Ladies and gentlemen, thank you for standing by. I am Miavia, your Chorus Call operator. Welcome, and thank you, for joining the First Quarter and Strategy Review Analysts' Conference Call of Deutsche Bank. Throughout today’s recorded presentation, all participants will be in a listen-only mode. The presentation will be followed by a question-and-answer session. [Operator Instructions] I would now like to turn the conference over to John Andrews, Head of Investor Relations. Please go ahead.

Operator, thank you, and good morning, to everybody. On behalf of Deutsche Bank, I’d like to welcome you to the review of our first quarter results and our strategy update. We have much to cover this morning. First, Stefan Krause, our CFO, will briefly review key aspects of the first quarter results, which as you know, we released yesterday afternoon. We do not intend to review the entire first quarter analyst presentation, but will be happy to address any questions you have on the first quarter in the Q&A session. We’ll then turn it over to Anshu, who’ll review the presentation on our strategy update, which was published this morning on the website. So without further ado, let me please turn it over to Stefan to discuss the quarter. Stefan?

Thank you very much, John, and good morning to everybody. Let me spend a few minutes on the first quarter, before Anshu then, as John said, discusses our strategic announcements of today. Overall, this was strong quarter, excluding the additional EUR 1.5 billion of litigation provisions that we announced last week. Group income before income taxes was just under EUR 1.5 billion. The fully loaded core tier-1 ratio was 11.1% and our leverage ratio was 3.4%. And tangible book value per share of EUR 41.26 was 7% percent higher than the first quarter of 2014. Let me now address just a few issues on the quarter. I'm not going to review the whole deck. So I'm just going to focus on a couple of issues, and then I will respond to any questions you may have regarding the quarter in our Q&A. Let's turn to Page 4. The first quarter, as you can see, fully loaded common tier equity ratio decreased by approximately 60 basis points to 11.1%, reflecting RWA growth, that I will just address shortly. Our common equity tier-1 capital increased by EUR 1.8 billion you wrote to EUR 47.8 billion, driven by the positive impact of the strengthening of the U.S. dollar. Further litigation actions put pressure on our profits and capital ratios for the rest of the year, as we have told you a couple of times. On Page 5, you see our risk-weighted assets that increased by EUR 37 billion to EUR 431 billion, with FX movements accounting for almost 50% of the increase. Credit risk RWA rose by EUR 4.6 billion as a result of business growth mainly in CB&S and GTB. Market-risk RWA increased by EUR 6.3 billion, mainly reflecting business growth and the impact of a regulatory driven methodology change for the…

Thank you, Stefan. Good morning, everyone. I’ll start with Slide 1 in the pack with Strategy 2020. I think the very first thing we said to you that is probably the thing which we've debated the most over the past few months, which is what kind of a bank do we want to be? And after considerable debate, the conclusion of that process was a clear reaffirmation of our commitment to being a leading global bank based in Germany. We remain totally focused in servicing our clients. We remain global, and we also remain universal, offering a range of products and services that our clients demand. And if that sounds like a simple statement, let me assure you, we spent a lot of time debating each and every word of what I’ve just said. Having said that we reaffirm our core identity, we equally realize that profound changes required in order to retain this core operating model, and more importantly, to deliver value to you, our shareholders. We must be more focused. We must reduce the span of our client coverage and deciding those clients who offer and value mutually beneficial partnership with us, but also shrinking relationships with those that don't. Yes, we remain global, but we must also reduce our footprint and focus on countries that are most essential to our clients and offer the greatest growth potential. We do remain universal, but also must reduce our product perimeter, eliminating or reducing products, that are increasingly unattractive in a leverage constrained world. Critically, we must be proactive in regulatory and control matters, and we must execute on all of these goals because that is how we will deliver value for our clients and to you, our shareholders. Going forward to Slide 2. I've talked about our unique positioning.…

Ladies and gentlemen at this time, we will begin the question-and-answer session. [Operator Instructions] And the first question is from the line of Kian Abouhossein of JP Morgan. Please go ahead.

Gentlemen, thanks for taking my questions. The first question I have is regarding cost savings, and I was wondering if you could give us a bit of time frame around the cost savings achievements. And in that context, if you could discuss a little bit gross versus net in terms of cost savings, because clearly EUR 3.5 billion is gross and you indicate compliance caused some growth initiatives et cetera. And in with respect to that your revenue outlook to get to 65% cost income. So really if you could give a little bit more meat around your cost targets and the revenue environment and 65%? The second question I have is regarding your execution of this program, because if I look at your historic cost savings plan, you don't really see that very well in the numbers. And I was just wondering if you can run me a little bit through your thinking, how you're going to make sure that these targets that you said today will actually be achieved in particular leverage as well as some particulars of cost savings plan, how you’re organized in that respect? And the third question is on risk-weighted assets where you have some operational and market risk impact besides the dollar effect. And I just wanted to see how should we think about risk-weighted assets, including Postbank. So assuming status quo, how they should develop over this year assuming no dollar impact risks from regulatory headwinds that you’re seeing on risk-weighted assets? Thank you.

Thank you, Kian, for your questions. Let me go through that. The first question was the timeframe of the cost. Of course the first piece that Anshu announced, which was the remainder of our OpEx program will be occur in the year - within the year 2015. And then the rest of, I would say in the next day three to five years. As you know the deconsolidation driven cost savings, we are targeting about 18 months to two-year time frame, and the rest will then come over time as we then implement the measures that Anshu announced.

