Ladies and gentlemen, welcome to the Q1 2024 Analyst Conference Call and Live Webcast. I'm Morita, the Chorus Call operator. At this time, it's my pleasure to hand over to Ioana Patriniche, Head of Investor Relations. Please go ahead.

Thank you for joining us for our first quarter 2024 results call. As usual, our Chief Executive Officer, Christian Sewing, will speak first; followed by our Chief Financial Officer, James von Moltke. The presentation is always available to download in the Investor Relations section of our website, db.com. Before we get started, let me just remind you that the presentation contains forward-looking statements, which may not develop as we currently expect. We 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, Ioana, and a warm welcome from me. I'm delighted to be discussing our first quarter results with you today. In February, we laid out a clear path to our 2025 objectives for financial performance and capital distributions, and we have delivered in line with our objectives and targets. Group revenues were €7.8 billion. This reflects business growth and franchise momentum, particularly in areas where we have been investing, like our capital-light businesses, while net interest income was more resilient than expected. This performance underlines the benefit of our complementary business mix. We are delivering on our cost targets. Adjusted costs were in line with our commitment to a quarterly run rate of around €5 billion for this year. Provision for credit losses remained elevated this quarter, but in line with our expectations and prior guidance, considering where we are in the credit cycle. Portfolio quality remains very solid, and we continue to expect provisions for the year to be at the higher end of our guidance range of 25 to 30 basis points of average loans. Our return on tangible equity was 8.7% in the first quarter, up from 8.3% in the first quarter last year. Capital remains robust. Our CET1 ratio was 13.4%, enabling us to remain on track in raising distributions through shareholders and supporting business growth. Let me unpack some of the drivers of our first quarter results on Slide 2. Pre-provision profit was up by 11% year-on-year to €2.5 billion and more than 20% higher since we launched our global house bank strategy. This reflected continued progress on driving operating leverage, which is a core element of our strategy execution. We increased revenues in our operating divisions by 3% year-on-year, while group revenues were up 1% on a reported basis. Group revenues include Corporate and Other, which tends to add some level of volatility into our revenue line. As committed, we delivered growth in noninterest revenues and saw an increase of 11% year-on-year in commissions and fee income, mainly in divisions where we made investments last year. As expected, our reported net interest income declined this quarter, but net interest income remained stable in our banking books, and James will shortly talk you through this in more detail. We reduced adjusted costs by 6% year-on-year and 5% sequentially to around €5 billion, in line with our guidance. This includes bank levies and higher compensation costs, which James will discuss later. Now let's look at the franchise achievements across all divisions on Slide 3. The Corporate Bank delivered strong business growth with a 5% increase in incremental deals won with multinational corporate clients compared to the prior year quarter. We closed a series of landmark project finance transactions and saw strong momentum across the structured credit market and trust and agency services. We also ranked #1 in 17 categories in the 2024 Euromoney Trade Finance survey, including being the best trade finance bank in Western Europe for the seventh consecutive year. Demonstrating the strength of our business model, the Investment Bank delivered a strong quarter with notable advances across the franchise. Investments in talent boosted our origination and advisory market share to 2.6%, a 70 basis point increase compared to the full year 2023 with notable gains in LDCM and DCM, elevating our global ranking from 11th to 7th. Our advisory franchise benefited from the breadth of our product set in the quarter. In GTCR's acquisition of Worldpay, we provided an integrated offering from financial advice to debt financing through to FX and rate hedging. The revenue increase in FIC was driven by both financing and our well-balanced business portfolio, which supports our revenue profile through the cycle. We maintained our strength in credit trading driven by our investments in 2023, particularly in the flow business, and we also grew revenues in the Americas. These developments further diversified the revenue mix in our portfolio. The Private Bank benefited from our investments, accelerated business momentum delivered €12 billion of net inflows in the first quarter, which makes it 17 consecutive quarters of net inflows bringing the total assets under management to €606 billion with a strategic shift towards fee-generating investment solutions. We also continue to strengthen capabilities in strategic areas by increasing coverage of ultra-high net worth individuals in Germany and enhancing the offering of investment solutions including third-party exclusive collaborations, which should drive further inflows. Asset Management delivered another strong quarter of volume growth. Net inflows were €9 billion ex cash, helping assets under management grow by €45 billion to €941 billion, over €100 billion higher than in the prior year quarter, which we expect to support future revenue generation. Now let me turn to the progress against our strategic objectives on Slide 4. Starting with revenues. We have delivered a compound annual growth rate of 6% since 2021 in line with our raised target range of 5.5% to 6.5% from 2021 to 2025. As promised, we grew mainly in capital-light businesses with strong growth in origination and advisory as well as in the Private Bank and in Asset Management, supported by high inflows of assets under management, underlying our franchise momentum. We aim to build on these developments as our franchise expands following our investments in growth initiatives across all business segments. With net interest income resilient at the start of the year and growth in noninterest revenues, we feel we are well on our way to our 2025 revenue ambitions. We continue to deliver on our €2.5 billion operational efficiency program. We have completed measures, which delivered our expected savings of €1.4 billion, nearly 60% of our target with around €1 billion in savings already realized. The incremental efficiencies this quarter were driven by optimization of our business in Germany and reshaping of our workforce and non-client-facing roles. We have further incremental measures already underway, including reengineering of our operating model via additional front-to-back improvements of product processes and harmonization of infrastructure capabilities. This gives us full confidence that we will deliver on our commitment of a quarterly run rate of adjusted cost of around €5 billion in 2024 and total cost of around €20 billion in 2025. Finally, on capital efficiency, we achieved a further €2 billion reduction in RWAs, bringing aggregate reductions to €15 billion. As we are intensifying our work on capital efficiency with further reductions coming from data and process improvements as well as securitization, we remain highly confident that we can meet our target range of €25 billion to €30 billion. Let me conclude with a few words on our strategy on Slide 5. In a nutshell, we delivered on all key initiatives and targets in the first quarter. And as we progress on our global house bank strategy, we are on the right path for both our clients and our shareholders. First, we have a strong and growing franchise. Clients come to us as our well-balanced, complementary businesses provide them with full-service products and solutions. This supports our revenue growth through different market cycles and drives our market share. And as we said consistently, clients want a partner that offers them an alternative to large U.S. banks, a partner with our expertise, product range, and global network. Second, we continue to improve our operational efficiency. We are maintaining our cost discipline. And as always, we are committed to our approach of self-funding our investments. 2023 marked the peak of our investments, but we continue to invest to reduce the complexity of our organization through improving technology, processes, and control capabilities. Finally, we are absolutely focused on creating value for our shareholders. And as we said in previous quarters, we are fully committed to increasing shareholder distributions as rewarding our shareholders is a top priority. We are confident we can increase distributions well beyond our original goal of €8 billion in respect of the financial year 2021 to 2025, and we expect to continue to grow dividends and make incremental share buybacks. With that, let me hand over to James.

