Ladies and gentlemen, thank you for standing by. I am Esmy, your Chorus Call operator. Welcome, and thank you for joining the Q1 2019 Analyst Call of Deutsche Bank [Operator Instructions]. I would now like to turn the conference over to James Rivett, Head of Investor Relations. Please go ahead.

Thank you, Esmie, and good morning. And thank you all for joining us today. On our call as usual, our CEO, Christian Sewing, will speak first; then James von Moltke, our CFO, will take you through the rest of the earnings presentation, which is available to download on our website, db.com. After the presentations, we'll obviously be happy to take your questions. Just before we get started, I'll remind you that the presentation may contain forward-looking statements, which may not develop as we currently expect. I therefore ask you to take notice of the precautionary warning at the end of our materials. With that, let me hand over to Christian.

Thank you, James, and welcome from me. I would like to start with a few comments on our announcement from yesterday to discontinue the discussions with Commerzbank. The potential in-market merger was, by no doubt, a major opportunity and was right for us to review it carefully. But having analyzed the situation in detail, we could not find a business case that would deliver sufficient value to our shareholders, in particular given the execution risks involved. Despite excellent collaboration with our counterparts at Commerzbank, our analysis showed that the net synergies would negatively impact our ability to deliver against our near- and long-term targets. And our commitment to these targets remains unchanged. The first quarter results show that we made further progress towards our targets in difficult conditions for our market-sensitive business. Overall, the net results in the first quarter was in line with our internal planning assumptions as we offset the weaker revenues with reductions in costs, and we benefited from lower tax expenses. But while we made progress in the first quarter in many areas, we do recognize that there is work for us to still do. And we will continue to review alternatives to deliver our short-term targets on our path to improving our long-term profitability and returns to shareholders. Turning now to our first quarter results. We reported net income to shareholders of €178 million, a 48% increase versus the prior year. The performance in our less market-sensitive businesses was resilient. We continue to invest into our businesses, and several important leading indicators are positive. We grew loans by €10 billion, and assets under management improved by €70 billion in the quarter. This highlights the strengths of our franchise. The results in our Sales & Trading business reflected the impact of the reshaping we completed in…

Thank you, Christian. Turning to a summary of our first quarter results on Slide 8. Revenues of €6.4 billion declined by 9% year-on-year on a reported basis but by 5% excluding the specific items detailed on Slide 20 of the presentation. Noninterest expenses of €5.9 billion declined by 8%, and we reduced adjusted costs by 7% to €5.9 billion. Provisions for credit losses were €140 million or the equivalent of 13 basis points of loans. As a result, we generated a profit before tax of €292 million and net income attributable to Deutsche Bank shareholders of €178 million. Tangible book value per share of €25.86 has increased by 1% compared to the prior quarter and over the last year. Turning to adjusted costs which as I noted declined by 7% year-on-year on a reported basis. FX movements, most noticeably the strengthening of the U.S. dollar, represented a headwind to reported costs in the first quarter on a year-on-year basis. On an FX-neutral basis, we reduced adjusted costs by approximately €540 million or 8% year-on-year. Compensation and benefit costs declined by €178 million on lower salary expenses given the workforce reduction of almost 5,700 in the past 12 months. IT costs declined by €90 million but remained in the recent spending range. At around 15% of our total adjusted costs, our ongoing commitments to invest in our IT infrastructure are unchanged. Professional service fees declined by over 20% or €87 million, reflecting our ongoing efforts to eliminate and optimize external vendor spend. Other costs declined by 10% or €130 million, reflecting lower occupancy costs and reductions in several other line items. Bank levies of €604 million decreased by €59 million year-on-year. This decline reflected adjustments we have made to the balance sheet over the past several years and a positive impact…

Thank you, James. Operator, let's open up for questions. I'm going to try, as usual, to limit you all to 2. If you could respect that, that would be great.

[Operator Instructions] The first question comes from the line of Andy Stimpson of Bank of America Merrill Lynch.

