entire - Deutsche Bank Annual Report 2012

Deutsche Bank 02 – Consolidated Financial Statements 310
Financial Report 2010 Additional Notes
36 – Regulatory Capital
Treasury implements the Group’s capital strategy, which itself is developed by the Capital and Risk Committee
and approved by the Management Board, including the issuance and repurchase of shares. The Group is
committed to maintain its sound capitalization. Overall capital demand and supply are constantly monitored
and adjusted, if necessary, to meet the need for capital from various perspectives. These include shareholders’
equity based on IFRS accounting standards, active book equity, regulatory capital and economic capital. The
Group’s target for the Tier 1 capital ratio continues to be at 10 % or above.
The allocation of capital, determination of the Group’s funding plan and other resource issues are framed by
the Capital and Risk Committee.
Regional capital plans covering the capital needs of the Group’s branch offices and subsidiaries are prepared
on a semi-annual basis and presented to the Group Investment Committee. Most of the Group’s subsidiaries
are subject to legal and regulatory capital requirements. Local Asset and Liability Committees attend to those
needs under the stewardship of regional Treasury teams. Furthermore, they safeguard compliance with
requirements such as restrictions on dividends allowable for remittance to Deutsche Bank AG or on the ability
of the Group’s subsidiaries to make loans or advances to the parent bank. In developing, implementing and
testing the Group’s capital and liquidity, the Group takes such legal and regulatory requirements into account.
On October 6, 2010, the Group completed a capital increase from authorized capital against cash contributions.
In total, 308.6 million new registered no-par value shares (common shares) were issued, resulting in gross
proceeds of € 10.2 billion. The net proceeds of € 10.1 billion raised in the issuance (after expenses of
approximately € 0.1 billion, net of tax) were primarily used to cover the capital consumption from the consolidation
of the Postbank Group, and, in addition, to support the existing capital base.
Treasury executes the repurchase of shares. As of January 1, 2010, the number of shares held in Treasury
from buybacks totaled 0.6 million. The 2009 Annual General Meeting granted the Group’s management board
the authority to buy back up to 62.1 million shares before the end of October 2010. During the period from
January 1, 2010 until the 2010 Annual General Meeting, 11.1 million shares were purchased. Thereof 10.6 million
were used for equity compensation purposes. As at the 2010 Annual General Meeting on May 27, 2010, the
number of shares held in Treasury from buybacks totaled 1.0 million. The 2010 Annual General Meeting granted
the Group’s management board the authority to buy back up to 62.1 million shares before the end of November
2014. Thereof 31.0 million shares may be purchased by using derivatives. During the period from the 2010
Annual General Meeting until December 31, 2010, 18.8 million shares were purchased, thereof 0.5 million via
sold put options which were executed by the counterparty at maturity date. 9.8 million of the total 18.8 million
shares repurchased were used for equity compensation purposes in 2010 and 9.0 million shares were used to
increase the Group’s Treasury position for later use for future equity compensation. As at December 31, 2010,
the number of shares held in Treasury from buybacks totaled 10.0 million.
Total outstanding hybrid Tier 1 capital (substantially all noncumulative trust preferred securities) as of December
31, 2010, amounted to € 12.6 billion compared to € 10.6 billion as of December 31, 2009. This
increase was mainly due to the consolidation of € 1.6 billion hybrid Tier 1 capital issued by Deutsche Postbank
and foreign exchange effects of the strengthened U.S. dollar to the U.S. dollar denominated hybrid Tier 1 capital.
During the first half year, 2010 the Group raised € 0.1 billion of hybrid Tier 1 capital by increasing an outstanding
issue.