Stefan, can I just interrupt you? Sorry for that, but I think it would be good to have a little bit more time frame around the EUR 3.5 billion considering five years is a long time to achieve those.

Well, we have - at this point obviously not complete the bottom-up plan on which I could base any statements I do right now. And we will obviously now as a next step plan in detail with our different business divisions and I will be able to tell you, give you more detail up to 90 days - in the next 90 days as we then take the next step towards the strategy development and really plan the measures that we announced in today in more detail and get a bottom-up plan. So I have to ask you to bear with us. On your question around the 65% cost income ratio. Obviously it will be achieved through cost efficiency. Also we are also assuming some modest revenue growth. And then on your question around then...

And modest means GDP kind of growth?

Yes.

Okay. So 2% or so. 1% to 2%, yes.

Yes, in that range. And now going back to your gross. Obviously part of the strategies we are being selective in growing some areas. So there will be cost increases. We do expect some more regulatory costs. I also don't have any numbers for you at this point in time what the net impact will be. This will be also then provided to you within the next 90 days.

And Stefan, if I can have one more follow-up. On Page 22, you clearly highlighted 15% of our adjusted cost by 2020. Now doing back-of-the-envelope calculation, I could get to something like EUR 2.5 billion net cost savings.

That's good. You see your calculation. Please understand that I don't have - I need a plan to base any statements on, and I don't have. So I can't give you a net guidance. 65% cost income ratio is our target that we want to achieve, and just bear with us until we have done the bottom-up plan.

That's fair enough.

Yes. That would be fair. Now the second - on your RWA development, I've always told you that we expect significant increases in RWAs. So that has been part of our strategic thinking. So we expect further pressure from our operational risk, from obviously the industry litigation losses on operational risk. But we only expect moderate changes from organic developments. So we expect to peak in 2015, and then obviously as litigation charges hopefully in the industry and for the bank starts to ease off, then obviously the operational risk charts will also start trending down again, we had said that. Nevertheless we did plan - in our strategic thinking, we did planned some significant additional RWA increases, has to come from regulatory trends in terms of RWA harmonization and things like that, but also from our selective business growth, only compensated then from RWA that we will lose based on our disposals and our shortening of the perimeter.

And then - okay. And if I ask maybe one more follow-up on that. On your international retail operations, you mentioned the reduction on country presence, but can you be a bit more specific around your European retail operations?

Unchanged.

Status quo, okay. Thank you.

Okay.

Next question is from the line of Kinner Lakhani of Citi Investment Research. Please go ahead.

Yes, hi. Good morning. So first question on the leverage ratio, which I think, Anshu called, the single most important change. I guess my question is why 5%? Why not 4%, why not 6%? What's driving this big change? And also if you could maybe give us a target for what do you think the RWAs will settle at on a two to three year view? Second question on NSFR, stable funding, as a result of the deconsolidation of Postbank. Where are you now and where do you get to? A few of your peers including Barclays now disclose NSFR ratios. So be grateful if you could elaborate on that? And thirdly, you do talk about a commitment to China. Is that the same as the commitment to holding stake in Hua Xia? Thank you.

Kinner, let me take the question on leverage ratio. Clearly, we had a lot of debate. And this is not science. We see our global peer group as averaging right around that 5% number. Some of the U.S. firms are a bit higher. Most of the Europeans are quite a bit lower. We felt that a 5% leverage ratio is the right blend, are still being able to give you a return on tangible equity, which is acceptable while putting us squarely in with our global peer group. We don't expect Europe necessarily to go to 5%. We think many of the European banking models, particularly those that will remain mortgage and retail asset-heavy will really struggle to achieve 5%. So we think we will be in the top quartile of the very least of the European and certainly with the pack in the U.S.

Okay. Then your other question around NSFR. Our NSFR currently is around 105%. And our assumption is that obviously including the deposits that we have in our blue bank, we will be able to achieve the 100% requirement and we will fully comply with the requirement obviously including a buffer, which will not be a problem based on the fact that we retain deposits and we shorten our balance sheet quite considerably. And then you had the question regarding Hua Xia, and there is no comment around our Hua Xia stake today. As Anshu said, committed to China.

Thank you. If I could just follow-up just on the dividend payout aspiration 50%, what's the timing on that?

Sorry I didn't get the question?

Just on the dividend payout aspiration of 50%. What's the timing on that?

That's like all ambitions that we've lined out. It’s obviously the timeframe three to five years.

Okay, great. And sorry, the RWA target. I don't think you had given a number?

No, we don't give RWA target, but you can assume that we did include in our projections this time around all the - our expected regulatory changes, and has given your guidance that we expect RWA to grow and our RWA density for the bank to increase.

Thank you very much. Thanks.

And the next question is from the line of Jernej Omahen of Goldman Sachs. Please go ahead.

Yes, thanks a lot. Good morning from my side as well. I have three questions please. The first one is on capital. And I think we will understand the ambition of Deutsche Bank to get to a 5% leverage ratio. What is less clear is how come that the core equity tier-1 target is at 11% which I believe is where Deutsche Bank already is as of now. So Stefan when you talk about risk-weighted asset inflation, just back-of-envelope reverse solving how much incremental capital of 5% leverage ratio implies gives us roughly 25% risk-weighted asset inflation to tell you the 5% leverage with an 11% core equity tier-1. Can you please give us a bit more color on that? And second question on capital is, so Deutsche Bank’s subsidiary in the U.S., which was subject to CCAR this year. And I obviously concede that only a fraction of assets are included in that, but still, that subsidiary didn't pass the CCAR or the U.S. stress test this year. How confident are you that it will be - that this subsidiary will do better this year and that you can have the U.S. bank in a position for the holding company to meet hold of U.S. requirements and hence pass the test when it is subjected to it on January 1 2018? And the final question that I have is on Deutsche Postbank. What does deconsolidation mean? Do you mean that you're going to go below 50%? Do you plan to IPO it and keep the controlling stake? I think that deconsolidation, I guess in this context would mean, as we will understand it going below 50%. But I guess that if you do that, there would be a capital deduction for the stake in a financial company. Anyway, thanks a lot.