So two questions from me, one on strategy and one on leverage exposure, please. So firstly, on strategy, I guess following the end of exploring the merger with Commerzbank then we're refocused back onto the numbers. And in that regard, we can see from consensus, the market is certainly not expecting you to reach the 4% return on tangible equity target for this year. So can I ask therefore, if at this time, you expect to deliver a new strategic plan? And if so, what time line you might be working to? Is that the summer, after the summer? Is that much nearer term, please? And then secondly, on leverage, leverage exposure went up a huge amount in the quarter, and the CET1 leverage ratio went backwards. How much further back can that ratio go for you to still be comfortable? I know you've got the target on the Tier 1 leverage ratio of 4.5% in the future. And it's not going to be a straight line to get there, I understand that, but I'm just wondering in the meantime, what we should think of as the floor for that ratio, please?

Thank you, Andy. I think let me respond to your first question, and James then takes the leverage question. And let me broaden the response to cover the strategic questions you all may have more in general. Let me be very clear that we will not be drawn on speculations about what other options we have considered or what options are or are not under ongoing consideration. And you should also not draw any conclusion from this unwillingness to comment. There is no information content that should be drawn from this posture. The main is I think that what we've just said and described in our comments. Our first order of business is that we have a plan against we continue to deliver. And I think you have seen with the Q1 results, in a very challenging market, that we remained focused on this plan and that we execute against this plan. And I think you can also see and, hopefully, can also clearly hear that there is full determination that we will deliver over the next quarters. Of course, we operate in a dynamic industry. And as a result, we will continue to review alternatives, as I said, that could potentially accelerate our existing objectives. And what I will also say is that our nonnegotiable starting point is that Deutsche Bank will remain a globally relevant financial services institution, present and serving clients in the key geographies, and that includes the U.S. and Asia and, obviously, our whole market in Germany and Europe. And also because there have been rumors, we have consistently said that we expect DWS to remain a core part of our strategy going forward. And you will understand that, I won't comment on some specific rumors, we have consistently indicated that we intend to participate in the industry consolidation we expect in Asset Management. And this was one of the key reasons to take that company public last year. I think it's important that I made this broader statement because I can imagine that some of you have questions in this regard.

Thanks, Andrew. It's James. On the leverage ratio, we do obviously manage two internal targets, and we set those targets well above the future capital or the regulatory minimums that exist. In terms of leverage exposure, it's a resource that we manage the way we do RWA in terms of setting limits for the businesses but obviously allowing businesses to earn revenues deploying those resources, and you saw that in the first quarter. We also point out the seasonality that always exists between the fourth quarter and the first quarter as pending settlements come back into or increase seasonally. As a parenthetical, I'd point out pending settlements will eventually then exit the calculation once that adjustment is made in the regulatory requirements. As to the minimum, I don't want to go into the internal minimums that we managed to, but basically, we're looking at outlook that keeps us at or above 4% through the year on a fully loaded basis. The 4.5% target, as you point out, is over time and is compared to our phase-in ratio, which we point out. One other item that I thought I'd mention, it's a little early. We intend to publish our calculation as we need to of the G-SIFI numbers that are in that calculation and will do that next week. But that number based on the most recent data that would be effective in 2022 would see us going down to the 1.5% bucket and so creating additional room between our target of 4.5% and the eventual regulatory requirement which incorporates half of the G-SIB surcharge. So we continue, therefore, to feel very good about our ability manage the leverage ratio and continue to deploy those resources to support revenues in the businesses.

So going down the G-SIB bucket that would be if the denominator, so using last year's denominator basically with your up-to-date data, you'd go down a bucket? Did I understand that right?

And whatever we can tell from the industry, the group of banks that are in the denominator number, our estimate would be that we come in at about 310 points on that score, which is reasonably within the 1.5% bucket. Of course, that all needs to be finalized based on industry data. But based on what we'll publish next week that would be our result.

Next question comes from the line of Magdalena Stoklosa of Morgan Stanley.