Thank you, Christian. Let me start with a few key performance indicators on Slide 7 and place them in the context of our 2025 targets. Christian mentioned our continued business momentum, which resulted in revenue growth of 6% on a compound basis for the last 12 months relative to 2021, the midpoint of our recently upgraded revenue growth target range. The cost/income ratio of 68% in the first quarter shows a 7 percentage point improvement against 2023, driven by operating leverage from sustained revenue growth and cost management. Our return on tangible common equity was 8.7% for the first quarter. Our capital position remained robust with the CET1 ratio at 13.4% this quarter after absorbing the impact of the share repurchase and the deduction for future distributions in line with revised EBA rules, reflecting our payout ratio policy. Our liquidity metrics also remained strong. The liquidity coverage ratio was 136%, above our target of around 130% and the net stable funding ratio was 123%. In short, our performance in the period reaffirms our resilience and our confidence in reaching our 2025 targets. With that, let me turn to the first quarter highlights on Slide 8. Group revenues were €7.8 billion, up 1% on the first quarter of 2023 or 2%, excluding specific items. Noninterest expenses were €5.3 billion, down 3% year-on-year. Nonoperating costs this quarter included litigation charges of €166 million and €95 million of restructuring and severance charges. Adjusted costs decreased 6% year-on-year, mainly due to lower bank levies. Provision for credit losses was €439 million or 37 basis points of average loans, and I will discuss this in more detail shortly. We generated a profit before tax of €2 billion, up 10% year-on-year and a net profit of €1.5 billion, also up 10% compared to the prior year quarter. Diluted earnings per share was €0.69 in the first quarter and tangible book value per share was €29.26, up 7% year-on-year. Our tax rate in the quarter was 29%. Let me now turn to some of the drivers of these results. Let me start with a review of our net interest income on Slide 9. Net interest income for the group decreased by approximately €100 million compared to the previous quarter, with the reduction being driven by accounting effects. As a reminder, these effects are revenue-neutral at the group level as the decrease in NII is offset by an increase in noninterest revenues. Excluding these accounting effects, banking book NII was essentially flat as the decline in the private bank was offset by an increase in the corporate bank and lower funding costs in the Investment Bank and Corporate and Other. The reduction in the Private Bank net interest margin was largely driven by the non-recurrence of favorable episodic effects in the fourth quarter of 2023 as well as the ongoing impact of beta normalization. On an absolute basis, net interest income in the Private Bank is in line with the plans on which our NII guidance from last quarter was based. The increase in corporate bank NII was due to a positive one-off impact from a CLO recovery, which was accounted as NII with deposit betas showing a steady increase in line with our assumptions. We expect to see a corporate bank NII decline in the coming quarters as betas continue to normalize. NII in fixed financing was essentially flat quarter-on-quarter. We're starting to see margin expansion on the asset side, which if it continues, will help offset margin compression from beta normalization. In summary, the development in the first quarter reinforces our expectation that we will meet or improve on our prior guidance of a €600 million reduction in banking book NII for 2024 relative to the prior year. With that, let's turn to adjusted cost development on Slide 10. Adjusted costs were around €5 billion for the quarter, specifically €5.02 billion, excluding bank levies, up 3% year-on-year, but down 4% sequentially, in line with our guidance. We were disciplined in most expense categories and the modest increase was primarily driven by higher compensation and benefit costs, reflecting inflationary pressures on fixed remunerations and increases in internal workforce after our targeted investments in talent throughout 2023 and higher performance-related compensation. The increase in compensation and benefit costs was partially offset by workforce optimization. Let's now turn to provision for credit losses on Slide 11. Provision for credit losses in the first quarter was €439 million, equivalent to 37 basis points of average loans. The decline compared to the previous quarter was driven by moderate stage 1 and 2 releases of €32 million due to improved macroeconomic forecast and model recalibration effects, which occurred in the prior quarter. Stage 3 provisions at €471 million remained elevated at a similar level to the previous quarter. This included continued weakness in the commercial real estate sector, mainly impacting the Investment Bank and the continued impact of operational backlogs in the Private Bank. Our full year guidance for provisions is unchanged at the higher end of the range of 25 to 30 basis points of average loans. This reflects our expectation that provisions will remain elevated in the first half of the year and should gradually reduce in the second half. The decline is expected to be driven by an improvement in the credit commercial real estate sector and the partial reversal of backlog-related provisions in the Private Bank. Before we move to performance in our businesses, let me turn to capital on Slide 12. Our first quarter common equity Tier 1 ratio came in at 13.4% compared to 13.7% at year-end 2023. We had a strong capital supply this quarter and the sequential decline was driven by our distribution actions and plans together with business growth. 