Yes, so let me take at least the conceptual part of the first question and then I'm going to have Stefan pickup from there. You correctly noticed that we are laying out a very ambitious goal to cut at least growth over EUR 340 billion of balance sheet, and yet we are targeting our core tier-1 to remain constant. And of course what that tells you is that there will be a significantly higher RWA density at Deutsche Bank in years to come and that's not a surprise. We see that. That will come largely because of RWA harmonization, model changes and so on, which as Stefan said, we've been guiding you towards all along. But certainly even if you take a look at our business mix change, if you go back to the CB&S page and if you look at the businesses which are being deemphasized such as repo, such as rates. Those tended to be high balance sheet, low RWA, and that change in business mix will take the RWA density up. And then very critically by the way and we've talked about this non-stop, now you're going to get to see it happen, EUR 150 billion of Postbank mortgages which are being deconsolidated are actually very high quality assets and commanded relatively low RWAs. So we are finally following through on what we've been arguing for a very long time, but were unsuccessful, which is to convince people that holding large quantities of low-risk assets should not be viewed with the suspicion that it is. Now you're saying the reverse of that. The exit of that sort of two sets of assets which are being reduced on high CRD4 leverage but relatively low RWA.

So Jernej, to answer your questions around the U.S. CCAR. As you know, it was a smaller subsidiary in the U.S. that underwent the CCAR test this year. It was very well capitalized as you remember from the comparisons. So it was not the capital that created the issue and it was classical non-passing of CCAR in the first time around on qualitative things. As now we have announced that we have a quite sizable remediation program in the United States that writes our internal controls and the concerns at around reporting the data and things like that. So that program is underway, and we're quite comfortable that, that program will be concluded in the near future, which would put us in a position to also address the qualitative issues that were addressed during the CCAR process on this small subsidiary this year. At the same time, obviously we are building the IHD [ph] which will be then the relevant entity that will go through then the - obviously larger CCAR test. We have some time, as you also pointed out until that entity will go through the CCAR test and we are quite comfortable that on the qualitative side as well as on the capital and quantitative side, we will comply by the time and obviously be able to have a positive result on CCAR results. And the team is working quite hard to get there. On Postbank, you’re asking us a question. Of course, yes, deconsolidate means that we, at least in the first step have to get below the 50% ownership threshold. But obviously our ambition is to do a complete re-IPO of Postbank over time. So because you otherwise correctly pointed out that it would not make sense to have a larger financial interest in another bank based on our non-regulatory measurements around ownership and minority ownership of other financial institutions. As Anshu announced today, we as of today, because we've surpassed the 95% ownership threshold are in a very good position to do a squeeze-out and after the squeeze-out, we would start to process of re-IPOing Postbank.

Okay, great. Stefan, can I just follow-up on. So Deutsche bank is committing that you will not have control in Deutsche Postbank by the end of 2016?

No, we will - obviously the IPO process, we cannot comment at this point in time what steps we will take. Obviously initially we will obviously bring below 50%, so we can deconsolidate. But obviously we have no interest. And let's not forget the IFRS frame also has to control aspect of it. So obviously we will give up all control over the entity as well.

Okay. Just a final question for me, and thanks for your patience. Just on this Deutsche Postbank issue. I mean, typically when you own all of an asset, 100% of an asset, you will want to sell it to a strategic investor, so as to get the premium of ceding control to someone else, whereas here Deutsche Bank is deciding to go below 50%, lose control, deconsolidate, and yet do it through a process that will yield a lower proceed for the shareholder. So why does that make sense?

Well, it's a basis of our thinking right now to follow the IPO route, and that's what we underlined the plan. So we obviously don't rule out any alternatives, but at this point we want to make sure that the plan assumes the path that we feel is the most safer path at the moment. And of course again the big benefit from Postbank doesn’t come from the sale price necessarily, the big benefit comes from RWA release.

Stefan, I guess that depends how much you sell it for?

Yes, of course, but let's say that the assumption that we’ve got to pick, push will be the RWA.

Thank you very much. Thank you.

And the next question is from the line of Jon Peace of Nomura. Please go ahead.

Yes, thank you. Two questions please. The first one was on your ROTE target of greater than 10%. Do you feel that’s a little cautious, or is it a function of just the amount of equity you plan to hold? In other words, was that 5% CT-1 leverage? Do you still imagine the vast majority is common equity, or do you plan to issue a lot more AT-1 within that? And then the second question was on Postbank. I believe you were targeting more than a billion of synergies from owning the business. Could you just remind us how much of that you’d achieved already? And so as you deconsolidated, how much should be back out and from which entities? Thanks.

Jon, let me take your first question. And here is a simple answer, as we've sat down and really iterated the model for this new strategy. Once you move to a 5% leverage ratio, it constrains the amount of balance sheet you can have, imposed upon that, it cost income ratio which is of course our attempt to figure out the right ambition to run the bank given the mix of businesses we've got. And the ROTE sort of falls out of those two key assumptions. Simple fact is for our business model, which is headquartered out of Europe, we feel that 10% ROTE is about where you would come out. And clearly if you would go back to the kind of leverage issues as we’ve run historically, there would easily be a 200 basis points or thereabouts uplift, if we were not targeting the 5% leverage ratio. So that's really the books in which we thought about. The cost income ratio, size of balance sheet, mix of businesses. That's where we come out. And we think it's going to be pretty realistic. I’ll let Stefan take...

