Ladies and gentlemen, thank you for standing by. I'm Miava, your Chorus Call operator. Welcome and thank you for joining the Second Quarter 2016 Analyst 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.

Good morning, and welcome everyone this morning for our second quarter earnings call. I'm joined this morning here in Frankfurt by John Cryan, our Chief Executive Officer; and Marcus Schenck, our Chief Financial Officer. They will take you through the analyst presentation which we have posted and is available on our external website, db.com. As has become our practice and as we did last quarter, I ask for the sake of efficiency and fairness that questioners limit themselves to just two of their most important questions when they come out of the call, so that will give as many people a chance as possible to participate in the Q&A session. I would also forewarn you that due to other scheduling obligations we will need to end this call up no later than 9:30 CET this morning. And let me close with the normal health warning to pay particular attention to the cautionary statements regarding any forward-looking comments that you will find at the end of the Investor Presentation. With that out of the way, let me hand it over to John. John?

Thank you, John, and good morning, everyone. The second quarter of 2016 was quite a ride. We've seen Europe placed once again at the crossroads following the decision by the British people to take the country out of the European Union. Initial market turbulence has since been replaced by a degree of market confidence in the power of British pragmatism to make the best of unexpected events. Europe however remains challenged. Not in recent history have so many people being unemployed, yet the continent remains a major destination for economic migrants. Policy reform has come to a standstill. Elections in the two largest European economies loom and a critical referendum in Italy. Populous politics has not played such an important role since the 1930s. The Brexit vote and the Republican Party rhetoric in the USA point to a popular desire for renationalization of policymaking pressing for reversal, or at least allow in the larger globalization. Against this backdrop, global policymakers continue to press for further banking reform, with calls for even stricter capitalization of banks, regardless of the impact on the real economy, especially in Europe. Monetary theorists persist with their negative interest rate policies relying evermore on hope for, rather than expectation of success. The outlook is therefore uncertain and that's particularly true in the Eurozone, where the intersection of policy actions, political decisions and market confidence will be critical in the coming months and quarters for European in particularly and potentially global economic growth. At Deutsche Bank, we are undertaking as much restructuring as possible in 2016 despite the burden of lost revenues and the added expense in the year. Not to do so would simply perpetuate our structural inefficiency and delay the achievement of our fundamental goal that of returning to sustainable profitability. We'll not deviate from…

Thank you, John. Good morning, and welcome also from my side to our second quarter ‘16 results call. For Q2 2016, we reported an EBIT of €408 million and a small net income of €20 million. Revenues were at €7.4 billion and non-interest expense was at €6.7 billion. Risk-weighted assets at quarter-end were up €402 billion and leverage exposure was at €1,415 billion. With that, fully loaded Core Tier 1 ratio came in at 10.8%, hence slightly up versus last quarter and this does not yet include the effects from the sale of our stake in Hua Xia. Leverage ratio remains at 3.4%. As John said, overall we passed a very challenging quarter with extraordinary events impacting the financial industry in general, but obviously also Deutsche Bank in specific. Results continued to be driven by low interest rates as well as reduced market activity in volumes which most likely will not improve in the short-term. This comes on top of the implementation of strategic decisions such as the closing or downsizing of certain countries and business areas which impacted revenues negatively, but which will positively impact profitability over time. An example for that is the accelerated de-risking in our non-core units. Let me first start with the net income bridge for the quarter. In constant exchange rates, revenues for the Group decline significantly by €1.7 billion versus the second quarter of 2015, a trend which mainly affects all our businesses other than Postbank, which however benefits from one-off gains, and I will come to that in a minute. Loan loss provisions increased by €109 million driven by the provisioning primarily in shipping, as well as metals and mining. The adjusted cost base improved by €335 million, mainly from lower cash bonus and retention expenses. As we proceed with the implementation…

Operator, if we could open up the queue, please?

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.