19 basis points of the decrease reflects the ECB approval for our €675 million share buyback, which we commenced in March. Half of the first quarter net income was deducted for future capital distributions in line with our 50% payout ratio guidance, with the remainder supporting other deductions. 12 basis points of the decrease came from RWA growth. The increase in RWA is net of reductions due to RWA optimization achieved during the quarter. At the end of the first quarter, our leverage ratio was 4.5%, 8 basis points lower compared to the previous quarter. The decline was primarily driven by lower Tier 1 capital in line with the movement in CET1 capital, with leverage exposure broadly unchanged. With that, let's now turn to performance in our businesses, starting with the Corporate Bank on Slide 14. Corporate Bank revenues in the first quarter were €1.9 billion, essentially flat sequentially and 5% lower compared to the prior year quarter, which marked the revenue peak of the current rate cycle. Year-on-year, the revenue decrease reflected the normalization of deposit revenues, lower loan net interest income, and the discontinuation of remuneration of minimum reserves by the ECB, predominantly impacting our corporate treasury services businesses, partly offset by 3% higher commissions and fee income. On a sequential basis, the revenue development mainly reflected lower overnight NII. Loans declined by €5 billion compared to the prior year quarter and remained flat sequentially, reflecting muted demand and our continued selective balance sheet deployment. Deposits were €31 billion higher year-on-year and over €10 billion higher than the fourth quarter, mainly driven by higher term deposits. Provision for credit losses was €63 million or 22 basis points of average loans, essentially flat versus the prior year, reflecting resilience of the corporate loan book. Noninterest expenses decreased sequentially driven by lower internal service cost allocations and the FDIC special assessment charge in the prior quarter, but increased year-on-year due to higher litigation costs. This resulted in a post-tax return on tangible equity of 15.4% and a cost income ratio of 64%. I'll now turn to the Investment Bank on Slide 15. Revenues for the first quarter were 13% higher year-on-year on a reported basis or 14% when excluding specific items. Revenues in fixed income and currencies increased by 7% versus the prior year quarter demonstrating the underlying diversification of the business. Financing performance was solid with revenues up 14% year-on-year, reflecting a robust carry profile and strong levels of issuance and securitization fees. As this is the first time we are disclosing financing revenue separately, you can find further information on the composition of the business in the appendix on Slide 38. Credit trading revenues were again significantly higher year-on-year as the business continued to build on the successful execution of our strategic initiatives and investments made through 2023, specifically in the Flow business. Emerging Markets revenues were also significantly higher, with revenues up across all three regions. Client activity was up year-on-year, aided by the investments in Latin America. Foreign Exchange revenues were significantly higher, benefiting from the non-repeat of the interest rate market dislocation seen in the prior year. The impact of a refocused business model with investments into controls and technology are also beginning to materialize, and collaboration with the wider franchise is driving cross-sell revenues in the quarter. Rates revenues were significantly lower when compared to a very strong prior year quarter and reflected a reduction in market volatility. Moving to Origination and Advisory, revenues were up 54% when compared to the prior year quarter, with the business gaining market share in a growing fee pool environment, both year-on-year and versus the prior quarter. Debt Origination revenues were significantly higher, benefiting from a material improvement in the leveraged debt market conditions. While investment-grade debt issuance activity was also higher year-on-year. Advisory revenues increased versus the prior year despite a reduction in the industry fee pool. The announced pipeline for the second quarter also remained strong. Noninterest expenses and adjusted costs are lower year-on-year as a result of significantly lower bank levy charges, partially offset by higher compensation costs reflecting targeted investments in 2023, including the Numis acquisition. The loan balance increased versus the prior quarter, primarily driven by increased activity in debt origination linked to the recovery seen in the industry this quarter, with a smaller increase in financing. Provision for credit losses was €150 million or 59 basis points of average loans. The increase versus the prior year was driven by an increase in stage 3 impairments primarily in the CRE portfolio. Turning to the Private Bank on Slide 16. We implemented a new reporting structure this quarter, reflecting our client segmentation. For further details, please see Slide 39 in the appendix. The division reported revenues of €2.4 billion, including higher revenues from Investment Products and