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 162
Our provision for loan losses in 2010 was € 1.3 billion, principally driven by € 562 million for our corporate credit
exposures, of which € 278 million of new provisions were established relating to assets which had been reclassified
in accordance with IAS 39, relating predominantly to exposures in Corporate Banking & Securities. The
remaining increase reflected impairment charges taken on a number of exposures in the Americas and in Europe
in an overall favorable global economic credit environment. Loan loss provisions in our collectively assessed
exposure amounted to € 751 million, reflecting a significant reduction of our net credit costs in Spain and India
partially offset by increases in Poland, which is lower than the € 808 million recorded in the prior year, which
was predominately driven by the challenging credit environment in Spain and Poland during 2009.
Our individually assessed loan loss allowance was € 1.6 billion as of December 31, 2010. The € 386 million
decrease in 2010 comprises net provisions of € 562 million (including the aforementioned impact from IAS 39
reclassifications), net charge-offs of € 896 million and a € 52 million decrease from currency translation and
unwinding effects.
Our collectively assessed loan loss allowance totaled € 1.7 billion as of December 31, 2010, representing an
increase of € 339 million against the level reported for the end of 2009 (€ 1.3 billion). Movements in this component
comprised a € 751 million provision, being partially offset by € 404 million net charge-offs and a € 8 million
net decrease from currency translation and unwinding effects.
Our allowance for loan losses as of December 31, 2009 was € 3.3 billion, a 72 % increase from the € 1.9 billion
reported for the end of 2008. The increase in our allowance was principally due to provisions exceeding substantially
our charge-offs.
Our gross charge-offs amounted to € 1.2 billion in 2009. Of the charge-offs for 2009, € 637 million were related
to our corporate credit exposure, of which € 414 million were related to assets which had been re-classified in
accordance with IAS 39 in our U.S. and U.K. portfolios, and € 419 million to our consumer credit exposure,
mainly driven by our German portfolios.
Our provision for loan losses in 2009 was € 2.6 billion, principally driven by € 1.8 billion for our corporate credit
exposures, of which € 1.3 billion of new provisions were established relating to assets which had been reclassified
in accordance with IAS 39, relating predominantly to exposures in Leveraged Finance. The remaining
increase reflected impairment charges taken on a number of exposures in the Americas and in Europe in an
overall deteriorating credit environment. Loan loss provisions for PCAM amounted to € 805 million, predominately
reflecting a more challenging credit environment in Spain and Poland. Provisions in 2009 were positively
impacted by changes in certain parameter and model assumptions, which reduced provisions by € 87 million in
CIB and € 146 million in PCAM.
Our individually assessed loan loss allowance was € 2.0 billion as of December 31, 2009. The € 1.1 billion
increase in 2009 is comprised of net provisions of € 1.8 billion (including the aforementioned impact from IAS
39 reclassifications), net charge-offs of € 637 million and a € 101 million decrease from currency translation
and unwinding effects.
Our collectively assessed loan loss allowance totaled € 1.3 billion as of December 31, 2009, representing an
increase of € 353 million against the level reported for the end of 2008 (€ 961 million). Movements in this component
include a € 808 million provision, including a positive impact by changes in certain parameter and model
assumptions which reduced provision by € 87 million, being offset by € 419 million net charge-offs and a
€ 36 million net decrease from currency translation and unwinding effects.