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 75
Noninterest Expenses
Compensation and benefits. The increase of € 1.7 billion, or 18 %, in 2009 compared to 2008 reflected a higher
variable compensation as a result of improved operating performance. It was also impacted by € 225 million in
respect of the bank payroll tax announced by the U.K. government. However, this increase was partially offset
by the positive impact of changes to our compensation structure, mainly reflecting an increased proportion of
deferred compensation compared with prior periods, in line with the requirements of the Bundesanstalt für
Finanzdienstleistungsaufsicht (BaFin, German Financial Supervisory Authority) and the guidelines agreed at
the G-20 meeting in Pittsburgh in the U.S., in September 2009.
General and administrative expenses. General and administrative expenses increased by € 63 million in 2009
compared to 2008. The development in both years was impacted by specific significant charges, which were
higher in 2009 than in 2008. In 2009, these included € 316 million from a legal settlement with Huntsman Corp.
and € 200 million related to our offer to repurchase certain products from private investors, both reflected in
Other expenses. In 2008, a provision of € 98 million related to the obligation to repurchase Auction Rate Preferred
(“ARP”) securities/Auction Rate Securities (“ARS”) at par from retail clients following a settlement in the
U.S. was recorded in Other expenses. Without these specific charges, General and administrative expenses
were down in 2009 compared to 2008, mainly from lower expenses for marketing, travel, professional services
and IT.
Policyholder benefits and claims. The charge of € 542 million in 2009, compared to a credit of € 252 million in
2008, resulted primarily from the aforementioned effects from Abbey Life. These insurance-related charges are
offset by related net gains on financial assets/liabilities at fair value through profit or loss.
Impairment of intangible assets. Included in 2009 was the reversal of an impairment charge on intangible assets
of € 291 million in AM, related to DWS Investments in the U.S. (formerly DWS Scudder), which had been taken
in the fourth quarter 2008. Also included were goodwill impairment charges of € 151 million in 2009 and of
€ 270 million in 2008, which were related to a consolidated RREEF infrastructure investment.
Income Tax Expense
A tax expense of € 244 million was recorded in 2009, compared to an income tax benefit of € 1.8 billion 2008.
The tax expense in 2009 benefited from the recognition of deferred tax assets in the U.S., which reflects strong
current performance and improved income projections of Deutsche Bank entities within that tax jurisdiction,
specific tax items including the resolution of tax audits relating to prior years, and tax exempt income. The net
tax benefit in 2008 was mainly driven by the geographic mix of income/loss and the valuation of unused tax
losses. The effective tax rates were 4.7 % in 2009 and 32.1 % in 2008.