Lending, which were more than offset by continued higher funding costs, including the impact of minimum reserve remuneration and the group neutral impact of certain hedging costs now allocated to the business previously in treasury. Sequentially, revenues remained stable, driven by higher revenues from investment products, in line with our strategy to grow commissions and fee income and reflecting seasonality. We saw continued strong business momentum with net inflows into assets under management of €12 billion, mainly in investment products in Wealth Management and Private Banking, particularly in Germany. Revenues in Personal Banking were impacted by the aforementioned higher funding and hedging costs for our lending books, partially offset by better deposit revenues in Germany. Wealth Management and Private Banking achieved higher revenues from lending and investment products, offset by lower deposit revenues in the international businesses. The Private Bank has continued its transformation with nearly 80 branch closures and headcount reductions of more than 800 in the last 12 months, benefiting from prior investments. Together with normalized investment spend and lower bank levies, these initiatives drove adjusted costs down by 6%. This trajectory includes the impact of higher service remediation costs, which is expected to roll off over the remaining quarters of the year. Pretax profit increased by 24% driven primarily by cost reductions. Provision for credit losses in the quarter was affected by elevated workout activity in Wealth Management as well as continued temporary effects from the operational backlog in Personal Banking. Overall, the quality of our portfolios remains intact. The previous year quarter included single name losses in Wealth Management. Let me continue with Asset Management on Slide 17. My usual reminder, the Asset Management segment includes certain items that are not part of the DWS stand-alone financials. Assets under management increased by €45 billion to €941 billion in the quarter, a record high. The increase was attributable to positive market appreciation of €30 billion, net inflows, and positive FX effects. Net inflows of €8 billion were primarily in passive, once again continuing the positive momentum in X trackers that we've seen throughout last year. The business remains the #2 ETP provider in EMEA by net inflows with growth outpacing the market and hence gaining further market share. Constructive equity markets are influencing investors to switch into passive strategies, but despite this, we've also reported positive net inflows in active products, mainly driven by fixed income and quantitative strategies. Revenues increased by 5% versus the prior year. This was primarily from higher management fees of €592 million, resulting from higher fees in liquid products due to increasing average assets under management. Noninterest expenses were 5% higher, while adjusted costs were 3% higher than the prior year. Compensation and benefits costs were higher, mainly driven by variable compensation due to DWS' share price increase, while non-compensation costs were effectively flat despite inflationary pressures. Profit before tax has improved by 6% from the prior year period, mainly reflecting higher revenues. The cost-income ratio for the quarter was 74%, and return on tangible equity was 14.5%, both improving from the fourth quarter of last year. Moving to Corporate & Other on Slide 18. Corporate & Other reported a pretax loss of €302 million this quarter versus the equivalent pretax loss of €208 million in the first quarter of 2023. Revenues were negative €140 million this quarter, primarily driven by funding and liquidity impacts and other essentially retained items. Valuation and timing differences were positive €2 million, driven by negative net impacts from interest rate movements offset by partial reversion of prior period losses. This compares to positive €239 million in the prior year quarter. Pretax loss associated with legacy portfolios was €96 million, driven primarily by litigation charges and expenses. At the end of the first quarter, risk-weighted assets stood at €33 billion, including €12 billion of operational risk RWA. In aggregate, RWAs have reduced by €11 billion since the prior year quarter. Leverage exposure was €36 billion at the end of the first quarter, essentially flat to the prior year quarter. Finally, let me turn to the group outlook on Slide 19. The first quarter showed that the expected benefits of our investments are materializing and will help to drive growth in noninterest revenues, while we have limited the downside to our net interest income given our interest rate hedging activity. This demonstrates that our businesses are positioned for future growth, contributing to the delivery of our revenue target of around €30 billion in 2024. We affirm our target to maintain our quarterly run rate of around €5 billion of adjusted costs this quarter and around €20 billion for the full year. We expect provisions for the year to come in at the higher end of our guidance range of 25 to 30 basis points of average loans. With our CET1 ratio of 13.4%, we are well positioned, and we'll continue to focus on distributions with a targeted payout ratio of 50% for the financial year 2024. And finally, as Christian said, our full focus remains on our progress through the execution of our strategy and the delivery of our 2035 targets. With that, let me hand back to Ioana, and we look forward to your questions.