Yes, hi. Thanks for taking my questions. The first question is related just coming back to your cost target of €26.5 billion, which is clearly flat. IC revenues down first half relative to last year, clean around 20%, and your run rate on cost even adjusting for the text levy would be around €25.5 billion, so about €1 billion better than what you are guiding to by year-end. So what I'm trying to understand is why there would be an additional cost base of €1 billion coming into the second half when normally you would see bonus accruals down, net staffing is declining in your group, if you could explain that to me. And then second question, if you could just highlight a few more numbers regarding the sale of assets or legacy assets that you're having in the third quarter. One, what are the risk-weighted assets and what are the costs associated to reduce these assets in the second quarter? Thank you.

Kian, just to make sure on your second question, are you referring to non-core units?

That's correct, yes.

Okay, let me start with the non-core unit first. I mean, we pointed out in October of last year that in addition to our normal as an historic cost associated with the non-core units we would aim to invest another €1.5 billion of additional EBIT loss for 2016 to accelerate the wind down. We are still very much within that target, so the remaining, let's say, roughly €20 billion of RWA that will be taken out in the quarter - sorry, in the next two quarters, will cost, I would say, slightly in excess of maybe another €1 billion to reduce that portfolio. So that's your second question. On the first question, with regard to the cost... Q - Kian Abouhossein And sorry, just a question on the - how much risk-weighted assets should be reduced in the third quarter, if I may ask?

No, we - I can't give you a specific number for the third quarter because that will clearly depend on when we find ways to exit certain positions. Some of those are negotiations with counterparties to get out, so I don't want to speculate on a specific breakdown of that roughly €20 billion reduction in to Q3 and Q4. We will achieve it by end of the year, that’s the target. We stick to that target.

Okay.

Now on your first question, the biggest driver for - or I would say the two biggest drivers for the cost development for the remainder of the year are on the one hand particularly an increase that we expect in our change the bank costs, so project-related spend which is largely related to the clearinghouse or improvement of our IT infrastructure. That is the single biggest portion. And then secondly, we actually - whilst overall headcount by the end will come down and it's very much really year-end loaded. So we have the agreements with workers council end of June and now we have to go through a process where essentially people apply for jobs and then those that don't get jobs will ultimately dropout. This takes time, so it's really a very backend loaded in the year and it doesn't really provide too much saving for 2016. And at the same time, we have to continue to invest as in grow the number of people in some of the control functions in particularly in audit and compliance, where actually headcount is going up, so that will actually drive cost a bit up. And then the third item I would highlight is that we also expect to see a further increase in software amortization on the IT side. Those are the main affects which is why you cannot take the first two quarters as a run rate for the remainder of the year and we stick to our guidance that will be cost-wise more or less flat for the year.

But intuitively, I mean, run rate cost should be down. Some of the branch employee reduction should come through and software amortization you already halved in the first half and you’ve given us a guidance at the time of the strategy announcement. So - and it looks like you are more on track in line with the guidance already in the first half. So I seem to miss something in the cost line, or is there anything else that I should be aware of, otherwise I don't see why costs should go up €1 billion in the second half.

Okay, as I said, there is - I mean, round numbers, change the bank costs for the second half of the year is going to go up by north of €300 million. On the amortization side, it's also a couple-of-hundred-million that will go up and then we have further investments in the control functions. And as I said, the headcount reduction you will largely see kicking in November and December, which doesn't then provide a lot of safe and then there is a continued effect but admittedly we also have that in particular in the second quarter of internalization where over a three to four months period, you actually increase cost because you run parallel with the people that you bring into the inside and it takes three to four months until you actually release people on the outside. And if you add all that up, I'm sorry, I - we are not in a position to take down the guidance. Our own plan show that we will be more or less flat.

Great. Thank you very much for your time.

Thanks Kian.

