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 150
Credit Exposure from Lending
Certain types of loans have a higher risk of non-collection than others. In our amortized cost loan portfolio we
therefore differentiate loans by certain categories on the basis of relevant criteria including their loss expectation
through the cycle, stability of their risk return relationship as well as the market perception of an asset class.
The following table provides an overview of the categories of our loan book and the segregation into a lower,
medium and higher risk bucket.
in € m. Dec 31, 2010 Dec 31, 2009
Lower risk bucket
PBC Mortgages 140,727 67,311
Investment Grade/German Mid-Cap 69,436 32,615
GTB 38,353 19,823
PWM 24,468 17,977
PBC small corporate 17,550 15,127
Government collateralized/structured transactions 9,074 7,674
Corporate Investments 7,966 12,774
Sub-total lower risk bucket 307,574 173,301
Moderate risk bucket
PBC Consumer Finance 18,902 15,032
Asset Finance (DB sponsored conduits) 18,465 19,415
Collateralized hedged structured transactions 12,960 14,564
Financing of pipeline assets 8,050 7,886
Sub-total moderate risk bucket 58,377 56,897
Higher risk bucket
Commercial Real Estate 29,024 12,990
CF Leveraged Finance 7,018 11,768
Other 9,032 6,492
Sub-total higher risk bucket 45,074 31,250
Total loan book 411,025 261,448
The majority of our low risk exposures are associated with our Private & Business Client retail banking activities.
75 % of our loan book at December 31, 2010 was in the low risk category, considerably higher than the 66 % at
December 31, 2009. The increase in low risk loans was driven by the first-time inclusion of Postbank’s exposures
which contributed € 109 billion to the low risk loans category. The majority of Postbank’s low risk loans related
to client mortgages.
Our Private & Business Clients (excluding Postbank integration) portfolio growth during 2010 was focused on
secured lending within the lower risk bucket, especially mortgages, while the consumer finance portfolio declined.
The rise in consumer finance exposures was again attributable to the inclusion of Postbank which had consumer
finance exposure of € 4 billion as at December 31, 2010. Excluding Postbank our overall consumer finance
exposure decreased in line with our defined strategy and predominantly relates to customers in Germany and
Italy.
Our higher risk bucket was predominantly driven by our leveraged finance and commercial real estate exposures.
Our credit risk management approach put strong emphasis specifically on the portfolios we deem to be
of higher risk. Portfolio strategies and credit monitoring controls are in place for these portfolios. The increase
in commercial real estate exposures was driven by the inclusion of Postbank’s commercial real estate exposures
which totaled € 15 billion at December 31, 2010. A borrower group concentration contributed approximately
50% of the exposure in the CF Leveraged Finance category.