Thank you, James. And with that, operator, we're ready for questions.

The first question comes from Kian Abouhossein from JPMorgan.

And a shout out to Fabrizio and Ram doing such a great job on gaining market share, especially against some of the European peers that also reported today. Two questions. First of all, on revenues, €32 billion in 2025. I have talked about in the past. Can you give us a little bit more of a split, how we should think about reaching this target by division in the context of the below €600 million NII adjustment this year? And then the second question is around cost. €20 billion of adjusted costs this year, stated €20 billion next year to get to your cost-income target, there's a delta of around €600 million to €700 million. If you could please talk about the assumptions that you're making here? And what are the easy wins and what are the difficult ones? And if I may, also the bank levy assumptions for this and next year?

Thank you, Kian, and thank you for your question. Also thank you very much for the shout-out to Fabrizio and Ram. I don't have to do it any more, and I even think that we took some market share from the U.S. banks, not only from the European banks, if I think about the performance in the Investment Bank. Look, to your first question, let me tackle that, and James will then go on with the second question and obviously, with further comments to question number one. Let me start actually on the journey in 2024 because it really builds up nicely then to the 2025 story. And it starts really with this good Q1, in my view, across all businesses. And if we now look how the business is progressing, then you can really see that the stable businesses, i.e., the corporate bank, the private bank, and asset management that what we have seen in Q1 is actually a good number you can have in your mind also for the following quarters. And one item, which is positive for us, and James can give you some further details is that the NII is actually behaving even better than we thought and that what we have given you earlier this year. So in this regard, there is less headwind on the NII side. And on the fee-generating side, we are actually succeeding there where we wanted to succeed and where the investments are now paying off. You have seen the market share gain in the origination and advisory business. We gained market share by 70 basis points. We have shown €500 million in revenues in O&A this quarter. To be honest, it's a number which I would also see based on the mandates for Q2, always hard to then go for Q3 and Q4. But with the investments we have done in people but also in Numis, I think that, again, Q1 is a very good marker in the O&A business. We have done, as you said, a very good job in the FIC business. that is far more diversified, far more stable, and far more robust. And with all the rating upgrades we have seen, obviously, it also helped to regain clients. And these are structural improvements where I would say this is, on the one hand, clearly supporting our market share gains, but also telling us that these kind of businesses and flow business we are doing there, are likely coming back also in the following quarters. So in a nutshell, if you take Q1 and you have the stability in the three businesses in Asset Management, Private Bank, and Corporate Bank, potentially even with some upside in Asset Management. And you see the strong pipeline we have in the O&A business and also the market position we have regained in the FIC business, I'm more than confident that we can achieve the €30 billion, just by adding up these four operating businesses based on the starting point we have right now. If I then go into 2025. The first comment is that there is the tailwind on the NII side in the Private Bank. We have always talked about that. We have now for quarters and quarters, gathered assets under management like in Q1 in PB and in Asset Management. And that obviously is driving further revenues there. So the NII tailwind and the benefits from the assets under management growth is driving further the Private Banking revenues in '25 versus '24. Then in the Corporate Bank, actually, there is no NII headwind anymore in '25 versus '24, but we are benefiting from all the mandates which we are getting actually, not only here in Germany, but globally. You have seen in the script, actually, how also in Q1 versus Q1 last year, we actually increased our mandates, which we won with multinational corporates, and that is, again, a momentum, which I can see going forward. So a very stable revenue growth than in the Corporate Bank also next year. In the Investment Bank, to be honest, Kian, I absolutely further expect that we go to at least the 1% market share gain versus what we had in 2022. We always said that with the investments we have done, we want to gain 1% market share. We have done 0.7% in Q1, but there is more to come. And I also do believe that in particular, in the O&A market, there is a further recovery. We can see the momentum in the M&A market, in the ECM market, it is starting, but it's not there where I can see the fee pool is in '25. And then obviously, when I go to the last point in the Asset Management, also there, we will benefit, obviously, with the continuous inflow in assets under management. Looking at that, looking at how we have started Q1, looking at actually the better-than-expected NII trail, and that the investments which we have done are paying off, I'm not only confident in the €30 billion, but then obviously, with the build-out in '25 in the €32 billion.

