Ladies and gentlemen, thank you for standing by. Welcome to the Second Quarter 2013 Conference Call of Deutsche Bank. [Operator Instructions] I would now like to turn the conference over to Robert Vollrath, Interim Head of Investor Relations. Please go ahead, sir.

Good morning, ladies and gentlemen, from Frankfurt. On behalf of Deutsche Bank, welcome to our Second Quarter Earnings Call. We have with us today, our co-CEO, Anshu Jain; and our CFO, Stefan Krause. First, Anshu is going to go over the progress we are making on our strategy and then, Stefan will discuss with you our financial performance in the quarter and year-to-date. Following their remarks, as customary, we'll welcome your questions. By now, you should have access to all of our publications on our website. As always, please be reminded of the cautionary statements regarding forward-looking statements at the end of the presentation. With that, Anshu, let me hand over to you.

Thank you very much, and good morning. We're now halfway through 2013 and nearly a year into Strategy 2015+. Today, I'm pleased to tell you that Deutsche Bank is on course, despite the continued headwinds we face. As you know, when we developed Strategy 2015+, we identified 5 key strategic levers: capital, costs, competencies in our core businesses, clients and culture. I'll say a few words in our journey on each of these. Turning first to capital. We've stated that strengthening our capital position was our most important and urgent strategic priority. A year ago, we started out with a significant capital deficit versus our peers. You told us clearly that this was unsustainable. On our last earnings call in April, I was pleased to tell you that we had taken our Basel III pro forma Core Tier 1 ratio from below 6% to 9.6%. In 9 months, we established Deutsche Bank as one of the leaders in our peer group on this measure with holders, thanks to an equity raise, which was well supported. In this quarter, nearly 2 years early, we reached our 2015 target of a Core Tier 1 ratio of 10%, and simultaneously continued to strengthen our litigation reserves. As you've seen, this includes a reserve of EUR 630 million this quarter. In total in the past year, we've increased reserves by some EUR 2.8 billion before releases and EUR 2.5 billion on a net basis. Reserves now stand at EUR 3 billion, and we expect settlements to accelerate in the coming quarters. Once again, the key to this achievement was solid retained earnings, thanks to strong operating performance, in tandem with sustained asset production. Our Non-Core Operations Unit has now reduced assets by around 40% from launch. It has already surpassed its year-end asset production…

Yes, thank you, Anshu, and good morning to everybody for joining us here on our second quarter results call. I know it's going to be a busy day for everyone so let me walk you quickly through a couple of slides that we provided to you. As you can see on Page 3, the underlying performance of our operating business was strong this quarter. Each one of our core businesses recorded better year-over-year revenues, while the bottom line was impacted by higher year-over-year litigation expenses, as we continue to build our reserves to address the legacy legal risk that we have always communicated to you. So let's turn to Slide 4. And on Slide 4, obviously, we'll increasingly point your attention to the Core Bank results as the best indicator of what sustainable performance for Deutsche Bank will be. As you can see, the Core Bank continues to deliver consistent revenues, and a very low level of loan losses. On a reported basis, noninterest expenses increased 1% year-over-year. On our adjusted basis, noninterest expenses in the Core Bank decreased 5% year-over-year to EUR 5.4 billion, mostly reflecting the initial savings from our Operational Excellence program. Pretax profitability in the Core Bank, as you can see, was EUR 1.5 billion this quarter or EUR 2.3 billion excluding cost to achieve in litigation. The Core Bank achieved a pretax return on average equity of 13.2% annualized, and 7% on a post tax basis. Let me turn on to Slide 5 now. The revenue environment, as you can see in the second quarter, was decidedly mixed. As you know, for the Investment Bank April and May saw strong direct markets across fixed income and equities and good levels of client activity. However, the Fed's tapering comments in mid-May led to a broad sell…

[Operator Instructions] The first question is from Mr. Huw Van Steenis of Morgan Stanley.

Can I just ask two questions on leverage? First, when you were talking about the EUR 250 billion possible shrinkage in sheet, does that also include any potential measures you need to take to hit the -- a draft from bank rules in the states? And then secondly, you mentioned a EUR 300 million cost of forgone earnings, so 12 basis points. Could you perhaps just talk us through what -- well, 12 basis points sounds like maybe at the low-ish end but I assume that some of these is repos and the like. Any extra color you could give us on the types of business you might be -- potentially need to shrink?