I've got a few questions. First one is about costs. So this is something that the target is something that you've stood by very, very strongly. The delivery of last year is also a testament to that. But let me maybe draw you on a slightly different conversation. You have two cost targets; one, which is an absolute cost savings target which is for the entire 2019; but another commentary today I thought was quite interesting about, you're still thinking that despite the fact that you are restructuring the cost base structurally; you still leave yourself a certain amount of operational flex in the more business-as-usual costs to be able to respond to any additional revenue pressures. Would you be able to give us a sense of how much of that cost flex there still is should the revenues surprise on the downside? So that's my first question. And my second question is really to James, if you could help us understand the trajectory of your Core Equity Tier 1 ratio from here. We have seen the movements that resulted in a 13.7% by the end of the first quarter. You have also indicated there are regulatory charges coming your way. And of course, we all, at the back of our minds, have your target of 13% also. So can you just talk about what's coming, what are the impacts and how we should look at it through the quarters of 2019?

Thank you. I take the first question on the cost. So that we are all clear, there's one key cost target for this year, and that is the €21.8 billion. And we are highly confident that we achieve that also not only with the track record which we have established I think in 2018 but also with the development which we have seen now in Q1. Of course, as a good management team, you always look for further options to further reduce cost, but I think it's too early now to judge what that potential number could be. But I think it would be anything else than a good management style if you see overall challenging markets like we have seen in Q1, and you are not trying to find out where you can go for incremental cost saves. We have demonstrated that in 2018 when we had the €23 billion cost target, and we clearly overachieved. And it is our goal not only to achieve the 21.8%, but if the environment is challenging, we will do everything to go further down. But the €21.8 billion is casted in stone, and we will achieve that.

On the capital trajectory, Magdalena, basically the guidance is 13.3%, and it incorporates everything that we see for the balance of the year. So we would intend to manage in a range around that 13.3% level, again assuming some or the remaining regulatory feedback comes. So it's just a question of managing, if you like, the denominator, the capital resources in the denominator carefully and optimizing those in the balance of the year.

And James, just to follow up on that, quite a few banks have started talking about the impacts of the TRIM exercise. Is that something that you're prepared to do?

And that's the 20 basis points that we're still uncertain of the timing and, frankly, the quantum. We based our estimates based on the dialogue that we have in the feedback process that exists there. We had a number of TRIM reviews, and that forward look reflects our best estimate of the remaining impact in 2019.

Next question comes from the line of Kian Abouhossein of JPMorgan.

If I look at your outlook statement, one area that consensus are very different from your statement is the CIB revenue outlook where you indicate a slight increase for the year, whereas consensus is down roughly 4% year-on-year. And clearly, you have the parameter changes as well with your headwind. So what gives you the confidence that we have a different seasonal environment? I know that March has been better, and it looks like April has been much better as well. Are the numbers so significantly improving that you feel so comfortable to make that statement? Is it that you feel material momentum and market share gains? Is it the transaction bank? Can you really explain your rationale for that and why consensus is incorrect? And the second question if I may sneak two little ones in. One is the asset review. You mentioned 20 basis points impact. I just wanted to understand this number. I wasn't aware of this 20 basis points. And then secondly also, your levy, I think you paid €900 million last year. What should we expect for this year?

Thanks, Kian. So on consensus, you point out in our outlook, we've adjusted clearly to reflect the actual performance in Q1, whereas our earlier outlook statements reflected estimates at the time, and we adjust the outlook also for current expectations about the balance of the year. We would expect in that probably a more sustained and better environment than certainly January and February were. But we don't want to get drawn into specific commentary on the current or exactly what underlies our future view in terms of market environment. Your point on seasonality is a fair one. I mean this is a year in which clearly the extent of a typical seasonal benefit in Q1 wasn't present in the industry, and that means the quarterly comparisons will be a little different this year than perhaps other years. The other thing that is true, as you all saw, Q4 was a extremely difficult quarter for the industry and the financial markets. And of course, the big question will be ultimately what would the Q4 environment look like, so all of that is baked into our forward look. And we don't control consensus, so we're publishing our view as of the date hereof. On the AQR point that we've called out now for several quarters the headwinds or the impacts that we expect from some of the regulatory exams that we've been going through. The first of the 2 was related to AQR, and the second relates to your ongoing feedback from TRIM reviews. This is one that we've expected for some time. It just so happens the letter arrives on our doorstep in early April so will be reflected in our April numbers but was not in our March numbers. And that was in high teens in terms of basis points.