So Kian, regarding expenses, we often discuss the run rate on a monthly and quarterly basis. We're pleased that our focus on delivery reached €5 billion this quarter, and we plan to maintain that level consistently throughout the year while managing to an exit rate that aligns with our 2025 targets. There are a few variables in play. Firstly, concerning the bank levy, we anticipate booking approximately €50 million this year, which could rise to €150 million next year depending on factors related to the SRB, deposit growth rates, and other considerations. Additionally, nonoperating costs have been high in recent years, but we believe we are nearing the end of the necessary restructuring and severance work, as well as addressing the litigation profile we've discussed before. Ideally, we would see those costs range between €300 million and €400 million next year, suggesting an operating cost level in the high 19s. On a run rate basis, this means we need to reduce expenses by about €50 million to €100 million per quarter next year to meet our targets. You asked about easy wins; however, achieving these goals will require significant effort, focus, and execution. Our starting point is the delivery of €1.4 billion in actions that have been executed but are not yet included in the run rate, which currently reflects €1 billion. Therefore, there's an additional €400 million that has already been executed, which will impact the quarterly run rate. Essentially, we need to crystallize the existing efforts. We do expect some inflation and additional investments, which we will need to counterbalance with the ongoing actions to close the gap between €1.4 billion and €2.5 billion, our total target. To summarize, we need to focus on executing daily measures such as branch closures, app decommissioning, headcount reductions, and process simplification. All of these plans have been underway for some time and are on track for delivery, and we are confident in our ability to meet the goals established for this year and next.

And the next question comes from Anke Reingen from RBC.

The first question is about capital, starting at 13.4%. I'm trying to gauge how much additional buyback you might consider this year. Are you targeting a flat rate of 13.7%, or would you be satisfied with 13.5%? How should we view the potential impact for the remainder of the year? Are there any regulatory challenges? How soon can you address the remaining €10 billion to €15 billion in risk-weighted asset optimization? The second question relates to loan losses. What gives you confidence in a decline for the second half? Your commercial real estate losses are unchanged, but how do long-term high rates affect this? Is there any regulatory pressure to expedite addressing commercial real estate exposure? You also mentioned reversing backlog-related provisions in the Private Bank; how much could this benefit the second half?

