European industry classification system.

	Dec 31, 2023
	Gross Carrying Amount					Allowance for Credit Losses
in € m.	Stage 1	Stage 2	Stage 3	Stage 3 POCI	Total	Stage 1	Stage 2	Stage 3	Stage 3 POCI	Total
Agriculture, forestry and fishing	288	77	20	0	384	0	1	4	(0)	6
Mining and quarrying	2,538	277	8	0	2,823	2	3	4	0	9
Manufacturing	23,474	4,061	1,445	44	29,024	27	48	456	2	533
Electricity, gas, steam and air conditioning supply	4,253	206	73	0	4,532	3	3	16	0	23
Water supply, sewerage, waste management and remediation activities	491	21	5	0	517	1	0	3	0	5
Construction	3,248	893	213	60	4,414	5	9	80	12	107
Wholesale and retail trade, repair of motor vehicles and motorcycles	17,237	3,407	698	25	21,366	16	31	351	3	402
Transport and storage	4,083	1,075	165	24	5,346	6	10	30	(0)	46
Accommodation and food service activities	1,471	320	76	3	1,869	2	3	26	(0)	31
Information and communication	7,398	814	89	0	8,302	10	11	28	0	49
Financial and insurance activities	342,352	12,189	1,691	351	356,583	96	90	491	92	769
Real estate activities	37,907	8,954	2,630	185	49,675	19	49	321	75	464
Professional, scientific and technical activities	5,887	918	179	1	6,985	6	12	75	1	94
Administrative and support service activities	7,980	1,107	351	24	9,463	7	11	114	9	141
Public administration and defense, compulsory social security	26,536	489	742	0	27,767	15	1	28	0	45
Education	226	46	11	0	283	0	1	2	0	3
Human health services and social work activities	3,986	482	34	0	4,503	5	7	14	0	25
Arts, entertainment and recreation	769	229	31	1	1,030	1	5	3	0	10
Other service activities	8,436	648	225	86	9,395	11	6	119	6	143
Activities of households as employers, undifferentiated goods- and services-producing activities of households for own use	193,318	19,492	4,113	3	216,927	212	379	1,792	(2)	2,381
Activities of extraterritorial organizations and bodies	213	0	0	0	213	0	0	0	0	0
Total	692,091	55,704	12,799	806	761,400	447	680	3,960	198	5,285

	Deutsche Bank
	Annual Report 2023 on Form 20-F

	Dec 31, 2022
	Gross Carrying Amount					Allowance for Credit Losses
in € m.	Stage 1	Stage 2	Stage 3	Stage 3 POCI	Total	Stage 1	Stage 2	Stage 3	Stage 3 POCI	Total
Agriculture, forestry and fishing	425	76	23	0	525	1	1	8	0	10
Mining and quarrying	2,227	137	70	0	2,434	4	5	23	0	32
Manufacturing	25,151	4,670	1,163	84	31,068	35	64	519	3	620
Electricity, gas, steam and air conditioning supply	6,226	563	51	0	6,839	4	5	33	0	42
Water supply, sewerage, waste management and remediation activities	624	63	39	0	726	1	1	6	0	8
Construction	3,453	540	203	87	4,282	5	9	91	10	115
Wholesale and retail trade, repair of motor vehicles and motorcycles	18,710	2,530	733	31	22,004	20	30	383	3	437
Transport and storage	5,233	642	225	28	6,127	9	8	65	(0)	83
Accommodation and food service activities	1,385	466	112	6	1,969	2	5	59	1	67
Information and communication	7,096	614	127	17	7,854	14	13	94	0	122
Financial and insurance activities	356,491	8,991	1,999	402	367,883	129	73	472	46	720
Real estate activities	41,450	6,345	896	238	48,929	30	22	116	71	239
Professional, scientific and technical activities	6,147	721	218	1	7,087	6	9	104	0	119
Administrative and support service activities	8,429	1,003	383	18	9,833	9	13	94	6	121
Public administration and defense, compulsory social security	30,984	418	923	0	32,325	15	0	17	0	33
Education	205	41	4	0	251	0	1	2	0	3
Human health services and social work activities	4,188	351	83	0	4,622	8	12	12	0	32
Arts, entertainment and recreation	922	185	28	1	1,137	1	5	2	0	9
Other service activities	7,198	818	226	123	8,365	10	6	133	25	174
Activities of households as employers, undifferentiated goods- and services- producing activities of households for own use	202,435	16,160	3,874	6	222,475	229	343	1,423	15	2,010
Activities of extraterritorial organizations and bodies	41	0	0	0	41	0	0	0	0	0
Total	729,021	45,335	11,379	1,041	786,776	533	626	3,656	180	4,995

Financial assets at amortized cost by region

	Dec 31, 2023
	Gross Carrying Amount					Allowance for Credit Losses
in € m.	Stage 1	Stage 2	Stage 3	Stage 3 POCI	Total	Stage 1	Stage 2	Stage 3	Stage 3 POCI	Total
Germany	297,495	21,499	3,653	0	322,648	214	390	1,936	(4)	2,537
Western Europe (excluding Germany)	134,375	15,228	3,410	560	153,573	116	179	1,076	194	1,564
Eastern Europe	8,768	1,058	396	0	10,221	4	11	47	0	62
North America	175,011	12,133	3,442	89	190,674	51	74	445	12	582
Central and South America	3,936	261	80	5	4,282	2	1	16	0	19
Asia/Pacific	52,290	5,031	909	92	58,322	28	23	317	1	370
Africa	4,099	187	717	0	5,003	8	1	30	0	39
Other	16,116	307	192	62	16,677	23	0	94	(5)	113
Total	692,091	55,704	12,799	806	761,400	447	680	3,960	198	5,285

	Deutsche Bank
	Annual Report 2023 on Form 20-F

	Dec 31, 2022
	Gross Carrying Amount					Allowance for Credit Losses
in € m.	Stage 1	Stage 2	Stage 3	Stage 3 POCI	Total	Stage 1	Stage 2	Stage 3	Stage 3 POCI	Total
Germany	324,716	19,904	3,689	0	348,310	201	333	1,619	13	2,166
Western Europe (excluding Germany)	141,935	9,828	3,171	712	155,646	178	194	1,224	162	1,758
Eastern Europe	8,050	1,174	386	0	9,609	3	7	97	0	107
North America	173,084	10,504	1,628	149	185,366	81	55	289	5	431
Central and South America	4,525	253	82	5	4,865	6	2	5	0	12
Asia/Pacific	58,621	2,967	1,475	112	63,174	40	28	330	3	400
Africa	3,144	177	843	0	4,164	8	0	7	0	15
Other	14,946	527	105	63	15,642	16	6	86	(4)	105
Total	729,021	45,335	11,379	1,041	786,776	533	626	3,656	180	4,995

Financial assets at amortized cost by rating class

	Dec 31, 2023
	Gross Carrying Amount					Allowance for Credit Losses
in € m.	Stage 1	Stage 2	Stage 3	Stage 3 POCI	Total	Stage 1	Stage 2	Stage 3	Stage 3 POCI	Total
iAAA–iAA	244,750	518	0	0	245,268	2	0	0	0	3
iA	101,538	2,359	0	9	103,907	8	1	0	0	9
iBBB	186,168	8,446	0	0	194,614	66	16	0	0	82
iBB	128,493	18,153	0	0	146,646	173	78	0	0	251
iB	28,531	20,040	0	0	48,571	165	294	0	0	459
iCCC and below	2,611	6,188	12,799	797	22,395	32	290	3,960	198	4,481
Total	692,091	55,704	12,799	806	761,400	447	680	3,960	198	5,285

	Dec 31, 2022
	Gross Carrying Amount					Allowance for Credit Losses
in € m.	Stage 1	Stage 2	Stage 3	Stage 3 POCI	Total	Stage 1	Stage 2	Stage 3	Stage 3 POCI	Total
iAAA–iAA	251,598	228	0	0	251,826	3	0	0	0	3
iA	106,548	580	0	14	107,142	9	1	0	0	10
iBBB	172,643	6,246	0	0	178,889	63	21	0	0	84
iBB	159,538	14,891	0	0	174,429	212	91	0	0	302
iB	35,626	17,717	0	14	53,358	218	276	0	6	501
iCCC and below	3,068	5,672	11,379	1,013	21,132	28	237	3,656	174	4,095
Total	729,021	45,335	11,379	1,041	786,776	533	626	3,656	180	4,995

The Group’s existing commitments to lend additional funds to debtors with Stage 3 financial assets at amortized cost amounted to € 816 million as of December 31, 2023, and € 621 million as of December 31, 2022.

Collateral held against financial assets at amortized cost in Stage 3

Dec 31, 2023

Dec 31, 2022

in € m.

Gross Carrying

Amount

Collateral

Guarantees

Gross Carrying

Amount

Collateral

Guarantees

Financial Assets at Amortized Cost (Stage 3)¹

12,799

4,451

1,435

11,379

3,431

1,439

¹ Stage 3 consists here only of non-POCI assets

In 2023, collateral and guarantees held against financial assets at amortized cost in Stage 3 increased by € 1 billion, or 21 % mainly driven by Investment Bank and Private Bank.

Due to full collateralization the Group did not recognize an allowance for credit losses against financial assets at amortized cost in Stage 3 for € 408 million in 2023 and € 916 million in 2022.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Modified assets at amortized cost

A financial asset is considered modified when its contractual cash flows are renegotiated or otherwise modified. Renegotiation or modification may or may not lead to derecognition of the old and recognition of the new financial instrument. This section covers modified financial assets that have not been derecognized.

Under IFRS 9, when the terms of a Financial Asset are renegotiated or modified and the modification does not result in derecognition, a gain or loss is recognized in the income statement as the difference between the original contractual cash flows and the modified cash flows discounted at the original effective interest rate (EIR). For modified financial assets the determination of whether the asset’s credit risk has increased significantly reflects the comparison of:

– The remaining lifetime probability of default (PD) at the reporting date based on the modified terms; with

– The remaining lifetime PD estimated based on data at initial recognition and based on the original contractual terms.

The following table provides the overview of modified financial assets at amortized cost in the reporting periods broken down into IFRS 9 stages.

Modified Assets at Amortized Cost

	Dec 31, 2023					Dec 31, 2022
in € m.	Stage 1	Stage 2	Stage 3	Stage 3 POCI	Total	Stage 1	Stage 2	Stage 3	Stage 3 POCI	Total
Amortized cost carrying amount prior to modification	0	1,072	220	0	1,292	0	0	47	0	47
Net modification gain/losses recognized	0	5	(40)	0	(35)	0	(0)	(6)	0	(6)

In 2023, the bank has observed the increase of € 1.2 billion in modified assets at amortized cost due to client related modifications, driven by a single large client in Private Bank and the CRE portfolio in Investment Bank and Corporate Bank. The latter were granted with no modification loss.

In 2023, the Group has not observed any amounts of modified assets that have been upgraded to Stage 1. The bank has not observed any subsequent re-deterioration of those assets into Stages 2 and 3.

In 2022, the Group has observed immaterial amounts of modified assets that have been upgraded to Stage 1. The bank has not observed any subsequent re-deterioration of those assets into Stages 2 and 3.

Financial assets at fair value through other comprehensive income

The fair value of financial assets at fair value through other comprehensive income (FVOCI) subject to impairment under IFRS 9 was € 36 billion at December 31, 2023, compared to € 32 billion at December 31, 2022. Allowance for credit losses against these assets remained at very low levels (€ 48 million as of December 31, 2023 and € 69 million as of December 31, 2022). Due to immateriality no further breakdown is provided for financial assets at FVOCI.

Off-balance sheet lending commitments and guarantee business

The following tables provide an overview of the nominal amount and credit loss allowance for the Group’s off-balance sheet financial asset class broken down into stages as per IFRS 9 requirements.

Development of nominal amount in the current reporting period

	Dec 31, 2023
	Nominal Amount
in € m.	Stage 1	Stage 2	Stage 3	Stage 3 POCI	Total
Balance, beginning of year	296,062	18,478	2,625	8	317,173
Movements including new business	4,062	2,510	(235)	0	6,337
Transfers due to changes in creditworthiness	(3,040)	3,094	(54)	0	0
Changes in models	0	0	0	0	0
Foreign exchange and other changes	(4,337)	(304)	(54)	0	(4,696)
Balance, end of reporting period	292,747	23,778	2,282	8	318,814
of which: Financial guarantees	58,405	5,991	401	0	64,798

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Development of nominal amount in the previous reporting period

	Dec 31, 2022
	Nominal Amount
in € m.	Stage 1	Stage 2	Stage 3	Stage 3 POCI	Total
Balance, beginning of year	276,157	14,498	2,582	11	293,248
Movements including new business	16,078	361	62	(3)	16,498
Transfers due to changes in creditworthiness	(3,047)	3,166	(119)	0	0
Changes in models	0	0	0	0	0
Foreign exchange and other changes	6,874	452	100	(0)	7,427
Balance, end of reporting period	296,062	18,478	2,625	8	317,173
of which: Financial guarantees	61,083	5,283	971	0	67,337

Development of allowance for credit losses in the current reporting period

	Dec 31, 2023
	Allowance for Credit Losses²
in € m.	Stage 1	Stage 2	Stage 3	Stage 3 POCI	Total
Balance, beginning of year	144	97	310	0	551
Movements including new business	(39)	(3)	(118)	0	(160)
Transfers due to changes in creditworthiness	11	(4)	(7)	0	0
Changes in models	0	0	0	0	0
Foreign exchange and other changes	1	(2)	3	0	2
Balance, end of reporting period	117	88	187	0	393
of which: Financial guarantees	84	37	113	0	233
Provision for Credit Losses excluding country risk¹	(28)	(7)	(125)	0	(160)

¹ The above table breaks down the impact on provision for credit losses from movements in financial assets including new business, transfers due to changes in creditworthiness and changes in models

² Allowance for credit losses does not include allowance for country risk amounting to € 9 million as of December 31, 2023

Development of allowance for credit losses in the previous reporting period

	Dec 31, 2022
	Allowance for Credit Losses²
in € m.	Stage 1	Stage 2	Stage 3	Stage 3 POCI	Total
Balance, beginning of year	108	111	225	0	443
Movements including new business	21	(1)	78	0	99
Transfers due to changes in creditworthiness	12	(15)	3	0	0
Changes in models	0	0	0	0	0
Foreign exchange and other changes	4	3	3	0	9
Balance, end of reporting period	144	97	310	0	551
of which: Financial guarantees	95	56	226	0	378
Provision for Credit Losses excluding country risk¹	33	(16)	82	0	99

¹ The above table breaks down the impact on provision for credit losses from movements in financial assets including new business, transfers due to changes in creditworthiness and changes in models

² Allowance for credit losses does not include allowance for country risk amounting to € 9 million as of December 31, 2022

Legal claims

Assets subject to enforcement activity consist of assets, which have been fully or partially written off and the Group still continues to pursue recovery of the asset. Such enforcement activity comprises for example cases where the bank continues to devote resources (e.g. our Legal Department/CRM workout unit) towards recovery, either via legal channels or third party recovery agents. Enforcement activity also applies to cases where the Bank maintains outstanding and unsettled legal claims. This is irrespective of whether amounts are expected to be recovered and the recovery timeframe. It may be common practice in certain jurisdictions for recovery cases to span several years.

Amounts outstanding on financial assets that were written off during the reporting period and are still subject to enforcement activity amounted to € 334 million in fiscal year 2023, mainly in Corporate Bank. In 2022, legal claims amounted to € 175 million, mainly in Corporate Bank and Private Bank.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Renegotiated and forborne assets at amortized costs

For economic or legal reasons the bank might enter into a forbearance agreement with a borrower who faces or will face financial difficulties in order to ease the contractual obligation for a limited period of time. A case-by-case approach is applied for corporate clients considering each transaction and client-specific facts and circumstances. For consumer loans the bank offers forbearances for a limited period of time, in which the total or partial outstanding or future instalments are deferred to a later point of time. However, the amount not paid including accrued interest during this period must be re-compensated at a later point of time. Repayment options include distribution over residual tenor, a one-off payment or a tenor extension. Forbearances are restricted and depending on the economic situation of the client, the Group’s risk management strategies and the local legislation. In case a forbearance agreement is entered into, an impairment measurement is conducted as described below, an impairment charge is taken if necessary and the loan is subsequently recorded as impaired.

In the Group’s management and reporting of forborne assets at amortized costs, the bank follows the EBA definition for forbearances and non-performing loans (Implementing Technical Standards (ITS) on Supervisory reporting on forbearance and non-performing exposures under article 99(4) of Regulation (EU) No 575/2013). Once the conditions mentioned in the ITS are met, the Group reports the loan as being forborne; removes the asset from the bank’s forbearance reporting, once the discontinuance criteria in the ITS are met (i.e., the contract is considered as performing, a minimum two year probation period has passed, regular payments of more than an insignificant aggregate amount of principal or interest have been made during at least half of the probation period, and none of the exposures to the debtor is more than 30 days past-due at the end of the probation period).

Forborne financial assets at amortized cost

	Dec 31, 2023							Dec 31, 2022
	Performing		Non-performing			Total forborne loans at amortized cost	Performing		Non-performing			Total forborne loans at amortized cost
in € m.	Stage 1	Stage 2	Stage 1	Stage 2	Stage 3		Stage 1	Stage 2	Stage 1	Stage 2	Stage 3
German	426	2,356	0	7	812	3,600	729	1,563	0	21	1,066	3,379
Non-German	639	4,399	0	194	3,632	8,864	1,254	3,139	60	13	3,299	7,764
Total	1,065	6,755	0	201	4,444	12,464	1,983	4,702	60	34	4,365	11,143

Development of forborne financial assets at amortized cost

in € m.	Dec 31, 2023	Dec 31, 2022
Balance beginning of period	11,143	13,741
Classified as forborne during the year	4,007	3,196
Transferred to non-forborne during the year (including repayments)	(2,500)	(5,899)
Charge-offs	(80)	(142)
Exchange rate and other movements	(106)	248
Balance end of period	12,464	11,143

Forborne assets at amortized cost increased by € 1.3 billion, or 12% in 2023. This was driven by the increase in Investment Bank.

Forborne assets at amortized cost decreased by € 2.6 billion, or 19% in 2022. This was driven by the reduction in the COVID-19 related forbearance measures, which was partly offset by an increase in Investment Bank and Corporate Bank.

Collateral Obtained

The Group obtains collateral on the balance sheet only in certain cases by either taking possession of collateral held as security or by calling upon other credit enhancements. Collateral obtained is made available for sale in an orderly fashion or through public auctions, with the proceeds used to repay or reduce outstanding indebtedness. Generally, the bank does not occupy obtained properties for its business use.

Collateral Obtained during the reporting period

in € m.	2023	2022
Commercial real estate	0	2
Residential real estate¹	3	1
Other	11	0
Total collateral obtained during the reporting period	14	4

¹ Carrying amount of foreclosed residential real estate properties amounted to € 30 million as of December 31, 2023 and € 62 million as of December 31, 2022

	Deutsche Bank
	Annual Report 2023 on Form 20-F

The collateral obtained, as shown in the table above, excludes collateral recorded as a result of consolidating securitization trusts under IFRS 10. In 2023 and 2022, the Group obtained € 0 million of collateral related to these trusts.

Derivatives – Credit Valuation Adjustment

The bank establishes counterparty Credit Valuation Adjustment (CVA) for OTC derivative transactions to cover expected credit losses. The adjustment amount is determined by assessing the potential credit exposure to a given counterparty and taking into account any collateral held, the effect of any relevant netting arrangements, expected loss given default and the credit risk, based on available market information, including CDS spreads.

Treatment of default situations under derivatives

Unlike standard loan assets, the bank generally has more options to manage the credit risk in its derivatives transactions when movement in the current replacement costs or the behavior of its counterparty indicate that there is the risk that upcoming payment obligations under the transactions might not be honored. In these situations, the bank is frequently able under the relevant derivatives agreements to obtain additional collateral or to terminate and close-out the derivative transactions at short notice.

The master agreements and associated collateralization agreements for OTC derivative transactions executed with its clients typically result in the majority of its credit exposure being secured by collateral. It also provides for a broad set of standard or bespoke termination rights, which allows the bank to respond swiftly to a counterparty’s default or to other circumstances which indicate a high probability of failure.

The bank’s contractual termination rights are supported by internal policies and procedures with defined roles and responsibilities which ensure that potential counterparty defaults are identified and addressed in a timely fashion. These procedures include necessary settlement and trading restrictions. When its decision to terminate derivative transactions results in a residual net obligation owed by the counterparty, the bank restructures the obligation into a non-derivative claim and manage it through its regular work-out process. As a consequence, for accounting purposes the bank typically does not show any nonperforming derivatives.

Wrong-way risk occurs when exposure to a counterparty is adversely correlated with the credit quality of that counterparty. In compliance with Article 291(2) and (4) CRR the bank has a monthly process to monitor several layers of wrong-way risk (specific wrong-way risk, general explicit wrong-way risk at country/industry/region levels and general implicit wrong-way risk, whereby relevant exposures arising from transactions subject to wrong-way risk are automatically selected and presented for comment to the responsible credit officer). A wrong-way risk report is then sent to Credit Risk senior management on a monthly basis. In addition, the bank utilized its established process for calibrating its own alpha factor (as defined in Article 284 (9) CRR) to estimate the overall wrong-way risk in its derivatives and securities financing transactions portfolio. The Private Bank Germany’s derivative counterparty risk is immaterial to the Group and collateral held is typically in the form of cash.

Managing and mitigation of credit risk

Managing credit risk on counterparty level

Credit-relevant counterparties are principally allocated to credit officers within credit teams which are organized by type of counterparty (such as financial institutions, corporates or private individuals), economic area (e.g., emerging markets) or product and supported by dedicated rating analyst teams where deemed necessary. The individual credit officers have the relevant expertise and experience to manage the credit risks associated with these counterparties and their associated credit related transactions. For retail clients, credit decision making and credit monitoring is highly automated due to standardized products and processes. Credit Risk Management has full oversight of the respective processes and tools used in these highly automated retail credit processes. It is the responsibility of each credit officer to undertake ongoing credit monitoring for their allocated counterparties. Deutsche Bank also has procedures in place intended to identify at an early-stage credit exposures for which there may be an increased risk of deteriorated risk/ loss.

In instances where Deutsche Bank has identified counterparties with emerging concern about their credit quality deteriorating or likely to deteriorate to the point where they present a heightened risk of default / loss, the respective counterparty is generally placed on the “Watchlist”. Deutsche Bank aims to identify those counterparties at an early stage to ensure that credit exposures with increased risks are effectively managed, the Bank’s risk management tools are appropriately applied aiming to minimize potential losses. The objective of this early warning system is to address potential problems while adequate options for action are still available. This early risk detection is a tenet of Deutsche Bank’s credit culture and is designed to raise management awareness of these positions.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Credit limits for individual counterparties are established by the Credit Risk Management function applying credit authorities assigned to individual Credit Officers. This also applies to settlement risk that must fall within limits pre-approved by Credit Risk Management and in a manner that reflects expected settlement patterns for the subject counterparty. Credit approvals are documented by electronic signature under 4-eye principle by the respective credit authority holders and are retained for future reference.

Credit authority is generally assigned as a personal credit authority according to the individual’s professional qualification and experience. All assigned credit authorities are reviewed on a periodic basis to help ensure that they are commensurate with the individual performance of the authority holder.

Where credit authority is insufficient to establish required credit limits, the transaction is referred to a credit authority holder with the respective credit authority or if exceeding the highest personal authority to an appropriate credit committee. Where personal and committee authorities are insufficient to establish appropriate limits, the case is referred to the Management Board for approval.

Mitigation of credit risk on counterparty level

In addition to determine counterparty credit quality by assigning internal ratings and the alignment of the exposure with the Bank’s counterparty concentration risk guidelines, Deutsche Bank also uses various credit risk mitigation & protection techniques to optimize credit exposure and reduce potential credit losses. These techniques are applied in the following forms:

–

Comprehensive and enforceable credit documentation with adequate terms and conditions

–

Collateral in its various forms to reduce losses by increasing the recovery of obligations; key principles for collateral management include legal effectiveness and enforceability, prudent and realistic collateral valuations, risk and regulatory capital reduction, as well as cost efficiency

– Risk transfers, which shift the risk of default of an obligor to a third-party including hedging executed by the bank’s Strategic Corporate Lending (SCL) team or entity; other de-risking tools, such as securitizations etc., may also be employed

– Netting and collateral arrangements which reduce the credit exposure from derivatives and securities financing transactions (e.g. repo transactions)

– Hedging of derivatives counterparty risk including CVA, using primarily CDS contracts via the bank’s Counterparty Portfolio Management desk

Collateral

Deutsche Bank regularly agrees on collateral to be received from customers that are subject to credit risk or to be provided by third parties agreed by legally effective and enforceable contracts as documented by a written and reasoned legal opinion. Collateral is credit protection in the form of (funded) assigned or pledged assets or (unfunded) third-party obligations that serves to mitigate the inherent risk of credit loss in an exposure, by either substituting the counterparty default risk or improving recoveries in the event of a default. Deutsche Bank generally takes all types of eligible collateral for its respective businesses but may limit accepted collateral types for specific businesses or regions as customary in the respective market or driven by purpose of efficiency. While collateral can be an alternative source of repayment, it does not replace the necessity of high-quality underwriting standards and a thorough assessment of the debt service ability of the counterparty in line with Article 194 (9) CRR.

Deutsche Bank distinguishes the following two types of credit protection approaches:

– Funded Credit Protection like financial and other collateral, which enables Deutsche Bank to recover all or part of the outstanding exposure by liquidating the collateral / asset provided, in cases where the counterparty is unable or unwilling to fulfill its primary obligations. Cash collateral, securities (equity, bonds), collateral pledges or assignments of other claims or inventory, movable assets (i.e., plant, machinery, ships and aircraft) and real estate typically fall into this category; all financial collateral is regularly, mostly daily, revalued and measured against the respective credit exposure; the value of other collateral, including real estate, is monitored based upon established processes that includes regular reviews or revaluations by internal and/or external experts

– Unfunded Credit Protection like Guarantees, which complement the counterparty’s ability to fulfill its obligation under the legal contract and as such is provided by uncorrelated third parties. Letters of credit, insurance contracts, export credit insurance, guarantees, credit derivatives and (unfunded) risk participations typically fall into this category. Guarantees and strong letters of comfort provided by correlated group members of customers (generally the parent company) may also be accepted and considered in approved rating approaches; guarantee collateral with a non-investment grade rating of the guarantor is limited

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Deutsche Bank’s processes seek to ensure that the collateral accepted for risk mitigation purposes is of high quality. This includes processes to generally ensure legally effective and enforceable documentation for realizable and measurable collateral or assets which are evaluated within the on-boarding process by dedicated internal appraisers or teams with the respective qualification, skills and experience or adequate external valuers mandated in regulated processes. The applied valuations follow generally accepted valuation methods or models. Ongoing correctness of values is monitored by collateral type-specific, appropriately frequent, and event-driven reviews considering relevant risk parameters. Revaluations are applied in cases of identified probable material deterioration and future monitoring may be adjusted respectively. The assessment of the suitability of collateral for a specific transaction is part of the credit decision and must be undertaken in a conservative way, including collateral haircuts that are applied. Deutsche Bank has collateral type specific haircuts in place which are regularly reviewed and approved. In this regard, Deutsche Bank strives to avoid “wrong-way” risk characteristics where the counterparty’s risk is positively correlated with the risk of deterioration in the collateral value. For unfunded credit protection like guarantees, the process for the analysis of the guarantor’s creditworthiness is aligned to the credit assessment process for credit-relevant counterparties.

