SEC Form 20-F - Deutsche Bank Annual Report 2012

Deutsche Bank
Annual Report 2010 on Form 20-F
Item 11: Quantitative and Qualitative Disclosures about Credit, Market and Other Risk 132
Item 11: Quantitative and Qualitative Disclosures
about Credit, Market and Other Risk
Included in the following section on quantitative and qualitative disclosures about credit, market and other risks
is information which forms part of the financial statements of Deutsche Bank and which is incorporated by
reference into the financial statements of this report. Such information is marked by a bracket in the margins
throughout this section.
Effective December 3, 2010, Deutsche Bank consolidated Deutsche Postbank Group (“Postbank”). The following
section on qualitative and quantitative risk disclosures provides a comprehensive view on the risk profile of
Deutsche Bank Group, after consolidation of Postbank. In particular, the quantitative information generally reflects
Deutsche Bank Group including Postbank for the reporting date December 31, 2010 or the respective reporting
period from December 3, 2010. In the limited instances where a consolidated view has not been presented, a
separate Postbank risk disclosure or applicable qualitative commentary is provided where appropriate.
Postbank currently conducts its own risk management activities under its own statutory responsibilities.
Deutsche Bank Group provides advisory services to Postbank with regard to specific risk management areas.
It is intended to increase the convergence of risk management principles across Deutsche Bank Group and
Postbank over time. This also responds to regulatory requirements that are applicable to Deutsche Bank AG as
the parent company of the combined group.
Risk Management Executive Summary
The overall focus of Risk and Capital Management in 2010 was on maintaining our risk profile in line with our
risk strategy, strengthening our capital base and supporting the Group’s strategic initiatives under phase 4 of
our management agenda. This approach is reflected across the different risk metrics summarized below.
Credit Risk
— Diligent adherence to our core credit principles of proactive and prudent risk management, coupled with the
economic recovery in our key markets in 2010 has resulted in lower credit losses and further improved quality
of our non-Postbank credit portfolio. This has been achieved by stringent application of our existing risk
management philosophy of strict underwriting standards, active concentration risk management and risk
mitigation strategies including collateral, hedging, netting and credit support arrangements.
— Our provision for credit losses in 2010 was € 1.3 billion which is significantly lower than € 2.6 billion in 2009.
The € 1.3 billion in 2010 included € 278 million of new provisions relating to assets reclassified in accordance
with IAS 39. Our provision for non IAS 39 assets in 2010 also declined during the year to € 996 million
(including € 56 million of Postbank related provisions in 2010) compared to € 1.4 billion in 2009.
— The portion of our corporate loan book carrying an investment-grade rating improved from 61 % at December
31, 2009 to 69 % at December 31, 2010, reflecting positive rating migration and the first-time inclusion of
Postbank positions.
— Excluding acquisitions, the loan portfolio grew by 3 % or € 8 billion whilst adhering to strict risk/reward
requirements.
— With the consolidation of Postbank on December 3, 2010, our loan portfolio increased by € 129 billion,
principally in German retail loans but also including € 15 billion commercial real estate loans.