So, on the Postbank synergies, we had set out EUR 1 billion about. Some of it were related to revenue synergies and some of that were related to cost synergies. Our lifetime synergies are about EUR 500 million. Most of them obviously will be realized or were realized on the revenue side. Some of it obviously was already achieved cost-cutting as well. So we clearly will have some synergies, but honestly the way that we look at the cooperation between the blue bank and Postbank in the future and much of the systems that were now renovated will be able to be used and mirror out for both organizations. We don't think these are sizable synergies that we have to consider.

That's great. Just sorry to revisit that first question. Do you plan on issuing more AT-1 or should we model you still around that EUR 5 billion level? And thank you for your answers.

That depends a lot on how TLAC develops. We are very much hopeful that we will get legislation coming out of Germany - well, Germany has it already, but we get a harmonized European solution which allows our investment grade debt to then qualify as TLAC usage. If we get that, we will then be moderate in our usage of further subordinated debt issues.

Great. Thank you.

And the next question is from the line of Omar Fall of Jefferies. Please go ahead.

Good morning. Firstly, you don't need me to tell you that there will be deep skepticism as to the delivery of the incremental cost savings and benefits from the investments spent. So what answer can you give us that the CtAs and investment costs will be at least paced, so as not to burden the P&L and that you'd retain potential for positive operating leverage? I know you haven't done this on a bottom-up basis yet, but does management at least have a broader commitment to protect the P&L of this period because the [indiscernible] would say that you’re announcing an additional EUR 6 billion of expenses across the P&L today for a very uncertain outcome, if we look at the track record from the last strategy? Secondly, when you look to the options for retail, can you give us more color on what the key parameters were for you ultimately not to decide to do more, in particular, if you could follow-up on your answer to an earlier question that you're not doing anything to European retail, and why not? Thirdly, what happens to the Magellan IT program, please, and the EUR 1 billion that's been invested there? Is the EUR 300 million sitting on Slide 21 related to an unwind of that? And then lastly, sorry to be short-termist but many of your peers’ highlighted momentum across primary and sales and trading. Their IBs continuing into Q2, and in some cases, even accelerating. Is that an assessment you would share? Thank you.

Okay, let me start with the skepticism around cost cutting. It’s not like we are unhappy with what we achieved. Regretfully our reported cost base obviously didn't show what the market was expecting it to show, mainly based on cost developments that were unforeseen in 2012, for example, the implementation of the fixed salary component in CRD4 as one of the larger drivers of the difference and then additional implementation in terms of systems, IT deployed, controls et cetera around our regulatory remediation in our implementation of no-regulatory requirements. I think you saw that in the industry. I think we’re not single out as a bank that had to face these additional costs. On the other hand, we did deploy these EUR 4 billion that we invested in terms of our OpEx programs quite well, and we did achieve and we reported to you that the OpEx program overall is quite successful, and has achieved its targets demonstratively as we track it in our financials. We can come to a conclusion the bank has gotten much better in terms of addressing and running these type of programs. The bank has done much better in terms of tracking and looking at efficiency of CtAs spent. And that's obviously where we take the positive view that we will be able to do some more. We explained that our new topics have made some decisions around perimeter. We've made some decisions. Obviously we will deconsolidate. We will take some complexity out of the bank. That's all what the strategy 2020 is about. And therefore obviously we are very confident that the investment that we're doing in terms to achieve these other EUR 3.5 billion gross savings will be as successful as the OpEx program is. I know that sometimes these perceptions are related…

Let me take the question regarding keeping the blue bank retail and how we thought about that, because we spent a lot of time looking at it. And the very simple answer is we see very strong model contribution from retaining retail once we deconsolidate Postbank. And that has multiple reasons. I talked about that during my main presentation. But let me highlight those for you again. This is a client base which confers the brand advantage to Deutsche Bank. It's a client base to whom we can cross-sell a number of our institutional products. We've already made the decision to move a large part of our middle-stone [ph] SME coverage to the branch network. We think we can do a lot more in the future with that. And then frankly the opportunity to introduce digital technology will allow us to stay in the business to reap significant efficiency from it. And then finally strategically that funding benefit which we get from the installed sticky deposit base gives us very good balance as a group. So this is the basis in which we chose the model that we’ve put in front of you as a better balance model than the more radical alternative of doing a complete vertical split.

Thank you. And just going back to - that’s great on blue bank. That's very clear. But what about the European retail franchises?

We've done those around. That business was a challenge right after the crisis. We’ve put good management in again. They are very focused businesses with good management. And candidly we are seeing both Italy and Spain turning around from a macro standpoint and market circumstances coming our way. So they are not huge businesses, but they do make a very important contribution. We’re very happy with them.

Okay. Thank you very much.

And the next question is from the line of Daniele Brupbacher of UBS. Please go ahead.