On the levy, if I may ask.

Yes, it's €604 million in this quarter. That's the SRF and then some smaller levies in other countries we operate in. But obviously, the overwhelming majority of the bank levies separate from deposit insurance costs, the bank levy impact is, as far as we can, fully reflected for the full year in the first quarter.

So we should think we are more or less done with the levies rather than the €900 million you paid last year?

Well, the €900 million is a bigger number that grosses up for it was, first of all, higher than this year. So we had a year-on-year improvement in the levy and was predominantly taken in, in the first quarter. There were some other items that showed up in the other quarters, but we don't expect material additional charges again from the bank levies. And sorry, just to clarify for sure that the €600 million is the SRF item. It's just the SRF.

The next question comes from the line of Jon Peace of Crédit Suisse.

My first question is could you talk about where we are with taking a little bit more risk on your liquidity portfolio, how much incremental have you generated so far and how much further do you think there is to go. And the second question is, could you just talk about how you're thinking about your funding costs at the moment, any actions you're taking to try to improve them and whether that might constrain your ability to take a bit more risk on the liquidity portfolio?

Christian indicated, we have made good progress on the liquidity optimization efforts that we talked about last quarter. And we feel we're on track to our targeted revenue impact which we described as more than €300 million for the full year. I will also say, though, that we originally targeted investing more of the liquidity reserves into the higher-yielding securities that are non-HQLA as well as deploying additional resources in our HQLA portfolio. At the margin, we scale back the asset repurchase program a little bit. This is non-HQLA piece. As we actually have seen greater opportunities to deploy resources in client businesses, you've seen that in the loan growth in CIB, which is obviously always our preferred use for liquidity deployment. But we nevertheless are on track against the revenue impact for the full year of liquidity optimization in general, which includes, to the second part of your question, additional optimization of our liability profile. So we'll measure each deployment on the asset side against actions that we could take on the liability side to deliver the same or, in some cases, certainly on a risk-adjusted basis, greater value to shareholders.

Next question comes from the line of Andrew Lim of Societe Generale.

So in PCB, you've talked again about deposit margin compression. And then it seems for a very long time now that we've had this issue. I mean can you give a bit more of reassurance that this might end at some point in the future? That's my first question. And then secondly, I'd like to talk a bit more detail about AML issues here. I know you've said that and you've done nothing wrong, but it just strikes me as inconceivable that you can have so much corresponding bank inflows related to Danske. I think it's about €150 billion. So my more specific question here is that, how is it that your compliance systems don't flag up such a huge amount of flows associated with Danske Estonia, don't flag up such activity report? And if it does, what do you do then? What do the regulators do then? And what's the ultimate action?

Sure. I'll take the first question. When we talk about deposit margin compression, it basically reflects the reinvestment of deposits against which we have an assumed duration. And over time, the longer-term investment revenues run off in a lower rate environment. Some of those are very long-term investments if you assume that the duration of some deposits goes out as much as 10-or-more years. And so that continues to roll off and that's what we refer to as deposit margin compression. When we give you a forward look of the same calculation, we obviously have to take into account or that calculation takes into account the reinvestment rates, which reflects at any given time the market environment and the implied forward rates. And one of the reasons you continue to hear us talk about margin compression is that at least recently, over the past year and several quarters, you've seen the reinvestment rate assumptions also come down, reflecting today's interest rate environment. So ultimately, the answer to your question is it turns around as the reinvestment opportunities against the modeled viabilities improve over time, and that's really a monetary policy question.