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

Yes, good morning from my side as well. I have two questions. So, the first one is on Page 16. And you show that Deutsche Bank’s FICC revenues were down 19% year-on-year, but then the commentary says that within this, FX was flat year-on-year and rates were up. So that leaves us with credit as the only negative contributing factor to this entire business line being down 19% year-on-year. So I'm assuming that the result within credit must have truly been terrible given the skew of Deutsche Bank’s franchise towards rates and towards FX. So, can you perhaps just give us a sense? I mean, back of envelope I would say down 50% to 70% year-on-year, and if you could perhaps explain if that's broadly accurate and what's driving it? And then the second question I have is - that's on - hang on, sorry. The second question I had is on the FBO and the ring-fence in the U.S. So as you point out in your release, on July 1 the IHC became effective. I was wondering if at this point given that it's all been setup, you could update us as to what is the capital position of the whole IHC today. What is the total leverage exposure, and what are the risk-weighted assets that you decided in the end to put into the IHC? And then finally - so sorry, three questions, not two. The H1, H2 seasonality. You suggested Marcus that you see a number of fee events being pushed from Q2 to Q3. Given the slow start for the industry as a whole and Deutsche is no exception here in the first half of the year, do you still expect the H1, H2 to seasonality to hold, or are you hopeful for the second half of the year to be somewhat better? Thank you very much.

Thanks Jernej. I’m glad I’m not the only guy that is constantly looking for where to find stuff on pages. On your first question on the debt side, as you rightfully pointed out, the biggest impact we have in credit trading where as I mentioned last year was very strong. There were some specific positive effects we had in particular in our distressed business which we didn’t repeat. And then overall the segment has been under pressure. It's not down 50%. It’s down by something like 25%. Don't forget there are also some other businesses which have been negatively impacted. As I tried to highlight, emerging market debt is also down and we also have seen a decline in our APAC business. So putting all those together, you have a negative effect which overcompensates the fact that both in FX and rates were slightly up. On your third question - and maybe John takes then the second. On the third question, yes indeed, we do expect to see a bit of a deviation from the traditional H1, H2 seasonality. Our sense clearly is that investors, in particular in Q1 have been very much sitting on the sideline not moving and we gradually are seeing some of that liquidity come back to the markets, which is why we think it - my strong expectation would be that the clients we have seen for Q1 and Q2 relative to last year when we will go into Q3 and Q4, the situation will be a different one. I mentioned that indeed there are some fee events that have been pushed out. Don't forget I made that specific comment in the context of our advisory business where we have seen some bigger transactions having been pushed out and we expect those to be then H2 events. We are still kind of cooking but have not yet come to a resolution. I made that specific comments in the context of the advisory business, but in general, our assessment is that we will see directionally on a relative basis a stronger second half of the year than for example when you compare that with 2015 where H1 was particularly strong and H2 was then a lot, lot weaker. John?

Jernej, on the IHC, we actually went live on July 1 and therefore the first quarter for which we'll produce financials will be on September 30. We file them on a financial reporting, you may know, called the Y-9C and we will make that publicly available, sometime in mid-November that will be available. So the first account was actually for Q3, but you will get that quarterly thereafter.

Thank you, John. Can I just ask, is it - can you at least perhaps give us a sense the out of gate capital for the IHC, was in the 10% total capital ratio as was discussed, or did you decide to move over a bigger chunk of capital?

Jernej, we prefer to go with the numbers when we publish them and not sort of pre-wire that. And let me just highlight again, I mean, what we have done and what we said will happen is there will essentially just be a debt to equity swap that we will do. I mean people shouldn't think of this as sending over a boat with additional money. It's all internal funding and we just swap it from debt to equity to the extent there is a bit more need.

Thank you very much.

Yes.

Thanks.

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

Yes, good morning, and thank you. Firstly, I wanted to ask about the low interest rates environment, and if you could elaborate a little bit on what the negative impact could be of negative or lower for longer interest rates if they stay there where they are for much longer? Where are the pressure points for your business model and how could that impact your overall results just sort of the best guess I understand it. Lot of moving parts in that equation, but still just interested in your thoughts there. And probably related to this, I mean Postbank results if I just take out the VISA gain, probably pretax was somewhat below €100 million. And I guess the key problem here is the low interest rates. Bearing all that in mind, how do you think about the potential IPO, your optionality around that and what you think could happen in this context? That would be useful. Thank you.