I'll take your question, first, to the U.S. Obviously, we have the FBO rules. And as you know we put together a plan of asset reduction in the U.S. Some of it, as we have communicated, is effective asset reduction as well that will contribute obviously to our EUR 250 billion. Some of it obviously, in complying with the FBO requirements, we will also take assets out of the U.S. that don't have to be in the U.S. that for historical reasons were booked in the U.S. We have some repo books out of Frankfurt, some repo books out of Tokyo that we booked in the U.S. that obviously don't need to sit there. We consolidate our Mexican subsidiary into the U.S. So these are actions that will not result in reductions, it will just result in geographic redistribution of assets. That was part of the capitalization plan for the United States. In terms of the cost, it comes from a variety of assets. I think if you think about our balance sheet being a portfolio of assets, of course, we had quite a few assets as well that more or less had 100% cost/income ratio and were not performing or had very low RoE. And of course, in a leverage regime, you cannot afford to hold these assets anymore. So most of it is coming that you correct, one of the books is the repo book that also you will have to scrutinize and cut a little bit and focus on. But the rest of the assets -- it's really a big variety of assets. But don't forget the biggest part of the EUR 250 billion is going to come from the CRD4 gross up which really has no P&L impact.

The next question is from Mr. Kian Abouhossein of JPMorgan. Kian Abouhossein - JP Morgan Chase & Co, Research Division: I have maybe 3 questions, if I may. The one is quite detailed, the litigation expenses. Would it be possible to just split them very briefly between divisions? That would be helpful. The second question is on fixed income. Your decline on a quarter-on-quarter basis was maybe slightly weaker than I expected in consensus against peers. Just wondering if you can talk a little bit about the fixed income development, but also how we're seeing the second half with the Fed tapering expectation, how that could impact your fixed income line? And the third question is just on the U.S. legal entity. Clearly, we now have more detailed rules on the U.S. and we know that the Basel III will apply at a minimal 3 of assets of EUR 250 billion. We don't know if that applies to you and I'm wondering if this Basel III calculation would apply to you. If so, you've indicated in the past that assets should come down to EUR 300 billion. Would you shrink them even further in the U.S. below EUR 250 billion if that 3% minimum Basel III would apply to you and the U.S. legal entity?

Okay, Kian, let me talk with the litigation expense. About 30% of our litigation is in the NCOU, to give you that breakdown. The rest is in the Core Bank. And as you know, the largest part of that is in obviously our CB&S business, just to give you a feeling for your -- how to distribute the litigation expense. Now on the fixed income performance, yes, we had a weaker quarter. It's -- we feel that's pretty much in line with what we saw based on the weakening of the European market. We do -- did have the same experience in that geographically the U.S. was stronger and therefore, it was impacted. We don't see this is as an ongoing weakness. We just see this as a quarterly result with obviously everything that happened after the Fed tapering. We actually had a quite good run until that point and see certainly weakening profitability there and weakening activity in the fixed income area since. And then additionally, obviously, are impacted by the situation in Europe. On the U.S. Basel III rules published, we'll be covered in our FBO project. I think that everything we read about the rules that was post does not change our view, our position, or did not have an impact on the plan. We reran our plan. We revalidated what we want to do and it does not affect us. Interesting enough, obviously, in terms of our local size as we are significantly below the EUR 700 billion volume threshold that was given out for some of the leverage adders, we are obviously significantly below that in terms of our U.S. and it leads from that specific regulation would not be subject to any additional leverage requirements at this point. But obviously, we are still expecting changes for foreign banks to occur and we'll have to wait on this. But currently, I can completely confirm our U.S. plan. Kian Abouhossein - JP Morgan Chase & Co, Research Division: Just to follow up, your U.S. plan is based on U.S. GAAP, but there's also in the new FDIC document clarity that banks which reach -- have more than EUR 250 billion of assets have to have a minimum of 3%. And I was wondering if you would likely fall into that category or not?

Yes, probably. We are above the EUR 250 billion but that's the minimum of 3%. But don't forget the -- in our previous plan, we had told you that the constraining factor is not the Basel III capital. The constraining factor is the leverage, so when I discussed with FBO before, it was always the leverage constraint that one that was driving our capitalization, and we -- to be honest, actually use the higher leverage requirement in our assumptions. By the way, we use also this higher leverage requirement when we took the hit to our German books, yes. As I described to you at year end, we used the 5, yes, leverage in our assumption. So therefore, this has not had impact when we ran the numbers after changes made, and our plan is the same and not impact the future.

The next question is from Mr. Jernej Omahen of Goldman Sachs.