Andrew, let me address your AML question. I think you remember from our Q4 2018 announcement that we took at that point in time the unusual step in the annual media conference to discuss those matters at some lengths and at more lengths than we usually do. But out of respect for the confidential nature of these matters, it was always our intention to revert back to our normal practice of refraining to comment unless and until there is a significant development that we are authorized to discuss. And I can tell you there are no such developments, and hence, we are not providing any updates on the matters. But that we all have in mind what we said in Q4, and this is still the case, we have not identified wrongdoing and have not been informed that any regulators and enforcement agencies have reached a contrary conclusion. However, we remain cautious because these are ongoing investigations and need to run their course. And until now, the only costs expected are the ones associated with conducting our internal investigation. Let me also say that I think Deutsche Bank, over the last years, has done a lot in order to upgrade its controls. We have invested a lot. And we also said that whatever we do on cost reduction, everything which is linked to regulatory remediation will not be affected by cost reduction. And we feel that our overall control environment has improved significantly, and there we are very confident.

Next question comes from the line of Amit Goel of Barclays.

Yes, so just coming back, actually, I know it's on the first question, and I appreciate that you don't want to speak on other options, things like that. But I just wanted to make sure I understood the message correctly. So for example, in a statement yesterday where you say you continue to review all alternatives to improve long-term profitability and shareholder returns, that's more of a business-as-usual type statement. In terms of the plan and the execution I guess you believe you're delivering, so there's not necessarily any of update that we should be looking for. But if you are to see further opportunities, you would address that at that time. Because the reason why I asked is because when I look at the profitability, obviously, I see you state the 3.6% RoTE, pro rata-ing the bank levy. But when I also do similar calculations based on the adjusted returns and I factor in some of the AT1 costs and so forth, I'm getting more like a 2.5% return, so still quite far off the 4%. So some commentary around that would be appreciated. That's the first question. And the second question is relating to the commentary in the outlook statements about striving for additional cost savings if the revenue environment does not develop as we expect. So just curious there in terms of -- obviously, I appreciate the €21.8 billion target for this year, but how much potential flex could there be if the environment is a bit tougher than anticipated?

Amit let me take the first question, though I think I'm not telling you anything new beyond that what I said right at the start. Yes, we have been reviewing a range of alternatives over the past weeks and months. And frankly, this work needed to be done as we also needed a realistic basis from which you compare the path of a potential domestic merger with other plans. And as I said, the Commerzbank transaction was obviously a significant focus for us given that it had presented itself as an opportunity, and it was essentially time bound, and we needed to respond. Having this now done, our full work, our full attention is now returning to executing on our existing plan again. I think we have shown in a very, very difficult and challenging Q1 that we can deliver, that we are in line with our internal planning for 2019 and that we are now trying to do everything to further accelerate our stand-alone plan. So too early to share a detailed update on our thinking, but we have been deliberate in the use of our language about improving long-term profitability and shareholder returns.

And Amit, on your question on flex, I think Christian covered it. It's always hard to give any precise view about how much we can do. As Christian said, we turn over every rock as we think about expense savings over time. That's in year and also creating the glide path to the future year expense ambitions that we have. I think we talked at the last quarter about some of the areas, some of the levers that you pull, whether that's investment spending, comp or other things. They're clearly things that we look at. And you've seen us take some action already inside the first quarter to offset the revenue weakness we saw earlier on. One other just item I want to mention is you are seeing against this absolute target, we are dealing with some headwinds from FX. And so even flat at the €21.8 billion, we are working hard to improve but also to offset FX, which really means that we're driving the numbers down even further relative to our original planning last year. We'll see obviously FX can change how that develops in the course of the year, but the work isn't always revealed, if you like, by the headline number.

And maybe just a slight follow-up just on the first part of the question. I mean just thinking in terms of when you do look at alternatives to improve long-term profitability and shareholder returns, how did it differently versus, say, what you did last year when you came in and/or in previous strategy reviews?

Well, it's an ongoing process of managing the businesses every month, looking at resource deployment, looking at the profitability of individual transactions, of client activities and the cost item we just talked about. So we challenge ourselves and challenge the businesses. And I think the key point to note here is we're always looking for ways to improve against the bench line that we've or the benchmark that we've articulated to you.

Next question comes from the line of Alevizos Alevizakos of Alevizakos [HSBC].