So on your first question in relation to interest rates, I mean there are clearly some of our businesses which are already being impacted and obviously if the environment stays as it is going forward, we are continued to be impacted by this environment, most notably our PWCC business, transaction banking, as well as Postbank, so that’s message one. Message two, clearly relative to our view that we had in mid of last year, I would see some downside on net interest margin income in the outer years if the environment stays as it is. I don't want to quantify that here but I mean clearly there is downside, let's see how the situation is going to evolve. In general, I would say that particularly when you think about our retail activities, yes, they are being - they are suffering from that environment but at the same time given our business mix is relative to many of our competitors in the segment is more skewed towards non-NIM income, we’re actually relatively better positioned. I would also think that in the retail markets in particular if the interest rate environment continues as it is, we will see repricing. There will be repricing of bank services [indiscernible] - and I think John has mentioned that some months ago, the negative interest rates in particular will ultimately also need to translate into higher interest rates being charged to clients. Some part I think the Central Banks want to see happening that's the logical consequence in a world where you cannot actually pass on negative rates on the deposit side. So that’s how I would see that. And then on Postbank, clearly this is a bank which is influenced by the interest rate environment. It is however a bank that is, as we've highlighted, in the process of substantially improving its cost position. And as we have also mentioned in the past quarters, this is what they should focus on. We are also seeing good possibilities to work on the business mix on the - as it relates to the loan exposure that Postbank has and the combination of the efforts on the business mix as well as on the cost side where we think will give the company possibility to actually improve its earnings outlook but that takes some time which is why we've been reiterating the point that this is in all likelihoods not a 2016 event, in fact today I would rule it out that this is a 2016 event. This is something that will happen later but we continue to see this as a perfectly viable option.

Thank you.

Next question is from the line of Stuart Graham of Autonomous Research. Please go ahead.

Good morning. I had one question and maybe a follow-up. The question is the macro interest rate outlook is very different now from how it looked back in ‘15 when you set the 10% return on tangible target for ‘18. How do you think about that 10% target now because when I look at consensus, consensus forecast 7%. So is it just a case that you need to come up with a plan B to get to 10%, or is it a case that the world has changed and 8% is the new 10%? Thank you.

So I’ll take that one, Stuart. Our target is 10% and we haven't deviated from that. I agree that in the very current market situation that’s looking more difficult. So what we said was we'd be a little bit more intensive in our intention to our cost restructuring and general tidier [ph] program. As Marcus just said, we don't believe that if you take for example the impact of negative interest rates, which is probably one of the major macro themes that impacts bank revenues, we don't think that banks will just sit there and absorb the cost themselves. So we do have to see some repricing, and we are relatively well-positioned because of our - the breadth and diversity of our businesses and we are seeing to some extent a movement towards more fee-based business. Now I can contradict myself in the second quarter because we did see - if you take for example, our German wealth business, we actually saw some exiting from some funds and securities and an inflow slightly oddly in counterintuitively of deposits. But I think we think that was a short-term phenomenon probably related to the uncertainty around Brexit. But I think a general theme would be that we need to work more on working with our clients to put them into products that provide a better return from them than just a passive deposit account. So we do think we'll see some repricing. We think that some of our competitors will come under more stress than we will because they are more by way of more monoline deposit takers and mortgage banks, particularly in our home markets and so we are not so pessimistic about the net impact, although the gross impact of negative interest rates is obviously slightly negative for us. So it remains to be seen. 10% is still our target. You may be right, we didn't quite make it because of what's happened in the interim but it doesn't mean we're going to stop trying.

Maybe looking at my follow-up question then. Consensus is baking in your cost guidance and your capital guidance, so the delta is basically revenues. And listening to what you said, it sounds like a bit of a hope strategy that you can reprice and everybody else stumbles with it. Given how slowly you will see the tanker [ph] changes and we've seen that when you try and change goals on cost, it takes ages for anything to come through. Is that good enough? I mean, do you not need to have a plan B now?