Good morning. I would have just two follow-up questions. One on the risk-weighted asset inflation. Can I just very specifically ask about capital floors and there the December 2014 consolidated document from the Basel Committee. Would your statement that you expect significantly higher risk and did it include a capital floor on either the various RWA buckets or the overall risk-weighted assets, because I think that could be quite significant impact? And then just the second question - sorry again, coming back to costs. You made a lot of statement of course and that's very useful. But just for me to understand better, is it fair to - if we model this. And at the last program you gave a dynamic element as well and you said we should assume a 65% marginal cost income ratio and additional revenues. And if that’s still sort of how we should think about connection to the top-line up or down? And then, is it fair to summarize your statements along the lines that the cost inflation outside of the cost-cutting program should come down meaningfully now going forward? I mean, you talked about those CRD4 regulatory cost et cetera, or is there anything I'm missing here which could still keep those other cost inflation items at stubbornly high levels? Thank you very much.

Daniele, thank you for your questions. On the Basel Committee question, obviously as you know from the public discussion, there is no conclusion on this. The floor discussed ranged ranges from 65% to 95%. So ultimately we feel that we'll get set of revised rules on how to calculate RWA, and on which this floors will apply. But it's too uncertain to make any statement around this at this point in time. Now on cost margin and cost income ratio. We did, as far as I recall, not give 65% margin or cost income ratio, but we gave you a 65% reported target. And on further cost information, please keep in mind that I don't have yet - and this is what's going to occur as a next step any detailed plan. So I would abstain of making further comments than the ones made on costs at this point in time.

Okay. Thank you.

Thank you. And the next question is from the line of Stuart Graham of Autonomous. Please go ahead.

Good morning. I had a few questions please. First, could you explain why you've chosen to set the goals at 2020? I think a lot of people were expecting 2017 goals, [indiscernible] 10% return on tangible in '17. So the first question is, why does it take so long? And my second question is, I guess the first plan didn't turn out how you would hoped, and the management team is pretty much unchanged with the exception of a new role of Mr. [indiscernible]. So I guess why should we believe this team will deliver this time around when it didn’t first time around? And then my third question was on the compensation ratio in Q1. It's very low at 33%, which I don’t think we’ve seen a compensation ratio like that before. Has something changed in the way you're recruiting, is there a new policy on compensation? Thank you.

We have set ourselves - Stuart, on your question on the 2020 goals. We by the way told that we will achieve them in the mid-term. So that doesn't mean that we have now calibrated these targets to all happen at the end of that period of time. And obviously as we told you at the moment, we need you to - asked you to bear with us for the next 90 days when we deliver now the measures into the bottom-up planning, we would be able hopefully to give you some more specific guidance on that. 2020 was only the timeframe. We felt it’s a reasonable timeframe to implement this next phase of this strategy, because obviously of some substantial and don’t underestimate - these are substantial decision we took that will take some time to implement until you see the full effect. And we wanted to have 2020 as the date in which then everything is completed as outlined today by Anshu. On the compensation ratio, no, we didn't change anything. Just consider we have obviously good revenues and a very strong revenue development and that impacted obviously the ratio. We have obviously much more in fixed as a result of CRD4 and therefore the methodology showing much less volatility because of bonus component is just smaller. But no change in our metrics.

So let me take your question regarding the last three years. I would not agree with your assessment that the plan did not work out. If you think about the starting point that Deutsche Bank had in 2012 versus where we are in 2015, much has been attained. We’ve totally turnaround the mix of our businesses. We’ve reshape the investment bank. We've de-risked and got a huge amount of our balance sheet in our risk-weighted assets, and yet unlike many of our peers kept a very strong competitive position. We have got a run rate cost base significantly. Clearly, we've also had major challenges which we've openly admitted. So I would say that combination definitely gives us a lot to be proud of yet very silver realization, but not all that we wanted to deliver has been delivered. Why should you have confidence that we can deliver? A, because take a look at what we have done in the last three years. We are resolutely focused on achieving the incremental amount. But secondly this time around, a lot of our delivery is and just organic. There are some very clear strategic steps. The deconsolidation of Postbank is a one step move which will really give us a very significant gain in terms of the balance sheet. The perimeter narrowing both in terms of clients, regions and in terms of products, again will be decisive implementation, which will give us real leg-up. So this is not all operating efficiency, although there is a very significant amount of that. Please wait. In just a few months, we will prepare back to you with strong details in terms of what the target operating model will look like.

That’s fair. Can I just ask one small follow-up? Stefan, could you maybe say what you're carrying value of Postbank is? What’s in your books at, please?

No, we are not disclosing that. Sorry Stuart.

Okay. All right. Thank you.

And then next question is from Huw van Steenis of Morgan Stanley. Please go ahead.

Yes, good morning. Three questions. First, Stefan would you able to give or should you need any time of buy when you hope to receive the 5% leverage ratio and increased dividend, if you think if you could do before 2020? So I'm conscious today in addition to the new costs and deleveraging slippages. You also in your Q1 release highlighted you have - you increased your contingent liability for litigation, presumably on the DOJ to EUR 3.2 billion. So you've got at least probably EUR 8 billion or EUR 9 billion headwinds. So would it be fair to say that by 2018 or 2019, you’d hope to hit your 5% leveraged ratio? I think second organizationally, will you be moving the assets out of the investment bank, which you intend to de-lever into the non-core unit, or you'll be doing that through that desks? And could you perhaps provide an explanation of why you're doing it if you're not moving it? And then lastly, in terms of the Postbank costs to exit, are there any capitalization of IT assets which will need to write-down? What’s the incremental cost to building out treasury? Perhaps you could share with us a little bit more about the costs of the Postbank separation project, because that surprisingly like today in terms of the materiality of presumably of those numbers? Thanks.

