entire - Deutsche Bank Annual Report 2012

Deutsche Bank 01 – Management Report 9
Financial Report 2010 Operating and Financial Review
Results of Operations
Consolidated Results of Operations
You should read the following discussion and analysis in conjunction with the consolidated financial statements.
Net Interest Income
The following table sets forth data related to our Net interest income.
in € m.
(unless stated otherwise) 2010 2009
2010 increase (decrease)
from 2009
in € m. in %
Total interest and similar income 28,779 26,953 1,826 7
Total interest expenses 13,196 14,494 (1,298) (9)
Net interest income 15,583 12,459 3,124 25
Average interest-earning assets 1 993,780 879,601 114,179 13
Average interest-bearing liabilities 1 933,537 853,383 80,154 9
Gross interest yield 2 2.90 % 3.06 % (0.16) ppt (5)
Gross interest rate paid 3 1.41 % 1.70 % (0.29) ppt (17)
Net interest spread 4 1.48 % 1.37 % 0.11 ppt 8
Net interest margin 5 1.57 % 1.42 % 0.15 ppt 11
ppt – Percentage points
1 Average balances for each year are calculated in general based upon month-end balances.
2 Gross interest yield is the average interest rate earned on our average interest-earning assets.
3 Gross interest rate paid is the average interest rate paid on our average interest-bearing liabilities.
4 Net interest spread is the difference between the average interest rate earned on average interest-earning assets and the average interest rate paid on average
interest-bearing liabilities.
5 Net interest margin is net interest income expressed as a percentage of average interest-earning assets.
Net interest income in 2010 was € 15.6 billion, an increase of € 3.1 billion, or 25 %, versus 2009. The improvement
was primarily driven by a decrease in interest expenses, mainly due to a shift in liabilities from higher
yields, originated in prior years, to current market rates and due to higher market rates at the beginning of 2009.
In addition, interest income improved due to an increase in average interest-earning assets by € 114 billion,
mainly in Corporate Banking & Securities, which exceeded the increase in average interest-bearing liabilities.
These developments resulted in a widening of our net interest spread by 11 basis points and of our net interest
margin by 15 basis points.
The development of our net interest income is also impacted by the accounting treatment of some of our
hedging-related derivative transactions. We enter into nontrading derivative transactions primarily as economic
hedges of the interest rate risks of our nontrading interest-earning assets and interest-bearing liabilities. Some
of these derivatives qualify as hedges for accounting purposes while others do not. When derivative transactions
qualify as hedges of interest rate risks for accounting purposes, the interest arising from the derivatives is
reported in interest income and expense, where it offsets interest flows from the hedged items. When derivatives
do not qualify for hedge accounting treatment, the interest flows that arise from those derivatives will appear
in trading income.