SEC Form 20-F - Deutsche Bank Annual Report 2012

Deutsche Bank
Annual Report 2010 on Form 20-F
Item 5: Operating and Financial Review and Prospects 67
The tables below show the incremental impact of the reclassification for CB&S. The tables show that the
reclassifications resulted in a € 753 million incremental loss to the income statement and a € 325 million
incremental loss to other comprehensive income for 2010. For the full year 2009, the reclassifications resulted
in a € 273 million incremental loss to the income statement and a € 1.2 billion incremental loss to other comprehensive
income. The consequential effect on credit market risk disclosures is provided in “Update on Key
Credit Market Exposures”.
Carrying value Fair value
Dec 31, 2010 Year ended Dec 31, 2010
Impact on
income before
income taxes
Impact on other
comprehensive
income
2010 impact of the reclassification
Sales & Trading – Debt
in € bn. in € bn. in € m. in € m.
Trading assets reclassified to loans 16.6 14.7 (582) –
Financial assets available for sale reclassified to loans
Origination and Advisory
8.7 7.8 2 (325)
Trading assets reclassified to loans 1 Loan products
1.4 1.2 (173) –
Financial assets available for sale reclassified to loans – – – –
Total 26.7 23.7 (753) 2
(325)
1 The significant decrease in carrying value and fair value of reclassified assets in Origination and Advisory since December 2009 is mainly due to the restructuring of
loans to Actavis Group hF in 2010 with a carrying amount of € 4.2 billion. There was no gain or loss recognized as a result of the restructuring. The restructuring is
detailed further in Note 17 “Equity Method Investments”.
2 In addition to the impact in CB&S, income before income taxes decreased by € 3 million in PBC.
Carrying value Fair value
Dec 31, 2009 Year ended Dec 31, 2009
Impact on
income before
income taxes
Impact on other
comprehensive
income
2009 impact of the reclassification
Sales & Trading – Debt
in € bn. in € bn. in € m. in € m.
Trading assets reclassified to loans 18.2 15.9 407 –
Financial assets available for sale reclassified to loans
Origination and Advisory
9.3 8.2 (16) (1,102)
Trading assets reclassified to loans
Loan products
6.1 5.7 (664) –
Financial assets available for sale reclassified to loans – – – (114) 1
Total 33.6 29.8 (273) 2
(1,216)
1 The negative amount shown as the annual movement in other comprehensive income is due to an instrument being impaired in the year. The decrease in fair value
since reclassification that would have been recorded in equity would then be removed from equity and recognized through the income statement.
2 In addition to the impact in CB&S, income before income taxes increased by € 18 million in PBC.
During 2010 we sold reclassified assets with a carrying value of € 2.0 billion. The sales resulted in a net loss on
sale of € 3 million. Sales were made due to circumstances that were not foreseen at the time of reclassification.
The assets reclassified included funded leveraged finance loans with a fair value on the date of reclassification
of € 7.5 billion which were entered into as part of an “originate to distribute” strategy. Assets with a fair value on
the date of reclassification of € 9.4 billion were contained within consolidated asset backed commercial paper
conduits as of the reclassification date. Commercial real estate loans were reclassified with a fair value on the
date of reclassification of € 9.1 billion. These loans were intended for securitization at their origination or purchase
date. The remaining reclassified assets, which comprised other assets principally acquired or originated for the
purpose of securitization, had a fair value of € 11.9 billion on the reclassification date.