Thank you. On the leverage timeframe, please understand that we have to now complete the plans. We outlined the measures, some of them are quite short-term in the sense that obviously we hope to achieve the deconsolidation of Postbank quite rapidly within the next two years, and then obviously the winding down of the CB&S assets should also be. But as Anshu showed you on the chart, obviously we are relying also on some of our retained earnings over time. So I think that chart should give you a little bit of an ability to estimate yourself. On the contingent liability increase, let's not forget that when we do contingent liability increases, we always - because we have no ability to estimate, we take quite high ranges. And these were not single large issues. These are a lot of small issues why the contingent liabilities were increased in this quarter. On the Postbank costs to exit, obviously we're planning about EUR 300 million of costs to carry out all the disposals, of which, approximately EUR 200 million are earmarked for Postbank. But obviously at this point in time this is a rough estimate and taken as such.

Regarding the de-risking of the CB&S balance sheet, that we'll all be done off the desks. Let me remind you, the only time we move assets to NCOU is that we wind up discontinuing a business, and at least at this point we’re not looking at any further discontinuation. So this will just be leveraging done by the trading desks themselves.

Okay, thanks.

Next question is from the line of Alevizakos of KBW. Please go ahead.

Hi, good morning. Thanks for taking my questions. I've got a couple of questions, primarily on leverage and on CB&S. My first one is on leverage. Once again we saw this quarter because of the FX moment, there was a mismatch on the leveraged assets which increased by EUR 101 billion compared to the equity that increased only EUR 1.9 billion. Can I assume that the changes in the plan with the huge deleveraging that you plan is going to also help so that the U.S. dollar assets are going to reduce more, so that it actually kind of improve that mismatch that we’ve previously seen? And secondly, do I understand correctly that you suggest that out of those EUR 200 billion that you're taking off in gross terms from the CB&S, the actual impact annually was only EUR 600 million of revenues? Thank you very much.

So in terms of leverage question, we did assume by the way on the plan obviously the movement of the exchange rates as we see them happening right now, actually happened a little bit faster than we had assumed in our strategic plans. So we did assume a strengthening of the dollar. And it's not correct. We are investing in the U.S. We want to grow our business in the United States. So we are not planning to reduce U.S. assets, but when we made 5%, commitment in our plan, we already foresaw that obviously there will be some pressure from FX in terms of the value of our dollar assets in terms of - in euro terms. On the EUR 200 billion of CB&S, it's true. These were all the assets that obviously were - profits were taken some time ago and they are therefore not having a big impact on our P&L. That is correct.

Okay. So just to…

Yes. So there will be an EUR 800 million one-time deleveraging cost. If you go back to Slide 12, we laid out for you very clearly. EUR 80 billion to EUR 90 billion, which is a disposal of low-yielding assets. That's a one-time unwind. We estimate it will cost us EUR 800 million to do that. In addition, if the other reduction which is going to be EUR 600 million per annum of foregone revenues which we hope to re-earn through other activities.

Okay. And if I just may have a follow-up on the leverage. So what you're suggesting is that basically that if you will increase the equity that’s been kept in U.S. dollars effectively, just to make sure that, for example, the leverage of the U.S. unit is going to become more stable, given the rules that they're going to be introduced in the U.S. with intermediate holding company? Is that correct?

Well, we - of course, yes, obviously we will have allocated more capital to the U.S. at the FPO and as we are planning to grow in the U.S. And that's correct.

All right. Thank you very much.

Next question is from the line of Jeremy Sigee of Barclays. Please go ahead.

Good morning. I’ve got three questions, which essentially follow-up some clarifications of earlier points. So firstly, did I understand correctly that you - if TLAC works how the way you think, you would envisage issuing relatively limited extra AT-1, so it’s going to be 30 bps in your leverage ratio, so the implication is you’re going to stay around that sort of limited level ofAT-1 and the bulk of the 5% new leverage ratio will be pure equity? That's the first question. Secondly, just trying to find the profile of restructuring charges. I just wanted to firstly I saw the extra bps. You talk about EUR 1 billion on digital, EUR 1.5 billion to grow GTB and AWM and EUR 0.8 billion to exit CB&S assets. Are any of those included in the 3.7 CtA charge that you mentioned, or are they additive, and what approximate timing do you expect the total restructuring charges to start materializing? I assume it's fairly front-end loaded in this current year with some follow-on. And then third and final question. Could you talk a bit more about the countries that you envisage leaving? I appreciate you probably don't want to name them, but could you sort of describe them in terms of what kind of countries do you envisage exiting, either in terms of which parts of the world, or what sort of operations those might look like? Do they have branch networks? Are they typically single office countries? That kind of thing would be helpful.

Let me take questions one and three. No, we’re not expecting a huge amount of further subordinated net debt issuance. So the 5% is going to be predominantly pretty growth in terms of capital. On question three, you're quite right in assuming we will not give out any details at this point about country exits, even along the lines of the questions you’ve asked. We'll be back - that will all be part of the second wave of disclosure in that 90-day window that you we’ve talked about.

Okay, you asked about the restructuring costs. And all these additive to the EUR 3.7 million and are built into our direct cost investments. And then in terms from the timing, please understand that we don't have a detailed plan yet. Our view currently is that CtAs will pick over the next 24 to 36 months.

And I guess some front-end loading in the profile of the charges. I'm going to guess once you’ve done your detailed plan, I guess then there will be…

Then we’ll have to tell you more, but some of it might, yes.

Okay. Thank you very much.

And the next question is from the line of Dirk Becker of Kepler. Please go ahead.