Well, we don’t think so. Because we have very large books if and when we reprice, then they have very large impacts. So yes, I agree it’s a supertanker on all costs given our home base in continental Europe. Our flexibility and nimbleness on cost management is a big constraint particularly by employment rule. But on the revenue side, I don’t think there is an impact for where we are. We reprice our books, they get repriced.

Okay. All right, thank you.

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

Hi, good morning. Thanks for taking my questions. I've got two quick questions. One is on the CET1 capital. You are saying that the assumption is about 11% by the year-end, so I would like to ask if you have factored in some litigation into that assumption? And also looking at the numbers from yesterday from Commerzbank whether that number includes any operational risk item or any kind of further reduction in the discount rates on your pension scheme? And then secondly, if we take into account that the final target would be 10% ROT, will global markets, or PWC actually have a higher ROT?

So second question first. Right now I would clearly say that it looks easier for PWCC to get to north of 10% than it is for global markets. It’s just a fact. Don't forget the - and in saying that, I particularly also reflect the assumptions that we have communicated to you in relation to where we will see inflation kick in on the RWA side. On your first question, 1about 11% year-end Core Tier 1 ratio target. Yes indeed we do assume that there will be some additional litigation charges in the second half of the year. Now quantifying that, as we've always highlighted, is a very tricky one. We think they could potentially be material, and depending on where they land, we need to manage the position. But yes, we do think there will be some additional items. With regard to the discount rate on pension scheme, I mean, there we are largely - so first of all, the pension rate assumption in Germany last quarter for us was 1.4% which I think is actually lower than what our competitors have been using. So we revaluate this position every quarter. When you look into - we largely actually have similar exposure on asset and liability side, which is why we're not seeing major moves or what you mentioned potentially having been an issue for our German competitor yet, we don't see that as an issue on our side. Q - Al Alevizakos Do you expect any significant op risk item for the rest of the year?

We do expect further increase in operational risk RWA for the remainder of the year. I mean, we highlighted already October last year that this is a recurring theme which we will see in several quarters. Again a big driver of that is the settlements that we see both from Deutsche Bank but also in the industry all those feed into our model and then translate into higher operational risk RWA. And yes, we also expect that for the second half of the year. Q - Al Alevizakos Okay, great. Thank you very much. Operator Next question is from the line of Fiona Swaffield of RBC. Please go ahead.

Hi. It was just a question on the outlook and when you basically said RWAs to decline but we managed to levels to achieve capital targets. Does that mean that you’ve kind of got a contingency plan that if certain variables change that you might reduce your RWAs further or quicker versus your original plan in 2020? Could you talk about that?

As we highlighted in our last call when we had Q1 results, we said that there was an additional €20 billion of RWA that we would contemplate to knockoff relative to what was the initially stated target. Initially we had said for the year would be flat, so roughly €400 billion. And then at the end of Q1 against the backdrop of a very weak first quarter, particularly on the revenue side, we said we will manage to bank to a lower RWA number, and that continues to be the plan and that's where we obviously within margins have some flexibility on how we can manage the position. So RWA depending on, quite frankly, what the earlier question was around litigation, if there is - if we have more room to breathe on the earnings side, then we can afford slightly higher RWA. If there is more pressure coming from the litigation side as in higher cost, then we need to manage RWA further down. And yes, we do have plans to cope with obviously within that range that we deem relevant. We do have the contingency plans in place to cope with those situations.

Could I just follow-up? So the end state RWA guidance and all the technical impacts, I think the €100 billion you talked about 2020. Does that all stay intact, so this is kind of climbing thing?

