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 74
Private Clients and Asset Management (PCAM). Combined net interest income and net gains (losses) on
financial assets/liabilities at fair value through profit or loss were € 4.2 billion in 2009, an increase of € 297 million,
or 8 %, compared to 2008. The increase included higher net interest income from Loan products, mainly in PBC
from increased loan margins, and from Other products, mainly driven by PBC’s asset and liability management
function.
Corporate Investments (CI). Combined net interest income and net gains (losses) on financial assets/liabilities
at fair value through profit or loss were € 793 million in 2009, compared to negative € 172 million in 2008. The
development primarily reflects gains related to our minority stake in Deutsche Postbank AG recognized during
2009.
Provision for Credit Losses
Provision for credit losses was € 2.6 billion in 2009, versus € 1.1 billion in 2008. The provision in CIB was
€ 1.8 billion in 2009, versus € 408 million in 2008, primarily reflecting a significant increase in the provision for
assets reclassified in accordance with IAS 39, relating predominantly to exposures in Leveraged Finance. The
remaining increase reflects impairment charges taken on a number of our counterparty exposures in the Americas
and in Europe on the back of an overall deteriorating credit environment. The provision in PCAM was € 806 million
in 2009, versus € 668 million in 2008, predominantly reflecting a more challenging credit environment in Spain
and Poland. Provision for credit losses in 2009 was positively impacted by changes in certain parameter and
model assumptions, which reduced the provision by € 87 million in CIB and by € 146 million in PCAM.
Remaining Noninterest Income
Commissions and fee income. Total commissions and fee income was € 8.9 billion in 2009, a decrease of
€ 830 million, or 9 %, compared to 2008. Commissions and fees from fiduciary activities decreased € 488 million
compared to the prior year, driven by lower assets under management in AM, as a consequence of the prevailing
weak market conditions (mainly in the first nine months of 2009). Underwriting and advisory fees improved
by € 426 million, or 32 %, mainly from increased primary issuances as market activity increased across all
regions, partly offset by decreased fees from advisory services as a result of continued low volumes of market
activity. Brokerage fees decreased by € 767 million, or 31 %, primarily driven by lower customer demand in 2009
following the market turbulence in 2008. Fees for other customer services were unchanged compared to 2008.
Net gains (losses) on financial assets available for sale. Net losses on financial assets available for sale were
€ 403 million in 2009, versus net gains of € 666 million in 2008. The losses in 2009 were primarily attributable
to impairment charges related to investments in CB&S and to AM’s real estate business. The net gains in 2008
were mainly driven by gains of € 1.3 billion from the sale of industrial holdings in CI, partly offset by impairment
charges in CIB’s sales and trading areas, including a € 490 million impairment loss on available for sale positions.
Net income (loss) from equity method investments. Net income from equity method investments was € 59 million
and € 46 million in 2009 and 2008, respectively. In 2009, income from our investment in Postbank, recorded in
CI, was partly offset by impairment charges on certain equity method investments in our commercial real estate
business in CB&S. There were no significant individual items included in 2008.
Other income. Total Other income (loss) was a loss of € 183 million in 2009. The decrease of € 882 million
compared to 2008 reflected primarily an impairment charge of € 575 million on The Cosmopolitan of Las Vegas
property in 2009 and a lower result from derivatives qualifying for hedge accounting in 2009 compared to 2008.