entire - Deutsche Bank Annual Report 2012

Deutsche Bank 01 – Management Report 145
Financial Report 2010 Outlook
Corporate Banking & Securities is expected to benefit from the further integration of the investment bank. This
will help us to better service corporate clients across a broad range of products, eliminate any duplication of
activity across front office and support functions and increase collaboration between all areas of the business,
including Global Transaction Banking. We will continue to focus on good asset efficiency and careful management
of risk exposures, especially those that will be impacted by the evolving regulatory landscape during the next
two years.
In sales and trading, revenues from flow products such as foreign exchange, money markets, interest rate
trading and cash equities will be supported by increased global activity. We expect to continue to generate
substantial revenues through our leading client market shares in these products as well as to benefit from our
continued investments in electronic trading and direct market access platforms. Our strategic focus on prime
finance platform has now developed this business into a market leader. Emerging markets trading and commodities
also remain key growth areas as demand for these products increases. We have now recalibrated our
credit and equity derivatives businesses after substantial losses during the crisis, focusing on both client flow
trading and solutions with appropriate risk appetite and resource utilization. During 2010 we exited our designated
proprietary equity trading business, following the closure of our designated proprietary credit trading business
in 2009. Our unique cross asset class structuring group will play a key role in delivering sales and trading
products as well as solutions to both corporate and institutional clients under the newly integrated Corporate &
Investment Bank.
Assuming a stable macro-economic environment the corporate finance fee pool will increase. Debt issuance is
expected to be strong across financial institutions and corporates, as companies continue to refinance and take
advantage of an attractive market environment for acquisition financing. We anticipate equity issuance will
continue to be strong given the IPO pipeline, growth in Asia and as financial institutions continue to recapitalize.
M&A activity is expected to increase as we move through a cyclical recovery and corporate clients reposition
themselves. Deutsche Bank aims to capitalize on all these trends and build on increased momentum in its
corporate finance franchise, which attained its target of a top five position by fees (source: Dealogic) in 2010.
CB&S aims to achieve a contribution to the target in 2011 of € 6.4 billion income before income taxes, based
on the assumptions set out above. Risks to this forecast include lower margins and loss of key talent due to
increased competition, reduced volumes or continued uncertainty around regulation and its potential implications
including higher costs or capital requirements. A significant turn in the macroeconomic environment would also
impact issuer and investor activity. Although progress has been made in the further integration of the investment
bank, failure to successfully complete this program would result in lower-than-expected revenue and cost synergies.