The valuation of collateral is considered under a liquidation scenario. The liquidation value is equal to the expected proceeds of collateral monetization / realization in a base case scenario, wherein a fair price is achieved through careful preparation and orderly liquidation of the collateral. Collateral can either move in value over time (dynamic value) or not (static value). The dynamic liquidation value generally includes a safety margin or haircut over realizable value to address liquidity and marketability aspects.

The Group assigns a liquidation value to eligible collateral, based on, among other things:

– The market value and / or lending value, notional amount or face value of a collateral as a starting point

– The type of collateral; the currency mismatch, if any, between the secured exposure and the collateral; and a maturity mismatch, if any

– The applicable legal environment or jurisdiction (onshore versus offshore collateral)

– The market liquidity and volatility in relation to agreed termination clauses

– The correlation between the performance of the borrower and the value of the collateral, e.g., in the case of the pledge of a borrower’s own shares or securities (in this case generally full correlation leads to no liquidation value)

– The quality of physical collateral and potential for litigation or environmental risks; and

– A determined collateral type specific haircut (0 – 100 %) reflecting collection risks (i.e. price risks over the average liquidation period and processing/utilization/sales costs) as specified in the respective policies.

Collateral haircut settings are typically based on available historic internal and / or external recovery data (expert opinions may also be used, where appropriate). They also incorporate a forward-looking component in the form of collection and valuation forecast provided by experts within Risk Management. Considering the expected proceeds from the liquidation of the different collateral types, respective value fluctuations, market specific liquidation costs, and time applied haircuts vary between 0 to 100 %. When data is not sufficiently available or inconclusive, more conservative haircuts than otherwise used must be applied. Haircut settings are reviewed at least annually.

Risk transfers

Risk transfers to third parties form a key part of the bank’s overall risk management process and are executed in various forms, including outright sales, single name and portfolio hedging, and securitizations. Risk transfers are conducted by the respective business units and/ or by Strategic Corporate Lending, in accordance with specifically approved mandates.

Strategic Corporate Lending manages the residual credit risk of loans and lending-related commitments of the institutional and corporate credit portfolio, part of the leveraged lending portfolio and the medium-sized German companies’ portfolio across the bank’s Corporate Bank and Investment Bank divisions.

Acting as a central pricing reference, Strategic Corporate Lending provides the businesses with an observed or derived capital market rate for loan applications; however, the decision of whether or not the business can enter into the credit risk remains exclusively with Credit Risk Management.

Strategic Corporate Lending concentrates on two primary objectives within the credit risk framework to enhance risk management discipline, improve returns and use capital more efficiently:

– To reduce single-name credit risk concentrations within the credit portfolio and

– To manage credit exposures by utilizing techniques including loan sales, securitization via collateralized loan obligations, sub-participations and single-name and portfolio credit default swaps

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Netting and collateral arrangements for derivatives and securities financing transactions

Netting is applicable to both exchange traded derivatives and OTC derivatives. Netting is also applied to securities financing transactions (e.g. repurchase, securities lending and margin lending transactions) as far as documentation, structure and nature of the risk mitigation allow netting with the underlying credit risk in accordance with applicable law and the bank’s Financial Contracts Netting and Collateral Policy and Procedures – Legal (collectively, “Netting Policies”). While cross-product netting between derivatives and securities financing transactions may be used in certain cases, the bank does not make use of cross-product netting for regulatory purposes.

All exchange traded derivatives are cleared through central counterparties (CCPs), which interpose themselves between the trading entities by becoming the counterparty to each of the entities. Where legally required or where available and to the extent agreed with the bank’s counterparties, Deutsche Bank also uses CCP clearing for its OTC derivative transactions.

The Dodd-Frank Act and related Commodity Futures Trading Commission (CFTC) rules require CCP clearing in the United States for certain standardized OTC derivative transactions, including certain interest rate swaps and index credit default swaps, subject to limited exceptions when facing certain counterparties. The European Regulation (EU) No 648/2012 on OTC Derivatives, Central Counterparties and Trade Repositories (EMIR) and the Commission Delegated Regulations (EU) 2015/2205, (EU) 2015/592 and (EU) 2016/1178 based thereupon introduced mandatory CCP clearing in the EU for certain standardized OTC derivatives transactions. Mandatory CCP clearing in the EU began for certain interest rate derivatives on June 21, 2016 and for certain iTraxx-based credit derivatives and additional interest rate derivatives on February 9, 2017. Article 4 (2) of EMIR authorizes competent authorities to exempt intragroup transactions from mandatory CCP clearing, provided certain requirements, such as full consolidation of the intragroup transactions and the application of an appropriate centralized risk evaluation, measurement and control procedure are met. The bank successfully applied for the clearing exemption for a number of its regulatory-consolidated subsidiaries with intragroup derivatives, including e.g., Deutsche Bank Securities Inc. and Deutsche Bank Luxembourg S.A. As of December 31, 2023, the bank is allowed to make use of intragroup exemptions from the EMIR clearing obligation for 58 bilateral intragroup relationships. The extent of the exemptions differs as not all entities enter into relevant transaction types subject to the clearing obligation. Of the 58 intragroup relationships, 14 are relationships where both entities are established in the Union (EU) for which a full exemption has been granted, and 44 are relationships where one is established in a third country (“Third Country Relationship”). Third Country Relationships required repeat applications for each new asset class being subject to the clearing obligation; the process took place in the course of 2017. Due to “Brexit”, the status of some group entities has changed from an EU entity to a third country entity, but there has been no impact for the bank in respect clearing exemptions.

The rules and regulations of CCPs typically provide for the bilateral set off of all amounts payable on the same day and in the same currency (“payment netting”) thereby reducing the bank’s settlement risk. Depending on the business model applied by the CCP, this payment netting applies either to all of the bank’s derivatives cleared by the CCP or at least to those that form part of the same class of derivatives. Many CCPs’ rules and regulations also provide for the termination, close-out and netting of all cleared transactions upon the CCP’s default (“close-out netting”), which reduces the bank’s credit risk. In its risk measurement and risk assessment processes Deutsche Bank applies close-out netting only to the extent Deutsche Bank believes that the relevant CCP’s close-out netting provisions are legally valid and enforceable and have been approved in accordance with the bank’s Netting Policies.

In order to reduce the credit risk resulting from OTC derivative transactions, where CCP clearing is not available, Deutsche Bank regularly seeks the execution of standard master agreements (such as master agreements for derivatives published by the International Swaps and Derivatives Association, Inc. (ISDA) or the German Master Agreement for Financial Derivative Transactions) with the bank’s counterparties. A master agreement allows for the close-out netting of rights and obligations arising under derivative transactions that have been entered into under such a master agreement upon the counterparty’s default, resulting in a single net claim owed by or to the counterparty. Payment netting may be agreed from time to time with the bank’s counterparties for multiple transactions having the same payment dates (e.g., foreign exchange transactions) pursuant to the terms of master agreements which can, reduce the bank’s settlement risk. In its risk measurement and risk assessment processes Deutsche Bank applies close-out netting only to the extent Deutsche Bank has concluded that the master agreement is legally valid and enforceable in all relevant jurisdictions and the recognition of close-out netting has been approved in accordance with the bank’s Netting Policies.

Deutsche Bank also enters into credit support annexes (CSAs) to master agreements in order to further reduce the bank’s derivatives-related credit risk. These annexes generally provide risk mitigation through periodic, usually daily, margining of the covered exposure. The CSAs also provide for the right to terminate the related derivative transactions upon the counterparty’s failure to honor a margin call. As with netting, when Deutsche Bank believes the annex is enforceable, Deutsche Bank reflects this in its exposure measurement.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Certain CSAs to master agreements provide for rating-dependent triggers, where additional collateral must be pledged if a party’s rating is downgraded. Deutsche Bank also enters into master agreements that provide for an additional termination event upon a party’s rating downgrade. These downgrade provisions in CSAs and master agreements usually apply to both parties but in some agreements may apply to Deutsche Bank only. Deutsche Bank analyzes and monitors its potential contingent payment obligations resulting from a rating downgrade in its stress testing and liquidity coverage ratio approach for liquidity risk on an ongoing basis. For an assessment of the quantitative impact of a downgrading of the bank’s credit rating please refer to table “Stress Testing Results” in the section “Liquidity Risk”.

The Dodd-Frank Act and CFTC rules thereunder, including CFTC rule § 23.504, as well as EMIR and Commission Delegated Regulation based thereon, namely Commission Delegated Regulation (EU) 2016/2251, introduced the mandatory use of master agreements and related CSAs, which must be executed prior to or contemporaneously with entering into an uncleared OTC derivative transaction. Certain documentation is also required by the U.S. margin rules adopted by U.S. prudential regulators. Under the U.S. prudential regulators’ margin rules, Deutsche Bank is required to post and collect initial margin for its derivatives exposures with other derivatives dealers, as well as with the bank’s counterparties that (a) are “financial end users,” as that term is defined in the U.S. margin rules, and (b) have an average daily aggregate notional amount of uncleared swaps, uncleared security-based swaps, foreign exchange forwards and foreign exchange swaps exceeding U.S.$ 8 billion in June, July and August of the previous calendar year. The U.S. margin rules additionally requires Deutsche Bank to post and collect variation margin for its derivatives with other derivatives dealers and certain financial end user counterparties. These margin requirements are subject to a U.S.$ 50 million threshold for initial margin, but no threshold for variation margin, with a combined U.S.$ 500,000 minimum transfer amount. The U.S. margin requirements have been in effect for large banks since September 2016, with additional variation margin requirements having come into effect March 1, 2017 and additional initial margin requirements having been phased in from September 2017 through September 2022.

Under Commission Delegated Regulation (EU) 2016/2251, which implements the EMIR margin requirements, the CSA must provide for daily valuation and daily variation margining based on a zero threshold and a minimum transfer amount of not more than € 500,000. For large derivative exposures exceeding € 8 billion, initial margin has to be posted as well. The variation margin requirements under EMIR apply as of March 1, 2017; the initial margin requirements originally were subject to a staged phase-in until September 1, 2021. However, legislative changes published on February 17, 2021 extended deadlines into 2022. Under Article 31 of Commission Delegated Regulation (EU) 2016/2251, an EU party may decide to not exchange margin with counterparties in certain non-netting jurisdictions provided certain requirements are met. Pursuant to Article 11 (5) to (10) of EMIR, competent authorities are authorized to exempt intragroup transactions from the margining obligation, provided certain requirements are met. While some of those requirements are the same as for the EMIR clearing exemptions (see above), there are additional requirements such as the absence of any current or foreseen practical or legal impediment to the prompt transfer of funds or repayment of liabilities between intragroup counterparties. The bank is making use of this exemption. The bank has successfully applied for the collateral exemption for some of its regulatory-consolidated subsidiaries with intragroup derivatives, including, e.g., Deutsche Bank Securities Inc. and Deutsche Bank Luxembourg S.A. As of December 31, 2023, the bank is allowed to use intragroup exemptions from the EMIR collateral obligation for a number of bilateral intragroup relationships which are published under db.com/legal-resources/european-market-infrastructure-regulation/intra-group-exemptions-margining. For some bilateral intragroup relationships, the EMIR margining exemption may be used based on Article 11 (5) of EMIR, i.e. without the need for any application or publication, because both entities are established in the same EU Member State. For third country subsidiaries, the intragroup exemption was originally limited until the earlier of June 30, 2022 and four months after the publication of an equivalence decision by the EU Commission under Article 13(2) EMIR, unless, in the case of an equivalence decision being applicable, a follow-up exemption application is made and granted. On February 13, 2023, an amendment to Regulation (EU) 2016/2251 has been published in the Official Journal, which amendment relates to the extension of the exemption end date until June 30, 2025. While the application requirement may be abolished with “EMIR 3.0” (see European Commission proposal COM (2022) 697 final), Deutsche Bank continues to have processes in place ensuring readiness for intragroup margining should the need arise.

Concentrations within credit risk mitigation

Concentrations within credit risk mitigations taken may occur if a number of guarantors and credit derivative providers with similar economic characteristics are engaged in comparable activities with changes in economic or industry conditions affecting their ability to meet contractual obligations. Concentration risk may also occur in collateral portfolios (e.g. multiple claims and receivables against third parties) which are considered conservatively within the valuation process and / or on-site inspections where applicable. Deutsche Bank uses a range of tools and metrics to monitor its credit risk mitigating activities and potential concentrations.

For more qualitative and quantitative details in relation to the application of credit risk mitigation and potential concentration effects please refer to the section “Maximum exposure to credit risk”.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Managing credit risk on portfolio level

Enterprise Risk Management (ERM) Portfolio sets the framework for the management of concentration risks at a portfolio level. This includes strategically setting, monitoring, reviewing, reporting, and controlling credit risk appetites across various dimensions such as group, division, business unit, legal entity, branch, country, and industry level that need to be considered in the context of credit approvals. In addition, ERM Portfolio provides a comprehensive and holistic view of the bank’s risk profile across risk types.

On a portfolio level, significant concentrations of credit risk could result from having material exposures to a number of counterparties with similar economic characteristics, or who are engaged in comparable activities, where these similarities may cause their ability to meet contractual obligations to be affected in the same manner by changes in economic or industry conditions.

Deutsche Bank’s portfolio management framework supports a comprehensive assessment of concentrations within its credit risk portfolio in order to keep concentrations within acceptable levels.

Risk and portfolio developments are regularly discussed at the

Credit Risk Appetite and Portfolio Management Forum which includes representation from across the Credit Risk Management function including the Head of Credit Risk Management.

Industry risk management

To manage industry risk, Deutsche Bank has grouped its corporate and financial institutions counterparties into various industry sub-portfolios. Portfolios are regularly reviewed at least on an annual basis. Reviews highlight industry developments and risks to the bank’s credit portfolio, review cross-risk concentration risks, analyze the risk/reward profile of the portfolio and incorporate the results of an economic downside stress test. Finally, this analysis is used to define the credit strategies for the portfolio in question.

In the bank’s industry risk management framework, thresholds are established for aggregate credit limits to counterparties within each industry sub-portfolio. For risk management purposes, the aggregation of limits across industry sectors follows an internal risk view that does not have to be congruent with NACE (Nomenclature des Activities Economiques dans la Communate Europeenne) code-based view applied elsewhere in this report. Regular industry portfolio overviews are prepared for the Enterprise Risk Committee to discuss recent developments and to agree on risk management actions where necessary.

Beyond credit risk, the bank’s industry risk framework comprises of thresholds for Traded Credit Positions while key industry relevant non-financial risks are closely monitored.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Country risk management

Avoiding undue concentrations from a regional and country perspective is also an integral part of the bank’s credit risk management framework. In order to achieve this, country risk thresholds are applied to countries in Non-Japan Asia, Central Eastern Europe, Middle East & Africa and Latin America as well as selected Developed Markets countries (based on internal country risk ratings). Country portfolios are regularly reviewed with the frequency of review dependent on portfolio size and risk profile as well as risk developments. Larger / riskier portfolios are reviewed at least on an annual basis. These reviews assess amongst other factors, key macroeconomic and political risk developments and outlook; portfolio composition, quality and cross-risk concentrations under normal and stress conditions; analyze the risk / reward profile of the portfolio. Based on this and taking into account the Group’s Risk Appetite and strategy, country risk appetite and strategies are set by ERM.

In the bank’s country risk framework, thresholds are established for counterparty credit risk exposures in each country to manage the aggregate credit risk subject to country-specific economic and political events. These thresholds cover exposures to entities incorporated locally and subsidiaries of foreign multinational corporations as well as companies with significant economic or operational dependence on a specific country even though they are incorporated externally. In addition, gap risk thresholds are set to control the risk of loss due to intra-country wrong-way risk exposure. As such, for risk management purposes, the aggregation of exposures across countries follows an internal risk view that may differ from the geographical exposure view applied elsewhere in this report. Beyond credit risk, the bank’s country risk framework comprises thresholds for trading positions that measure the aggregate market value of traded credit risk positions. For Emerging Markets, thresholds are also set to measure the profit and loss impact under specific country stress scenarios on trading positions across the bank’s portfolio. Furthermore, thresholds are set for capital and intra-group funding exposure of Deutsche Bank entities in above countries given the transfer risk inherent in these cross-border positions. Key non-financial risks are closely monitored and factored into financial threshold setting considerations where relevant. Deutsche Bank’s country risk ratings represent a key tool in its management of country risk. They include:

– Sovereign rating (set and managed by ERM Risk Research): A measure of the probability of the sovereign defaulting on its foreign or local currency obligations

– Transfer risk rating (set and managed by ERM Risk research): A measure of the probability of a “transfer risk event”, i.e., the risk that an otherwise solvent debtor is unable to meet its obligations due to inability to obtain foreign currency or to transfer assets as a result of direct sovereign intervention

All sovereign and transfer risk ratings are reviewed, at least on an annual basis.

Product/Asset class specific risk management

Complementary to the bank’s counterparty, industry and country risk approach, Deutsche Bank focuses on certain product / asset class specific risk concentrations and sets limits or thresholds where required for risk management purposes. Specific risk limits are set in particular if a concentration of transactions of a specific type might lead to significant losses under certain conditions. In this respect, correlated losses might result from disruptions in the functioning of financial markets, significant moves in market parameters to which the respective product or asset class is sensitive to, or other risk drivers common to the asset class.

Private Bank and certain Corporate Bank businesses are managed via product-specific strategies setting the bank’s risk appetite for portfolios with similar credit risk characteristics, such as the retail portfolios of mortgages and consumer finance products as well as products for business clients. Risk analyses are performed on portfolio level including further breakdown into business units as well as countries/regions. In Wealth Management, target levels are set for global concentrations along products as well as based on type and liquidity of collateral.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Underwriting of capital markets transactions

Specific focus is placed on transactions with underwriting risks where Deutsche Bank underwrites commitments with the intention to sell down or distribute part of the risk to third parties. These commitments include the undertaking to provide bank loans for syndication into the debt capital market and bridge loans for the issuance of notes. The inherent risks of being unsuccessful in the distribution of the facilities or the placement of the notes, comprise of a delayed distribution, funding of the underlying loans as well as a pricing risk as some underwriting commitments are additionally exposed to market risk in the form of widening credit spreads. Where applicable, Deutsche Bank dynamically hedges this credit spread risk to be within the approved market risk limit framework.

A major asset class, in which Deutsche Bank is active in underwriting, is leverage lending, which Deutsche Bank mainly executes through its Leveraged Debt Capital Markets business unit. The business model is a fee-based‚ originate to distribute approach focused on the distribution of largely unfunded underwriting commitments into the capital market. The afore-mentioned risks regarding distribution and credit spread movement apply to this business unit, however, are managed under a range of specific notional as well as market risk limits. The latter require the business to also hedge its underwriting pipeline against market dislocations. The fee-based model of the bank’s Leveraged Debt Capital Markets business unit includes a restrictive approach to single-name risk concentrations retained on Deutsche Bank’s balance sheet, which results in a diversified overall portfolio without any material concentrations. The resulting longer-term on-balance sheet portfolio is also subject to a comprehensive credit limit and hedging framework.

Deutsche Bank assumes underwriting risk with respect to Commercial Real Estate loans. Primarily in the Commercial Real Estate business unit in the Investment Bank loans may be originated with the intent to securitize in the capital markets or syndicate to other lenders. The afore-mentioned inherent underwriting risks such as delayed distribution and pricing risk are managed through notional caps, market risk limits and hedging against the risk of market dislocations.

Deutsche Bank also provides material underwriting activity through its Debt Capital Markets desk which is focused on supporting Investment Grade and cross-over rated corporate borrowers, usually in connection with M&A transaction financing. These exposures are typically 12-24 month bridge loans, which are expected to be repaid by syndicated loans and/or capital markets issuance by the borrower. Deutsche Bank does not bear market placement or pricing risk on these exposures but faces funding risk and credit risk for the duration of the commitment, which are managed through notional underwriting limits for the Group and an industry concentration framework.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Market Risk Management

Market Risk framework

The vast majority of Deutsche Bank’s businesses are subject to market risk, defined as the potential for change in the market value of the Group’s trading and invested positions. Risk can arise from changes in interest rates, credit spreads, foreign exchange rates, equity prices, commodity prices and other relevant parameters, such as market volatility and market implied default probabilities. The market risk can affect accounting, economic and regulatory views of the exposure.

Market Risk Management is part of Deutsche Bank’s independent Risk function and sits within the Market and Valuations Risk Management group. One of the primary objectives of Market Risk Management is to ensure that the business units’ risk exposure is within the approved risk appetite commensurate with its defined strategy. To achieve this objective, Market Risk Management works closely together with risk takers (“the business units”) and other control and support groups.

The Group distinguishes between three substantially different types of market risk:

– Trading market risk arises primarily through the market-making and client facilitation activities of the Investment Bank and Corporate Bank divisions. This involves taking positions in debt, equity, foreign exchange, other securities and commodities as well as in equivalent derivatives

– Traded default risk arising from defaults and rating migrations relating to trading instruments

– Non-trading market risk arises from market movements, primarily outside the activities of the trading units, in the banking book and from off-balance sheet items; this includes interest rate risk, credit spread risk, investment risk and foreign exchange risk as well as market risk arising from pension schemes, guaranteed funds and equity compensation; non-trading market risk also includes risk from the modeling of client deposits as well as savings and loan products

Market Risk Management governance is designed and established to promote oversight of all market risks, effective decision-making and timely escalation to senior management.

Market Risk Management defines and implements a framework to systematically identify, assess, monitor and report the Group’s market risk. Market risk managers identify market risks through active portfolio analysis and engagement with the business units.

Market Risk measurement

The Group aims to accurately measure all types of market risks by a comprehensive set of risk metrics embedding accounting, economic and regulatory considerations.

The market risks are measured by several internally developed key risk metrics and regulatory defined market risk approaches.

Trading Market Risk

The Group’s primary mechanism to manage trading market risk is the application of the bank’s risk appetite framework of which the limit framework is a key component. The Management Board, supported by Market Risk Management, sets group-wide value-at-risk, economic capital and portfolio stress testing limits for market risk in the trading book. Market Risk Management allocates this overall appetite to the Corporate Divisions and their individual business units based on established and agreed business plans. Deutsche Bank also has business aligned heads within Market Risk Management who establish business unit limits, by allocating the limit down to individual portfolios, geographical regions and types of market risks.

Value-at-risk, economic capital and portfolio stress testing limits are used for managing all types of market risk at an overall portfolio level. As an additional and important complementary tool for managing certain portfolios or risk types, Market Risk Management performs risk analysis and business specific stress testing. Limits are also set on sensitivity and concentration/liquidity, exposure, business-level stress testing and event risk scenarios, taking into consideration business plans and the risk versus return assessment.

Business units are responsible for adhering to the limits against which exposures are monitored and reported. The market risk limits set by Market Risk Management are monitored on a daily, weekly and monthly basis, dependent on the risk management tool being used.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Internally developed Market Risk Models

Value-at-Risk (VaR)

VaR is a quantitative measure of the potential loss (in value) of Fair Value positions due to market movements that should not be exceeded in a defined period of time and with a defined confidence level.

The Group’s value-at-risk for the trading businesses is based on historical simulation model (internal model approach) predominantly utilizing full revaluation, although some portfolios remain on a sensitivity-based approach. The approach is used for both Risk Management and capital requirements.

Risk management VaR is calibrated to a 99% confidence level and a one day holding period. This means we estimate there is a 1 in 100 chance that a mark-to-market loss from our trading positions will be at least as large as the reported VaR. For regulatory capital purposes, the VaR model is calibrated to a 99% confidence interval and a ten day holding period.

The calculation employs a historical simulation technique that uses one year of historical market data as input and observed correlations between the risk factors during this one year period.

The VaR model is designed to take into account a comprehensive set of risk factors across all asset classes. Key risk factors are swap/government curves, index and issuer-specific credit curves, single equity and index prices, foreign exchange rates, commodity prices as well as their implied volatilities. To help ensure completeness in the risk coverage, second order risk factors, e.g., money market basis, implied dividends, option-adjusted spreads and precious metals lease rates are also considered in the VaR calculation. The list of risk factors included in the VaR model is reviewed regularly and enhanced as part of ongoing model performance reviews.

The model incorporates both linear and, especially for derivatives, nonlinear impacts predominantly through a full revaluation approach but it also utilizes a sensitivity-based approach for certain portfolios. The full revaluation approach uses the historical changes to risk factors as input to pricing functions. Whilst this approach is computationally expensive, it does yield a more accurate view of market risk for nonlinear positions, especially under stressed scenarios. The sensitivity-based approach uses sensitivities to underlying risk factors in combination with historical changes to those risk factors.

For each business unit a separate VaR is calculated for each risk type, e.g., interest rate risk, credit spread risk, equity risk, foreign exchange risk and commodity risk. “Diversification effect” reflects the fact that the total VaR on a given day will be lower than the sum of the VaR relating to the individual risk types. Simply adding the VaR figures of the individual risk types to arrive at an aggregate VaR would imply the assumption that the losses in all risk types occur simultaneously.

The VaR enables the Group to apply a consistent measure across the fair value exposures. It allows a comparison of risk in different businesses, and also provides a means of aggregating and netting positions within a portfolio to reflect correlations and offsets between different asset classes. Furthermore, it facilitates comparisons of the market risk both over time and against the daily trading results.

When using VaR results a number of considerations should be taken into account. These include:

– The use of historical market data may not be a good indicator of potential future events, particularly those that are extreme in nature; this “backward-looking” limitation can cause VaR to understate future potential losses (as in financial credit crisis 2008/09), but can also cause it to be overstated immediately following a period of significant stress (as in COVID-19 pandemic)

– The one day holding period does not fully capture the market risk arising during periods of illiquidity, when positions cannot be closed out or hedged within one day

– VaR does not indicate the potential loss beyond the 99 ^th quantile

– Intra-day risk is not reflected in the end of day VaR calculation

– There may be risks in the trading or banking book that are not fully captured in the VaR model (either partially captured or missing entirely)

The process of systematically capturing and evaluating risks currently not captured in the bank’s VaR model has been further developed and improved. An assessment is made to determine the level of materiality of these risks and material risks are prioritized for inclusion in the bank’s internal model. Risks not in VaR are monitored and assessed on a regular basis through the Risk Not In VaR (RNIV) framework. This framework has also undergone a significant overhaul in 2020 which included the alignment of methodologies with the Historical Simulation approach which in turn yields a more accurate estimate of the contribution of these missing items and their potential capitalization.

Deutsche Bank is committed to the ongoing development of the internal risk models, and substantial resources are allocated to review, validate and improve them.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Stressed Value-at-Risk

Stressed Value-at-Risk (SVaR) calculates a stressed value-at-risk measure based on a one year period of significant market stress. The Group calculates a stressed value-at-risk measure using a 99 % confidence level. Stressed VaR is calculated with a holding period of ten days. The SVaR calculation utilizes the same systems, trade information and processes as those used for the calculation of value-at-risk. The only difference is that historical market data and observed correlations from a period of significant financial stress (i.e., characterized by high volatilities) are used as an input for the historical simulation.

The stress period selection process for the stressed value-at-risk calculation is based on the comparison of VaR calculated using historical time windows compared to the current SVaR. If a historical window produces a VaR which is higher than the current SVaR, it is further investigated and the SVaR window can subsequently be updated accordingly. This process runs on a quarterly basis.