Yes, good morning. I have a question regarding your two growth divisions; Asset & Wealth Management and GTB. You still have financial targets for the current year for these two divisions. EUR 1.7 billion for Asset & Wealth Management, EUR 1.6 billion to EUR 1.8 billion for GTB. Are you walking away from these targets today, or are you still committed to them? And then secondly as a question on Postbank. You spoke very positively about Postbank, but at the end of the day it's a bank which generated 4% ROE last year which is struggling with big overcapacities and with the low interest rates. So would you agree this will be a tough sell when you IPO it and you will probably get less than the stated book value of the bank?

Let me answer your Postbank question. Obviously it’s too early to tell, and obviously conditions by the time of IPO at the moment, difficult to predict. On the other hand Postbank has done a good job in terms of its cost base. It has proposed also to develop further its fee business and strengthen that. And obviously, we still have some NCOU Postbank assets that obviously we can dispose of ahead of time. So in that sense, overall I think we’re not concerned about the IPO of Postbank at all. The AWM and GTB targets. Obviously, we are now focused on delivering on Strategy 2020, and not delivering on previous targets. But I can tell you that if you see the quarter results of both businesses, it had performed quite well. So there is no reason to believe that they are not on track to continue to grow as we had devised in the previous plan.

Okay. Thank you.

Next question is from the line of Fiona Swaffield of RBC. Please go ahead.

Hi, can I have two questions. One is one the NCOU and the additional cost reductions from that. Should I think the costs are running about EUR 1.2 billion, EUR 1.3 billion underlying, if you annualize Q1? Are you assuming that's going to zero, because I think in the past you said there were some standard costs? Could you talk us through, how the NCOU will kind of pan out in the next couple of years? And then on basically the kind of costs from the deleveraging, the EUR 600 million. Could you talk us through what your assumptions are there and how you came up with that number? Thanks.

So Fiona, thank you. On NCOU, as we have always told you, obviously the biggest part of the costs of NCOU always related to the operating assets, and obviously you can see actually deconsolidated some and sold some of operating assets, their costs have down. There is an allocated cost from the group, because as a part of the group, there is a quite sizable allocated cost from the group which obviously, even if that costs would slightly started come down on an allocated basis, it still costs the group as unallocated to its different business division. So that might be a reduction for NCOU, but that might not be a reduction for the group. And then obviously the NCOU, as we told you, will continue to operate for quite a while. We now have some sticky longer term assets. We told you that the pace of the risking will slow down. And therefore obviously the operating costs of NCOU, the direct costs will stay around. But the [indiscernible] in the operating costs should be reduced. So we have on Page 30 of the deck - by the way we have P&L details on the NCOU. There you can see these trends I talked about. Then now let me clarify again that we need EUR 800 million one-time costs for the EUR 200 million reduction and it’s EUR 600 million revenue sacrifice we expect this to bring. So only to clarify these two numbers, the EUR 800 million, we would need to dispose the costs. The EUR 600 million will be then ongoing revenue reduction from that, because obviously we are picking low-yielding assets. The number was actually quite well calculated. Our investment banks were quite comfortable with that reliable number.

Thank you.

And the next question is from the line of Andrew Stimpson of Bank of America. Please go ahead.

Thanks guys. Hi there. So just three questions from me. Your payout ratio is already above 50% from the last few years, and obviously for 1Q ’15, it was close to 100% because of the new rules. So just looking at what deleveraging? The growth in GTB and Asset & Wealth Management balances out about half of the reduction in the CB&S from my quick numbers. Comparing that with your risk-weighted asset inflation comments as well that you’ve made today, just wanted to check on with timing of the - how you're going to grow those ratios? It sounds to me more like that a lot of the progress is going to come towards the back-end of five-year plan. So obviously if you do hold a dividend constant there in place, a little retained capital this year certainly? And then number two. Coming back to Stuart’s question on the cost accrual. There might not be a change but there has not been a huge revenue quarter for a while, I suppose there. Can you just remind us how you accrue for comp, and whether it's on a quarterly/full-year forecast or is it a number we should expect 4Q drop [ph] or is that just a comp ratio that used as an input for the quarter? And then lastly, if the ECB came out and said that you only needed a 4% leveraged ratio, would you be inclined to revise that 4% leverage target, or is it something that you just want to get ahead of any European regulator and you're more comparing that to peers as you suggested earlier on the call? Thanks guys.

Okay, let me start on your bonus accrual question, the first one. Obviously we do quarterly accruals. We have formulas that are based. Obviously we have a plan for the full-year, that's also based on this formula. And we accrue throughout the quarters, and obviously in case of significant deviations, we will do adjustments and the formula will react changes there. So we generally don't have a large 4Q true-up [ph] with some, but not the large queue-up.

Okay.

Then on your payout ratio, please take this as a guidance we're going giving of what the ambition is for the - what was the strategy. And please understand that the moment because I don't have the bottom-up plan. I cannot give you further guidance on timing. We will be back to you shortly with that information.

Okay.

The question on leverage ratio, quite simply we are targeting 5% that's now bought up our new strategic set of parameters, European regulation is only one factor in that. We see ourselves as competing with the top-end global competitors, and it's not of that desire that we are targeting 5%.

Great. Thank you very much.

Next question is from the line of Amit Goel of Exane. Please go ahead.