So I mean that is more - so what I just said is more really in relation to how we manage 2016 to make sure that Core Tier 1 ratio lands at around 11%. Your question in relation to inflation assumptions go out until the end of 2019. Here right now we don't have any better basis to come up with a different number, different from the €100 billion inflation assumption that we have stated in October. Again we've always said the biggest share of that is on the credit side and then you have op risk and FRTB or market risk on the other side. That €100 billion is still the target. Obviously everyone is aware of there being a big debate around what no one has meant to call Basel IV or everyone does call it Basel IV other than the regulators. Technically it's probably Basel III refined. There is a big debate around this. A lot of impact studies have been published right now. It looks like the impact is humongously Draconian and would essentially be a complete game changer for the banking industry on this planet. And I think there is a lot of work still going on to see how this can be put in sync with what I think was last stated on the G20 meeting where they again reiterated that is Basel III refinement is not meant to cause any significant additional capital need on the side of the banking industry. So look, we still stick to the €100 billion. By the way the €100 billion is in our case the assumption that there is going to be a 33% inflation, so let's see where we in the end really land, but no change to that guidance.

Thank you.

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

Good morning. Thank you. Just two follow-up questions really. The first is on the Postbank discussion that you were touching on earlier on. Not expecting the IPO this year, hoping still - I think you said you still think it's very viable for next year. I just wondered is there any sort of time limits on that? I mean if we sort of roll forward and we go through the first half of 2017 and it's still not viable. Does it come a point at which you have to really think about a plan B and could you talk about what that plan B might consist of? I mean, there have been press reports which I think you denied of looking at a broader retail listing. I just wondered if you could sort of talk about what’s the timing and also the contingency planning aspects of that debate. And then secondly, also I guess relating to capital and capital build. Could you just talk a bit more about the stress tests that are coming up? You made a comment about the op risk, conduct losses and market risk impacts being bigger than the previous tests, and I just wondered if you could sort of amplify that a little bit and also talk about philosophically, if you like, how do you think about these stress tests and how they affect the bank’s capital planning?

Postbank, the key reason why the bank communicated last year that it would - Postbank was to manage the capital position. As we highlighted last quarter, we think by now it is fair to assume that the earliest when really the Basel III/IV refinements hits banks’ balance sheet is late - is in 2019, if not later. And against that backdrop, that's kind of how you need to think about the time limits here. So we'll really have to improve the capital position. Until then, that determines how we think about timing of an exit from Postbank. In other words that still leaves us quite some time. So some people may think this is a must do ‘17. Clear answer, it is not. Okay? Let me very clearly, it's not. Let me also make one additional statement in relation to what you call plan B and alluded to a broader retail solution. That is absolutely nothing this bank has considered or is considering. So this is, I think, an interesting misinterpretation from the media of some work that the bank has been doing to improve the legal setup basically for recovering resolution planning. It has nothing to do with any idea of splitting up the bank. So that was really just someone got a little bit off track. On the second point, stress testing. I think first of all we need to wait until the results get published and we should leave in a way the authority to also communicate all that obviously to EBA and ECB. In principle, the concept of stress testing personally I believe is a good one. I mean it's fairly sophisticated and has been in place for many years in the U.S. through the CCAR process. And I think Europe is still refining, this test was different. It was much more severe, so people shouldn't really compare results this year with results from the last test. It starts with an operational risk. It was not included in the last test, so that's a big difference. I think at this stage the main point that we can make is that as the ECB/EBA has started to communicate is that it will impact the SREP 2016 decision and there in particular how to think about the MDA restrictions, which as we commented when talking through the chart, I think there is a clear expectation that the MDA trigger points will decline. Now to what level? That is up to the authorities to determine, but I think there is clear guidance that that is exactly what's going to happen.

But the overall SREP requirement roughly similar including the sort of Pillar 2 guidance element for the MDA comes down but yes.

I am not going to speculate. I mean, we are price-taker on that end. So you need to ask that question to other people, sorry.

Okay, thank you very much for the answers. Thank you.

Next question is from the line of Andrew Coombs of Citigroup. Please go ahead.