During 2023, the stress period selection process for the Group was conducted as outlined above. As a result, the SVaR window used at various periods in 2023 included the financial credit crisis of 2008/09 and the European sovereign crisis of 2011/12.

Incremental Risk Charge

Incremental Risk Charge captures default and credit rating migration risks for credit-sensitive positions in the trading book. The Group uses a Monte Carlo Simulation for calculating incremental risk charge as the 99.9 % quantile of the portfolio loss distribution over a one-year capital horizon under a constant position approach and for allocating contributory incremental risk charge to individual positions.

The model captures the default and migration risk in an accurate and consistent quantitative approach for all portfolios. Important parameters for the incremental risk charge calculation are exposures, recovery rates, maturities, ratings with corresponding default and migration probabilities and parameters specifying issuer correlations.

Market Risk Standardized Approach

The Market Risk Standardized Approach (“MRSA”) is used to determine the regulatory capital charge for the specific market risk of trading book securitizations, for certain types of investment funds and for longevity risk as set out in CRR/CRD regulations.

Longevity risk is the risk of adverse changes in life expectancies resulting in a loss in value on longevity linked policies and transactions. For risk management purposes, stress testing and economic capital allocations are also used to monitor and manage longevity risk.

Market Risk Stress Testing

Stress testing is a key risk management technique, which evaluates the potential effects of extreme market events and movements in individual risk factors. It is one of the core quantitative tools used to assess the market risk of Deutsche Bank’s positions and complements VaR and Economic Capital. Market Risk Management performs several types of stress testing to capture the variety of risks (Portfolio Stress Testing, individual specific stress tests and Event Risk Scenarios) and also contributes to Group-wide stress testing. These stress tests cover a wide range of severities designed to test the earnings stability and capital adequacy of the bank.

Trading Market Risk Economic Capital

Deutsche Bank’s trading market risk economic capital model-scaled Stressed VaR based EC (SVaR based EC) - comprises two core components, the “common risk” component covering risk drivers across all businesses and the “business-specific risk” component, which enriches the Common Risk via a suite of Business Specific Stress Tests. Both components are calibrated to historically observed severe market shocks. Common risk is calculated using a scaled version of the SVaR framework while Business Specific Stress Tests are designed to capture more product/business-related bespoke risks (e.g., complex basis risks) as well as higher order risks not captured in the common risk component. The SVaR based EC uses the Monte Carlo SVaR framework.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Traded Default Risk Economic Capital

The Traded Default Risk Economic Capital captures the relevant credit exposures across our trading and fair value banking books. Trading book exposures are monitored by Market Risk Management via single name concentration and portfolio thresholds which are set based upon rating, size and liquidity. Single name concentration risk thresholds are set for two key metrics: Default Exposure, i.e., the P&L impact of an instantaneous default at the current recovery rate, and bond equivalent Market Value, i.e., default exposure at 0 % recovery. In order to capture diversification and concentration effects we perform a joint calculation for traded default risk economic capital and credit risk economic capital. Important parameters for the calculation of traded default risk are exposures, recovery rates and default probabilities as well as maturities. The probability of joint rating downgrades and defaults is determined by the default and rating correlations of the portfolio model. These correlations are specified through systematic factors that represent countries, geographical regions and industries.

Trading Market Risk Reporting

Market Risk Management reporting creates transparency on the risk profile and facilitates the understanding of core market risk drivers to all levels of the organization. The Management Board and Senior Governance Committees receive regular reporting, as well as ad hoc reporting as required, on market risk, regulatory capital and stress testing. Senior Risk Committees receive risk information at a number of frequencies, including weekly or monthly.

Additionally, Market Risk Management produces daily and weekly Market Risk specific reports and daily limit utilization reports for each business owner.

Regulatory prudent valuation of assets carried at fair value

Pursuant to Article 34 CRR, institutions shall apply the prudent valuation requirements of Article 105 CRR to all assets measured at fair value and shall deduct from CET 1 capital the amount of any additional value adjustments necessary.

We determined the amount of the additional value adjustments based on the methodology defined in the Commission Delegated Regulation (EU) 2016/101.

As of December 31, 2023, the amount of the additional value adjustments was € 1.7 billion. The December 31, 2022, amount was € 2.0 billion. The decrease was predominantly due to a combination of risk exposure changes and reductions in price dispersion.

As of December 31, 2023, the reduction of the expected loss from subtracting the additional value adjustments was € 102 million, which partly mitigated the negative impact of the additional value adjustments on our CET 1 capital.

Non-trading Market Risk

Non-trading market risk arises primarily from activities outside of the trading units, in the banking book, including pension schemes and guarantees, and embedding considerations of different accounting treatments of transactions. Significant market risk factors the Group is exposed to and are overseen by risk management groups in that area are interest rate risk (including risk from embedded optionality and changes in behavioral patterns for certain product types), credit spread risk, foreign exchange risk (including structural foreign exchange risk), equity risk (including equity compensation related risk and investments in public and private equity as well as real estate, infrastructure and fund assets).

As for trading market risks the Group’s risk appetite and limit framework is also applied to manage our exposure to non-trading market risk. On group level those are captured by the management board set limits for market risk economic capital capturing exposures to all market risks across asset classes as well as earnings and economic value based limits for interest rate risk in the banking books. Those limits are cascaded down by market risk management to the divisional or portfolio level. The limit framework for non-trading market risk exposure is further complemented by a set of business specific stress tests, value-at-risk & sensitivity limits monitored on a daily or monthly basis dependent on the risk measure being used.

Interest Rate Risk in the Banking Book

Interest rate risk in the banking book (IRRBB) is the current or prospective risk, to both the Group's capital and earnings, arising from movements in interest rates, which affect the Group's banking book exposures. This includes gap risk, which arises from the term structure of banking book instruments, basis risk, which describes the impact of relative changes in interest rates for financial instruments that are priced using different interest rate curves, as well as option risk, which arises from option derivative positions or from optional elements embedded in financial instruments.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

The Group manages its IRRBB exposures using economic value as well as earnings based measures. The Group Treasury function is mandated to manage the interest rate risk centrally, with Market Risk Management acting as 2nd Line of Defense (LoD) independently assessing and challenging the implementation of the framework and adherence to the risk appetite. Group Audit in its role as the 3rd LoD is accountable for providing independent and objective assurance on the adequacy of the design, operating effectiveness and efficiency of the risk management system and systems of internal control. The Group Asset & Liability Committee (“ALCo”) oversees and steers the Group’s structural interest risk position with particular focus on banking book risks and the management of the net interest income. The ALCo monitors the sensitivity of financial resources and associated metrics to key market parameters such as interest rate curves and oversees adherence to divisional/business financial resource limits.

Economic value based measures look at the change in economic value of banking book assets, liabilities and off-balance sheet exposures resulting from interest rate movements, independent of the accounting treatment. Thereby the Group measures the change in economic value of equity (∆EVE) as the maximum decrease of the banking book economic value under the six standard scenarios defined by the EBA in addition to internal stress scenarios for risk steering purposes. For the reporting of internal stress scenarios and risk appetite the Group applies a few different modelling assumptions as used in this disclosure. When aggregating the economic value of equity ∆EVE across different currencies, DB adds up negative and positive changes without applying weight factors for positive changes. Furthermore, the Group is using behavioral model assumptions about the interest rate duration of own equity capital as well as non-maturity deposits from financial institutions.

Earnings-based measures look at the expected change in net interest income (NII) resulting from interest rate movements over a defined time horizon, compared to a defined benchmark scenario. Thereby the Group measures net interest income ∆NII as the maximum reduction under the six standard scenarios defined by the EBA in addition to internal stress scenarios for risk steering purposes, compared to a market implied curve scenario, over a period of 12 months.

The Group employs mitigation techniques to hedge the interest rate risk arising from non-trading positions within given limits. The interest rate risk arising from non-trading asset and liability positions is managed through Treasury Markets & Investments. Thereby the Group uses derivatives and applies different hedge accounting techniques such as fair value hedge accounting or cash flow hedge accounting. For fair value hedges, the Group uses interest rate swaps and options contracts to manage the fair value movements of fixed rate financial instruments due to changes in benchmark interest. For hedges in the context of the cash flow hedge accounting, the Group uses interest rate swaps to manage the exposure to cash flow variability of the variable rate instruments as a result of changes in benchmark interest rates.

The Group assesses and measures hedge effectiveness of a hedging relationship based on the change in the fair value or cash flows of the derivative hedging instrument relative to the change in the fair value or cash flows of the hedged item attributable to the hedged risk.

The “Model Risk Management” function performs independent validation of models used for IRRBB measurement, as per all market risk models, in line with Deutsche Bank’s group-wide risk governance framework.

The calculation of VaR and sensitivities of interest rate risk is performed daily, whereas the measurement and reporting of economic value interest rate and earnings risk is performed on a monthly basis. The Group generally uses the same metrics in its internal management systems as it applies for the disclosure in this report.

Deutsche Bank’s key modelling assumptions are applied to the positions in the Private Bank and Corporate Bank divisions. Those positions are subject to risk of changes in client’s behavior with regard to their deposits as well as loan products. The Group regularly tests the assumptions and updates them where appropriate following a defined governance process. In particular, the Group has made changes to its assumptions during the early phase of rising interest rates where a slower repricing in deposits was observed than it was anticipated.

The Group manages the interest rate risk exposure of its non-maturity deposits through a replicating portfolio approach to determine the average repricing maturity of the portfolio. For the purpose of constructing the replicating portfolio, the portfolio of non-maturity deposits is clustered by dimensions such as business unit, currency, product and geographical location. The main dimensions influencing the repricing maturity are elasticity of deposit rates to market interest rates, volatility of deposit balances and observable client behavior. For the reporting period the average repricing maturity assigned across all such replicating portfolios is 2.40 years and Deutsche Bank uses 15 years as the longest repricing maturity.

In the loan and some of the term deposit products Deutsche Bank considers early prepayment/withdrawal behavior of its customers. The parameters are based on historical observations, statistical analyses and expert assessments.

Furthermore, the Group generally calculates IRRBB related metrics in contractual currencies and aggregates the resulting metrics for reporting purposes. When calculating economic value based metrics the commercial margin is excluded for material parts of the balance sheet.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Credit spread risk in the banking book

Deutsche Bank is exposed to credit spread risk of bonds held in the banking book, mainly as part of the Treasury Liquidity Reserves portfolio. The credit spread risk in the banking book is managed by the businesses, with Market Risk Management acting as an independent oversight function ensuring that the exposure is within the approved risk appetite. This risk category is closely associated with interest rate risk in the banking book as changes in the perceived credit quality of individual instruments may result in fluctuations in spreads relative to underlying interest rates. The calculation of credit spread sensitivities and value-at-risk for credit spread exposure is in general performed on a daily basis, the measurement and reporting of economic capital and stress tests are performed on a monthly basis.

Foreign exchange risk

Foreign exchange risk arises from non-trading asset and liability positions that are denominated in currencies other than the functional currency of the respective entity. The majority of this foreign exchange risk is transferred through internal hedges to trading books within the Investment Bank and is therefore reflected and managed via the value-at-risk figures in the trading books. The remaining foreign exchange risks that have not been transferred are mitigated through match funding the investment in the same currency, so that only residual risk remains in the portfolios. Small exceptions to above approach follow the general Market Risk Management monitoring and reporting process, as outlined for the trading portfolio.

The bulk of non-trading open foreign exchange risk arises from the foreign exchange translation of local capital into the reporting currency of the Group and related capital hedge positions. Thereby structural open long positions

are taken for a selected number of relevant currencies to immunize the sensitivity of the capital ratio of the Group against changes in the exchange rates.

Equity and investment risk

Non-trading equity risk is arising predominantly from our non-consolidated investment holdings in the banking book and from our equity compensation plans.

Deutsche Bank’s non-consolidated equity investment holdings in the banking book are categorized into strategic and alternative investment assets. Strategic investments typically relate to acquisitions made to support the bank’s business franchise and are undertaken with a medium to long-term investment horizon. Alternative assets are comprised of principal investments and other non-strategic investment assets. Principal investments are direct investments in private equity, real estate, venture capital, hedge or mutual funds whereas assets recovered in the workout of distressed positions or other legacy investment assets in private equity and real estate are of a non-strategic nature.

Investment proposals for strategic investments as well as monitoring of progress and performance against committed targets are evaluated by the Group Investment Committee. Depending on size, strategic investments may require approval from the Group Investment Committee, the Management Board or the Supervisory Board.

Credit Risk Management Principal Investments is responsible for the risk-related governance and monitoring of our alternative asset activities. The review of new or increased principal investment commitments is the task of the Principal Investment Commitment Approval Group, established by the Enterprise Risk Committee as a risk management forum for alternative asset investments. The Principal Investment Commitment Approval Group approves investments under its authority or recommends decisions above its authority to the Management Board for approval. The Management Board also sets investment limits for business divisions and various portfolios of risk upon recommendation by the Enterprise Risk Committee.

The equity investment holdings are included in regular group wide stress tests and the monthly market risk economic capital calculations.

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Pension risk

The Group is exposed to market risks from defined benefit pension schemes for past and current employees. Market risks in pension plans materialize due to a potential decline in the market value of plan assets or an increase in the present value of the pension liability of each of the pension plans. Market Risk Management is responsible for a regular measurement, monitoring, reporting and control of market risks of the asset and liability side of the defined benefit pension plans. Thereby, market risks in pension plans include but are not restricted to interest rate risk, inflation risk, credit spread risk, equity risk, and longevity risk. For further details on the Group’s defined benefit pension obligations and their management, please refer to Note 33 “Employee Benefits” in the “Notes to the Consolidated Financial Statements” section.

Other risks in the banking book

Market risks in the Asset Management business primarily result from principal guaranteed funds or accounts, but also from co-investments in the bank’s funds.

Non-trading Market Risk Economic Capital

Non-trading market risk economic capital is calculated either by applying the standard traded market risk EC methodology or through the use of non-traded market risk models that are specific to each risk class and which consider, among other factors, historically observed market moves, the liquidity of each asset class, and changes in client’s behavior in relation to products with behavioral optionality.

100

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Operational risk management

Operational Risk Management Framework

Deutsche Bank applies the European Banking Authority’s Single Rulebook definition of operational risk: “Operational risk means the risk of losses stemming from inadequate or failed internal processes, people and systems or from external events. Operational risk includes legal risks but excludes business and reputational risk and is embedded in all banking products and activities.” Operational risk forms a subset of the bank’s non-financial risks.

Deutsche Bank’s operational risk appetite sets out the amount of operational risk it is willing to accept as a consequence of doing business. The bank takes on operational risks consciously, both strategically as well as in day-to-day business. While the bank may have no appetite for certain types of operational risk events (such as violations of laws or regulations and misconduct), in other cases a certain amount of operational risk must be accepted if the bank is to achieve its business objectives. In case a residual risk is assessed to be outside risk appetite, risk reducing actions must be undertaken, including remediating the risks, insuring risks or ceasing business.

The Operational Risk Management Framework is a set of interrelated tools and processes that are used to identify, assess, mitigate and monitor the bank’s operational risks. Its components have been designed to operate together to provide a comprehensive, risk-based approach to managing the bank’s most material operational risks. Operational Risk Management Framework components include the Group’s approach to setting and adhering to operational risk appetite, the operational risk type and control taxonomies, the policies and procedures for operational risk management processes including the respective tools, and the bank’s operational risk capital model.

Organizational and governance structure

While the day-to-day management of operational risk is the primary responsibility of business divisions and infrastructure functions, where these risks are generated, Non-Financial Risk Management (NFRM) oversees the Group-wide management of operational risks, identifies and reports risk concentrations, and promotes a consistent application of the Operational Risk Management Framework across the bank. NFRM is part of the Group’s risk function, the Chief Risk Office, which is headed by the Chief Risk Officer.

The Chief Risk Officer appoints the Head of NFRM, who is accountable for the design, oversight and maintenance of an effective, efficient and regulatory compliant Operational Risk Management Framework, including the operational risk capital model. The Head of NFRM monitors and challenges the Operational Risk Management Framework’s Group wide implementation and monitors overall risk levels against the bank’s operational risk appetite.

The Non-Financial Risk Committee, which is chaired by the Chief Risk Officer, is responsible for the oversight, governance and coordination of the management of operational risk in the Group on behalf of the Management Board, by establishing a cross-risk and holistic perspective of the key operational risks of the Group. Its decision-making and policy related authorities include the review, advice and management of all operational risk issues that may impact the risk profile of business divisions and infrastructure functions. Several sub-fora with attendees from both the 1st LoD and 2nd LoD support the Non-Financial Risk Committee to effectively fulfil its mandate. In addition to the Group level Non-Financial Risk Committee, business divisions have established 1st LoD non-financial risk fora for the oversight and management of operational risks on various levels of the organization.

The governance of operational risks follows the bank’s 3LoD approach to managing all of its financial and non-financial risks. The Operational Risk Management Framework establishes the operational risk governance standards including the core 1st and 2nd LoD roles and their responsibilities, to ensure effective risk management and appropriate independent challenge.

Operational risk requirements for the 1st LoD: Risk owners as the 1st LoD have full accountability for their operational risks and manage these against a defined risk appetite.

Risk owners are those roles in the bank whose activities generate - or who are exposed to - operational risks. As heads of business divisions and infrastructure functions, they must determine the appropriate organizational structure to identify their operational risk profile, actively manage these risks within their organization, take business decisions on the mitigation or acceptance of operational risks to ensure they remain within risk appetite, and establish and maintain 1st LoD controls.

Operational risk requirements for the 2nd LoD: Risk Type Controllers act as the 2nd LoD control functions for all sub-risk types under the overarching risk type “Operational Risk”.

101

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Risk Type Controllers establish the framework and define Group level risk appetite statements for the specific operational risk type they oversee. Risk Type Controllers define the minimum risk management and control standards and independently monitor and challenge risk owners’ implementation of these standards in their day-to-day processes, as well as their risk-taking and risk management activities. Risk Type Controllers provide independent operational risk oversight and prepare aggregated risk type profile reporting. Risk Type Controllers monitor the risk type’s profile against risk appetite and have a right to veto risk decisions leading to foreseeable risk appetite breaches. As risk type experts, Risk Type Controllers define the risk type and its taxonomy and support and facilitate the implementation of the risk type framework in the 1st LoD. To maintain their independence, Risk Type Controller roles are located only in infrastructure functions.

Operational risk requirements for NFRM as the Risk Type Controller for the overarching risk type “Operational Risk”: As the Risk Type Controller / risk control function for operational risk, NFRM establishes and maintains the overarching Operational Risk Management Framework and determines the appropriate level of capital to underpin the Group’s operational risk.

– As the 2nd LoD risk control function, NFRM defines the bank’s approach to operational risk appetite and monitors its adherence, breaches and consequences; NFRM is the independent reviewer and challenger of the 1st LoD’s risk and control assessments and risk management activities relating to the holistic operational risk profile of a unit (while Risk Type Controllers monitor and challenge activities related to their specific risk types). NFRM provides the oversight of risk and control mitigation plans to return the bank’s operational risk to its risk appetite, where required; it also establishes and regularly reports the bank’s operational risk profile and operational top risks, i.e., the bank’s material operational risks which are outside of risk appetite

– As the subject matter expert for operational risk, NFRM provides independent risk views to facilitate forward-looking management of operational risks, actively engages with risk owners (1st LoD) and facilitates the implementation of risk management and control standards across the bank

– NFRM is accountable for the design, implementation and maintenance of the approach to determine the adequate level of capital required for operational risk, for recommendation to the Management Board; This includes the calculation and allocation of operational risk capital demand and expected loss under the Advanced Measurement Approach (AMA)

Managing operational risk

To manage the broad range of sub-risk types underlying operational risk, the Operational Risk Management Framework provides a set of tools and processes that apply to all operational risk types across the bank. These enable the bank to determine its operational risk profile in relation to risk appetite for operational risk, to systematically identify operational risk themes and concentrations, and to define risk mitigating measures and priorities.

In 2023, the bank continued to mature the management of operational risk by further integrating and simplifying the risk management process. This was achieved through enhancement of the bank’s central controls inventory; upgrading the application used to analyze operational risk loss events by integrating ‘lessons learned’ functionality; introduction of residual risk tolerance zones in the risk appetite framework and by extending framework adherence monitoring to also cover 2LoD activities.

Loss data collection: Data on internal and relevant external operational risk events (with a P&L impact ≥ €10,000) is independently validated in a timely manner. Material operational risk events trigger clearly defined lessons learned and read-across analyses, which are performed in the 1st LoD in close collaboration between business partners, risk control and other infrastructure functions. Lessons learned reviews analyze the reasons for significant operational risk events, identify their root causes, and document appropriate remediation actions to reduce the likelihood of their reoccurrence. Read across reviews take the conclusions of the lessons learned process and seek to analyze whether similar risks and control weaknesses identified in a lessons learned review exist in other areas of the bank, even if they have not yet resulted in problems or losses. This allows preventative actions to be undertaken. In 2023, lesson learned documentation functionality was integrated into the operational risk event management application (EMApp), allowing for direct technical linkage to the underlying operational risk event and enhanced lessons learned monitoring, governance and reporting.

102

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Scenario analysis: The operational risk profile is complemented and further substantiated by incorporating exploratory scenario analysis into day-to-day risk management activities. Scenario analysis is used as a risk identiﬁcation and management tool that enables risk owners and Risk Type Controllers to explore potential exposure to risk as the basis for identifying potential gaps in the banks existing operational risk profile. Furthermore, it is used as an input into the calculation of the operational risk capital for the bank. Scenario storylines build on internal losses, emerging risk reviews, top risks and risk concentrations, and findings, as well as the review of external peer operational risk loss events. Information from actual and potential future loss events are systematically utilized to identify thematic susceptibilities and actively seek to reduce the likelihood of similar incidents, for example through deep dive analyses or risk profile reviews. In 2023, the scenario analysis process has been strengthened by further tightening the roles and responsibilities within the 1st LoD and 2nd LoD in executing scenarios and scenario analysis continues to play an important role in operational resilience exercises, particularly in assessing impacts of emerging risk themes. Additionally, work has started which will allow scenario analysis to be performed in the event management application (EMApp) in order to automate the capture, governance and reporting.

Risk & Control Assessment: The risk and control assessment process comprises of a series of bottom-up assessments of the risks generated by business divisions and infrastructure functions, the effectiveness of the controls in place to manage them, and the remediation actions required to bring the risks within the risk appetite perimeter. The Risk & Control Assessment is performed at a global business level and as such covers all jurisdictions. It is designed to assist Senior Management to determine whether operational risks are being managed and controlled adequately via a dynamic assessment approach which covers all applicable Risk Types from the Group’s Non-Financial Risk Type Taxonomy (NFRTT). The Risk & Control Assessment puts a greater emphasis on assessing and mitigating risks that are outside of appetite and risks that drive unethical and inappropriate market conduct within the bank.

Top risks: The Top Risk process is a regular process to identify the risks which pose greatest concern across Group and divisions, in addition to ensuring there is commensurate remediation activity associated to mitigate the risk. The associated Top Risk reporting provides a forward-looking perspective on the impact of top risk reduction programs, comprising of planned remediation and control enhancements, indicating the expected timeframe for reduction. The reporting also contains emerging risks and themes that have the potential to influence the top risk population in the future. The top risk identification process is closely connected to both the risk and control assessment and risk appetite, consuming the risk exposure from the former and the appetite levels from the latter to help inform the top risk population.

Transformation Risk Assessment: To identify and appropriately manage risks from material change initiatives within the bank, a transformation risk assessment process is in place to assess the impact of transformation on the bank’s risk profile and control environment. The assessment considers impacts to financial and non-financial risk types and is mandatory for a subset of initiatives, categorized as key deliverables (typically includes regulatory initiatives, technology migrations, remediation initiatives, strategy and organizational changes). In 2023 the scope of the transformation risk assessment was expanded to cover to bank’s future joint ventures and strategic investments, to implement requirements of the bank’s updated Joint Venture and Strategic Investment Policy.

Risk appetite: Non-financial risk appetite reflects the amount of non-financial risk the bank is willing to accept to pursue its strategy. The non-financial risk appetite framework provides a common approach to define the level of risk appetite across the firm and monitor exposure against this appetite. NFR appetite metrics are used to monitor the operational risk profile against the bank’s defined risk appetite, and to alert the organization to impending problems in a timely fashion. In 2023, design amendments have been made resulting in the introduction of residual risk tolerance zones which allow for a more precise articulation of tolerance for residual risk assessed by the risk and control assessment process. This introduces defined consequences for given combinations of likelihood and severity of impact for a given risk type.

Findings and issue management: The findings and issue management process facilitates the bank in mitigating the risks associated with known control weaknesses and deficiencies and enables management to make risk-based decisions over the need for further remediation or risk acceptance. Outputs from the findings management process must be able to demonstrate to internal and external stakeholders that the bank is actively identifying its control weaknesses and taking steps to manage associated risks within acceptable levels of risk appetite. In 2023, Group Audit’s review and approval role in the lifecycle of Self-Identified Issues was enhanced. Additionally, the scope of the ‘Findings to Control’ linkage was expanded to cover all Risk Types and integrated in the Findings management tool.

Framework Adherence: Operational Risk Framework Adherence is a key activity to oversee, monitor and test the conformity to NFR Framework component requirements by key stakeholders. Operational Risk Framework Adherence results aim to proactively identify implementation improvements required of users of the NFR Framework and highlight potential Framework design improvements. In 2023, Operational Risk Framework Adherence monitoring was expanded to also cover 2^nd LoD activities.

