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 187
Capital Management at Postbank
Postbank manages its capital by continuously monitoring capital supply and demand. Capital management
aims at regulatory as well as at economic capital adequacy, in line with the concept of risk bearing capacity. In
general, the capital allocation requires an appropriate return on regulatory capital demand. The capital allocation
is approved by Postbank’s Management Board based on a multi year plan.
The regulatory and economic capital demand is permanently monitored to adjust the available capital if required.
Capital demand forecasts are regularly determined and carried forward based on the planned development of
the business volume and results as well as expected risk parameter changes. Capital ratios are managed in
compliance with the Postbank’s Management Board approved statutory guidelines, by steering the existing and
new transaction volume, by issuance of Tier 1 and Tier 2 capital instruments or by executing risk mitigating
capital market transactions.
Balance Sheet Management
We manage our balance sheet on a Group level excluding Postbank and, where applicable, locally in each
region. In the allocation of financial resources we favor business portfolios with the highest positive impact on
our profitability and shareholder value. Our balance sheet management function has the mandate to monitor
and analyze balance sheet developments and to track certain market-observed balance sheet ratios. Based on
this we trigger discussion and management action by the Capital and Risk Committee. While we monitor IFRS
balance sheet developments, our balance sheet management is principally focused on adjusted values as
used in our leverage ratio target definition, which is calculated using adjusted total assets and adjusted total
equity figures.
Similarly Postbank follows a value-oriented financial management approach that includes balance sheet
management.
As of December 31, 2010, on a consolidated basis our leverage ratio according to our target definition was 23,
at the same level as of December 31, 2009, and below our leverage ratio target of 25. The impact from our
acquisitions on our total assets was fully compensated for by the impact of our rights issue on the applicable
equity. Our leverage ratio calculated as the ratio of total assets under IFRS to total equity under IFRS was 38
as of December 31, 2010, a slight decrease compared to 40 at the end of 2009. For a tabular presentation of
our leverage ratios and the adjustments made for the values according to our target definition please see section
“Leverage Ratio (Target Definition)” on page S-19 of the supplemental financial information.