I just have 3 very brief questions this time around. The first one is on Page 16 and you point out in your comments that if we exclude the impact of Basel III mitigation, et cetera, revenues were up 13% year-on-year rather than the 9% reported. And I was just -- I wanted to ask you how should we think about the difference between these 13% and 9%? So this EUR 135 million of lost revenues per quarter, is this the cost of risk-weighted asset mitigation which we should think about on a recurring basis or is it something else? That's question number one. Question number two is you've been a very good job and thank you for this, for disclosing the CRD4 leverage ratio. Could you also give us the Basel III leverage ratio as per the most recent proposal? Because I take your point that the CRD doesn't come into effect, we're waiting for the EBA to complete their studies. But on the other hand, I think that you will -- or that every bank will have to start disclosing the Basel III leverage as of Q1 '15. But can you also please confirm that my understanding of that is accurate? And lastly, just a broader question on your targets and profitability, and Anshu made a statement at the beginning saying that he is reaffirm -- or that you are, Deutsche Bank, is reaffirming all the profitability targets communicated last year. And I was just wondering, for your 15% return on -- for your 12% return on equity target in 2015, I guess the share count is now higher by broadly 10% since you've communicated those targets. As I understand it, you've now hit the 10% fully phased Basel III but capital is going to grow further from here. So what is the implied increase of net income i.e., of your profits that allows you -- in this target, that allows you to say that the 12% is still on track given what happened to the denominator?

Well, let me go -- on your Page 16 question, obviously, a mitigation of CVA, DVA is to take out volatility of debt and it's cost of the hedging we do. And in that sense, yes, it is a cost issue if you have to think about of dealing with volatility. As you know, what CVA, DVA will do to any P&L is create lots -- tons of volatility, but over time is meaningless, yes. So in that sense, obviously as we manage that volatility, there is an additional cost associated to that. That's how you have to think about Page 16. Then on your Basel III. Obviously, we recognize that under the proposed and yet to be discussed Basel rules, some exposures get treated less favorable than under the CRD4. But I will be very clear through the actions that I've outlined, we create sufficient buffer to also deal with a 3% threshold under the proposed Basel rules. That's what I can tell you about that. Now in terms of your question on the profitability target of 2015. Our plan always included obviously the view that we will have substantially more capital, yes, and that obviously our plan needs therefore substantially more profitability than the historic profitability. Most of this assumption in profitability was a very conservative approach to revenue growth, which we had in the plan, and obviously, the substantial cost-cutting and efficiency improvements. So if you have to -- if you make your math or if you want to understand how we arrive to that and why we continue to be quite okay because we don't have a plan that's based on more than inflation driven revenue growth, right? So we don't see a risk to that plan. At this point in time, to be honest, on current performance, we rather see an upside to the plan where if I look at our performance versus in the half year, we are significantly ahead of that plan despite the fact that our cost-cutting has just shown first result, but obviously have not fully taken out a significant portion of our profit. So that's why with confidence, I can confirm to you that we stay in line with our targets.

Just on the Basel III leverage, can you at least give us a steer what you think the difference is between maybe -- not even on the ratio, maybe just on the risk capital measure i.e., on the total assets between CRD4 as you show it in Basel III?

Yes, I gave you the indication that within the mitigation that we announced to you, we will be able to deal with this. Think about the mitigation puts us at, and you can calculate at 3.6 CRD4 ratio with this mitigation, and think about that, that buffer then also will cover with the buffer and the reduction will cover our exposure increase under Basel III.

The next question is from Mr. Andrew Stimpson of KBW. Andrew Stimpson - Keefe, Bruyette & Woods Limited, Research Division: Sorry if I missed this but I just wanted to ask you how the AT1 issuance planning is coming along and how the discussions with the regulator are going, when you're thinking you might issue these instruments to replace that EUR 11 billion? And then whether you're willing to talk around a timeline for the mitigation of that EUR 250 billion for the leverage?

Yes, okay. The discussions with our regulators are ongoing. On recognition you know that in Germany, this is still an open topic while in other geographies, already the acceptance of, regulatory acceptance, of these type of instruments has been clarified. And therefore, we will get -- for sure, we will get a resolution hopefully within this year to really understand these structures. And then obviously, as our old issuance slowly run out over time, we will replace them with new issuance as we have articulated. And assume that the residual -- based on the announcement that will assume that the rest of -- we will issue the -- towards until the end of the year of the AT1 so I think we will be in a very good position in a very short period of time. And the timeline for the leverage, obviously we have said by 2015, we will have this asset reductions done but as I described previously, the pace of the more significant ones can be quite rapidly.

The next question is from Mr. Stuart Graham of Autonomous.