103

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Operational risk type frameworks

Operational risk is a risk type on the Group’s Risk Type Taxonomy. Together with Reputational Risk it forms Non-Financial risk. The Operational Risk Management Framework is a set of interrelated tools and processes that are used to identify, assess, measure, monitor and mitigate Deutsche Bank Group’s operational risks according to regulatory and industry-established definition of operational risk. It applies to the operational sub-risk types on a more granular level and enables the bank to aggregate and monitor its operational risk profile. These operational sub-risk types are controlled by various infrastructure functions and include the following:

– The Compliance department performs an independent 2nd level control function that protects the bank’s license to operate by promoting and enforcing compliance with the law and driving a culture of compliance and ethical conduct in the bank; the Compliance department assists and challenges the business divisions and works with other infrastructure functions and regulators to establish and maintain a risk-based approach to the management of the bank’s compliance risks in accordance with the bank’s risk appetite and to help the bank detect, mitigate and prevent breaches of laws and regulations; the Compliance department performs the following principal activities: the identification, assessment, mitigation, monitoring and reporting on compliance risk; performs second level controls; the results of these assessments and controls are regularly reported to the Management Board and Supervisory Board; the Compliance department also assists the Regulatory Management team with regulatory engagement

– Financial crime risks are managed by the Anti-Financial Crime (AFC) function via maintenance and development of a dedicated program; the AFC program is based on regulatory and supervisory requirements; AFC has defined roles and responsibilities and established dedicated functions for the identification and management of financial crime risks resulting from money laundering, terrorism financing, compliance with sanctions and embargoes, the facilitation of tax evasion as well as other criminal activities including fraud, bribery and corruption and other crimes; AFC updates its strategy for financial crime prevention via regular development of internal policies processes and controls, institution-specific risk assessment and staff training

– The Legal department is a fully independent infrastructure function, mandated to provide legal advice to the Management Board, the Supervisory Board (restricted to matters that do not give rise to conflict of interest), corporate divisions and infrastructure functions, and to support the Management Board in setting up and guarding the bank’s corporate governance framework and manage the bank’s legal corporate governance framework, antitrust legal and data privacy risk

The Legal Department carries out its mandate through the following responsibilities:

– Advising the Management Board and Supervisory Board on legal aspects of their activities

– Providing legal advice to all Deutsche Bank units to facilitate adherence to legal and regulatory requirements in relation to their activities respectively

– Supporting other bank units managing Deutsche Bank Group’s interactions with regulatory authorities

– Engaging and managing external lawyers used by Deutsche Bank Group (in conjunction with the Outside Counsel Management team in Regulatory & Exam Management

– Managing Deutsche Bank Group’s litigation and contentious regulatory matters, (including contentious HR matters), and managing Deutsche Bank Group’s response to external regulatory enforcement investigations

– Establishing appropriate processes for the preparation, review and execution of transactional documentation

– Preserving documents in connection with the management of Continuous Matters by issuing Legal Holds

– Advising on legal aspects of internal investigations

– Setting the global governance framework for Deutsche Bank Group, facilitating its cross-unit application and assessing its implementation

– Developing and safeguarding efficient corporate governance structures suitable to support efficient decision-making, to align risk and accountability based on clear and consistent roles and responsibilities

– Maintaining Deutsche Bank Group’s framework for policies, procedures, framework and key operating documents and serving in particular as guardian for the same

– Setting the framework for the establishment, composition and functioning of joint decision-making bodies, ensuring its consistent implementation and providing a framework and platforms for sustainable, and auditable documentation of decision-making events, allowing for central swift retrieval of information

– Setting the framework for and facilitating the legal entity approval processes

– Advising on internal corporate governance topics to ensure the implementation of the governance frameworks, including the analysis of corporate governance specific laws and regulations, interaction with supervisors on internal corporate governance-related topics and the ongoing development of solutions for organizational/structural topics of Deutsche Bank Group

– Advising on data privacy laws, rules and regulation and maintaining Deutsche Bank Group´s data privacy risk and control framework

– Ensuring appropriate quality assurance in relation to all of the above

– Deutsche Bank’s New Product Approval and Systematic Product Review processes form a control framework designed to manage the risks associated with new products and services and their lifecycle management; these processes are overseen by Product Governance, within the Non-Financial Risk function; existing products and services are reviewed in one- to three year cycles designed to assess whether they remain fit for purpose and consistent with their respective target markets’ characteristics and objectives; each product or service must be sponsored by a business Managing Director who bears ultimate accountability for it; breaches of the New Product Approval requirements are in scope of the bank’s Red Flag consequence management process

104

	Deutsche Bank
	Annual Report 2023 on Form 20-F

– NFRM is the Risk Type Controller for a number of operational resilience risks; its mandate includes second line oversight of controls over transaction processing activities, as well as infrastructure risks to prevent technology or process disruption, maintain the confidentiality, integrity and availability of data, records and information security, and ensure business divisions and infrastructure functions have robust plans in place to recover critical business processes and functions in the event of disruption including technical or building outage, or the effects of cyber-attack or natural disaster as well as any physical security or safety risk; NFRM Risk Type Controller also manages the risks arising from the bank’s internal and external vendor engagements via the provision of a comprehensive third party risk management framework

Measuring Operational Risks

Deutsche Bank calculates and measures the regulatory and economic capital requirements for operational risk using the Advanced Measurement Approach (AMA) methodology. The AMA capital calculation is based upon the loss distribution approach. Gross losses from historical internal and external loss data (Operational Riskdata eXchange Association consortium data) complemented by scenario data are used to estimate the risk profile (i.e., a loss frequency and a loss severity distribution). The loss distribution approach model includes conservatism by recognizing losses on events that arise over multiple years as single events in the historical loss profile.

Within the loss distribution approach model, the frequency and severity distributions are combined in a Monte Carlo simulation to generate potential losses over a one-year time horizon. Finally, the risk mitigating benefits of insurance are applied to each loss generated in the Monte Carlo simulation. Correlation and diversification benefits are applied to the net losses in a manner compatible with regulatory requirements to arrive at a net loss distribution at Group level, covering expected and unexpected losses. Capital is then allocated to each of the business divisions considering qualitative adjustments after deducting expected loss.

The regulatory and economic capital requirements for operational risk is derived from the 99.9% percentile; see the section “Internal Capital Adequacy” for details. Both regulatory and economic capital requirements are calculated for a time horizon of one year.

The regulatory and economic capital demand calculations are performed on a quarterly basis. NFRM establishes and maintains the approach for capital demand quantification and ensures that appropriate development, validation and change governance processes are in place, whereby the validation is performed by an independent validation function and in line with the Group’s model risk management process.

Drivers for operational risk capital development

By design of the AMA capital calculation, Deutsche Bank’s operational risk capital demand is predominantly driven by historical internal loss events. In view of the relevance of legal risks within the bank’s operational risk profile, specific attention is dedicated to the management and measurement of open civil litigation and regulatory enforcement matters where the bank relies both on information from internal as well as external data sources to consider developments in legal matters that affect the bank specifically but also the banking industry as a whole. Reflecting the multi-year nature of legal proceedings, the measurement of these risks furthermore takes into account changing levels of certainty by capturing the risks at various stages throughout the lifecycle of a legal matter.

Conceptually, the bank measures operational risk including legal risk by determining the annual operational risk loss that will not be exceeded with a given probability. This loss amount is driven by a component that due to the IFRS criteria is reflected in the bank’s financial statements and a component beyond the amount reflected as provisions within the bank’s financial statements.

The legal losses which the bank expects with a likelihood of more than 50% are already reflected in the IFRS group financial statements. These losses include net changes in provisions for existing and new cases in a specific period where the loss is deemed probable and is reliably measurable in accordance with IAS 37.

Uncertain legal losses which are not reflected in the bank’s financial statements as provisions because they do not meet the recognition criteria under IAS 37 are considered within regulatory or economic capital demand.

105

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Liquidity risk management

Liquidity risk arises from Deutsche Bank Group’s potential inability to meet payment obligations when they come due or without incurring excessive costs. The Group’s risk taxonomy differentiates between two aspects of liquidity risk: Short-term liquidity risk and Structural funding risk, both embedded in one liquidity risk management framework. Its objective is to ensure that all necessary governance and controls are established within the Group to fulfil its payment obligations at all times (including intraday) and to manage its liquidity and funding risks within the Management Board approved risk appetite, when executing the strategic plan. The framework considers relevant and significant drivers of liquidity risk, whether on-balance sheet or off-balance sheet.

Liquidity and funding risk framework

The Management Board defines the liquidity and funding risk strategy for the Group and sets the risk appetite, based on recommendations made by the Group Asset and Liability Committee and Group Risk Committee. The Management Board reviews and approves the risk appetite at least annually. The risk appetite is applied to the Group and to bespoke Key Liquidity Entities e.g., Deutsche Bank AG to monitor and control liquidity risk as well as the Group’s long-term funding and issuance plan.

The Liquidity Risk Management Framework defines the organization of the liquidity managing functions in alignment with the three lines of defense structure, which is described in the “Risk Management Policy”. The Corporate Divisions and Treasury comprise the first line of defense, responsible for executing the steps needed to most effectively manage the liquidity of the Group and steer business activities. Risk comprises the second line of defense, responsible for defining the liquidity risk management framework, providing independent risk oversight, challenge, and validation of activities conducted by the first line of defense, including establishing the risk appetite. Group Audit comprises the third line of defense, responsible for overseeing the activities of both the first line of defense and second line of defense.

The Group Asset and Liability Committee is the Group’s decisive governing body mandated by the Management Board to optimize the sourcing and deployment of the Group’s balance sheet and financial resources in line with the Management Board’s risk appetite and strategy. The Group Asset and Liability Committee has the overarching responsibility to define, approve and optimize the Group’s funding strategy. Regarding the second line of defense the Group Risk Committee is mandated by the Management Board with decision-making authority regarding material risk-related topics. In addition, it reviews and recommends items for Management Board approval, including key risk management principles, the Group’s risk appetite statement, recovery plan, the contingency funding plan, over-arching risk appetite parameters, and recovery and escalation indicators.

The Group’s liquidity risk management principles are documented in the “Liquidity Risk Management Policy” and the framework is described in the “Global Liquidity Risk Framework” and “Global Funding Risk Framework” documents. Both the policy and framework documents adhere to and articulate how the eight key risk management practices are applied to liquidity risk, namely risk governance, risk organization (3 lines of defense), risk culture, risk appetite and -strategy, risk identification and -assessment, risk mitigation and controls, risk measurement and reporting, stress planning and -execution. The individual roles and responsibilities are laid out and documented in the Global Responsibility Matrix, which provides further clarity and transparency on the roles and responsibilities across all involved stakeholders. All additional policies and procedures (both global and local) issued by the liquidity risk management functions further define the requirements specific to liquidity risk practices. They are subordinate to the “Liquidity Risk Management Policy” and are subject to the standards it sets forth.

In accordance with the European Central Bank’s Supervisory Review and Evaluation Process (and revised Internal Liquidity Adequacy Assessment Process requirement issued in November 2018), the Group has implemented an Internal Liquidity Adequacy Assessment Process, which is assessed, documented and reviewed at least annually and approved by the Management Board.

As part of an annual strategic planning process, Treasury projects the development of the key liquidity and funding metrics including the U.S. Dollar currency exposure based on anticipated business activities to ensure that the strategic plan can be executed in accordance with the Group’s risk appetite.

Risk appetite and control setting

The Group’s liquidity risk appetite, which is defined through qualitative principles and supporting quantitative metrics, is laid out in the “Risk Appetite Statement” and is subject to the standards defined in the “Risk Appetite Policy”. This Risk Appetite Statement is further underpinned by the liquidity risk controls framework consisting of ”Key Limits” based on risk appetite, as well as a suite of additional limits, thresholds and early warning indicators.

107

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Deutsche Bank implemented a dedicated Risk Appetite framework covering regulatory Pillar 1as well as internal stress metrics (Pillar 2) which are defined by Liquidity Risk Management and ensure the Group’s liquidity position is balanced across the Group, its Key Liquidity Entities and across currencies.

Treasury manages liquidity and funding, in accordance with the risk appetite across a range of relevant metrics and implements several tools including business level risk appetite limits further cascading aspects of risk appetite to divisional level, to ensure compliance. As such, Treasury works closely with Liquidity Risk Management under its delegated authority and the business divisions to identify, analyze and monitor underlying liquidity risk characteristics within business portfolios. These parties are engaged in regular dialogue regarding changes in the Group’s liquidity position arising from business activities and market circumstances.

Furthermore, the Group ensures at the level of each liquidity relevant entity that all local liquidity metrics are managed in compliance with the defined risk appetite. Local liquidity surpluses are pooled in Deutsche Bank AG hubs and local liquidity shortfalls can be met through support from these hubs. Transfers of liquidity capacity between entities are subject to the approval framework involving the Group’s liquidity steering function as well as the local liquidity managers considering the compliance with Pillar 1 metrics like Liquidity Coverage Ratio (LCR), Net Stable Funding Ratio (NSFR) as well as stressed Net Liquidity Position (sNLP), which is a Pillar 2 metric. Available surplus that resides in entities with restriction to transfer liquidity to other Group entities, for example due to regulatory lending requirements, is treated as trapped and as such not considered in the calculation of the consolidated Group liquidity surplus.

The Management Board is informed about the Group’s performance against the key liquidity metrics, including the risk appetite and internal and market indicators, via a weekly liquidity dashboard.

Liquidity risk monitoring and management

Finance - Liquidity & Treasury Reporting & Analysis (LTRA) and Finance - Global Reporting – LTRA together have overall accountability for the accurate and timely production of both external regulatory liquidity reporting (Pillar 1) as well as internal management reporting (Pillar 2) for liquidity risk of the Group. In addition, Liquidity & Treasury Reporting & Analysis is responsible for the development of management information systems and the related analysis to support the liquidity risk framework and its governance for Treasury and Liquidity Risk Management.

Liquidity Coverage Ratio

The LCR which is also a key limit is intended to promote the short-term resilience of a bank’s liquidity risk profile over a 30-day stress scenario. The ratio is defined as the amount of High-Quality Liquid Assets that could be used to raise liquidity in a stressed scenario, measured against the total volume of net cash outflows, arising from both contractual and prescribed modelled exposures over a 30-day time horizon on a consolidated currency basis.

By maintaining a ratio in excess of the minimum regulatory requirements, the LCR seeks to ensure that the Group holds adequate liquidity resources to mitigate a short-term liquidity stress.

Key differences between the internal liquidity stress test (sNLP) and the LCR include the time horizon (eight weeks versus 30 days), the classification and haircut differences between debt securities within the sNLP and the LCR High-Quality Liquid Assets, outflow rates for various categories of funding, as well as inflow assumption for various assets (for example, loan repayments). The Group’s internal liquidity stress test also includes outflows related to intraday liquidity assumptions, which are not explicitly reflected in the LCR.

Net Stable Funding Ratio

The Net Stable Funding Ratio is a regulatory metric for assessing a Bank’s structural funding profile. The NSFR is intended to reduce medium to long-term funding risks by requiring banks to maintain a stable funding profile in relation to their on- and off-balance sheet activities. The ratio is defined as the amount of Available Stable Funding (the portion of capital and liabilities expected to be a stable source of funding), relative to the amount of Required Stable Funding (a function of the liquidity characteristics of various assets held).

Based on risk appetite a NSFR key limit has been set for the Group as well as for all Key Liquidity Entities and liquidity relevant entities subject to a respective regulatory requirement to ensure compliance to it.

108

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Liquidity stress testing and scenario analysis

Global internal liquidity stress testing and scenario analysis is used for measuring liquidity risk and evaluating the Group’s short-term liquidity position within the liquidity framework. This complements the daily operational cash management process. The long-term liquidity strategy based on contractual and behavioral modelled cash flow information is represented by a long-term metric known as the Funding Matrix (refer to Funding risk management and funding diversification below).

The global liquidity stress testing process is managed by Treasury towards a respective risk appetite. Treasury is responsible for the design of the overall methodology, the choice of liquidity risk drivers and the determination of appropriate assumptions (parameters) to translate input data into stress testing output. Liquidity Risk Management is responsible for the definition of the stress scenarios. Under the principles and policy requirements laid out by Model Risk Management, Liquidity Risk Management and Model Risk Management perform the independent validation of liquidity risk models and non-model estimates. Finance -Liquidity & Treasury Reporting & Analysis and Finance - Global Reporting are responsible for implementing these methodologies and performing the stress test calculation in conjunction with Treasury, Liquidity Risk Management, Group Strategic Analytics and IT.

Stress testing and scenario analysis are used to describe and evaluate the impact of sudden and severe stress events on the Group’s liquidity position. Deutsche Bank has selected four scenarios to calculate the Group’s stressed Net Liquidity Position. These scenarios are designed to capture potential outcomes which may be experienced by the Group. The most severe scenario assesses the potential consequences of a combined market-wide and idiosyncratic stress event, including downgrades of Deutsche Bank credit rating. Under each of the scenarios, the impact of a liquidity stress event over different time horizons and across multiple liquidity risk drivers, covering all business lines and product areas and with that all portfolios and balance sheet, is considered. The output from this scenario analysis feeds the Group Wide Stress Test, which considers the impact of scenarios across all risk stripes.

In addition, potential funding requirements from contingent liquidity risks which can arise under stress, including drawdowns on lending facilities, increased collateral requirements under derivative agreements, and outflows from deposits with a contractual rating linked trigger are included in the analysis. Subsequently, countermeasures, which are the actions the Group would take to counterbalance the outflows incurred during a stress event, are taken into consideration. Those countermeasures include the usage of the Group’s liquidity reserve and generating liquidity from other unencumbered, marketable assets without causing any material impact on the Group’s business model.

Stress testing is conducted at a global level and for defined entities relevant for liquidity risk management. The stress analysis covers an eight-week stress horizon which is considered to be the most critical time span during a liquidity crisis requiring that liquidity is actively assessed and steered on a Group level. In addition to the consolidated currency stress test, further stress tests are performed for material currencies. On a global level and in the U.S. liquidity stress tests a twelve-months period is covered. Additionally, stress test results are monitored over a twelve-month period with specific risk limits, if required by local regulators. Ad-hoc analysis may be conducted to reflect the impact of potential downside events that could affect the Group such as climate / ESG-related events. Relevant stress assumptions are applied to reflect liquidity flows from risk drivers and on-balance sheet and off-balance sheet products. The suite of stress testing scenarios and assumptions are reviewed on a regular basis and are updated when enhancements are made to stress testing methodologies.

Complementing the daily liquidity stress testing, the Group also conducts regular group-wide stress tests run by Enterprise Risk Management, which analyze liquidity risks in conjunction with the other defined risk types and evaluate their impact and interplay to both capital and liquidity positions as described in “Risk and Capital Framework - Stress testing”.

Funding Risk Management and Funding Diversification

Funding Management

In line with regulatory guidelines, Deutsche Bank has developed a set of internal indicators to measure its inherent funding risks. These are considered for steering purposes in addition to the regulatory metric Net Stable Funding Ratio.

The Group relies on a vast range of funding sources such as e.g. deposits, unsecured wholesale funding, Capital Markets Issuances and secured funding. These protect its liquidity position twofold. Firstly, since stress events may impact funding markets differently, maintaining a well-diversified funding portfolio will lower the average impact of these. Secondly, when experiencing liquidity stress, having access to a wide range of funding sources significantly improves the Group’s ability to tap different funding markets. The diversification across products is complemented by Risk thresholds in order to monitor tenor concentration and counterparty concentration for both secured and unsecured funding sources.

109

	Deutsche Bank
	Annual Report 2023 on Form 20-F

In addition, the stability of Deutsche Bank Group’s funding position can be negatively impacted by various forms of industry risks. These are typically medium to long term structural trends with potentially significant long-term impact on the economy and consequently on banks’ balance sheets. Deutsche Bank is performing ad-hoc analyzes on such emerging risks to assess the impact of such trends on its funding position to ensure that mitigating measures will be taken well in time when deemed necessary. In addition, Treasury evaluates current market access information in its significant funding markets on a regular basis. Market access information is compiled monthly and presented to Group Asset and Liability Committee.

The Group’s primary internal tool for monitoring and managing structural funding risk is the Funding Matrix. The Funding Matrix assesses the Group’s structural funding profile over a time horizon beyond one year. To produce the Funding Matrix, all funding-relevant assets and liabilities are mapped into time buckets corresponding to their contractual or modelled maturities. This allows the Group to identify expected excesses and shortfalls in term liabilities over assets in each time bucket, facilitating the management of potential liquidity exposures.

The liquidity profile is based on contractual cash flow information. If the contractual maturity profile of a product does not adequately reflect the liquidity profile, it is replaced by modelling assumptions. Short-term balance sheet items (less than one year) or matched funded structures (asset and liabilities directly matched with no liquidity risk) are excluded from the term analysis.

The bottom-up assessment by individual business line is combined with a top-down reconciliation against the Group’s IFRS balance sheet. From the cumulative term profile of assets and liabilities beyond 1 year, long-funded surpluses or short-funded gaps in the Group’s maturity structure can be identified. The cumulative profile is thereby built up starting from the “greater than ten-year” bucket down to the “greater than one-year” bucket. The Funding Matrix is also undertaken for material foreign currencies i.e. USD.

To diversify our refinancing activities Deutsche Bank actively uses among others Capital Markets Issuance.

Capital Markets Issuance

The main objective of debt issuance is to raise medium term funding and securing in the most cost optimal manner. Debt issuance, encompassing senior unsecured bonds, covered bonds, and capital securities, is a key source of term funding for the Group and is managed directly by Treasury. At least once a year, following endorsement by the Asset and Liability Committee, Treasury submits an annual long-term funding plan to the Group Risk Committee for recommendation and then to Management Board for approval. This plan is driven by global and local funding and liquidity requirements based on expected business development. The Group’s capital markets issuance portfolio is dynamically managed through annual issuance plans to avoid excessive maturity concentrations.

Deutsche Bank holds a license to issue mortgage Pfandbriefe and maintains a program to issue structured covered bonds. Additionally, the Group continues to run a program for the purpose of issuing covered bonds under Spanish law (Cedulas). In 2023, Deutsche Bank further diversified its investor base through inaugural transactions in China (so-called Panda bonds). Since 2020 the Group maintains its Green Bond framework which the bank continuously expands to offer green note issuances to both, institutional and retail investors. Furthermore, multiple green structured notes, first green deposits and first green repurchase agreements (repos) were executed. In 2023, the Group concluded on integrating the legacy bond portfolio from former Postbank activities into Deutsche Bank’s infrastructure, leading to a uniform platform for all issuances.

Risk Mitigation

High Quality Liquid Assets

High-quality Liquid Assets (HQLA) is a Pillar 1 calculation which feeds into LCR and, since the beginning of the fourth quarter 2023 is a key limit per the risk appetite, replacing Liquidity Reserve. HQLA comprise available cash and cash equivalents and unencumbered high quality liquid securities (including government and government guaranteed bonds), representing the most readily available and most important countermeasure in a stress event.

The vast majority of the Group’s HQLA are held centrally across major currencies at the central bank accounts of the parent entity and foreign branches in the key locations in which we are active and in a dedicated Treasury-owned Strategic Liquidity Reserves portfolio, set up exclusively to serve as a mitigant during periods of stress.

110

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Asset Encumbrance

Encumbered assets primarily comprise those on- and off-balance sheet assets that are pledged as collateral against secured funding, collateral swaps, and other collateralized obligations. Generally, loans are encumbered to support long-term capital markets secured issuance such as covered bonds or other self-securitization structures, while financing debt and equity inventory on a secured basis is a regular activity for the Investment Bank business. Additionally, in line with the European Banking Authority technical standards on regulatory asset encumbrance reporting, assets pledged with settlement systems (including default funds and initial margins) as well as other assets pledged which cannot be freely withdrawn such as mandatory minimum reserves at central banks are considered encumbered assets. Derivative margin receivable assets as encumbered under these European Banking Authority guidelines are also included.

Funds transfer pricing

The funds transfer pricing framework is key to incentivize liquidity steering activities to the business units. It applies to all Corporate Divisions and entities with balance sheet items requiring active management and funding from the Group and promotes pricing of (i) assets in accordance with their underlying liquidity risk, (ii) liabilities in accordance with their liquidity value and (iii) contingent liquidity exposures in accordance with the cost of providing for appropriate High Quality Liquid Assets.

Within this framework funding and liquidity risk costs and benefits are allocated to the Group’s business units based on rates which reflect the economic costs of liquidity for Deutsche Bank. Treasury might set further financial incentives in line with the Group’s liquidity risk guidelines. While the framework promotes a diligent Group-wide allocation of its funding costs to the liquidity users, it also provides an incentive-based framework for businesses generating stable long-term and stress compliant funding.

Throughout 2023, the Bank continued to deliver against improvements of the changes to the internal Funds Transfer Pricing framework started in 2019 aimed at enhancing its effectiveness as a management tool, as well as better supporting funding cost optimization. Additional details are included in Note 4 “Business segments and related information“ of the consolidated financial statements.

Contingency Funding Planning

Deutsche Bank’s Group Contingency Funding Plan outlines how Deutsche Bank would respond to an actual or anticipated liquidity stress event. It specifies the provisions, procedures and action plans for responding to potential disruptions to the Bank’s ability to fund itself. It covers actions that can be taken to raise cash and/or recover the Bank’s liquidity metrics in breach. The Contingency Funding Plan outlines governance arrangements for its activation and presents the framework of liquidity indicators enabling the bank to identify deteriorating market circumstances in a timely manner and that determine quickly what actions need to be taken, incl. communication and coordination during a liquidity stress event. Deutsche Bank has established the Financial Resource Management Council, which is responsible for oversight of capital and liquidity across contingency, recovery, and resolution scenarios in a defined crisis situation.

111

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Enterprise risk management

Enterprise Risk Management (ERM) provides a holistic view of the Bank’s risk profile across risk types, businesses and geographies. Key responsibilities include:

– Defining the overarching risk management policy, including setting of risk management standards.

– Setting and monitoring the Bank’s overarching risk appetite and cascading to business & entity dimensions.

– Delivering insight through emerging risks and trends analysis, forward-looking stress tests, portfolio concentration, deep-dive analyses and ad-hoc event reporting.

– Overseeing the Bank’s internal capital adequacy process, including capital risk appetite.

– Coordinating and implementing the group recovery plan and maintaining credible resolution plans that could be executed in a crisis.

– Developing and managing the climate risk management framework.

– Providing risk reporting and analytics to key stakeholders, including senior management and regulators.

– Acting as risk controlling function for credit risk.

Strategic risk

Strategic risk is the risk of a shortfall in planned earnings (excluding other material risks) due to incorrect business plans, ineffective plan execution, or inability to effectively respond to material plan deviations. Strategic risk arises from the exposure of the bank to the macroeconomic environment, changes in the competitive landscape, and regulatory and technological developments. Additionally, it could occur due to errors in strategic positioning, the bank’s failure to execute its planned strategy and/or a failure to effectively address underperformance versus plan targets.

The strategic plan is developed annually and presented to the Management Board for discussion and approval. The final plan is presented to the Supervisory Board. The plan is challenged in an iterative process with respect to its assumptions, credibility and integrity. During the year, execution of business strategies is regularly monitored to assess the performance against targets. A more comprehensive description of this process is detailed in the section ‘Strategic and Capital Plan’.

Strategic risk is measured through a dedicated risk model that quantifies potential losses caused by unexpected pre-tax earnings shortfalls that cannot be offset by cost reductions under extreme but plausible market conditions over a 12-month period. Strategic risk appetite is also established for the Group via dedicated metrics.

The Business Divisions and Infrastructure Functions are the 1^st LoD that own the risk and have the responsibility to manage strategic risk in accordance with the plan approved by the Management Board. Finance and Risk are the 2^nd LoD and act as facilitators via their controlling activities, and are responsible for escalation to the appropriate decision-taking authorities.

Capital risk

Capital risk is defined as the risk that Deutsche Bank has an insufficient level or composition of capital supply to support its current and planned business activities and associated risks during normal and stressed conditions.

The bank’s capital risk framework consists of several elements which aim to ensure that Deutsche Bank maintains on an ongoing basis an adequate capitalization to cover the risks to which is exposed. The framework is strongly integrated with the bank-wide strategic planning process and closely linked to Deutsche Bank’s internal capital adequacy assessment process (see section “Internal Capital Adequacy Assessment Process” for further details). Treasury together with the divisions is the key risk manager of the associated risks and represents the 1^st LoD. ERM acts as the 2^nd LoD for capital risk.

Treasury function manages capital risk at group level and locally in each region, as applicable. This includes managing issuances and repurchases of capital instruments (see section on “Capital management” for details). Additionally, divisional limits for key capital resources are approved by the Group Asset and Liability Committee to ensure alignment with the capital risk appetite (see section on “Resource limit setting” for details).

ERM sets the capital risk framework, assesses the capital risk profile and provides independent challenge. This includes setting of risk appetite thresholds for key capital ratios. Threshold breaches are subject to a dedicated governance framework triggering management actions up to the execution of Deutsche Bank’s recovery plan. Thresholds also provide boundaries to the capital plan and are fully integrated into the regular assessment of capital risk under stress scenarios.