Good morning. Three questions for me, please. The first on the contingent litigation liabilities, down €0.5 billion to €1.7 billion Q-on-Q and that’s despite taken a €120 million of additional provisional charges in second quarter. So just wanted to drill down into what gave you the confidence to reduce those contingent litigation liabilities? Any more color you can provide there would be useful. My second question was just on Global Markets. Could you comment on what you're seeing in terms of staff attrition at the moment above and beyond the 117 reduction related to restructuring that you draw out in your accounts and that's in the context of obviously quite a sharp decline in compensation there year-on-year. And then finally, John, I thought I’d give you the chance to provide a few comments on Brexit and on passporting implications that may have for Deutsche Bank. I know in the statement today you say you don't expect any changes in the near-term, but in the long-term which business lines do you think could be impacted and where do you think you may be required to relocate headcount to Frankfurt? Thank you.

I do the first two and then John comments on the more strategic question. So contingent liabilities are down for two reasons; one, some cases have moved basically from contingent into either provision or settlements, and two, there are actually also a few cases - there was one in particular that we did see in relation to - and I'm not going to specify that any more in relation to some anti-trust matters where we basically have data points pointing towards us actually not being at risk, which is why there were also cases, that one case that has moved out of our contingent liability into no longer expected to be an issue. I think I'd really like also to highlight that is whilst there is only a smaller decline quarter-on-quarter when you actually compare it with prior year, it’s a very substantial decline. With that, I'm not at all trying to indicate that there no longer is an issue. We all know that we need to work through litigation, but I think the one point we can make is we are starting to see that we get sort of a better grip on and visibility on what the overall pipeline looks like and it’s gradually coming down. And I think that's - it is core message we want to bring across. GM staff attrition, at prior-year level, nothing abnormal. So no change that we see on that side. John?

Yes, on the Brexit, when we operate in London, we in the vast, vast majority of cases, operate out of Deutsche Bank AG itself. So we’re facing our clients and counterparties out of the German bank. We do add, London brands to our documents but it's essentially we are dealing with DB AG. Having said that, we do employ a lot of people in the U.K. We basically view this as something that will essentially be client-driven for us. So we wouldn't intend to do anything ourselves other than we have to respond to our clients’ requirements. So we are reticent to make any long-term commitments about U.K. other than we don't plan to do anything of our own best [ph]. But if our Eurozone clients in particular increasingly want us to be facing them from locations within the Eurozone, if that proves to be the case, then we are reasonably well-positioned because our head office in home is in the center of the Eurozone. So for us I think we end up slightly bizarrely by having something of a competitive advantage which we didn't want to create and it's a bit inadvertent, but we come out of this relatively strongly. So from our perspective we think passporting into the U.K. will continue. That’s the message we seem to be getting. Of course that will probably come with a little bit more scrutiny over the way the branches run, so that's no more scrutiny than frankly we would increasingly apply ourselves as we rollout improved controls and just monitor the business get better. So, very little net impact, although we will, as always respond to our clients.

Thank you.

In the interest of time, our last question today comes from Amit Goel of Exane. Please go ahead.

Hi, thank you. I've got one question just actually going back to the Slide 12 on the stress test. Just so I understand in terms of the Pillar 2 guidance, if actually a large part of the requirement is going to come from that and that's based on the adverse test outcome, does that suggest that the adverse result is going to be significantly weaker than say 5.5%, plus 2% GSIP [ph] charge, so below 7.5%, or would that be probably thinking too much or reading too much into how the Pillar 2 guidance is likely to be set?

Look, we very consciously put on the page the word illustrative. We don't want to speculate at all around where the numbers are going to be set. This is entirely up to the regulators. We just more or less copied a page that they have, I think, published as part of some Q&A which has been made available to the public one or two days ago. And we don't want to give any guidance here on the sizing of any of the P2G and P2R blocks. They may be between zero and 100% of - so I really would completely shy away from speculating on the size. I think I would almost refer people then really just to go through the - there is a Q&A that’s - or frequently asked questions as I think that it's called at the ECB has or will make public, and I think this is what I would kindly like to refer people to rather us speculating on what ECB/EBA are going to do. Sorry.

Okay. Thanks.

Operator. Okay, everyone I think we’re going to end the call there. We thank you very much for your attendance this morning. Apologies to those who didn't manage to get into the queue to ask the question, but we will be available in the IR team to take up your follow-up inquiries. Thanks and have a good day.

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