Thanks, Anke. So look, the target that we've been working to is really a January 1 target with the Basel III impact reflected and a 200 basis point gap to MDA against that. So solve for 13.2% on January 1 with the €15 billion in it that we've talked about. And really what we have in the balance of the year is earnings, less additional stock buybacks and the impact of business growth, and then from a model methodology, all that stuff, think of that as neutral. We're working through that capital optimization to at least offset those pressures. Q1 is always a quarter where you'll see more burdens on the capital supply side. So I would not look at that as representative of the capital build that earnings can drive. And while Q1 is usually a high point in terms of organic capital generation, we've had a pretty good track record of generating sort of 25 to 30 basis points per quarter over the past several years. So that's sort of the walk that we would outline to you. On the loan losses, we talk about sort of three things that are running high in the first quarter. Commercial real estate, which we expect to improve gradually over the year, the collections activity disruption that we expect to also correct and potentially see some recoveries in the second half and equally on the wealth management side. We've had a series of cases over the years where we hope as we move to work out, there may be recoveries there as well against an, I'll call it, underlying strong credit portfolio. So that reversion in the second half is one, but at least based on everything we see at the moment, we have good line of sight on. And so we need to, in essence, compensate for every basis point above 30 today, would need to compensate being below 30 in the second half, but we see the drivers that would drive us there. And lastly, commenting on part of your question, we've had a very deep dive into the commercial real estate portfolio over the last 4, 5, 6 months, sort of name by name and feel comfortable that with the provisions we took in Q1, we reflect the risks that we see in that portfolio. We have, as we mentioned, seen the firming in our portfolio that's visible in some of the market pricing indices and what have you. While that is, to some degree, rates sort of dependent, we do think that we're seeing a floor and are optimistic, at least based on what we see that, that will be preserved over the balance of the year.

And you don't see any pressure by the regulator to take anything faster?

Look, the regulators is very focused. I mean we're obviously careful in how we comment on these things, but the regulator is naturally focused on how the banks broadly defined are managing through a sectoral stress in commercial real estate, not just in the U.S. but globally. So you'd expect them to be paying a great deal of attention and for us as consequently to be looking carefully at our portfolio.

And the next question comes from Nicolas Payen from Kepler Cheuvreux.

I have two, please. The first one will be on NII. You mentioned in your people remark that you could exceed your guidance of a decrease of €600 million in NII this year. And I was wondering what are the conditions to beat this guidance actually? Is it higher rates for longer? Is it stable betas? Is it an improvement on the asset margins, as you mentioned? Any color will be great. And also what kind of magnitude we could expect regarding the betas on this guidance? And the second question would be on incremental share buyback for H2. Have you got any update to give us whether you have applied for this new share buyback with the ECB? Or what kind of discussion you have with the regulators regarding this topic currently?

Thank you, Nicolas. Regarding net interest income, it’s still early in the year to provide a definitive estimate, but it could potentially reach significant amounts in the hundreds of millions. The factors contributing to this include improved deposit margins, increased deposit volumes, stronger loan margins, and better funding costs, including unsecured funding. However, the beta is still trailing. To some degree, the interest curve and implied forward rates reflect this, although we have effectively hedged much of that risk as shown in our materials. Overall, these factors are favorably impacting our projections, except for one area—loan volumes. We would like to see an increase there as the economy strengthens and demand grows. Nevertheless, these drivers are all contributing to our positive outlook.

Nicolas, on the buybacks, nothing has changed from our target, which we gave to the market before. We have clearly stated that shareholder value creation is a key priority for us. And hence, we are fully committed to the plans we have outlined to you, and that also means fully committed that we have a goal to actually distribute beyond the €8 billion, which we gave you earlier. Now with regard to timing, I think we are doing exactly what we also said. We always said that we wanted to wait until Q1. We wanted to see that Q1 is running in line with our own plan that we show operating leverage, that we show further increasing revenues, that we have costs under control, exactly that has happened, and that gives us the confidence that we can now obviously also plan for the next steps and go into the discussions. But that is the discussion with the regulator. And that should be always respected. But as I said, we always said Q1 needs to be done. We are happy with Q1 and now we take the next steps.

And the next question comes from Giulia Miotto from Morgan Stanley.

My first question is about commercial real estate. I'm surprised to see that the €31 billion is decreasing; it's slightly increasing due to foreign exchange, but I would have expected Deutsche Bank to be reducing these exposures. So, my first question is why isn't that changing? Secondly, I noticed that your litigation expenses are expected to rise compared to 2023. Any comments on that?

So Giulia, regarding your second question about the significant release in the fourth quarter, I don't view it as a negative shift in our position. Concerning commercial real estate, it's primarily a portfolio that is transitioning through extensions and refinancings. Foreign exchange has a minor impact, and we are engaging in very selective new financing activities, typically in lower-risk areas that align with our criteria. However, it's an ongoing portfolio, and I do not anticipate a significant decrease in the coming quarters.

And the next question comes from Jeremy Sigee from BNP Paribas Exane.