112

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Portfolio concentration risk

Risk concentrations refer to clusters of the same or similar risk drivers within specific risk types (intra-risk concentrations in credit, market, operational and strategic risks) as well as across different risk types (inter-risk concentrations). They occur within and across counterparties, businesses, regions/countries, industries and products. The management and monitoring of risk concentrations is achieved through a quantitative and qualitative approach, as follows:

– Intra-risk concentrations are assessed, monitored and mitigated by the individual risk functions (enterprise, credit, market, operational and liquidity risk management). This is supported by risk appetite including limit setting on different levels and/or management according to each risk type

– Inter-risk concentrations are managed through quantitative top-down stress-testing and qualitative bottom-up reviews, identifying and assessing risk themes independent of any risk type and providing a holistic view across the bank. The diversification effects between credit, market, operational and strategic risk are measured through a dedicated risk model that quantifies the diversification benefit caused by non-perfect correlations between these risk types. The calculation of the risk type diversification benefit is intended to ensure that the standalone economic capital figures for the individual risk types are aggregated in an economically meaningful way

The most senior governance body for the oversight of risk concentrations is the Group Risk Committee (GRC).

Environmental, social and governance risk

The impacts of rising global temperatures, the enhanced focus on climate change and the transition to a net-zero economy from society, regulators and the banking sector have led to the emergence of new and increasing sources of financial and non-financial risks. These include the physical risks arising from extreme weather events, which are growing in frequency and severity, as well as transition risks as carbon intensive sectors are faced with higher taxation, reduced demand and potentially restricted access to financing. These risks can impact Deutsche Bank across a broad range of financial and non-financial risk types.

Financial institutions are facing increased scrutiny on climate and broader ESG-related issues from governments, regulators, shareholders and other bodies, leading to reputational risks if the Group is not seen to support the transition to a lower carbon economy, to protect biodiversity and human rights. Deutsche Bank is reviewing and enhancing its ESG risk management frameworks in alignment with regulatory guidance and to ensure that we actively manage ESG risks and prevent greenwashing. Data, methodologies and industry standards for measuring and assessing climate and other environmental risks are still evolving or, in certain cases, are not yet available. This, combined with a lack of comprehensive and consistent climate and other environmental risk disclosures by its clients means that the bank, in line with the wider industry, remains partially reliant on proxy estimates and qualitative approaches when assessing these risks which introduces a higher degree of uncertainty into climate-related disclosures.

Financial institutions are facing increased scrutiny as well as reporting requirements on climate and broader ESG-related issues from governments, regulators, shareholders and other bodies. This can lead to reputational risks if the bank is not seen to support the transition to a lower carbon economy or is perceived to be heavily involved in the financing of activities harmful to nature or linked to human rights abuse within supply chains.

Certain jurisdictions have begun to develop anti-ESG measures including requiring financial institutions that wish to do business with them to certify their non-adherence to aspects of the transition agenda. Failing to comply with these requirements may result in the termination of existing business and the inability to conduct new business with those jurisdictions, while complying may lead to reputational risks.

Deutsche Bank is committed to managing its business activities and operations in a sustainable manner, including aligning its portfolios with net zero emissions by 2050. In October, Deutsche Bank published its Initial Transition Plan (*), which documents the strategy that the bank has developed to decarbonize its operations, its upstream supply chain and its financing portfolio. In the plan the Group also disclosed net-zero aligned decarbonization pathways for three additional carbon intensive sectors compared to 2022, bringing the total number of sectors covered by portfolio targets to seven: Oil and Gas (upstream), Power Generation, Automotive (light duty vehicles), Steel, Coal mining, Cement and Shipping. Targets and metrics disclosed in the bank’s Transition Plan are integrated into the Group-wide risk management framework, appetite and controls.

113

	Deutsche Bank
	Annual Report 2023 on Form 20-F

The Group Sustainability Committee acts as the main governance and decision-making body for sustainability related matters across Deutsche Bank. This includes the assessment of material impacts as well as risks and opportunities for Deutsche Bank. The Management Board has delegated sustainability related decisions to this committee, which is chaired by the Chief Executive Officer and the Chief Sustainability Officer (Vice Chair).

The Group Risk Committee, chaired by the Chief Risk Officer and established by the Management Board has the mandate to oversee several risk & capital related matters. This includes the responsibility for developing the bank’s Climate Risk Framework. The Committee approves the Bank’s climate and environmental risk appetite, including appetite for deviation from net-zero decarbonization linear reduction pathways. A number of other committees of the Group Risk Committee are responsible for the development and management of specific elements of climate and environmental risk.

Deutsche Bank’s business activities are governed by a dedicated Climate and Environmental Risk Policy outlining roles, responsibilities as well as qualitative risk appetite principles and quantitative risk-appetite thresholds and KPIs. In addition, the bank’s Environmental and Social policy outlines specific restrictions for certain sectors. Deutsche Bank uses a number of complementary tools to identify and assess risks including the Group’s risk identification process, an internal climate risk taxonomy and regular internal reporting of portfolio financed emissions and intensities and progress against net zero targets.

114

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Model Risk Management

Introduction

Model risk is the potential for adverse consequences from decisions based on incorrect estimation approaches (covering models and non-model estimates) or their misused outputs. Model risk can lead to financial loss, poor business or strategic decision making, or damage to its reputation. Deutsche Bank recognizes the use of estimation approaches can affect other risk-types, and that model risk is a distinct risk that can increase or decrease aggregate risk across other risk-types.

Deutsche Bank uses estimation approaches for a broad range of decision-making activities, such as: underwriting credits; valuing exposures, instruments, and positions; measuring risk; managing and safeguarding client assets and determining capital and reserve adequacy. The term ‘estimation approach’ refers to a ‘model’ or ‘non-model estimate’ that is a quantitative or qualitative method, system, or approach that applies expert judgement, statistical, economic, financial, or mathematical theories, techniques, and assumptions to process input data into quantitative estimates. Estimation approaches are simplified representations of real-world relationships and are based on assumptions and judgment. Accordingly, the bank is exposed to model risk, which must be identified, measured, and controlled appropriately.

Model risk management oversight is provided by all levels of management, including the Management Board. Management of model risk is underpinned by a framework designed and monitored by a 2nd Line of Defense control function independent from developer, owner, and user of estimation approaches.

Model Risk Management Framework and Governance

Model risk is one of the bank’s Level 1 risks, and is overseen by the Chief Risk Officer through the setting of a quantitative and qualitative risk appetite statement, and managed through:

– The Model Risk Policy and Procedure, and supporting documents aligned to risk appetite, regulatory requirements, and industry best practice, with clear roles and responsibilities for stakeholders

– Inventorization of all estimation approaches, supporting ongoing model risk framework components including risk assessments and attestations

– Key controls for estimation approaches from development through to decommissioning, including validation, approval, deployment and monitoring

– Independent Validations, and subsequent independent approvals, verify that estimation approaches have been appropriately designed and implemented for their intended scope and purpose, and that respective controls are in place to assure that they continue to perform as expected during their use

– The controls identify estimation approaches’ limitations and weaknesses, resulting in findings and compensating controls, these may be conditions for use, such as adjustments or overlays

– Model risk governance, including senior forums for monitoring and escalation of model risk related topics, as well as monthly updates to the Management Board on the model risk appetite metrics, and periodic model risk updates to the Supervisory Board.

Developments during the reporting period

In 2023, Deutsche Bank elevated the status of model risk management with the Global Head of Model Risk Management joining the Executive Committee of the Chief Risk Officer and reporting directly into the CRO. This manifests the importance of model risk for the bank and is reflective of model risk being a Level 1 risk for the bank.

In addition, Deutsche Bank consolidated the Model Inventory systems further on the strategic bank-wide model risk platform replacing all historic inventories going forward. This single platform aligns model risk data across the bank and supports compliance to the model risk framework, including key measurements, controls, and mitigation of model risks.

115

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Reputational Risk Management

Within the group’s risk management process, reputational risk is defined as the risk of possible damage to Deutsche Bank’s brand and reputation, and the associated risk to earnings, capital or liquidity arising from any association, action or inaction which could be perceived by stakeholders to be inappropriate, unethical or inconsistent with the Deutsche Bank’s values and beliefs.

Deutsche Bank has limited appetite for transactions or relationships with material reputational risk or in areas which inherently pose a higher reputational risk such as the defense, gaming, or adult entertainment sectors, or where there are certain environmental concerns. Reputational risk cannot be precluded as it can be driven by unforeseeable changes in perception of its practices by its various stakeholders (e.g. public, clients, shareholders and regulators).

The Reputational Risk Framework (the Framework) is in place to manage the process through which active decisions are taken on matters which may pose a reputational risk, before the event, and in doing so to prevent damage to Deutsche Bank’s reputation wherever possible. The Framework provides consistent standards for the identification, assessment and management of reputational risk issues. Reputational impacts which may arise as a consequence of a failure from another risk type, control or process are addressed separately via the associated risk type framework and are therefore not addressed in this section.

The reputational risk could arise from multiple sources including, but not limited to, potential issues with the profile of the counterparty, the business purpose / economic substance of the transaction or product, high risk industries, environmental and social considerations, and the nature of the transaction or product or its structure and terms.

The modelling and quantitative measurement of reputational risk internal capital is implicitly covered in the bank’s economic capital framework primarily within strategic risk.

Governance and Organizational Structure

The Framework is applicable to all business units and regions. Matters specific to DWS are reviewed by a DWS reputational risk committee and, if necessary, escalated to the DWS Executive Board, which can escalate matters to the management board of Deutsche Bank AG.

Whilst every employee has a responsibility to protect the bank’s reputation, the primary responsibility for the identification, assessment, management, monitoring and, if necessary, referring or reporting of reputational risk matters lies with Deutsche Bank’s Business Divisions as the primary risk owners. Each Business Division has an established process through which matters, which are deemed to be a moderate or greater reputational risk are assessed, the Unit Reputational Risk Assessment Process.

The Unit RRAP is required to refer any material reputational risk matters to the respective Regional Reputational Risk Committee. The Framework also sets out a number of matters which are considered inherently higher risk from a reputational risk perspective and are therefore mandatory referrals to the Regional Reputational Risk Committees. The Regional Reputational Risk Committees, which are 2nd LoD Committees, are responsible for ensuring the oversight, governance and coordination of the management of reputational risk in the respective region of Deutsche Bank. The Regional Reputational Risk Committees meet, as a minimum, on a quarterly basis with ad hoc meetings as required. The Group Reputational Risk Committee (GRRC) is responsible for ensuring the oversight, governance and coordination of the management of reputational risk at Deutsche Bank on behalf of the Group Risk Committee and the Management Board. Additionally, the Group Reputational Risk Committee reviews cases with a Group wide impact and in exceptional circumstances, those that could not be resolved at a regional level.

116

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Cybersecurity

Cybersecurity governance

Responsibility for cybersecurity matters sits within the Chief Security Office, where it forms the first Line of Defense (1^st LoD) within Deutsche Bank’s Three Lines of Defense (“3LoD”) model. The Chief Security Officer has delegated authority from the Management Board and reports directly to the Chief Technology, Data, and Innovation Officer, who is a member of the Management Board.

Deutsche Bank’s Chief Security Officer has served in various roles in information security for more than 20 years. This includes the role as global Chief Information Security Officer (CISO) / Chief Security Officer (CSO) for three different large European financial institutions and a partner position in a global strategy and consulting firm, leading security work for financial service clients.

The Chief Security Officer is supported by information security role holders at various seniority levels to help ensure that security requirements are met from a regional, divisional, and technical perspective. All information security activities are overseen by two dedicated governance fora chaired by the Chief Security Officer: the Group IT Security Council (interface to the bank’s IT units), and the Group Information Security Committee (interface to the bank’s business and infrastructure divisions). Furthermore, both fora oversee the information security posture of Deutsche Bank against defined targets, the progress and performance of key information security deliverables, the remediation status of information security related audit findings and current information security incidents. They also endorse the information security strategy and act as the highest escalation level within the Chief Security Office.

The Chief Security Office develops the bank’s group-wide security strategy and oversees its implementation and operationalization globally via the organizational set-up, governance, and implemented security policies. The security strategy is reviewed continually to address changes in the threat landscape, technology, the regulatory environment, the bank’s corporate and IT strategy, and other internal and external parameters. Deutsche Bank’s security strategy framework provides comprehensive and layered security controls. This framework is strengthened by a threat-driven approach to direct and adjust the security investment, including the continual review and assessment of the maturity of the bank’s security implementation.

The Chief Security Office maintains a comprehensive metrics and reporting framework, underpinned by an extensive data set allowing for global, regional, and divisional views. Security metrics and reporting provided to the bank´s governance fora at all seniority levels support appropriate security risk awareness and decision taking. The Management Board receives a comprehensive quarterly information security risk posture report, as well as ad hoc information if required. Furthermore, the Chief Security Officer provides regular updates on material topics relating to security to the Supervisory Board’s Committee responsible for Technology, Data and Innovation.

Information Security Risk is managed as an Operational Risk under the Non-Financial Risk Management Framework of the bank. The Chief Security Office, in its responsibility as 1st LoD, executes against the Non-Financial Risk Management Framework and leverages its various instruments (e.g., an annual Risk & Control Assessment) whereas the Non-Financial Risk Management as second Line of Defense (2nd LoD) provides oversight, review, and challenge. Accordingly, part of the Non-Financial Risk Committee’s (NFRC) remit is to oversee and govern Deutsche Bank’s cybersecurity risk profile, remediation programs and risk tolerance. Also, 2nd LoD is represented in both 1st LoD fora described above.

In alignment with its Non-Financial Risk Management policies, Deutsche Bank’s security policy framework defines the core principles of security risk management and the fundamentals for security management. The complete framework is reviewed annually, and any changes are endorsed by the Group Information Security Committee. The framework is governed centrally and applied globally across all product groups and business and infrastructure divisions. The framework includes a clear description of the risk tolerance related to information security. It also sets out the roles, responsibilities and accountabilities of key personnel identified to manage information security risk; the strategy and measures to cope with information security breaches, and related communication procedure.

117

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Additionally, the bank’s Information Security Management System has been certified according to ISO 27001 for all information security domains defined in that standard since 2012. To maintain the ISO 27001 certification, the bank performs a full recertification process every three years, with the latest taking place in 2021. In the years a full certification process does not take place, the bank performs a certification-follow-up, designed to ensure compliance between certification intervals. The latest certification follow-up was in 2023. The next full recertification will take place in September 2024.

Deutsche Bank employs a variety of mechanisms to self-identify areas for improvements and control enhancements. These include security testing, security problem management and lessons learned. The effectiveness of the bank´s overall information security program is evaluated on a regular basis by third-party organizations that compare the bank’s approach with industry benchmarks. Deutsche Bank´s independent Group Audit function frequently includes the assessment of security controls in its audit plan.

Identifying, assessing and managing cybersecurity threats

Deutsche Bank operates in an environment with increasing levels of digitization and a continually evolving landscape related to cybersecurity threats. Due to the dynamics and complexity of the current environment, the bank is continuously monitoring the security threat landscape. The bank vigilantly observes technological developments, the geopolitical landscape and economic impacts driving security risks and assesses their relevance for potential impacts to Deutsche Bank and the wider financial ecosystem.

Deutsche Bank has a variety of prevention methods and controls in place, such as threat intelligence, data leakage prevention, cyber hygiene, and encryption solutions. These also include placing a strong emphasis on detection, backed by a robust incident-response process. The bank actively shares best practices and threat information with national and international security organizations, government authorities, and peer organizations. These relationships help to ensure that the bank’s security technology and procedures reflect current industry best practices and keep pace with the threat environment.

Deutsche Bank’s security incident management covers cybersecurity events that may affect the bank, its clients, business partners, or employees. The related management and reporting processes performed with the involvement of Compliance, Legal and Group Data Privacy are designed to enable a quick and effective response to cyberattacks and information security threats. The objective is to minimize loss, leakage, or disruption and to use insights gained from the handling of incidents to continuously improve the bank’s processes. The worldwide distributed Cyber Intelligence and Response Centers in Asia-Pacific, Europe and America allow detection of threats and response to incidents worldwide by 24/7 operations.

To address evolving security threats, the bank continually reviews and enhances its information security controls into every layer of technology, including identity and access management, data, infrastructure, devices, and applications. This is complemented by organizational controls and security training and awareness. The purpose of this layered approach is to provide end-to-end protection, as well as multiple opportunities to detect, prevent, respond to, and recover from cyberthreats.

Security risks are assessed on a regular basis, at least annually, taking internal as well as external risk drivers and events dynamically into account. A thorough analysis of the external threat landscape, which leverages industry standard threat assessment frameworks, provides a foundation for the assessment of financial industry relevant risk scenarios. These are evaluated against the bank’s capabilities to cope with these risks. In case of emerging developments, additional risk reviews are conducted. As part of the annual risk and control assessment process, subject matter experts provide a risk description, and are supported by other areas such as Legal, Compliance or Group Data Privacy, as necessary. Senior information security experts from all divisions and functions assess the exposure of the Group, based on their divisional or functional background. The process considers contextual data such as major events, threat assessments, findings, scenario analysis, control metrics, lessons learned, read across, regulatory expectations and remediation activities when assessing control suites and residual risk positions. Measures for the further reduction of material residual risks may include policy changes or policy amendments at divisional or group level as well as prioritized investment and accelerated implementation of risk mitigating activities.

Reliance on third parties’ products and services that support critical operations can affect the bank’s risk posture, because these can be the target of new and evolving cybersecurity attacks. This risk, along with expanded regulatory requirements, has necessitated an increased use of technology to better identify information security risks across third parties and where necessary, pro-actively perform outreach with them. Deutsche Bank manages third party information security risks by means of its global third-party risk management program. This program includes an information security policy specifically for third parties that sets forth the bank’s control objectives and expectations. Additionally, Deutsche Bank has a third-party risk management process designed to identify, monitor, and mitigate risks arising from working with third parties, which includes the bank’s oversight of third parties’ operations related to the services provided to the bank.

118

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Material and potentially material impacts from cybersecurity threats

Deutsche Bank’s cybersecurity threats are mainly related to the risk of breaches in confidentiality, integrity, or availability of the banks or clients’ information, which includes breaches of the security of third-party computer systems. Breaches can occur due to unauthorized access to networks or resources, the introduction of computer viruses or malware, or other forms of cybersecurity attacks or incidents, including regulatory, geopolitical, operational, and third-party risk.

119

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Risk and capital performance

Capital, Leverage Ratio, TLAC and MREL

Own Funds

The calculation of Deutsche Bank’s own funds incorporates the capital requirements following the “Regulation (EU) No 575/2013 on prudential requirements for credit institutions” CRR and the “Directive 2013/36/EU on access to the activity of credit institutions and the prudential supervision of credit institutions” “CRD”, which have been further amended with subsequent Regulations and Directives. The CRD has been implemented into German law. The information in this section as well as in the section “Development of risk-weighted assets” is based on the regulatory principles of consolidation.

This section refers to the capital adequacy of the group of entities consolidated for banking regulatory purposes pursuant to the CRR and the German Banking Act (“Kreditwesengesetz” or “KWG”), which does not include insurance companies and companies outside the finance sector.

The total own funds pursuant to the effective regulations as of year-end 2023 comprises Tier 1 and Tier 2 capital. Tier 1 capital is subdivided into Common Equity Tier 1 capital and Additional Tier 1 capital.

CET 1 capital consists primarily of common share capital (net of own holdings) including related share premium accounts, retained earnings (including losses for the financial year, if any) and accumulated other comprehensive income, subject to regulatory adjustments (i.e., prudential filters and deductions), as well as minority interests qualifying for inclusion in consolidated CET 1 capital. Prudential filters for CET 1 capital, according to Articles 32 to 35 CRR, include securitization gains on sale, cash flow hedges and changes in the value of own liabilities, and additional value adjustments. CET 1 capital deductions for instance includes intangible assets (exceeding their prudential value), deferred tax assets that rely on future profitability, negative amounts resulting from the calculation of expected loss amounts, net defined benefit pension fund assets, (reciprocal cross holdings in the capital of financial sector entities and, significant and non-significant investments in the capital (CET 1, AT1, Tier 2) of financial sector entities above certain thresholds. All items which are not deducted (i.e., amounts below the threshold) are subject to risk-weighting.

Additional Tier 1 capital consists of AT1 capital instruments and related share premium accounts as well as noncontrolling interests qualifying for inclusion in consolidated AT1 capital. To qualify as AT1 capital under CRR/CRD, instruments must have principal loss absorption through a conversion to common shares or a write-down mechanism allocating losses at a trigger point and must also meet further requirements such as perpetual with no incentive to redeem, institution must have full dividend/coupon discretion at all times, etc.

Tier 2 capital comprises eligible capital instruments, the related share premium accounts and subordinated long-term debt, certain loan loss provisions and noncontrolling interests that qualify for inclusion in consolidated Tier 2 capital. To qualify as Tier 2 capital, capital instruments or subordinated debt must have an original maturity of at least five years. Moreover, eligible capital instruments may inter alia not contain an incentive to redeem, a right of investors to accelerate repayment, or a credit sensitive dividend feature.

120

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Capital instruments

The Management Board was authorized by the 2022 Annual General Meeting to buy, on or before April 30, 2027, shares of up to 10% of the share capital at the time this resolution was taken or, if lower, of the share capital at the respective time the authorization was exercised. As at the 2022 Annual General Meeting, this corresponded to a volume of up to 206.6 million shares. Thereof, a volume of up to 5% of the total share capital or 103.3 million shares can be purchased by using derivatives, including derivatives with a volume of up to 2% of the total share capital with a maturity exceeding 18 months. During the period from the 2022 Annual General Meeting until the 2023 Annual General Meeting, 36.3 million shares were purchased for equity compensation purposes in the same period or upcoming periods. Thereof, 22.7 million shares were purchased by exercising call options. In addition, 30.2 million new call options were purchased for equity compensation purposes in upcoming periods. The number of shares held in Treasury amounted to 5.0 million as of the 2023 Annual General Meeting. These shares were held for equity compensation purposes in upcoming periods.

The Annual General Meeting on May 17 , 2023 granted the Management Board the approval to buy, on or before April 30, 2028, shares of up to 10% of the share capital at the time of this resolution was taken or, if lower, of the share capital at the respective time the authorization was exercised. As at the 2023 Annual General Meeting, this corresponded to 204 million shares. Thereof, a volume of up to 5% of the total share capital or 102 million shares can be purchased by using derivatives, including derivatives with a volume of up to 2% of the total share capital with a maturity exceeding 18 months. These authorizations replaced the authorizations of the previous year. During the period from the 2023 Annual General Meeting until December 31, 2023, 45.5 million shares were purchased for cancellation with the purpose of distributing capital to shareholders. The number of shares held in Treasury from buybacks amounted to 48.2 million as of December 31, 2023. Thereof 45.5 million relate to shares bought back for cancellation. The remaining amount of 2.7 million shares relates to shares to be used for equity compensation purposes in upcoming periods.

Since the 2017 Annual General Meeting, renewed at the 2021 Annual General Meeting, and as of December 31, 2023, authorized capital available to the Management Board is € 2,560 million (1,000 million shares).

Since the 2022 Annual General Meeting, the Management Board is authorized to issue participatory notes and other hybrid debt securities that fulfill the regulatory requirements to qualify as Additional Tier 1 capital with an equivalent value of € 9.0 billion on or before April 30, 2027. Deutsche Bank issued € 1.25 billion new AT1 notes under this authorization in November 2022.

The current CRR as applicable since June 27, 2019, provides further grandfathering rules for AT1 and Tier 2 instruments issued prior to June 27, 2019. AT1 and Tier 2 instruments issued through special purpose entities were grandfathered until December 31, 2021. In 2023, transitional arrangements only exist for AT1 and Tier 2 instruments which continue to qualify until June 26, 2025, even if they do not meet certain new requirements that apply since June 27, 2019. Deutsche Bank had an immaterial amount of instruments that qualified during 2023, which resulted in no material difference between the “fully loaded” and “transitional” amounts.

Based on the current CRR, the Group has eligible AT1 instruments of € 8.6 billion outstanding as of December 2023. In 2023, the bank did not issue or redeem AT1 notes.

As of December 31, 2023, Tier 2 capital instruments amounted to € 8.6 billion (nominal value of € 11.5 billion). In 2023, the bank issued Tier 2 capital instruments with a nominal value U.S. $ 1.5 billion (equivalent amount of € 1.4 billion) and a notional of € 132.5 million Tier 2 capital instruments matured.

Minimum capital requirements and additional capital buffers

The Pillar 1 CET 1 minimum capital requirement applicable to the Group is 4.50% of RWA. The Pillar 1 total capital requirement of 8.00% demands further resources that may be met with up to 1.50% Additional Tier 1 capital and up to 2.00% Tier 2 capital.

Failure to meet minimum capital requirements can result in supervisory measures such as restrictions of profit distributions or limitations on certain businesses such as lending. Deutsche Bank complied with the minimum regulatory capital adequacy requirements in 2023.

In addition to these minimum capital requirements, the following combined capital buffer requirements were fully effective beginning 2023 onwards. These buffer requirements must be met in addition to the Pillar 1 minimum capital requirements but can be drawn down in times of economic stress.

The capital conservation buffer is implemented in Section 10c German Banking Act, based on Article 129 CRD and equals a requirement of 2.50% CET 1 capital of RWA in 2023 and onwards.

121

	Deutsche Bank
	Annual Report 2023 on Form 20-F

The countercyclical capital buffer is deployed in a jurisdiction when excess credit growth is associated with an increase in system-wide risk. It may vary between 0% and 2.50% CET 1 capital of RWA. In exceptional cases, it could also be higher than 2.50%. The institution-specific countercyclical buffer that applies to Deutsche Bank is the weighted average of the countercyclical capital buffers that apply in the jurisdictions where our relevant credit exposures are located. As per December 31, 2023, the institution-specific countercyclical capital buffer was at 0.45%.

In addition to the aforementioned buffers, national authorities, such as the BaFin, may require a systemic risk buffer to prevent and mitigate long-term non-cyclical systemic or macro-prudential risks that are not covered by the CRR. They can require an additional buffer of up to 5.00% CET 1 capital of RWA. As of the year end 2023, a systemic risk buffer applied to Deutsche Bank is 0.19%.

Deutsche Bank continues to be designated as a global systemically important institution (G-SII) by the BaFin in agreement with the Deutsche Bundesbank, resulting in a G-SII buffer requirement of 1.50% CET 1 capital of RWA in 2023 based on the indicators as published in 2020. This assessment has been confirmed by the FSB in 2023. Further, BaFin has announced that the G-SII buffer requirement for Deutsche Bank will remain unchanged for the years 2024 and 2025.

Additionally, Deutsche Bank has been classified by BaFin in agreement with the Deutsche Bundesbank as an “other systemically important institution” (O-SII) with an additional capital buffer requirement of 2.00% in 2023 that has to be met on a consolidated level. Hence, for Deutsche Bank, the O-SII buffer amounts to 2.00% in 2023. BaFin has announced O-SII buffer requirement for Deutsche bank remain unchanged for the year 2024.The higher of the buffers for systemically important institutions (G-SII buffer or O-SII buffer) must be applied.

Pursuant to the Pillar 2 SREP, the ECB may impose capital requirements on individual banks which are more stringent than statutory requirements (so-called Pillar 2 requirement).

The following table gives an overview of the different Pillar 1 and Pillar 2 minimum capital buffer requirements (but excluding the Pillar 2 guidance) as applicable to Deutsche Bank for the years 2023 and 2024.

