SEC Form 20-F - Deutsche Bank Annual Report 2012

Deutsche Bank Item 3: Key Information 15
Annual Report 2010 on Form 20-F
incur, as a result of the takeover and consolidation as well as the implementation of our strategic goals, such
as the strengthening of our private banking business and the redeployment of capital in other business areas,
involve subjective assumptions and judgments that are subject to significant uncertainties. These include, for
example, assumptions and judgments relating to Postbank’s credit quality, the quality of other assets such as
securities portfolios, liquidity and capital planning, risk management and internal controls. Postbank’s securities
portfolio, for example, contains partially illiquid or only somewhat liquid structured products that may also be
subject to a further decrease in value in a substantial amount.
Furthermore, unforeseen difficulties may emerge in connection with the integration of Postbank’s business into
our own, including potential difficulties due to different risk management structures and IT systems, difficulties
in integrating personnel, different internal standards and business procedures, the commitment of management
resources in connection with the integration process and the potential loss of our key personnel or Postbank’s
key personnel. Any of these factors could adversely affect the benefits and synergies we expect to realize or
increase our costs in connection with the integration. In addition, a variety of factors that are partially or entirely
beyond our and Postbank’s control, such as negative market developments, could result in our failure to realize
benefits and synergies to the full extent we expect or within the timeframe we expect, or increase our costs.
Also, while we own a majority of Postbank’s shares, and while, as of February 24, 2011, four of the 20 members
of Postbank’s supervisory board are employed by or otherwise associated with us, Postbank still has third-party
holders of its publicly traded shares, and Postbank’s management continues to be responsible to all its shareholders.
Accordingly, we cannot control Postbank’s activities to the same extent as if it were a wholly owned
subsidiary. This may limit our ability to maximize the value to us of our ownership position, including by limiting
our ability to implement initiatives to integrate Postbank and pursue revenue and cost synergies, to manage
portfolios of assets where we have identified potential improvements or to engage in other transactions between
Postbank and us. Any failure to integrate Postbank’s operations into our own on a timely and efficient basis could
have a material adverse effect on our net assets, financial condition and results of operations.
Postbank reported a loss before tax in each of 2009 and 2008, and although it reported a net profit
before tax in 2010, this does not indicate that it will be profitable in any future periods.
Postbank reported a loss before tax of € 1,064 million in its 2008 financial year and a loss before tax of
€ 398 million in its 2009 financial year. In its 2010 financial year, Postbank preliminarily reported a profit before
tax of € 315 million. However, this does not indicate that Postbank will be profitable in any future periods. In
addition, a variety of factors that are partially or entirely beyond our and Postbank’s control, such as valuation
risks in respect of Postbank’s investment portfolio, could have an adverse effect on its results of operations.
Any failure by Postbank to achieve a sustainable improvement of its results could have a material adverse
effect on our net assets, financial condition and results of operations following the consolidation of Postbank.
The consolidation of Postbank had a material adverse effect on our regulatory capital ratios, and our
assumptions and estimates concerning the effects of the consolidation on our regulatory capital ratios
may prove to be too optimistic.
The consolidation of Postbank had a material adverse effect on our regulatory capital ratios, reducing our Tier 1
capital ratio by 2.65 % and our core Tier 1 capital ratio by 2.45 %, although this effect was offset by the capital
increase we implemented in October 2010. The consolidation also increased our risk-weighted assets by
€ 60.4 billion (consisting of € 66.9 billion of new risk weighted assets from Postbank and an elimination of
€ 6.4 billion in relation to our pre-consolidation Postbank investment). The final purchase price allocation for the