So first question, you talk a lot about the FX headwinds in costs. But clearly, also you had some tailwinds in revenues from the FX rates. And part of that question is, could you give me 2 numbers: What was the underlying improvement in GTB revenues in constant currency? Because I've seen the 6% higher year-on-year, but I wonder what it is basically if you were to strip out the FX effect; and then secondly, am I right to believe that you have dropped more market share through the lower perimeter in Fixed Income than Equities? And then a small second question. What is the guidance for the Corporate & Other for the rest of the year given that the quarter was very positive? So will it be around, I don't know, minus €150 million per quarter?

Thank you. That was a rapid question, so I hope I caught them all. On the currency, you're absolutely right. When we're speaking to currency on the cost basis, we're talking about an absolute target, and hence, I think it's important to point out. You're right that if you think about margin a strengthening dollar versus euro delivers, we think, slight margin improvements. I'll point to Page 23 of the investor deck where we show a rough split that can be helpful for this in the difference between revenues and expenses expressed by currency, where the revenues are higher in dollars than the expenses. So there is that benefit. On the Corporate & Other performance, look, it can be a volatile segment. And one of the things we do is try to allocate all costs that can be allocated out of Corporate & Other, whether that's funding or operating expenses. And some of the volatility, for example, for hedging risks on the balance sheet you see reflected in Corporate & Other and, as we've pointed out, shareholder expenses. The shareholder expenses is reasonably steady at something in a range of €90 million to, say, €110 million depending on the amount of severance that's taken in those areas. The hedging results, which we call valuation and timing differences and, to a lesser extent, the treasury items which we attempt to clear to 0 are items that throw some volatility. So the short version is it's always hard to predict what that valuation and timing result will be. In this quarter, it was positive, and the other items are more predictable. In terms of market share loss in FIC, Christian may want to add to it, but we've seen some amount of what I would call adverse rotation I think, compared to what the market opportunities were in the first quarter. Particularly, there seems to have been some strength in commodities and U.S. mortgages that we don't participate in. I think the environment in Europe was a little bit weaker. We've also, as you mentioned, had the perimeter adjustment impact which you're seeing this quarter and which, of course, will fade in the coming quarters. We also, I would think, and by the way, Christian gave some orders of magnitude of what we think that looks like. Annualized for the year, it would be about €400 million. We've seen some idiosyncratic, I think, headwinds in the fourth quarter that we think abated in the first quarter as time progressed. But that last item is frankly hard to measure in terms of when you're making market share comparisons. I'm sorry, one other thing as I look at the list of questions. GTB, yes, part of the growth reflects the benefit of both being having revenues in U.S. dollar, but importantly also, interest revenues, it reflecting the increase in rates in the U.S. over that 12-month period. So it is certainly a factor in the 6% year-on-year growth. Thanks.

Next question comes from the line of Jeremy Sigee of Exane BNP Paribas.

I've got two questions, 1 strategic and then 1 on number specifics. The strategic question is really on the announcement yesterday about abandoning the merger talks. It seems to me that a lot of the major financial impacts were fairly clear from quite early on in the process in terms of heavy risks, heavy restructuring costs that you referred to. So I'm wondering really what you feel you discovered as you went through the 6-week process, whether there are things you hoped might be better that turned out not to be or whether there are things that you've discovered turned out to be worse than you had expected. Because it seems that a lot of the big shape of it was fairly clear from fairly early on, so I just wondered what you found, you discovered during the process that ultimately led to that decision not to proceed. And then secondly, my numbers question is much more straightforward. Could you just tell us what you expect the cost of the AT1 coupons to be next quarter and what you expect the cost of restructuring and severance to be for the full year?