122

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Overview total capital requirements and capital buffers

	2023	2024
Pillar 1
Minimum CET 1 requirement	4.50%	4.50%
Combined buffer requirement	5.14%	5.19%
Capital Conservation Buffer	2.50%	2.50%
Countercyclical Buffer¹	0.45%	0.50%
Systemic Risk Buffer²	0.19%	0.19%
Maximum of:	2.00%	2.00%
G-SII Buffer	1.50%	1.50%
O-SII Buffer	2.00%	2.00%
Pillar 2
Pillar 2 SREP Add-on of CET 1 capital (excluding the "Pillar 2" guidance)	2.70%	2.65%
of which covered by CET 1 capital	1.52%	1.49%
of which covered by Tier 1 capital	2.03%	1.99%
of which covered by Tier 2 capital	0.68%	0.66%
Total CET 1 requirement from Pillar 1 and 2³	11.16%	11.18%
Total Tier 1 requirement from Pillar 1 and 2	13.17%	13.18%
Total capital requirement from Pillar 1 and 2	15.84%	15.84%

¹ Deutsche Bank’s countercyclical buffer requirement is subject to country-specific buffer rates decreed by EBA and the Basel Committee of Banking Supervision (BCBS) as well as Deutsche Bank’s relevant credit exposures as per respective reporting date; the countercyclical buffer rate for 2024 has been calculated to be 0.50% based on known countercyclical buffer changes in 2024. The countercyclical buffer is subject to Deutsche Bank portfolio changes and further changes of countercyclical buffer rates throughout the year

² The Systemic risk buffer rate for 2024 has been calculated to be 0.19% based on known systemic risk buffer changes in 2024. The Systemic risk buffer is subject to Deutsche Bank portfolio changes and further changes in systemic risk buffer rates throughout the year

³ The total Pillar 1 and Pillar 2 CET 1 requirement (excluding the “Pillar 2” guidance) is calculated as the sum of the SREP requirement, the systemic risk buffer requirement, the capital conservation buffer requirement and countercyclical buffer requirement as well as the higher of the G-SII/O-SII requirement

Development of Own Funds

Deutsche Bank’s CET 1 capital as of December 31, 2023, amounted to € 48.1 billion and remained materially flat compared to the end of 2022. AT1 capital was € 0.2 billion lower amounted to € 8.3 billion as of December 31, 2023 compared to € 8.5 billion at the end of 2022. Tier 1 capital as of December 31, 2023, amounted to € 56.4 billion compared to € 56.6 billion at the end of 2022. Tier 2 capital was € 0.9 billion lower as of December 31, 2023, amounted to € 8.6 billion compared to € 9.5 billion at the end of 2022. Total capital was € 1.1 billion lower as of December 31, 2023, amounted to € 65.0 billion compared to € 66.1 billion at the end of 2022.

CET 1 capital was materially flat over the year with positive net profit of € 4.8 billion for the year 2023 offset by regulatory deductions for future common share dividend and AT1 coupon payments of € 1.3 billion which is in line with the ECB Decision (EU) (2015/656) on the recognition of interim or year-end profits in CET 1 capital in accordance with the Article 26(2) of Regulation (EU) No 575/2013 (ECB/2015/4), and increased regulatory adjustments related to the expected loss shortfall of € 1.9 billion mainly due to new model implementations and deferred tax assets of € 1.0 billion partially offset by reductions in the additional value adjustment of € 0.3 billion, equity compensation of € 0.2 billion and other regulatory adjustments of € 0.1 billion. In addition, CET 1 capital decreased as a result of negative effects from currency translation adjustments net of capital deduction item counter-effects of € 0.8 billion and share buybacks of € 0.5 billion.

The AT1 capital decrease of € 0.2 billion was driven by increased capital deduction resulting from higher limits for market making transactions.

The Tier 2 capital decrease of € 0.9 billion was mainly due to the redemption of a Tier 2 instrument with a notional amount of € 1.3 billion, € 0.7 billion amortization, € 0.2 billion due to foreign exchange effects and € 0.2 billion higher deduction in market making limit. This was partially offset by issuance of a new Tier 2 capital instrument with a notional amount of € 1.4 billion in the first quarter of 2023.

123

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Own Funds Template (including RWA and capital ratios)

	Dec 31, 2023	Dec 31, 2022
in € m.	CRR/CRD	CRR/CRD
Common Equity Tier 1 (CET 1) capital: instruments and reserves
Capital instruments, related share premium accounts and other reserves	44,908	45,458
Retained earnings	16,509	12,305
Accumulated other comprehensive income (loss), net of tax	(1,760)	(1,314)
Independently reviewed interim profits net of any foreseeable charge or dividend¹	3,493	4,183
Other	973	1,002
Common Equity Tier 1 (CET 1) capital before regulatory adjustments	64,124	61,634

Common Equity Tier 1 (CET 1) capital: regulatory adjustments
Additional value adjustments (negative amount)	(1,727)	(2,026)
Other prudential filters (other than additional value adjustments)	(126)	600
Goodwill and other intangible assets (net of related tax liabilities) (negative amount)	(5,014)	(5,024)
Deferred tax assets that rely on future profitability excluding those arising from temporary differences (net of related tax liabilities where the conditions in Art. 38 (3) CRR are met) (negative amount)	(4,207)	(3,244)
Negative amounts resulting from the calculation of expected loss amounts	(2,386)	(466)
Defined benefit pension fund assets (net of related tax liabilities) (negative amount)	(920)	(1,149)
Direct, indirect and synthetic holdings by an institution of own CET 1 instruments (negative amount)	(0)	(0)
Direct, indirect and synthetic holdings by the institution of the CET 1 instruments of financial sector entities where the institution has a significant investment in those entities (amount above the 10 % / 15 % thresholds and net of eligible short positions) (negative amount)	0	0
Deferred tax assets arising from temporary differences (net of related tax liabilities where the conditions in Art. 38 (3) CRR are met) (amount above the 10 % / 15 % thresholds) (negative amount)	0	0
Other regulatory adjustments²	(1,679)	(2,225)
Total regulatory adjustments to Common Equity Tier 1 (CET 1) capital	(16,058)	(13,536)
Common Equity Tier 1 (CET 1) capital	48,066	48,097

Additional Tier 1 (AT1) capital: instruments
Capital instruments and the related share premium accounts	8,578	8,578
Amount of qualifying items referred to in Art. 484 (4) CRR and the related share premium accounts subject to phase out from AT1	0	0
Additional Tier 1 (AT1) capital before regulatory adjustments	8,578	8,578

Additional Tier 1 (AT1) capital: regulatory adjustments
Direct, indirect and synthetic holdings by an institution of own AT1 instruments (negative amount)	(250)	(60)
Residual amounts deducted from AT1 capital with regard to deduction from CET 1 capital during the transitional period pursuant to Art. 472 CRR
Other regulatory adjustments	0	0
Total regulatory adjustments to Additional Tier 1 (AT1) capital	(250)	(60)
Additional Tier 1 (AT1) capital	8,328	8,518
Tier 1 capital (T1 = CET 1 + AT1)	56,395	56,616

Tier 2 (T2) capital	8,610	9,531
Total capital (TC = T1 + T2)	65,005	66,146
Total risk-weighted assets	349,742	360,003
Capital ratios
Common Equity Tier 1 capital ratio (as a percentage of risk-weighted assets)	13.7	13.4
Tier 1 capital ratio (as a percentage of risk-weighted assets)	16.1	15.7
Total capital ratio (as a percentage of risk-weighted assets)	18.6	18.4

N/M – Not meaningful

¹ Full year profit is recognized as per ECB Decision (EU) 2015/656 in accordance with the Article 26(2) of Regulation (EU) No 575/2013 (ECB/2015/4)

² Includes capital deductions of € 1.4 billion (Dec 2022: € 1.2 billion) based on ECB guidance on irrevocable payment commitments related to the Single Resolution Fund and the Deposit Guarantee Scheme, € 0.3 billion (Dec 2022: € 1.0 billion) based on ECB's supervisory recommendation for a prudential provisioning of non-performing exposures, € 0.9 million (Dec 2022: € 7.4 million) resulting from minimum value commitments as per Article 36 (1)(n) of the CRR and CET 1 shows no change in the current year, but a decrease of € 14.7 million for the year 2022 from IFRS 9 transitional provision as per Article 473a of the CRR

124

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Reconciliation of shareholders’ equity to Own Funds

	CRR/CRD
in € m.	Dec 31, 2023	Dec 31, 2022
Total shareholders’ equity per accounting balance sheet (IASB IFRS)	65,999	61,772
Difference between equity per IASB IFRS / EU IFRS³	(1,513)	187
Total shareholders’ equity per accounting balance sheet (EU IFRS)	64,486	61,959
Deconsolidation/Consolidation of entities	(35)	29
Of which:
Additional paid-in capital	0	0
Retained earnings	(35)	29
Accumulated other comprehensive income (loss), net of tax	0	0
Total shareholders' equity per regulatory balance sheet	64,451	61,988
Minority Interests (amount allowed in consolidated CET 1)	973	1,002
AT1 coupon and shareholder dividend deduction¹	(1,279)	(1,342)
Capital instruments not eligible under CET 1 as per CRR 28(1)	(21)	(14)
Common Equity Tier 1 (CET 1) capital before regulatory adjustments	64,124	61,634
Additional value adjustments	(1,727)	(2,026)
Other prudential filters (other than additional value adjustments)	(126)	600
Goodwill and other intangible assets (net of related tax liabilities) (negative amount)	(5,014)	(5,024)
Deferred tax assets that rely on future profitability	(4,207)	(3,244)
Defined benefit pension fund assets (net of related tax liabilities) (negative amount)	(920)	(1,149)
Direct, indirect and synthetic holdings by the institution of the CET 1 instruments of financial sector entities where the institution has a significant investment in those entities	0	0
Other regulatory adjustments²	(4,065)	(2,691)
Common Equity Tier 1 capital	48,066	48,097

¹ Full year profit is recognized as per ECB Decision (EU) 2015/656 in accordance with the Article 26(2) of Regulation (EU) No 575/2013 (ECB/2015/4)

³ Differences in “equity per balance sheet” result entirely from deviations in profit (loss) after taxes due to the application of EU carve-out rules as set forth in the chapter "Material accounting policies and critical accounting estimates". These rules were initially applied in the first quarter 2020

Development of Own Funds

	CRR/CRD
in € m.	twelve months ended Dec 31, 2023	twelve months ended Dec 31, 2022
Common Equity Tier 1 (CET 1) capital - opening amount	48,097	46,506
Common shares, net effect	(69)	(2)
Additional paid-in capital	(332)	(79)
Retained earnings	4,794	5,945
Common shares in treasury, net effect/(+) sales (–) purchase	(150)	(325)
Movements in accumulated other comprehensive income	(445)	(870)
AT1 coupon and shareholder dividend deduction ¹	(1,279)	(1,342)
Additional value adjustments	300	(215)
Goodwill and other intangible assets (net of related tax liabilities) (negative amount)	11	(127)
Deferred tax assets that rely on future profitability (excluding those arising from temporary differences)	(962)	(1,779)
Negative amounts resulting from the calculation of expected loss amounts	(1,920)	107
Defined benefit pension fund assets (net of related tax liabilities) (negative amount)	230	(158)
Direct, indirect and synthetic holdings by the institution of the CET 1 instruments of financial sector entities where the institution has a significant investment in those entities	0	0
Deferred tax assets arising from temporary differences (amount above 10 % and 15 % threshold, net of related tax liabilities where the conditions in Art. 38 (3) CRR are met)	0	151
Other, including regulatory adjustments	(208)	285
Common Equity Tier 1 (CET 1) capital - closing amount	48,066	48,097
Additional Tier 1 (AT1) Capital – opening amount	8,518	8,868
New Additional Tier 1 eligible capital issues	0	1,967
Matured and called instruments	0	(2,350)
Other, including regulatory adjustments	(190)	33
Additional Tier 1 (AT1) Capital – closing amount	8,328	8,518
Tier 1 capital	56,395	56,616
Tier 2 (T2) capital – closing amount	8,610	9,531
Total regulatory capital	65,005	66,146

¹ Full year profit is recognized as per ECB Decision (EU) 2015/656 in accordance with the Article 26(2) of Regulation (EU) No 575/2013 (ECB/2015/4)

125

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Minimum loss coverage for Non Performing Exposure (NPE)

In April 2019, the EU published requirements Regulation (EU) 2019/630 amending the CRR (Regulation (EU) No 575/2013) for a prudential backstop reserve for non-performing exposure (NPE). This regulation results in a Pillar 1 deduction from CET 1 capital when a minimum loss coverage requirement is not met. It is applied to exposures originated and defaulted after April 25, 2019.

In addition, in March 2018, the ECB published its “Addendum to the ECB Guidance to banks on non-performing loans: supervisory expectations for prudential provisioning of non-performing exposures” and in August 2019, its “Communication on supervisory coverage expectations for NPEs”.

The ECB guidance issued is applicable to all newly defaulted loans after April 1, 2018 (ECB - new NPE’s after April 1, 2018) and, similar to the EU rules, it requires banks to take measures in case a minimum impairment coverage requirement is not met. Within the annual SREP discussions ECB may impose Pillar 2 measures on banks in case ECB is not confident with measure taken by the individual bank.

For the year end 2020, the bank introduced a framework to determine the prudential provisioning of non-performing exposure as a Pillar 2 measure as requested in the before mentioned ECB’s guidance and SREP recommendation.

For the minimum loss coverage expectation for NPE´s arising from clients defaulted before April 1, 2018 (ECB – NPE Stock) a phase-in path to 100 % coverage expectation was envisaged with an annual increase of 10 %. In a first step, banks were allocated to three comparable groups on the basis of the bank’s net NPL ratios as of end-2017 and in a second step an assessment of capacity regarding the potential impact was carried out for each individual bank with a horizon of end-2026. Deutsche Bank has been assigned to Group 1 which requires a full applicability of 100 % minimum loss coverage by year end 2024 for secured loans respectively by year end 2023 for unsecured loans.

The shortfall between the minimum loss coverage requirements for non-performing exposure and the risk reserves recorded in line with the IFRS 9 for defaulted (Stage 3) assets amounted to € 322 million as of December 31, 2023 and was deducted from CET 1. This additional CET 1 charge can be considered as additional loss reserve and leads to a € 2.6 billion RWA relief. The reduction in the shortfall and the respective increase in the RWA relief in 2023 were driven by the benefits from data and process optimization as part of the bank´s capital efficiency measures, as discussed below.

Non-performing exposure loss coverage

	Dec 31, 2023
in € m. (unless stated otherwise)	Exposure value¹	Total minimum coverage requirement	Available coverage	Applicable amount of insufficient coverage
Corporate Bank	3,745	650	1,299	51
Investment Bank	9,415	3,684	4,753	223
Private Bank	6,621	1,428	3,169	43
Asset Management	0	0	0	0
Corporate & Other	491	59	98	4
Total	20,271	5,820	9,319	322

¹ Exposure value in accordance with Article 47c CRR

	Dec 31, 2022
in € m. (unless stated otherwise)	Exposure value¹	Total minimum coverage requirement	Available coverage	Applicable amount of insufficient coverage
Corporate Bank	4,378	795	1,176	316
Investment Bank	14,665	8,182	10,117	383
Private Bank	6,101	1,250	2,202	315
Asset Management	0	0	0	0
Corporate & Other²	282	67	41	35
Total	25,426	10,294	13,535	1,048

¹ Exposure value in accordance with Article 47c CRR

² Aligned to the current representation

126

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Development of risk-weighted assets

The table below provides an overview of RWA broken down by risk type and business division. It includes the aggregated effects of the segmental reallocation of infrastructure related positions, if applicable, as well as reallocations between the segments.

Risk-weighted assets by risk type and business division

	Dec 31, 2023
in € m.	Corporate Bank	Investment Bank	Private Bank	Asset Management	Corporate & Other	Total
Credit Risk	63,156	94,246	78,422	11,652	18,314	265,789
Settlement Risk	0	1	13	0	0	14
Credit Valuation Adjustment (CVA)	82	4,654	110	0	429	5,276
Market Risk	181	19,019	22	28	2,260	21,510
Operational Risk	5,568	21,611	7,659	3,475	18,839	57,153
Total	68,987	139,532	86,226	15,155	39,842	349,742

	Dec 31, 2022¹
in € m.	Corporate Bank	Investment Bank	Private Bank	Asset Management	Corporate & Other	Total
Credit Risk	68,022	93,184	79,865	9,417	18,726	269,214
Settlement Risk	0	63	0	0	61	124
Credit Valuation Adjustment (CVA)	130	5,144	29	4	877	6,184
Market Risk	847	17,895	72	28	7,289	26,131
Operational Risk	5,304	23,155	7,637	3,414	18,839	58,349
Total	74,303	139,442	87,602	12,864	45,792	360,003

¹ Prior year’s comparatives aligned to presentation in the current year

Deutsche Bank´s RWA were € 349.7 billion as of December 31, 2023, compared to € 360.0 billion at the end of 2022.

Market risk RWA declined by € 4.6 billion, primarily driven by decreases in the Value-at-Risk and Stressed-Value-at-Risk components following a reduction in the qualitative and quantitative components of the capital multiplier. In addition, reductions in exposure led to a lower Value-at-Risk and Stressed-Value-at-Risk, which was partially offset by a higher Incremental Risk Charge, when compared to year end 2022.

Credit risk RWA decreased by € 3.4 billion, primarily driven by benefits from data and process optimization as part of the bank´s capital efficiency measures, new securitizations, foreign exchange movements and a reduction in RWA for deferred tax assets. This was partially offset by an RWA increase due to regulatory changes from the introduction of new models, impacts from rating migration, exposures to

central counterparties, increases from the acquisition of Numis and business growth. Operational risk RWA decreased by € 1.2 billion, mainly driven by a more favorable development of Deutsche Bank´s internal loss profile feeding into the capital model. Credit valuation adjustment (CVA) RWA decreased by € 0.9 billion mainly driven by model updates and market data changes, partially offset by changes in methodology and policy as well as business activities.

The tables below provide an analysis of key drivers for risk-weighted asset movements observed for credit risk, credit valuation adjustments as well as market and operational risk in the reporting period. They also show the corresponding movements in capital requirements, derived from the RWA by an 8% minimum capital requirement.

Development of risk-weighted assets for Credit Risk including Counterparty Credit Risk

	Dec 31, 2023		Dec 31, 2022
in € m.	Credit risk RWA	Capital requirements	Credit risk RWA	Capital requirements
Credit risk RWA balance, beginning of year	269,214	21,537	263,752	21,100
Book size	(3,694)	(296)	(6,254)	(500)
Book quality	(886)	(71)	(478)	(38)
Model updates	298	24	(179)	(14)
Methodology and policy	5,831	466	8,244	659
Acquisition and disposals	571	46	0	0
Foreign exchange movements	(4,174)	(334)	5,320	426
Other	(1,371)	(110)	(1,191)	(95)
Credit risk RWA balance, end of year	265,789	21,263	269,214	21,537

127

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Of which: Development of risk-weighted assets for Counterparty Credit Risk

	Dec 31, 2023		Dec 31, 2022
in € m.	Counterparty credit risk RWA	Capital requirements	Counterparty credit risk RWA	Capital requirements
Counterparty credit risk RWA balance, beginning of year	23,589	1,887	24,780	1,982
Book size	(4,664)	(373)	(1,734)	(139)
Book quality	1,278	102	(41)	(3)
Model updates	0	0	0	0
Methodology and policy	312	25	0	0
Acquisition and disposals	0	0	0	0
Foreign exchange movements	(646)	(52)	584	47
Other	0	0	0	0
Counterparty credit risk RWA balance, end of year	19,868	1,589	23,589	1,887

The classifications of key drivers for the RWA credit risk development table are fully aligned with the recommendations of the Enhanced Disclosure Task Force. Organic changes in the Group´s portfolio size and composition are considered in the category “book size”. The category “book quality” mainly represents the effects from portfolio rating migrations, loss given default, model parameter recalibrations as well as collateral and netting coverage activities. “Model updates” include model refinements and advanced model roll out. RWA movements resulting from externally, regulatory-driven changes, e.g., applying new regulations, are considered in the “methodology and policy” section. “Acquisition and disposals” is reserved to show significant exposure movements which can be clearly assigned to new businesses or disposal-related activities. Changes that cannot be attributed to the above categories are reflected in the category “other”.

The decrease in RWA for credit risk by € 3.4 billion, or 1.3%, since December 31, 2022, is mainly driven by the categories “foreign exchange movements”, “book size”, “other” and “book quality”. This was partially offset by changes shown in the categories “methodology and policy”, “acquisition and disposals” and “model updates”. The decrease in category “book size” is predominantly driven by a relief from synthetic securitizations in the Corporate Bank and the Private Bank, which was partially offset by business growth. Additionally, the decrease in category “other” reflects a reduction in RWA for deferred tax assets and investments in financial sector entities. The reduction in “book quality” is mainly driven by benefits from data and process optimization as part of the bank´s capital efficiency measures, partially offset by counterparty rating deteriorations. The aforementioned decreases were partially offset by increases in the category “methodology and policy” which mainly reflects impacts from the introduction of new models due to regulatory changes and exposures to central counterparties. The category “acquisition and disposals” reflects the acquisition of Numis. Furthermore, credit risk RWA increased in the category “model updates” compared to 2022, driven by refinements on Deutsche Bank´s IRBA model.

RWA for counterparty credit risk decreased by € 3.7 billion, or 15.8%, since December 31, 2022, mainly driven by the decrease in category “book size” reflecting lower exposures for derivatives along with lower risk weights for new positions as well as a reduction in the category “foreign exchange movements”. This decrease was partially offset by an increase in category “book quality”, particularly stemming from counterparty rating deteriorations. Additionally, RWA for counterparty credit risk increased in the category “methodology and policy”, driven by impacts from the introduction of new models due to regulatory changes and exposures to central counterparties.

Based on the CRR/CRD regulatory framework, Deutsche Bank is required to calculate RWA using the CVA which takes into account the credit quality of our counterparties. RWA for CVA covers the risk of mark-to-market losses on the expected counterparty risk in connection with OTC derivative exposures and securities financing transactions. Deutsche Bank calculates the majority of the CVA based on our own internal model as approved by the BaFin.

Development of risk-weighted assets for Credit Valuation Adjustment

	Dec 31, 2023		Dec 31, 2022
in € m.	CVA RWA	Capital requirements	CVA RWA	Capital requirements
CVA RWA balance, beginning of year	6,184	495	6,327	506
Movement in risk levels	170	14	1,217	97
Market data changes and recalibrations	(656)	(52)	(200)	(16)
Model updates	(683)	(55)	(1,160)	(93)
Methodology and policy	261	21	0	0
Acquisitions and disposals	0	0	0	0
Foreign exchange movements	0	0	0	0
CVA RWA balance, end of year	5,276	422	6,184	495

128

	Deutsche Bank
	Annual Report 2023 on Form 20-F

The development of CVA RWA is broken down into a number of categories: “Movement in risk levels”, which includes changes to the portfolio size and composition; “Market data changes and calibrations”, which includes changes in market data levels and volatilities as well as recalibrations; “Model updates”, which refers to changes to either the IMM credit exposure models or the value-at-risk models that are used for CVA RWA; “Methodology and policy”, which relates to changes to the regulation. Any significant business acquisitions or disposals would be presented in the category “Acquisitions and disposals”.

As of December 31, 2023, RWA for CVA amounted to € 5.3billion, representing a decrease of € 0.9 billion or -15% compared to December 31, 2022. This includes €0.7billion decrease in model updates and € 0.7billion decrease in market data changes, partially offset by methodology and policy changes and business activities throughout the year.

Development of risk-weighted assets for Market Risk

	Dec 31, 2023
in € m.	VaR	SVaR	IRC	Other	Total RWA	Total capital requirements
Market risk RWA balance, beginning of year	7,413	12,221	3,639	2,857	26,131	2,091
Movement in risk levels	(1,901)	(1,724)	3,647	72	95	8
Market data changes and recalibrations	(393)	(10)	0	(53)	(456)	(36)
Model updates/changes	77	(663)	(158)	0	(745)	(60)
Methodology and policy	(1,446)	(2,735)	0	722	(3,459)	(277)
Acquisitions and disposals	0	0	0	0	0	0
Foreign exchange movements	0	0	0	(57)	(57)	(5)
Other	0	0	0	0	0	0
Market risk RWA balance, end of year	3,750	7,090	7,129	3,542	21,510	1,721

	Dec 31, 2022
in € m.	VaR	SVaR	IRC	Other	Total RWA	Total capital requirements
Market risk RWA balance, beginning of year	3,538	9,360	3,657	3,219	19,773	1,582
Movement in risk levels	(175)	1,986	(17)	266	2,061	165
Market data changes and recalibrations	2,651	(617)	0	(593)	1,441	115
Model updates/changes	100	(650)	0	0	(550)	(44)
Methodology and policy	1,299	2,142	0	0	3,441	275
Acquisitions and disposals	0	0	0	0	0	0
Foreign exchange movements	0	0	0	113	113	9
Other	0	0	0	0	0	0
Market risk RWA balance, end of year	7,413	12,221	3,639	2,857	26,131	2,091

The analysis for market risk covers movements in the bank’s internal models for value-at-risk (VaR), stressed value-at-risk, incremental risk charge (IRC) as well as results from the market risk standardized approach (MRSA), which is captured in the category “Other”. MRSA is used to determine the regulatory capital charge for the specific market risk of trading book securitizations, for certain types of investment funds and for longevity risk as set out in CRR/CRD regulations.

Market risk RWA movements due to changes in market data levels, volatilities, correlations, liquidity and ratings are included under the “Market data changes and recalibrations” category. Changes to market risk RWA internal models, such as methodology enhancements or risk scope extensions, are included in the category “Model updates”. In the “Methodology and policy” category regulatory driven changes to market risk RWA models and calculations are reported. Significant new businesses and disposals would be assigned to the line item “Acquisition and disposals”. The impacts of “Foreign exchange movements” are only calculated for the CRM and Standardized approach methods.

As of December 31, 2023 the RWA for market risk was € 21.5 billion, a decrease of € 4.6 billion, or -18% since December 31, 2022. The decrease is driven by the “Methodology and policy” category due to a reduction in quantitative component of capital multiplier by 0.85 on the back of backtesting outliers moving out of the 250 day window and reduction in qualitative component of multiplier by 0.5. The Incremental Risk Charge increased by € 3.5 billion driven by changes in sovereign bond inventory for facilitating market making in Global Rates and Global Emerging Markets business which is offset by lower value at risk and stressed value at risk driven by a reduction in interest rates exposure under Global Rates and reductions following the changes in Global Foreign Exchange business strategy.

129

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Development of risk-weighted assets for operational risk

	Dec 31, 2023		Dec 31, 2022
in € m.	Operational risk RWA	Capital requirements	Operational risk RWA	Capital requirements
Operational risk RWA balance, beginning of year	58,349	4,668	61,718	4,937
Loss profile changes (internal and external)	(1,577)	(126)	(3,405)	(272)
Expected loss development	150	12	(166)	(13)
Forward looking risk component	130	10	794	63
Model updates	0	0	(669)	(54)
Methodology and policy	100	8	78	6
Acquisitions and disposals	0	0	0	0
Operational risk RWA balance, end of year	57,153	4,572	58,349	4,668

Changes in internal and external loss events are reflected in the category “Loss profile changes”. The category “Expected loss development” is based on divisional business plans as well as historical losses and is deducted from the AMA capital figure within certain constraints. The category “Forward looking risk component” reflects qualitative adjustments and, as such, the effectiveness and performance of the day-to-day operational risk management activities via Non-Financial Risk appetite metrics and Risk and Control Assessment (RCA) scores, focusing on the business environment and internal control factors. The category “Model updates” covers model refinements, such as the implementation of model changes. The category “Methodology and policy” represents externally driven changes such as regulatory add-ons. The category “Acquisition and disposals” represents significant exposure movements which can be clearly assigned to new or disposed businesses.