I have a few questions. Just on Slide 28, the EUR 11 billion of AT1, is this illustrative or are you actually saying you'll run with EUR 11 billion because I always thought you would not run with more than EUR 6 billion which is equivalent to 1.5% of RWA. So I'm just trying to understand whether you'll really run with the EUR 11 billion? The second question then is on your EUR 300 million profit guidance. Does that include the cost of issuing the AT1 or is that simply the cost of lost revenues from the EUR 250 billion slim down? And then I guess the third question is back to FIC revenues. I know you said you're relatively relaxed about it, but this is the third quarter in a row that you've missed consensus FIC revenues. I can't remember Deutsche ever missing 3 quarters in a row. So I wonder whether there's something going on in terms of your having to shift the business down as you've shed assets et cetera, and we're settling into a lower FIC revenue trajectory than we as the analysts have all thought about.

Yes, I'll take 2 of your questions. First of all, the first question is the EUR 11 billion honestly, my whole calculation is an illustrative calculation, yes. I wanted to show you what the potential is. We are committing to the EUR 250 billion, but then I did the illustrative calculation. So what I used is our current actuals and took the 10% haircut because that's the amount that goes off every year. So that's the basis of that number. Obviously, depending on how the structure comes in, we could issue more or we would not have to do anything that depends now on how our AT1 structures get defined and get regulatory recognition. Now if -- the second question was the P&L, that's the result of the specific EUR 250 billion cut, if I understood your question correctly.

Yes, so it doesn't include the cost of the AT1 then?

It does not include the cost of the AT1. It's only the asset cut. But because the level we have is EUR 11 billion, don't forget in my calculation, I used that, that's my starting P&L includes the cost of the current actuals, which the current actuals minus 10% that's why obviously didn't put in a difference in that. I agree with you, if you were to issue more, then obviously there will be obviously an additional cost to that. But that's why my calculation I wanted to only to tell you with what we have right now, assuming regulatory recognition, it's fine.

Let me take your first question on fixed income, as you might have expected me to. Now, look, we track market share and we track competitive trends very closely. We don't track consensus as closely frankly when we judge our divisions. So I cannot speak for why analysts see things a certain way. By our calculations, in the first half of 2013, I believe all our major competitors have now reported. We finished in third position in FICC. Yes, the gap to #1 has widened, perhaps that's what's driving some of this consensus. And if you ask me to speculate, our market share and the fees are all in line, our peer performance versus average is still pretty good. But it is possible that if there is strong U.S. fixed income performance might have the margin and a slightly dampened European performance might have had an impact, I would not put this down to any loss of competitive capacity or impact of de-risking. But the headcount cuts that we've done, the balance sheet reduction, the usual suspects, we're very sensitive to making sure that those are done in ways that don't impair our performance. And I'm confident the new team is on track.

The last question is from Mr. Michael Helsby of Merrill Lynch.

I've just got 2 quick questions, if that's all right. Firstly, on the -- just along leverage actually, can you confirm that your CRD4 gross up is based on the revised June text and specifically, that you've used the new 40% floors for the PFE calculation? And secondly, sorry if I've missed this. But can you actually break out the EUR 413 billion CRD gross up that you've given us for the derivative SFT and off balance sheet impacts, please?

Okay, Michael, to your first question it's a yes, we have utilized this last definition. And the breakout I will owe you because we haven't disclosed the breakup on this gross up.

The next question is from Mr. Jon Peace of Nomura.

Just 2 final questions, please. The first one is in private and business clients. Can you just remind me what you've said the size of the nonrecurring impacts were this quarter both through revenues and expenses with washer? And then the second question is, given the good progress you are making on Core Tier 1 in leverage, what does that imply to your dividend policy, bearing in mind the regulatory and the litigation challenges you've already highlighted?

Let me start on the core Tier 1. I think that at a point, we have not changed our priority, we obviously have to build capital first. It's very important that we have in our view achieved our 10% which gives us some room to move up and that's the flexibility we get. Now we, obviously, over the next couple of months, based also on our proposal and plan, have to look how our plan on leverage and how the leverage discussion pans out. We are honestly quite confident that with our plan, we will keep the flexibility as we are already in line with the CRD4 requirements to have flexibility around that point. But again, we haven't made any decisions or fixed decision now that we have to continue to observe what this leverage discussion. But from a capital point of view, obviously, the 10% achievement is, I think, a milestone in terms of the question that you asked. In terms of PBC, it was that we only had one nonrecurring item that was a provision release for our business, for a business, a separate business, a joint venture we had with HuaXia and think about the size of EUR 50 million above.

Excuse me, there are no further questions at this time. Please continue with any other points you wish to raise.

Thank you. So this concludes our second quarter analyst call. If you have any additional questions, please do not hesitate to get in touch with us directly in Investor Relations. With that, let me thank you for your interest in Deutsche Bank and wish you all a good day. Bye-bye.

Ladies and gentlemen, the conference has now concluded, and you may disconnect your telephone. Thank you for joining, and have a pleasant day. Goodbye.