Thanks, Jeremy, and let me take the first question. Let me start strategically. I mean if you get presented the chance that the #1 and the strongest economy in Europe has a chance to merge with the #2, you obviously take a close look at this because simply from an industry consolidation over the next years, not only in Germany but also in Europe, it is something where I think a management should look at it and should also have a thorough view at it. And I also honestly do believe that just the top-down analysis on certain assumptions which you may have made before and, obviously, which we have done before is simply not sufficient because the truth, at the end of the day, whether the net synergies are sufficient enough to also provide the adequate returns for shareholders in such a complex integration, you only find out if you are doing a detailed due diligence. And I really have to say that these discussions have been more than constructive. But then you also go obviously into details that you see cost synergies but also potential revenue dis-synergies because, obviously, you have also quite a high overlap in clients also in Germany. And when you then net out all the cost synergies and revenue dis-synergies, you come up with the number and compare that to the execution risks, where we simply believe that on a net basis, it is not enough to convince our shareholders to do such a transaction. But I really would say it was never a complete black and white story. It was a very serious assessment which we have done. I'm also very glad that we have done this because it really tells me what the right way for us is, but you can't just simply judge on it from a top-down without doing a diligent review.

So on the numbers questions, the AT1 coupon is something we pay in the second quarter, and that is a calculated number, it's part of the contractual terms. I think it's around €325 million that is paid next quarter. On the severance assumptions that we made, as we said, in the walk to 4%, there are assumptions built into our planning about severance costs. In terms of a range, I'd give you €200 million to €300 million in the full year, reflecting what we had initially assumed in terms of restructuring actions in 2019. Obviously, that's a budget that we manage as well based on a number of factors, but that's what's built into our planning, and we look to optimize the use of those resources.

Next question comes from the line of Jernej Omahen of Goldman Sachs.

I have two questions, please. So the first one is on funding, and I just like to ask this question I guess its best aimed at James. So the last time I think Deutsche has done a benchmark issue was unsecured benchmark was back in February, and that was done at elevated spreads. Can I ask when is the next benchmark planned? And more broadly, so with the CDS now back up to 100 -- above 170 basis points, it's broadly twice the level of Deutsche Bank's European or U.S. competitors. What happens to the CIB business, to the CIB revenue, if the funding costs stay at this level throughout the year? So that's the question on funding. And then the second question I have is on M&A, and I'll try and ask it in a way that allows you to say something. So Christian, before you said in the opening statement that you came to the conclusion that this transaction would have resulted in dilution to your return-on-equity targets to which Deutsche Bank is committed. That implies that you have certain M&A criteria in mind against which you judge potential transactions. What are those criteria? Is it simply that the transaction needs to be at least EPS neutral? Is it a certain return-on-investment hurdle? Anything you can share on that I think would be helpful.

Happy to go first on your second question. Honestly, I always make that quite simple. Anything which we potentially consider to do must be accretive and incremental to our existing internal plans stand-alone and that from an RoTE point of view in particular because you know as well as I know that even if it's only a little bit incrementally positive, the execution risk with each M&A you are doing are huge, and therefore, I always compare any potential alternative to our internal medium- and long-term plan. That's what we did, by the way, with Commerzbank. And that's the habit I have, and I will stick to that.

So on funding, Jernej, as you mentioned, and we have our Fixed Income call on Monday when Dixit and I will talk to issuance plans for the full year. But as I said to an answer to earlier question, we obviously will work to optimize the funding costs both in the size and the profile of our funding book. When we focus on the senior non-preferred, which were the issues that we did in February, a couple points to note: we've announced the funding plan of €9 billion to €11 billion for the full year. We've achieved more than half of that plan, having issued €6 billion year-to-date. We think of that as essentially a capital instrument. And now that the driver of senior non-preferred issuance is frankly, so TLAC, MREL and also as we talk about the Loss Given Failure ratio that we manage too, which is a Moody's ratio, we pass a portion of those credit spreads to the businesses in their funding costs. So naturally, it has an impact on the returns and the yield calculation that our businesses do when we price business. We work to optimize that and it's already essentially embedded in the way we compete for business today. Is it a modest competitive disadvantage? Sure. But it's something that we work with and we manage and we hope to improve over time.

James, just one very short follow-up. Are there any scheduled reviews by the major rating agencies of Deutsche that you're expecting over the course of this quarter? And are you expecting any action either way to the extent you can comment?