The overall decrease of the RWA for operational risk by € 1.2 billion during 2023 was mainly driven by lower loss frequencies feeding into our capital model.

Economic Capital

Economic capital adequacy

Deutsche Bank’s internal capital adequacy assessment process (ICAAP) aims at maintaining the continuity of the bank on an ongoing basis. Internal capital adequacy is assessed from an economic perspective as the ratio of economic capital supply divided by economic capital demand as shown in the table below.

Total economic capital supply and demand

in € m. (unless stated otherwise)	Dec 31, 2023	Dec 31, 2022
Components of economic capital supply
Shareholders' equity	64,486	61,959
Noncontrolling interests¹	899	897
AT1 coupons deduction	(381)	(319)
Gain on sale of securitizations, cash flow hedges	(45)	790
Fair value gains on own debt and debt valuation adjustments, subject to own credit risk	(82)	(190)
Additional valuation adjustments	(1,727)	(2,026)
Intangible assets	(3,692)	(3,677)
IFRS deferred tax assets excl. temporary differences	(4,737)	(3,937)
Expected loss shortfall	(2,386)	(466)
Defined benefit pension fund assets	(947)	(1,176)
Other adjustments	(3,782)	(1,864)
Economic capital supply	47,607	49,989

Components of economic capital demand
Credit risk	11,875	11,802
Market risk	8,328	6,355
Operational risk	4,572	4,668
Strategic risk	1,874	1,854
Diversification benefit	(3,385)	(3,778)
Total economic capital demand	23,265	20,900

Economic capital adequacy ratio	205%	239%

¹ Includes noncontrolling interest up to the economic capital requirement for each subsidiary

The economic capital adequacy ratio was 205% as of December 31, 2023, compared with 239% as of December 31, 2022. The decline was due to an increase in economic capital demand, which is explained in the section “Risk Profile”, and a decrease in economic capital supply.

130

	Deutsche Bank
	Annual Report 2023 on Form 20-F

The decrease in economic capital supply by € 2.4 billion compared to year-end 2022 was mainly driven by higher capital deduction from expected loss shortfall of € 1.9 billion, introduction of a new deduction of € 1.5 billion for valuation differences between carrying and fair values for debt securities held to collect, deductions for future common share dividend and AT1 coupon payments of € 1.3 billion, currency translation adjustments of € 1.1 billion, higher capital deductions for IFRS deferred tax assets excluding temporary differences of € 0.8 billion and cash flow hedges of € 0.8 billion. These decreases were partly offset by a positive net income of € 4.8 billion and reduced deduction for additional valuation adjustments of € 0.3 billion.

Leverage Ratio

Leverage Ratio according to CRR/CRD framework

The non-risk-based leverage ratio is intended to act as a supplementary measure to the risk-based capital requirements. Its objectives are to constrain the build-up of leverage in the banking sector, helping avoid destabilizing deleveraging processes which can damage the broader financial system and the economy, and to reinforce the risk-based requirements with a simple, non-risk based “backstop” measure.

A minimum leverage ratio requirement of 3% was introduced effective starting with June 28, 2021. Starting January 1, 2023, an additional leverage ratio buffer requirement of 50% of the applicable G-SII buffer rate applies. This additional requirement equals 0.75% for Deutsche Bank. Furthermore, the European Central Bank has set a Pillar 2 requirement for the leverage ratio for the first time; effective January 1, 2024, this requirement will be 0.10%.

Deutsche Bank calculates its leverage ratio exposure in accordance with Articles 429 to 429g of the CRR.

The Group’s total leverage ratio exposure includes derivatives, securities financing transactions (SFTs), off-balance sheet exposure and other on-balance sheet exposure (excluding derivatives and SFTs).

The leverage exposure for derivatives is calculated by using a modified version of the standardized approach for counterparty credit risk (SA-CCR), comprising the current replacement cost plus a regulatory defined add-on for the potential future exposure. The effective notional amount of written credit derivatives, i.e., the notional reduced by any negative fair value changes that have been incorporated in Tier 1 capital is included in the leverage ratio exposure measure; the resulting exposure measure is further reduced by the effective notional amount of purchased credit derivative protection on the same reference name provided certain conditions are met.

The SFT component includes the gross receivables for SFTs, which are netted with SFT payables if specific conditions are met. In addition to the gross exposure a regulatory add-on for the counterparty credit risk is included.

The off-balance sheet exposure component follows the standardized approach for credit risk with credit risk conversion factors (CCF) depending on the risk category (0% for low risk, 20% for medium/low risk, 50% for medium risk, or 100% for full risk). For the determination of the leverage exposure a floor of 10% is applied leading to a 10% CCF for the low risk category.

The on-balance sheet exposures (excluding derivatives and SFTs) component reflects the accounting values of the assets (excluding derivatives, SFTs and regular-way purchases and sales awaiting settlement). The exposure value of regular-way purchases and sales awaiting settlement is determined as offset between those cash receivables and cash payables where the related regular-way sales and purchases are both settled on a delivery-versus payment basis.

Assets can be excluded from the leverage ratio exposure measure if they have been deducted in the determination of Tier 1 capital. The corresponding regulatory adjustments are reflected in the asset amounts deducted in determining Tier 1 capital component.

The following tables show the leverage ratio exposure and the leverage ratio. For further details on Tier 1 capital please also refer to the section “Development of Own Funds”.

Summary reconciliation of accounting assets and leverage ratio exposures

in € bn.	Dec 31, 2023	Dec 31, 2022
Total assets as per published financial statements	1,312	1,337
Adjustment for entities which are consolidated for accounting purposes but are outside the scope of regulatory consolidation	2	2
Adjustments for derivative financial instruments	(122)	(171)
Adjustment for securities financing transactions (SFTs)	4	1
Adjustment for off-balance sheet items (i.e. conversion to credit equivalent amounts of off-balance sheet exposures)	127	128
Other adjustments	(83)	(57)
Leverage ratio total exposure measure	1,240	1,240

131

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Leverage ratio common disclosure

in € bn. (unless stated otherwise)	Dec 31, 2023	Dec 31, 2022
Total derivative exposures	131	130
Total securities financing transaction exposures	99	96
Total off-balance sheet exposures	127	128
Other Assets	897	897
Asset amounts deducted in determining Tier 1 capital	(14)	(11)

Tier 1 capital	56.4	56.6
Leverage ratio total exposure measure	1,240	1,240
Leverage ratio (in %)	4.5	4.6

Description of the factors that had an impact on the leverage ratio in 2023

As of December 31, 2023, the leverage ratio was 4.5% compared to 4.6% as of December 31, 2022. This takes into account a Tier 1 capital of € 56.4 billion over an applicable exposure measure of € 1,240.3 billion as of December 31, 2023 (€ 56.6 billion over an applicable exposure measure of € 1,240.5 billion as of December 31, 2022, respectively).

Over the year 2023 the leverage exposure was materially unchanged at € 1,240.3 billion. Asset amounts deducted in determining Tier 1 capital declined by € 2.8 billion mainly reflecting higher capital deductions for negative amounts resulting from the calculation of expected loss amounts and deferred tax assets. In addition, off-balance sheet leverage exposure decreased by € 0.6 billion. The leverage exposure for assets not related to derivatives and secured financing transactions decreased by € 0.5 billion which largely reflects the development of the balance sheet (for additional information please refer to section “Movements in assets and liabilities” in this report).

SFT-related items (securities purchased under resale agreements and securities borrowed) increased by € 3.0 billion, largely in line with the development on the balance sheet. Furthermore, the leverage exposure related to derivatives increased by € 0.8 billion.

The development of the leverage exposure in 2023 includes a negative foreign exchange impact of € 17.7 billion mainly due to the weakening of the U.S. Dollar versus the Euro. The effects from foreign exchange rate movements are embedded in the movement of the leverage exposure items discussed in this section.

For main drivers of the Tier 1 capital development please refer to section “Development of Own Funds”.

Minimum Requirement of Own Funds and Eligible Liabilities and Total Loss Absorbing Capacity

MREL Requirements

The minimum requirement for own funds and eligible liabilities (MREL) was introduced by the European Union’s Regulation establishing uniform rules and a uniform procedure for the resolution of credit institutions (Single Resolution Mechanism Regulation or SRMR) and the European Union’s Directive establishing a framework for the recovery and resolution of credit institutions (Bank Recovery and Resolution Directive or BRRD) as implemented into German law by the German Recovery and Resolution Act.

The currently required level of MREL is determined by the competent resolution authorities for each supervised bank individually, depending on the respective preferred resolution strategy. In the case of Deutsche Bank AG, MREL is determined by the Single Resolution Board. While there is no statutory minimum level of MREL, the SRMR, BRRD and a delegated regulation set out criteria which the resolution authority must consider when determining the relevant required level of MREL. Guidance is provided through an MREL policy published annually by the SRB. Any binding MREL ratio determined by the SRB is communicated to Deutsche Bank via the German Federal Financial Supervisory Authority (BaFin).

As a result of its regular annual review the SRB has updated Deutsche Bank AG’s binding MREL ratio requirements in the second quarter of 2023 applicable immediately. The MREL ratio requirement on a consolidated basis is now 25.21% of RWA and 6.92% of LRE of which 19.54% of RWA and 6.92% of LRE must be met with own funds and subordinated instruments.

The combined buffer requirements of 5.14% as of December 31, 2023 must be met in addition to the RWA based MREL and subordinated MREL requirements.

132

	Deutsche Bank
	Annual Report 2023 on Form 20-F

TLAC Requirements

Since June 27, 2019, Deutsche Bank, as a global systemically important bank, has also become subject to global minimum standards for its Total Loss-Absorbing Capacity (TLAC). The TLAC requirement was implemented via amendments to the Capital Requirements Regulation and the Capital Requirements Directive provided in June 2019 with the publication of Regulation (EU) 2019/876 and Directive (EU) 2019/878.

This TLAC requirement is based on both risk-based and non-risk-based denominators and set at the higher-of 18% of RWA plus the combined buffer requirements and 6.75% of LRE since January 1, 2022.

MREL ratio development

As of December 31, 2023, available MREL were € 123.3 billion, corresponding to a ratio of 35.24% of RWA. This means that Deutsche Bank has a comfortable MREL surplus of € 17.1 billion above Deutsche Bank’s MREL requirement of € 106.2 billion (i.e. 30.35% of RWA including combined buffer requirement). Compared to December 31, 2022 the surplus has reduced as a higher MREL requirement was not fully offset by lower RWA.

€ 114.1 billion of Deutsche Bank’s available MREL were own funds and subordinated liabilities, corresponding to a MREL subordination ratio of 32.63% of RWA, a buffer of € 27.8 billion over Deutsche Bank’s subordination requirement of € 86.3 billion (i.e. 24.68% of RWA including combined buffer requirements). Compared to December 31, 2022 the surplus has increased due to a lower subordinated MREL requirement and lower RWA.

TLAC ratio development

As of December 31, 2023, TLAC was € 114.1 billion and the corresponding TLAC ratios were 32.63% of RWA and 9.20% of LRE. This means that Deutsche Bank has a comfortable TLAC surplus of € 30.4 billion over its TLAC requirement of € 83.7 billion (6.75% of LRE). Compared to December 31, 2022 the surplus has reduced due to a lower available TLAC.

133

	Deutsche Bank
	Annual Report 2023 on Form 20-F

MREL and TLAC disclosure

in € m. (unless stated otherwise)	Dec 31, 2023	Dec 31, 2022
Regulatory capital elements of TLAC/MREL
Common Equity Tier 1 capital (CET 1)	48,066	48,097
Additional Tier 1 (AT1) capital instruments eligible under TLAC/MREL	8,328	8,518
Tier 2 (T2) capital instruments eligible under TLAC/MREL
Tier 2 (T2) capital instruments before TLAC/MREL adjustments	8,610	9,531
Tier 2 (T2) capital instruments adjustments for TLAC/MREL	2,478	1,898
Tier 2 (T2) capital instruments eligible under TLAC/MREL	11,088	11,429
Total regulatory capital elements of TLAC/MREL	67,483	68,045

Other elements of TLAC/MREL
Senior non-preferred plain vanilla	46,624	47,862
Holdings of eligible liabilities instruments of other G-SIIs (TLAC only)	0	0
Total Loss Absorbing Capacity (TLAC)	114,106	115,907
Add back of holdings of eligible liabilities instruments of other G-SIIs (TLAC only)	0	0
Available Own Funds and subordinated Eligible Liabilities (subordinated MREL)	114,106	115,907
Senior preferred plain vanilla	5,538	4,552
Senior preferred structured products	3,609	3,215
Available Minimum Own Funds and Eligible Liabilities (MREL)	123,253	123,674

Risk Weighted Assets (RWA)	349,742	360,003
Leverage Ratio Exposure (LRE)	1,240,318	1,240,483

TLAC ratio
TLAC ratio (as percentage of RWA)	32.63	32.20
TLAC requirement (as percentage of RWA)	23.14	22.57
TLAC ratio (as percentage of Leverage Exposure)	9.20	9.34
TLAC requirement (as percentage of Leverage Exposure)	6.75	6.75
TLAC surplus over RWA requirement	33,167	34,638
TLAC surplus over LRE requirement	30,385	32,174

MREL subordination
MREL subordination ratio (as percentage of RWA)	32.63	32.20
MREL subordination requirement (as percentage of RWA)	24.68	24.85
Surplus over MREL subordination requirement	27,781	26,430

MREL ratio
MREL ratio (as percentage of RWA)	35.24	34.35
MREL requirement (as percentage of RWA)	30.35	29.46
MREL surplus over requirement	17,098	17,600

134

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Own Funds and Eligible Liabilities

To meet the MREL and TLAC requirement, Deutsche Bank needs to ensure that enough eligible liabilities instruments are maintained. Instruments eligible for MREL and TLAC are regulatory capital instruments (own funds) and liabilities that meet certain criteria, which are referred to as eligible liabilities.

Own funds used for MREL and TLAC include the full amount of Tier 2 capital instruments with a remaining maturity of greater than 1 year and less than 5 years which are reflected in regulatory capital on a pro-rata basis only.

Eligible liabilities are liabilities issued out of the resolution entity Deutsche Bank AG that meet eligibility criteria which are supposed to ensure that they are structurally suited as loss-absorbing capital. As a result, eligible liabilities exclude deposits which are covered by an insurance deposit protection scheme or which are preferred under German insolvency law (e.g., deposits from private individuals as well as small and medium-sized enterprises). Among other things, secured liabilities and derivatives liabilities are generally excluded as well. Debt instruments with embedded derivative features can be included under certain conditions (e.g., a known and fixed or increasing principal). In addition, eligible liabilities must have a remaining time to maturity of at least one year and must either be issued under the law of a Member State of the European Union or must include a bail-in clause in their contractual terms to make write-down or conversion effective. The SRB has granted a transitional period for liabilities issued under UK law on or before November 15, 2018, which do not include an enforceable and effective bail-in clause but can still be included in eligible liabilities after Brexit until June 28, 2025.

In addition, eligible liabilities need to be subordinated to be counted against the TLAC and MREL subordination requirements. Effective January 1, 2017, the German Banking Act provided for a new class of statutorily subordinated debt securities that rank as senior non-preferred below the bank’s other senior liabilities (but in priority to the bank’s contractually subordinated liabilities, such as those qualifying as Tier 2 instruments). Following a harmonization effort by the European Union implemented in Germany effective July 21, 2018, banks are permitted to now decide if a specific issuance of eligible senior debt will be in the non-preferred or in the preferred category. Any such senior non-preferred debt instruments issued by Deutsche Bank AG under such rules rank on parity with its outstanding debt instruments that were classified as senior non-preferred under the prior rules. All these senior non-preferred issuances meet the TLAC and MREL subordination criteria.

135

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Credit Risk Exposure

Deutsche Bank defines its credit exposure by taking into account all transactions where losses might occur due to the fact that counterparties may not fulfill their contractual payment obligations as defined under ‘Credit Risk Framework’.

Maximum Exposure to Credit Risk

The maximum exposure to credit risk table shows the direct exposure before consideration of associated collateral held and other credit enhancements (netting and hedges) that do not qualify for offset in the financial statements for the periods specified. The netting credit enhancement component includes the effects of legally enforceable netting agreements as well as the offset of negative mark-to-markets from derivatives against pledged cash collateral. The collateral credit enhancement component mainly includes real estate, collateral in the form of cash as well as securities-related collateral. In relation to collateral, the Group applies internally determined haircuts and additionally cap all collateral values at the level of the respective collateralized exposure.

Maximum Exposure to Credit Risk

	Dec 31, 2023
			Credit Enhancements
in € m.	Maximum exposure to credit risk¹	Subject to impairment	Netting	Collateral	Guarantees and Credit derivatives²	Total credit enhancements
Financial assets at amortized cost³
Cash and central bank balances	178,424	178,424	−	0	−	0
Interbank balances (w/o central banks)	6,144	6,144	−	0	0	0
Central bank funds sold and securities purchased under resale agreements	14,725	14,725	−	13,761	−	13,761
Securities borrowed	39	39	−	33	−	33
Loans	484,527	484,527	−	260,047	42,191	302,239
Other assets subject to credit risk^4,5	82,826	77,541	24,019	914	626	25,559
Total financial assets at amortized cost³	766,685	761,400	24,019	274,755	42,817	341,591
Financial assets at fair value through profit or loss⁶
Trading assets	122,841	−	−	1,458	951	2,408
Positive market values from derivative financial instruments	251,877	−	195,517	40,036	30	235,583
Non-trading financial assets mandatory at fair value through profit or loss	87,153	−	1,931	76,894	92	78,917
Of which:
Securities purchased under resale agreement	65,937	−	1,931	63,877	0	65,807
Securities borrowed	13,036	−	−	12,863	0	12,863
Loans	812	−	−	89	72	160
Financial assets designated at fair value through profit or loss	75	−	−	0	0	0
Total financial assets at fair value through profit or loss	461,946	−	197,447	118,388	1,072	316,908
Financial assets at fair value through OCI	35,546	35,546	0	2,744	988	3,732
Of which:
Securities purchased under resale agreement	1,805	1,805	−	1,740	0	1,740
Securities borrowed	0	0	−	0	0	0
Loans	4,867	4,867	−	16	976	991
Total financial assets at fair value through OCI	35,546	35,546	−	2,744	988	3,732
Financial guarantees and other credit related contingent liabilities⁷	65,131	64,798	−	4,127	7,136	11,263
Revocable and irrevocable lending commitments and other credit related commitments⁷	255,409	254,016	−	21,736	6,779	28,515
Total off-balance sheet	320,540	318,814	−	25,863	13,915	39,777

Maximum exposure to credit risk	1,584,717	1,115,760	221,466	421,750	58,792	702,008

¹ Does not include credit derivative notional sold (€ 540,063 million) and credit derivative notional bought protection

² Bought Credit protection is reflected with the notional of the underlying

³ All amounts at gross value before deductions of allowance for credit losses

⁴ All amounts at amortized cost (gross) except for qualifying hedge derivatives, which are reflected at Fair value through P&L

⁵ Includes Asset Held for Sale regardless of accounting classification

⁶ Excludes equities, other equity interests and commodities

⁷ Figures are reflected at notional amounts

136

	Deutsche Bank
	Annual Report 2023 on Form 20-F

	Dec 31, 2022
			Credit Enhancements
in € m.	Maximum exposure to credit risk¹	Subject to impairment	Netting	Collateral	Guarantees and Credit derivatives²	Total credit enhancements
Financial assets at amortized cost³
Cash and central bank balances	178,897	178,897	−	0	−	0
Interbank balances (w/o central banks)	7,199	7,199	−	0	0	0
Central bank funds sold and securities purchased under resale agreements	11,479	11,479	700	10,771	−	11,471
Securities borrowed	0	0	−	0	−	0
Loans	495,979	495,979	−	269,428	38,899	308,327
Other assets subject to credit risk^4,5	98,336	93,221	29,171	871	317	30,359
Total financial assets at amortized cost³	791,891	786,776	29,871	281,070	39,216	350,158
Financial assets at fair value through profit or loss⁶
Trading assets	90,180	−	−	1,573	1,264	2,837
Positive market values from derivative financial instruments	299,856	−	227,361	53,290	6	280,657
Non-trading financial assets mandatory at fair value through profit or loss	88,799	−	2,480	78,920	69	81,469
Of which:
Securities purchased under resale agreement	63,855	−	2,480	61,376	0	63,855
Securities borrowed	17,414	−	−	17,300	0	17,300
Loans	1,037	−	−	78	46	124
Financial assets designated at fair value through profit or loss	168	−	−	0	94	94
Total financial assets at fair value through profit or loss	479,002	−	229,841	133,783	1,433	365,057
Financial assets at fair value through OCI	31,675	31,675	0	2,622	879	3,500
Of which:
Securities purchased under resale agreement	2,156	2,156	−	1,732	0	1,732
Securities borrowed	0	0	−	0	0	0
Loans	4,069	4,069	−	11	879	890
Total financial assets at fair value through OCI	31,675	31,675	−	2,622	879	3,500
Financial guarantees and other credit related contingent liabilities⁷	67,214	67,214	−	4,738	7,482	12,220
Revocable and irrevocable lending commitments and other credit related commitments⁷	251,021	249,959	−	24,769	5,694	30,463
Total off-balance sheet	318,234	317,173	−	29,507	13,176	42,683

Maximum exposure to credit risk	1,620,803	1,135,624	259,712	446,982	54,704	761,398

¹ Does not include credit derivative notional sold (€ 738,733 million) and credit derivative notional bought protection

² Bought Credit protection is reflected with the notional of the underlying

³ All amounts at gross value before deductions of allowance for credit losses

⁴ All amounts at amortized cost (gross) except for qualifying hedge derivatives, which are reflected at Fair value through P&L

⁵ Includes Asset Held for Sale regardless of accounting classification

⁶ Excludes equities, other equity interests and commodities

⁷ Figures are reflected at notional amounts

The overall decrease in maximum exposure to credit risk for December 31, 2023 was € 36.1 billion mainly driven by decreases of € 48.0 billionin positive market values from derivatives financial instruments, € 15.5 billion in other assets subject to credit risk and € 11.5 billion in loans at amortized cost. These decreases were partly offset by increases in trading assets of € 32.7 billion, € 3.9 billion in financial assets at fair value through OCI and € 2.3 billion in Off-balance sheet exposure.

Trading assets as of December 31, 2023, includes traded bonds of € 112.5 billion (€ 80.2 billion as of December 31, 2022) of which over 85 % were investment-grade (over 83 % as of December 31, 2022).

Credit Enhancements are split into three categories: netting, collateral and guarantees / credit derivatives. Haircuts, parameter setting for regular margin calls as well as expert judgments for collateral valuation are employed to prevent market developments from leading to a build-up of uncollateralized exposures. All categories are monitored and reviewed regularly. Overall credit enhancements received are diversified and of adequate quality being largely cash, highly rated government bonds and third-party guarantees mostly from well rated banks and insurance companies. These financial institutions are domiciled mainly in European countries and the United States. Furthermore, the bank has collateral pools of highly liquid assets and mortgages (principally consisting of residential properties mainly in Germany) for the homogeneous retail portfolio.

137

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Main Credit Exposure Categories

The tables in this section show details about several of Deutsche Bank’s main credit exposure categories, namely Loans, Revocable and Irrevocable Lending Commitments, Contingent Liabilities Over-The-Counter (“OTC”) Derivatives, Debt Securities and Repo and repo-style transactions:

– “Loans” are gross loans as reported on our balance sheet at amortized cost, loans at fair value through profit and loss and loans at fair value through other comprehensive income before deduction of allowance for credit losses; this includes “Traded loans” that are bought and held for the purpose of selling them in the near term, or the material risks of which have all been hedged or sold; from a regulatory perspective the latter category principally covers trading book positions

– “Revocable and irrevocable lending commitments” consist of the undrawn portion of revocable and irrevocable lending-related commitments

– “Contingent liabilities” consist of financial and performance guarantees, standby letters of credit and other similar arrangements (mainly indemnity agreements)

– “OTC derivatives” are the bank’s credit exposures from over-the-counter derivative transactions that the Group has entered into, after netting and cash collateral received; on the bank’s balance sheet, these are included in financial assets at fair value through profit or loss or, for derivatives qualifying for hedge accounting, in other assets, in either case only applying cash collateral received and netting eligible under IFRS

– “Debt securities” include debentures, bonds, deposits, notes or commercial paper, which are issued for a fixed term and redeemable by the issuer, as reported on our balance sheet within accounting categories at amortized cost and at fair value through other comprehensive income before deduction of allowance for credit losses, it also includes category at fair value through profit and loss; this includes “Traded bonds”, which are bonds, deposits, notes or commercial paper that are bought and held for the purpose of selling them in the near term; from a regulatory perspective the latter category principally covers trading book positions

– “Repo and repo-style transactions” consist of reverse repurchase transactions, as well as securities or commodities borrowing transactions, only applying collateral received and netting eligible under IFRS

Although considered in the monitoring of maximum credit exposures, the following are not included in the details of the Group’s main credit exposure: brokerage and securities related receivables, cash and central bank balances, interbank balances (without central banks), assets held for sale, accrued interest receivables, traditional securitization positions.

Unless stated otherwise, the tables below reflect credit exposure before the consideration of collateral and risk mitigation or structural enhancements, except for OTC derivatives wherein they are post credit enhancements.