Hi, thank you for taking my questions. Just three main questions. The first one relating to costs. I appreciate you haven't done the bottom-up review yet, but in that case I just want to try and understand that the EUR 3.5 billion number basically how you come up with that number, the conviction you have on it. And then do you have a sense of the kind of revenue impact it could have? And then also within that, would I think about the basis thing you will - kind of 2015 your total year cost base as a starting point or would it be some sort of annualization of Q1, or would it be based on 2014 cost base? So that's the first part. The second question relates to the litigation and the increased contingent liabilities, just to get a sense of potential timing for that to come through. And the third part of my question relates to what you're seeing in terms of pricing within the IB, and how you think about the RWA inflation, and I guess the implied RWA inflation when you price, I guess longer dated swap products or other things within the IB, given the uncertainties about the RWA inflation that we’re going to see? Thank you.

So Amit, let me take your cost question and then please I understand but we really have no detailed planning on which I can base statements that I make to you at this point in time. We will obviously, as I told you come back to you shortly. The size of the EUR 3.5 billion, obviously we did a lot of industry benchmarking and looking at efficiency in the industry. It will not impact revenue significantly, because obviously our view is other than obviously the perimeter changes that they have revenue impact but obviously the perimeter changes. We are selecting for a reason. That might be revenue, but no EBIT impact. So in terms of the efficiency, most of what, Anshu showed you in the structuring, it’s a EUR 2.2 billion efficiency improvement and that should have obviously no revenue impact at all. So think about it in those terms and let me get back to you shortly as soon as we have planned out the measures that we announced today. On the contingent liabilities, as you know, we are not - and I can reiterate again, regretfully, we’re not in control of timing of certain litigation issues to come to a solution that obviously also for us there was [indiscernible] but there is nothing we can do about it. The contingent liabilities that we put on the books, our view is obviously that we will have another - have a litigation year in 2015, and then we will see some in 2016. But as I told you also with our projection of the operational-risks RWA, we see this too slowly take off then over time.

On your question about the pricing of higher risk-weighted assets in terms of our customer business. There, there is some good news. Certainly in the nine months as the total industry been consolidate, the one positive that's coming out of it is that our peer group is starting to price-in, balance sheet cost and RWA cost at the margin and we think that will continue. So much more of that is being passed through [Technical Difficulty] with the resultant modest improvement in margins especially in products which consume a lot of risk-weighted assets.

Okay, thank you. Just sorry on the points about - the basis for the cost reduction. Is that still to be decided in terms of the EUR 3.5 billion. Is that relative to 2014 or kind of 2015 full-year?

We looked at our 2014 cost base obviously, yes. It’s where you need do assumptions. But let me give you then some more detail. It's approximately 15% reduction from our 2014 cost base.

Okay. Thank you.

And the last question is from the line of Andrew Lim of Société Générale. Please go it.

Hi, good morning. Thanks for taking my questions. On Page 23, I've got a big difficulty understanding how you get 40 basis points improvement in the leverage ratio coming from Postbank deconsolidation. I was wondering if you could explain how you achieved this? If you go back to, there is Page 14, Postbank today has a balance sheet of only 155, and if we take that leverage exposure, that's only about 10% of the group. So to get a 40 basis points increase on an leverage ratio, you basically inclining your IPO in Postbank with zero capital which obviously can't be the case. So I just can't make the math square at all. It just doesn’t make any sense. And then perhaps together with that, if you could explain what the return on equity is for Postbank, does it seem to be close on Slide 14? I'm guessing from my own math something like 5.5% for the ROE. And if that's the case, how does that square your expectation for what you should sell let's say IPO Postbank had? Presumably then you’d be achieving the sale price much longer than the EUR 6.2 billion that you post Postbank for back in 2010 and there is a case - there is a risk of taking a capital loss on sale. So perhaps you could share your thoughts on that? And then thirdly on FX. I mean, obviously we've had the IBOR fine settlements, and it’s come out a lot higher than expected. And then part of the fine seems to be relating to an issue about a delay in disclosure of data and so forth. I'm just wondering what kind of read-across that has for FX because earlier on - well, let's say late last year you said that the FX might fine for yourselves might be lower than expected since you’re not part of the initial group to set for regulators. And I was wondering if that's still something you want to stick by in light of what's happening with the IBOR fine? Many thanks.

Okay, let me start with your FX fines. As you know, we have always told you and you also know that out of the public statements in the press that at the moment our FX situation is much more favorable than obviously our comparative LIBOR situation and IBOR situation was. And therefore obviously we don't expect at this point this to be some but not be as material big impact at this - certainly we will analyze what the higher IBOR settlement will mean for our projections. We have started to look into it, and we see this inflation of fines occurring, and therefore obviously we will and have taken that into account when we took our reserves. So we plan for contingent liabilities. On the Postbank question, our math shows that a reduction does bring to 40 basis points. So it's difficult now to compare numbers. So it's not on capital impact. It's the balance sheet reduction of EUR 545 billion is a significant improvement in the leverage ratio. We showed that on the color coding of Page 23. So I don't know how you get to your numbers, and probably maybe we should talk afterwards so we can compare those things here on the slide, may be difficult. And there was your question, NDRA [ph]. Please understand that on the sale of Postbank, obviously for obvious reasons, we cannot provide any further public disclosure.

Okay. Thanks for that, Stefan. I just like to point out and maybe we can just take this offline later on, but you're saying that the leverage ratio for Postbank is 3.1%. For Deutsche Bank today its 3.5%. So if you deconsolidate 100% of Postbank, it's very difficult to see how we get a 40 basis point increase in the average ratio.

Let us take this offline.

Yes, sure. Okay. All right, thanks.

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

Operator, thank you very much. And thank you everybody for participating on today's call. We appreciate your patience, and then obviously we will be available to follow-up with any questions here in the IR department. Have a very good day. Thanks.

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