So Jernej, we can't and don't comment on specific interactions with the rating agencies, nor do we have visibility into their processes and timing. All I will say is we engage very actively with the rating agencies. I think they've published some commentary on us in general and also more recently given the strategic environment. So that's all I'll really say there.

Next question comes from the line of Anke Reingen of RBC.

I just had a small follow-up question. In terms of your potential to address costs any further, I mean looking at the percentage change year-over-year that I would say is somewhat impressive. Compensation is the largest part. Where would you see the additional flexibility in bringing costs down any further? And then I wondered about the proposal in the U.S. about potential liquidity and capital rules for U.S. subsidiaries or IHCs. Do you have already initial assessment? Or is that all in line with plan?

So we've talked about flex. I don't have much more to add. To the way you phrase your question really focused on both comp and non-comp. And I think you've seen in the past several quarters' significant movement on both, and that's something we'll continue to work through. On the IHC capital rules and the proposals, and there was also a liquidity proposal. It's still early days. We think our both capitalization and liquidity are extremely robust in our U.S. entities, but we'll work through the notice of public rulemaking process in the U.S. and ultimately adjust if there are any adjustments frankly that are necessary given our strong both capital and liquidity starting point.

Next question comes from the line of Stuart Graham of Autonomous Research.

I had two. The first one is, I hear that you don't want to be drawn on the details of any possible further restructuring plans, but can you at least rule out raising fresh equity to finance the upfront costs of any further restructuring plan? That's the first question. And then the second question is, I don't quite understand why your revenue guidance today. On March 22 when you published the annual report, you said you expected revenues to be slightly higher year-on-year, but now you say it's essentially flat. Yet I think March was a good month, and many peers have said that that's continuing to April. So I don't understand why you're unhappy with slightly higher today if you were happy with that when you published the annual report.

Stuart, as I said before, we will not be drawn on any of the options under consideration, and there is no information content that should be drawn from a lack of comment on any of them. But please also be guided by the capital ratio which we just have published yesterday and today. We are at 13.7%, improvement versus last quarter. So we are focusing on our plan, and I don't want to speculate anymore on that.

And so Stuart, on the outlook, we obviously refreshed our forward view and can now bake in the full first quarter. In that, we have benchmarks against which we key our guidance, and there's a modest change that slipped within that benchmark, so we update. It's nothing more than that.

But I guess when you made the statement at the annual report, you knew January and February. March was better, so surely you'd be more positive on revenues, not less positive on revenues?

We knew a great deal about March, too.

So it's got worse since then?

So you don't just bake in the existing quarter, you also look forward for the full year. I think the important point here, Stuart, is that we're saying that our forward guidance remains consistent with our full year targets and that we've been able to offset the revenue weakness in the first quarter. And our outlook reflects everything we know as of the date hereof.

The next question comes from the line of Adam Terelak of Mediobanca.

I had a couple of questions on operational risk. Obviously, you got the HDMA model. But when I look at the lost data side, where you've had a bit of a tick-down as well, what is the outlook for that? And should we expect further reduction as losses are pushed further out into the history? And what impact would you take if you saw further charges after a relatively clean year last year for litigation? And then secondly, how would you expect operational risk RWA to develop if you were to change the business perimeters? So if you were to shrink certain businesses, would it mostly stick with you given it's litigation-driven?

Yes, op risk in general takes a long time to feed in the evolving data set and for historical loss events to fall out of the data set. So what we are talking about today is really a methodology change and less of an impact from data changes, although there have been improvements and, frankly, steady improvements in the underlying loss event data. The impact on op risk of perimeter adjustment frankly takes a very, very long lead time to feed through. There isn't in regulation necessarily a direct linkage, business activities that you're not in no longer feeding into your op risk data set. So we've had obviously already exited businesses several years ago, U.S. securitization is a great example, against which we still have to carry the op risk RWA. And that's simply the system as it exists, but it's, of course, subject to regulatory guidance and feedback.

Sorry, there are no further questions at this time. I hand back to James Rivett for closing comments.

Perfect. Thank you very much, everyone. The IR team is around for your further questions. Otherwise, enjoy the rest of your day.

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