Main Credit Exposure Categories by Business Divisions

	Dec 31, 2023
	Loans				Off-balance sheet		OTC derivatives
in € m.	at amortized cost¹	trading - at fair value through P&L	Designated / mandatory at fair value through P&L	at fair value through OCI²	Revocable and irrevocable lending commitments³	Contingent liabilities	at fair value through P&L⁴
Corporate Bank	116,732	456	303	4,393	158,490	59,781	55
Investment Bank	100,645	7,614	582	474	56,939	2,169	18,991
Private Bank	261,250	0	0	0	39,515	3,128	301
Asset Management	3	0	0	0	99	9	0
Corporate & Other	5,896	165	3	0	365	44	3,208
Total	484,527	8,235	887	4,867	255,409	65,131	22,555

…

	Dec 31, 2023
	Debt Securities			Repo and repo-style transactions⁷			Total
in € m.	at amortized cost⁵	at fair value through P&L	at fair value through OCI⁶	at amortized cost	at fair value through P&L	at fair value through OCI
Corporate Bank	294	19	0	595	0	0	341,118
Investment Bank	4,611	114,741	1,520	14,169	74,878	0	397,333
Private Bank	447	1	1	0	0	0	304,644
Asset Management	0	4,483	82	0	0	0	4,675
Corporate & Other	16,516	1,242	27,271	0	4,096	1,805	60,611
Total	21,868	120,485	28,874	14,764	78,973	1,805	1,108,381

¹ Includes stage 3 and stage 3 POCI loans at amortized cost amounting to € 13.4 billion as of December 31, 2023

² Includes stage 3 and stage 3 POCI loans at fair value through OCI amounting to € 44.2 million as of December 31, 2023

³ Includes stage 3 and stage 3 POCI off-balance sheet exposure amounting to € 2.3 billion as of December 31, 2023

⁴ Includes the effect of netting agreements and cash collateral received where applicable. Excludes derivatives qualifying for hedge accounting

⁵ Includes stage 3 and stage 3 POCI debt securities at amortized cost amounting to € 39.5 million as of December 31, 2023

⁶ Includes stage 3 and stage 3 POCI debt securities at fair value through OCI amounting to € 1.5 million as of December 31, 2023

⁷ Before reflection of collateral and limited to securities purchased under resale agreements and securities borrowed

138

	Deutsche Bank
	Annual Report 2023 on Form 20-F

	Dec 31, 2022
	Loans				Off-balance sheet		OTC derivatives
in € m.	at amortized cost¹	trading - at fair value through P&L	Designated / mandatory at fair value through P&L	at fair value through OCI²	Revocable and irrevocable lending commitments³	Contingent liabilities	at fair value through P&L⁴
Corporate Bank	121,543	497	312	3,797	155,299	61,134	72
Investment Bank	103,072	7,198	883	272	51,299	3,515	24,353
Private Bank	264,893	7	7	0	43,737	2,503	388
Asset Management	23	0	0	0	92	9	0
Corporate & Other	6,447	253	3	0	594	52	4,154
Total	495,979	7,955	1,205	4,069	251,021	67,214	28,967

…

	Dec 31, 2022
	Debt Securities			Repo and repo-style transactions⁷			Total
in € m.	at amortized cost⁵	at fair value through P&L	at fair value through OCI⁶	at amortized cost	at fair value through P&L	at fair value through OCI
Corporate Bank	617	12	0	1,042	0	0	344,326
Investment Bank	4,800	82,947	1,606	10,437	74,662	0	365,045
Private Bank	804	3	2	0	0	0	312,345
Asset Management	0	3,728	80	0	0	0	3,932
Corporate & Other	19,375	1,334	23,763	0	6,607	2,156	64,738
Total	25,596	88,025	25,450	11,479	81,270	2,156	1,090,386

¹ Includes stage 3 and stage 3 POCI loans at amortized cost amounting to € 12.2 billion as of December 31, 2022

² Includes stage 3 and stage 3 POCI loans at fair value through OCI amounting to € 54.9 million as of December 31, 2022

³ Includes stage 3 and stage 3 POCI off-balance sheet exposure amounting to € 2.6 billion as of December 31, 2022

⁴ Includes the effect of netting agreements and cash collateral received where applicable. Excludes derivatives qualifying for hedge accounting

⁵ Includes stage 3 and stage 3 POCI debt securities at amortized cost amounting to € 327.6 million as of December 31, 2022

⁶ Includes stage 3 and stage 3 POCI debt securities at fair value through OCI amounting to € 15.1 million as of December 31, 2022

⁷ Before reflection of collateral and limited to securities purchased under resale agreements and securities borrowed

Deutsche Bank’s total main credit exposure increased by € 18.0 billion year-on-year where € 32.2 billion of an increase in Investment Bank, is partly offset by a decrease in the Private Bank by € 7.7 billion, Corporate Bank by € 3.2 billion and in Corporate & Other by € 4.1 billion. The business division Corporate & Other primarily contains exposures in Treasury and Capital Release Unit. Exposure increases have been observed primarily in Debt securities and Off-Balance sheet which is partly offset by decrease in Loans and OTC Derivative products included in main credit exposures by business division.

Main Credit Exposure Categories by Industry Sectors

The below tables give an overview of the bank’s credit exposure by industry based on the NACE code of the counterparty. NACE (Nomenclature des Activités Économiques dans la Communauté Européenne) is a standard European industry classification system and does not have to be congruent with an internal risk based view applied elsewhere in this report.

139

	Deutsche Bank
	Annual Report 2023 on Form 20-F

	Dec 31, 2023
	Loans				Off-balance sheet		OTC derivatives
in € m.	at amortized cost¹	trading - at fair value through P&L	Designated / mandatory at fair value through P&L	at fair value through OCI²	Revocable and irrevocable lending commitments³	Contingent liabilities	at fair value through P&L⁴
Agriculture, forestry and fishing	384	2	0	0	224	32	1
Mining and quarrying	2,774	230	126	0	4,893	1,409	47
Manufacturing	28,397	285	5	1,877	53,572	13,809	1,303
Electricity, gas, steam and air conditioning supply	4,081	307	75	272	6,475	2,967	142
Water supply, sewerage, waste management and remediation activities	486	0	0	0	523	148	38
Construction	4,257	217	1	20	2,965	3,060	7
Wholesale and retail trade, repair of motor vehicles and motorcycles	21,030	233	79	784	16,540	6,247	599
Transport and storage	4,924	616	13	63	6,088	1,108	173
Accommodation and food service activities	1,862	3	0	0	1,015	138	10
Information and communication	7,589	372	21	100	13,244	3,209	289
Financial and insurance activities⁸	110,901	3,840	276	1,281	90,138	28,491	18,176
Real estate activities⁹	49,267	1,302	103	122	7,061	183	304
Professional, scientific and technical activities	6,889	68	0	0	6,190	2,213	172
Administrative and support service activities	8,911	148	169	157	5,007	577	486
Public administration and defense, compulsory social security	5,731	364	10	27	6,759	123	303
Education	279	2	0	0	72	55	68
Human health services and social work activities	4,390	42	0	0	1,725	127	53
Arts, entertainment and recreation	1,017	22	0	33	1,402	102	49
Other service activities	5,302	183	10	130	4,534	850	165
Activities of households as employers, undifferentiated goods- and services-producing activities of households for own use	216,055	0	0	1	26,981	282	140
Activities of extraterritorial organizations and bodies	0	0	0	0	0	2	29
Total	484,527	8,235	887	4,867	255,409	65,131	22,555

140

	Deutsche Bank
	Annual Report 2023 on Form 20-F

	Dec 31, 2023
	Debt Securities			Repo and repo-style transactions⁷			Total
in € m.	at amortized cost⁵	at fair value through P&L	at fair value through OCI⁶	at amortized cost	at fair value through P&L	at fair value through OCI
Agriculture, forestry and fishing	0	0	0	0	0	0	643
Mining and quarrying	46	486	2	0	0	0	10,012
Manufacturing	0	1,481	54	0	0	0	100,783
Electricity, gas, steam and air conditioning supply	175	776	20	0	0	0	15,289
Water supply, sewerage, waste management and remediation activities	29	26	0	0	0	0	1,250
Construction	130	387	133	0	0	0	11,177
Wholesale and retail trade, repair of motor vehicles and motorcycles	0	458	2	0	0	0	45,973
Transport and storage	66	481	15	0	0	0	13,548
Accommodation and food service activities	5	90	0	0	0	0	3,124
Information and communication	95	531	0	0	0	0	25,449
Financial and insurance activities⁸	4,639	25,416	4,789	14,695	76,785	1,805	381,232
Real estate activities⁹	227	1,159	546	69	0	0	60,343
Professional, scientific and technical activities	49	151	111	0	0	0	15,843
Administrative and support service activities	51	436	8	0	0	0	15,950
Public administration and defense, compulsory social security	15,907	83,791	22,725	0	2,154	0	137,893
Education	0	160	9	0	0	0	645
Human health services and social work activities	99	95	11	0	0	0	6,543
Arts, entertainment and recreation	0	58	0	0	0	0	2,683
Other service activities	146	3,028	151	0	34	0	14,531
Activities of households as employers, undifferentiated goods- and services-producing activities of households for own use	0	0	0	0	0	0	243,459
Activities of extraterritorial organizations and bodies	205	1,476	298	0	0	0	2,010
Total	21,868	120,485	28,874	14,764	78,973	1,805	1,108,381

¹ Includes stage 3 and stage 3 POCI loans at amortized cost amounting to € 13.4 billion as of December 31, 2023

² Includes stage 3 and stage 3 POCI loans at fair value through OCI amounting to € 44.2 million as of December 31, 2023

³ Includes stage 3 and stage 3 POCI off-balance sheet exposure amounting to € 2.3 billion as of December 31, 2023

⁴ Includes the effect of netting agreements and cash collateral received where applicable. Excludes derivatives qualifying for hedge accounting

⁵ Includes stage 3 and stage 3 POCI debt securities at amortized cost amounting to € 39.5 million as of December 31, 2023

⁶ Includes stage 3 and stage 3 POCI debt securities at fair value through OCI amounting to € 1.5 million as of December 31, 2023

⁷ Before reflection of collateral and limited to securities purchased under resale agreements and securities borrowed

⁸ Includes exposure to Corporates including Holding Companies of € 96 billion, Asset-Backed Securities of € 44 billion, Banks of € 55 billion, Insurance of € 13 billion, Financial Intermediaries of € 10 billion and Public Sector of € 16 billion, all based on internal client classification

⁹ Non-recourse Commercial Real Estate portfolio based on Deutsche Bank’s definition is € 38 billion

141

	Deutsche Bank
	Annual Report 2023 on Form 20-F

	Dec 31, 2022
	Loans				Off-balance sheet		OTC derivatives
in € m.	at amortized cost¹	trading - at fair value through P&L	Designated / mandatory at fair value through P&L	at fair value through OCI²	Revocable and irrevocable lending commitments³	Contingent liabilities	at fair value through P&L⁴
Agriculture, forestry and fishing	524	2	0	0	275	17	2
Mining and quarrying	2,392	248	40	0	5,636	2,644	41
Manufacturing	30,534	380	7	1,431	58,584	13,053	1,863
Electricity, gas, steam and air conditioning supply	4,893	107	75	28	6,479	3,779	145
Water supply, sewerage, waste management and remediation activities	725	0	0	0	457	158	245
Construction	4,239	233	0	21	3,198	2,927	75
Wholesale and retail trade, repair of motor vehicles and motorcycles	21,535	224	39	806	16,947	6,795	570
Transport and storage	5,547	409	22	90	6,254	1,061	170
Accommodation and food service activities	1,965	7	0	0	1,137	110	14
Information and communication	7,002	489	62	231	14,567	3,317	960
Financial and insurance activities⁸	116,558	3,186	620	969	74,787	28,173	22,881
Real estate activities⁹	47,973	1,556	101	41	7,251	192	452
Professional, scientific and technical activities	7,013	124	0	0	5,070	2,309	108
Administrative and support service activities	7,470	199	192	62	5,101	1,062	413
Public administration and defense, compulsory social security	5,287	552	10	128	6,767	60	398
Education	249	0	0	0	125	53	169
Human health services and social work activities	4,523	31	0	0	1,898	146	36
Arts, entertainment and recreation	1,128	1	0	50	1,507	106	83
Other service activities	5,324	206	39	210	4,037	793	68
Activities of households as employers, undifferentiated goods- and services-producing activities of households for own use	221,098	0	0	1	30,943	455	189
Activities of extraterritorial organizations and bodies	1	0	0	0	0	2	85
Total	495,979	7,955	1,205	4,069	251,021	67,214	28,967

142

	Deutsche Bank
	Annual Report 2023 on Form 20-F

	Dec 31, 2022
	Debt Securities			Repo and repo-style transactions⁷			Total
in € m.	at amortized cost⁵	at fair value through P&L	at fair value through OCI⁶	at amortized cost	at fair value through P&L	at fair value through OCI
Agriculture, forestry and fishing	0	8	0	0	0	0	828
Mining and quarrying	34	362	2	0	0	0	11,398
Manufacturing	64	983	41	0	0	0	106,939
Electricity, gas, steam and air conditioning supply	78	732	35	1,515	0	0	17,867
Water supply, sewerage, waste management and remediation activities	0	23	0	0	0	0	1,609
Construction	29	621	1	0	0	0	11,344
Wholesale and retail trade, repair of motor vehicles and motorcycles	0	357	2	0	0	0	47,275
Transport and storage	117	537	14	0	0	0	14,220
Accommodation and food service activities	0	26	0	0	0	0	3,259
Information and communication	108	579	2	0	0	0	27,317
Financial and insurance activities⁸	4,669	18,440	4,421	9,965	75,497	2,156	362,322
Real estate activities⁹	405	1,703	548	0	0	0	60,222
Professional, scientific and technical activities	27	206	115	0	0	0	14,973
Administrative and support service activities	39	268	5	0	0	0	14,811
Public administration and defense, compulsory social security	19,782	59,291	19,991	0	5,768	0	118,034
Education	0	113	17	0	0	0	727
Human health services and social work activities	88	49	12	0	0	0	6,783
Arts, entertainment and recreation	0	125	0	0	0	0	3,001
Other service activities	115	2,636	18	0	4	0	13,449
Activities of households as employers, undifferentiated goods- and services-producing activities of households for own use	0	0	0	0	0	0	252,687
Activities of extraterritorial organizations and bodies	40	964	229	0	0	0	1,322
Total	25,596	88,025	25,450	11,479	81,270	2,156	1,090,386

¹ Includes stage 3 and stage 3 POCI loans at amortized cost amounting to € 12.2 billion as of December 31, 2022

² Includes stage 3 and stage 3 POCI loans at fair value through OCI amounting to € 54.9 million as of December 31, 2022

³ Includes stage 3 and stage 3 POCI off-balance sheet exposure amounting to € 2.6 billion as of December 31, 2022

⁴ Includes the effect of netting agreements and cash collateral received where applicable. Excludes derivatives qualifying for hedge accounting

⁵ Includes stage 3 and stage 3 POCI debt securities at amortized cost amounting to € 327.6 million as of December 31, 2022

⁶ Includes stage 3 and stage 3 POCI debt securities at fair value through OCI amounting to € 15.1 million as of December 31, 2022

⁷ Before reflection of collateral and limited to securities purchased under resale agreements and securities borrowed

⁸ Includes exposure to Corporates including Holding Companies of € 85 billion, Asset-Backed Securities of € 43 billion, Banks of € 54 billion, Insurance of € 15 billion, Financial Intermediaries of € 22 billion and Public Sector of € 13 billion, all based on internal client classification

⁹ Non-recourse Commercial Real Estate portfolio based on Deutsche Bank’s definition is 39 billion

The portfolio is subject to the same credit underwriting requirements stipulated in the bank’s “Principles for Managing Credit Risk”, including various controls according to single name, country, industry and product/asset class-specific concentration.

Material transactions, such as loans underwritten with the intention to sell down or distribute part of the risk to third parties, are subject to review and approval by senior credit risk management professionals and (depending upon size) an underwriting committee and/or the Management Board. High emphasis is placed on structuring and pricing such transactions so that de-risking can be achieved i a timely manner and – where Deutsche Bank takes market price risk – to mitigate such market risk.

The Group’s amortized cost loan exposure within above categories is mostly to good quality borrowers. Moreover, with the focus on the Corporate Bank and Investment Bank, loan exposure is subject to further risk mitigation through the bank’s e.g. Strategic Corporate Lending unit.

Deutsche Bank’s household loan exposure is principally associated with Private Bank portfolios.

143

	Deutsche Bank
	Annual Report 2023 on Form 20-F

The bank’s amortized cost loan exposure of € 49.3 billion to Real Estate activities as reported above is based on NACE code classification and comprises of recourse and non-recourse financing, across various parts of the Group and client segments. This includes € 25.1 billion of loans which is based on Deutsche Bank’s definition of non-recourse CRE loans. For more information on non-recourse CRE loans, see section Focus areas in 2023 in the chapter IFRS 9 Impairment.

The Group’s commercial real estate loans, primarily originated in the U.S. and Europe, are generally secured by first mortgages on the underlying real estate property. Deutsche Bank originates fixed and floating rate loans and selectively acquires (generally at substantial discount) sub- /non-performing loans sold by financial institutions. The underwriting process is stringent and the exposure is managed under separate portfolio limits. Credit underwriting policy guidelines provide that LTV ratios of generally less than 75 % are adhered to at loan origination. Additionally, given the significance of the underlying collateral, independent external appraisals are commissioned for all secured loans by a valuation team (part of the independent Credit Risk Management function) which is also responsible for reviewing and challenging the reported real estate values regularly. Deutsche Bank originates loans for distribution in the banking market or via securitization. In this context Deutsche Bank frequently retains a portion of the syndicated loans while securitized positions may be entirely sold (except where regulation requires retention of economic risk). Mezzanine or other junior tranches of debt are retained only in exceptional cases. The bank also participates in conservatively underwritten unsecured lines of credit to well-capitalized real estate investment trusts and other real estate operating companies.

Commercial real estate property valuations and rental incomes can be significantly impacted by macro-economic conditions and idiosyncratic events affecting the underlying properties. Accordingly, the portfolio is categorized as higher risk and hence subject to the aforementioned tight restrictions on concentration.

The Group’s credit exposure to the ten largest counterparties accounted for 12 % of the bank’s aggregated total credit exposure in these categories as of December 31, 2023, compared with 11 % as of December 31, 2022. The top ten counterparty exposures were well-rated counterparties or otherwise related to structured trades which show high levels of risk mitigation.

Deutsche Bank’s exposure to Financial and Insurance Activities is € 381.2 billion as of December 31, 2023 which also includes exposures to Asset Backed Securities, Banks, Insurance, Financial intermediaries, Public Sector as well as to Corporates including Holding Companies. Exposures are managed using bespoke risk management frameworks, trade-by-trade approvals and relevant risk appetite metrics. Total loans across all applicable measurement categories amounted to € 116.3 billion, total repo and repo style transactions across all applicable measurement categories amounted to € 93.3 billion and off-balance sheet activities amounted to € 118.6 billion as of December 31, 2023 and were principally associated with Investment Bank and Corporate Bank portfolios, which were majorly held in North America and Europe.

144

	Deutsche Bank
	Annual Report 2023 on Form 20-F

Main credit exposure categories by geographical region

	Dec 31, 2023
	Loans				Off-balance sheet		OTC derivatives
in € m.	at amortized cost¹	trading - at fair value through P&L	Designated / mandatory at fair value through P&L	at fair value through OCI²	Revocable and irrevo- cable lending commitments³	Contingent liabilities	at fair value through P&L⁴
Europe	338,507	2,906	516	1,698	148,778	39,716	14,814
Of which:
Germany	231,287	321	70	409	76,810	16,532	4,146
United Kingdom	8,323	239	97	252	13,175	3,102	4,834
France	4,587	76	75	317	7,868	1,876	694
Luxembourg	18,056	612	23	142	8,493	641	970
Italy	23,490	138	32	16	4,842	5,021	219
Netherlands	8,996	248	8	252	9,279	2,863	1,463
Spain	16,073	230	24	91	3,738	4,330	219
Ireland	5,273	331	184	87	4,237	351	542
Switzerland	6,827	37	1	0	8,206	2,558	355
Poland	2,617	0	0	16	2,569	176	6
Belgium	1,742	23	0	58	1,551	623	144
Russian Federation⁸	243	6	0	7	26	21	0
Ukraine⁸	8	208⁹	0	0	3	5	0
Other Europe⁸	10,984	435	2	50	7,981	1,617	1,222
North America	101,306	2,325	238	2,378	95,768	12,172	4,745
Of which:
U.S.	89,570	2,202	178	2,247	89,460	10,754	3,269
Cayman Islands	4,985	50	0	0	2,383	787	963
Canada	1,396	49	3	106	2,048	226	324
Other North America	5,356	24	56	24	1,877	405	188
Asia/Pacific	35,807	1,746	123	597	9,031	12,093	2,745
Of which:
Japan	1,404	328	34	10	481	451	459
Australia	3,203	250	0	0	2,652	830	153
India	7,576	78	88	23	921	3,774	53
China	4,254	1	0	22	413	1,442	762
Singapore	3,789	362	0	189	1,558	1,357	157
Hong Kong	2,259	64	0	82	836	607	242
Other Asia/Pacific	13,323	662	1	271	2,170	3,632	919
Other geographical areas	8,906	1,259	10	193	1,831	1,151	252
Total	484,527	8,235	887	4,867	255,409	65,131	22,555

145

	Deutsche Bank
	Annual Report 2023 on Form 20-F

	Dec 31, 2023
	Debt Securities			Repo and repo-style transactions⁷			Total
in € m.	at amortized cost⁵	at fair value through P&L	at fair value through OCI⁶	at amortized cost	at fair value through P&L	at fair value through OCI
Europe	9,682	52,205	12,884	6,021	17,184	395	645,306
Of which:
Germany	830	10,114	1,388	348	1,351	0	343,606
United Kingdom	240	10,475	1,504	461	3,773	0	46,476
France	0	7,756	2,901	657	5,100	0	31,906
Luxembourg	0	2,180	537	9	206	0	31,870
Italy	4,890	7,953	1,030	2,251	1,688	0	51,571
Netherlands	0	2,289	27	0	99	0	25,526
Spain	1,487	3,144	358	1,587	35	0	31,318
Ireland	1,563	1,269	7	0	960	0	14,804
Switzerland	0	1,289	1	0	225	0	19,499
Poland	0	473	2,899	0	98	0	8,852
Belgium	0	1,759	1,606	0	11	0	7,517
Russian Federation⁸	0	31	0	0	0	0	333
Ukraine⁸	0	73	7	0	0	0	305
Other Europe⁸	672	3,401	619	707	3,638	395	31,724
North America	9,433	32,184	11,503	5,855	47,782	0	325,688
Of which:
U.S.	9,415	31,042	11,320	2,979	14,357	0	266,793
Cayman Islands	0	495	0	2,876	33,284	0	45,823
Canada	0	546	183	0	54	0	4,936
Other North America	18	101	0	0	88	0	8,137
Asia/Pacific	2,428	31,297	4,295	2,620	13,860	858	117,499
Of which:
Japan	22	3,017	485	431	8,818	0	15,941
Australia	1,725	2,387	315	0	284	0	11,800
India	414	5,858	62	0	0	279	19,126
China	0	7,977	98	0	1,365	0	16,334
Singapore	0	1,396	665	0	683	0	10,156
Hong Kong	9	738	463	0	124	0	5,424
Other Asia/Pacific	258	9,922	2,206	2,189	2,587	579	38,718
Other geographical areas	325	4,799	191	268	148	552	19,887
Total	21,868	120,485	28,874	14,764	78,973	1,805	1,108,381

¹ Includes stage 3 and stage 3 POCI loans at amortized cost amounting to € 13.4 billion as of December 31, 2023

² Includes stage 3 and stage 3 POCI loans at fair value through OCI amounting to € 44.2 million as of December 31, 2023

³ Includes stage 3 and stage 3 POCI off-balance sheet exposure amounting to € 2.3 billion as of December 31, 2023

⁴ Includes the effect of netting agreements and cash collateral received where applicable. Excludes derivatives qualifying for hedge accounting

⁵ Includes stage 3 and stage 3 POCI debt securities at amortized cost amounting to € 39.5 million as of December 31, 2023

⁶ Includes stage 3 and stage 3 POCI debt securities at fair value through OCI amounting to € 1.5 million as of December 31, 2023

⁷ Before reflection of collateral and limited to securities purchased under resale agreements and securities borrowed

⁸ Thematic addition on back of the ongoing border conflict between the Russian Federation and Ukraine

⁹ Ukraine trading loan exposure driven by financing, materially guaranteed by supranational development bank. Net exposure considering broader risk mitigation structure is deminimis

146

	Deutsche Bank
	Annual Report 2023 on Form 20-F

	Dec 31, 2022
	Loans				Off-balance sheet		OTC derivatives
in € m.	at amortized cost¹	trading - at fair value through P&L	Designated / mandatory at fair value through P&L	at fair value through OCI²	Revocable and irrevo- cable lending commitments³	Contingent liabilities	at fair value through P&L⁴
Europe	346,395	2,647	724	1,708	142,035	41,773	19,294
Of which:
Germany	242,180	444	42	462	80,857	16,364	4,872
United Kingdom	7,937	184	229	329	9,759	4,067	6,673
France	3,696	99	75	70	7,264	2,095	1,364
Luxembourg	15,472	400	67	124	7,525	747	855
Italy	24,578	145	8	25	3,709	5,354	291
Netherlands	9,009	165	45	200	8,279	2,519	1,404
Spain	17,429	326	8	107	3,460	4,037	503
Ireland	5,234	125	234	129	3,234	266	565
Switzerland	6,772	32	0	117	7,277	2,897	294
Poland	2,324	0	0	26	758	190	7
Belgium	1,532	12	0	77	1,730	571	193
Russian Federation⁸	537	18	0	41	75	64	0
Ukraine⁸	44	270⁹	0	0	3	5	0
Other Europe⁸	9,650	428	16	0	8,105	2,598	2,274
North America	101,736	2,998	350	1,687	98,137	11,766	5,542
Of which:
U.S.	87,794	2,713	290	1,520	92,551	10,585	4,485
Cayman Islands	5,202	103	4	23	2,026	445	419
Canada	1,919	78	2	118	1,884	463	372
Other North America	6,821	104	54	25	1,676	274	266
Asia/Pacific	39,502	1,517	109	602	9,268	12,507	3,910
Of which:
Japan	1,349	120	46	22	589	487	374
Australia	2,964	196	0	0	2,478	769	259
India	7,861	27	3	23	1,154	3,408	179
China	4,189	3	12	3	407	1,583	591
Singapore	5,402	390	22	164	1,408	1,258	277
Hong Kong	2,525	84	0	40	695	846	357
Other Asia/Pacific	15,213	698	25	351	2,537	4,154	1,873
Other geographical areas	8,346	793	22	72	1,580	1,168	222
Total	495,979	7,955	1,205	4,069	251,021	67,214	28,967

147

	Deutsche Bank
	Annual Report 2023 on Form 20-F

	Dec 31, 2022
	Debt Securities			Repo and repo-style transactions⁷			Total
in € m.	at amortized cost⁵	at fair value through P&L	at fair value through OCI⁶	at amortized cost	at fair value through P&L	at fair value through OCI
Europe	10,218	40,948	7,321	4,912	26,494	418	644,886
Of which:
Germany	701	7,968	672	1,795	3,035	12	359,403
United Kingdom	1,212	8,399	708	585	8,519	0	48,598
France	0	6,161	870	6	7,337	0	29,038
Luxembourg	0	1,816	702	0	549	0	28,257
Italy	4,868	3,570	953	200	480	0	44,180
Netherlands	0	2,057	24	177	212	0	24,091
Spain	1,486	3,390	1	1,485	24	0	32,256
Ireland	1,270	1,543	4	0	1,346	0	13,948
Switzerland	0	491	2	0	215	0	18,096
Poland	0	113	2,944	0	149	0	6,511
Belgium	40	2,271	342	0	1	0	6,769
Russian Federation⁸	0	15	0	0	0	0	750
Ukraine⁸	0	17	0	0	0	0	339
Other Europe⁸	643	3,139	99	664	4,628	406	32,651
North America	12,359	24,416	14,616	4,365	43,893	0	321,863
Of which:
U.S.	12,340	23,644	14,359	976	21,484	0	272,741
Cayman Islands	0	276	0	3,389	17,904	0	29,790
Canada	0	350	180	0	4,494	0	9,859
Other North America	19	146	77	0	11	0	9,473
Asia/Pacific	2,878	19,347	3,344	2,126	10,652	1,301	107,063
Of which:
Japan	25	2,759	481	284	6,374	0	12,909
Australia	1,989	1,328	315	0	946	0	11,243
India	481	4,856	49	0	6	1,012	19,058
China	0	1,384	209	0	292	0	8,675
Singapore	0	847	159	0	210	0	10,136
Hong Kong	186	559	254	0	64	0	5,611
Other Asia/Pacific	196	7,613	1,877	1,842	2,761	290	39,430
Other geographical areas	141	3,314	170	77	232	437	16,573
Total	25,596	88,025	25,450	11,479	81,270	2,156	1,090,386