Just a couple of follow-ups on topics that have already been touched on. First one, just picking up on CRE again. the modified loan number that you show us, which I think is €10 billion here, that's been increasing from €8 billion and €6 billion over the last couple of quarters. Are you still happy with the nature of those modifications; that these are healthy, constructive, they're not just extend and pretend? So is that process still okay as far as you're concerned? That's my first question. And then the second question, again, just kind of picking into the cost point. Your adjusted cost ex bank levies were up about 2.5% year-on-year. Is that just noise? Or is that a source of pressure that causes you concern looking at the need to bring costs down as you've discussed? Is that increase year-on-year any kind of concern to you?

So Jeremy, the modification process, yes, I'd say in short, okay. We've talked about this for a while. As we look at each individual property, we engaged in the discussion with the sponsors on refinancing. Often that includes terms, new equity, sometimes sort of concessions from the banks, and that's as it should be. I don't think of it as a giant extend and pretend process, but a healthy process of managing these assets through a cycle. You should expect the modifications to continue to rise. But if this is a cycle that as we think it is burning itself out, then the provision number as a percentage of that denominator should begin to decline along with the gradual reduction in CLPs on a quarterly basis. And so that's what we would expect to see going forward. A lot of work still lies ahead, but so far, behavior has been rational in light of valuations. On adjusted costs, that increase represents, if you like, the cumulative impact of the various investments we'd be making. We've talked about investments in controls. We've even talked about investments in technology, also the front office investments we made last year and now the run rate impact of the Numis transaction as well fully in the quarter. So that increase is there. Is it concerning? No, so far as it was deliberate actions and targeted investments on our part. But as per the answer to Kian, now the work needs to be done to take that run rate back down modestly over the next seven quarters.

And the next question comes from Chris Hallam from Goldman Sachs International.

Two for me. Just first on NII, and it's a bit of a follow-up to Nicolas' question earlier. In your prepared remarks, you sounded at the margin a bit more confident on what you'd expect to see for this year. But if you look into next year, has anything changed for the NII outcome then particularly in light of the moves we've seen in rate expectations in the past couple of months, and also the positive development in deposit funding costs in Germany? And then secondly, so thank you for the extra disclosure on FIC. If I look at the business mix on Slide 30, that's split between EM credit and macro. Is that the right mix of business when you think about the global house bank strategy? Or would you expect that pie chart to change shape meaningfully over the next few years, whether it be through investments or share gains, etc.?

Yes, I'll address both points, and Christian may want to add his thoughts. We hoped to convey more confidence on this call compared to our prepared remarks about net interest income. We're pleased with the current trajectory, but we're being cautious. We believe this supports our target of €30 billion this year and €32 billion next year. The additional net interest income we anticipate for 2025 will be analyzed against the higher base from 2024, effectively adding due to the factors I've mentioned as key drivers. To summarize, this is incremental in 2024 and will carry over into 2025. The figures in the appendix will evolve over time, influenced by market shifts and the general environment. We believe our portfolio mix in fixed markets is robust, characterized by macro and micro trends and client positioning, as well as the frequency of structured transactions in those areas. There will be fluctuations, but we see it as a healthy portfolio mix.

Yes. And Chris, I think two additional comments. Number one, if you take that over time, actually, we have seen a nice uplift in Credit Trading following investments which we have done. And while we wanted to actually have a more balanced portfolio in the FIC ex financing business. And secondly, I would say that going forward, if you think about the global house bank concept and the way how actually Fabrizio is tying up the day-to-day FIC work with the corporate bank, I would say that we have actually a really good chance also with that what is happening on the corporate side and how corporates are thinking that the emerging markets piece and also part of the macro pieces are actually further increasing. We can see that these discussions are happening each and every day. We have an initiative where we are actually targeting corporate within the Corporate Bank and tying them into our FIC businesses, and we can see the results. So I would say that in a normal development and now taking aside the comments James did on unique and particular transactions. But with the network we have, with the global approach we have, I could see that the emerging markets piece and part of the market piece are actually growing because the connection of the IB with the Corporate Bank.

And the next question comes from Stefan Styrman from Autonomous.

I wanted to ask about the private bank, please. You had another very good Flow quarter. I think your annualized growth in Wealth Management and Private Banking is running at around 8% annualized from net new money. And I'm really hard-pressed to come up with any competitor getting close to that kind of growth. Can you maybe talk a little bit more about what you're doing there? What geographies are driving this, whether they are particular products or any other unique selling points that are explaining this? And a related question, one investor alerted me to a story honest with Media platform this morning, which suggested that FINMA is looking at your wealth management business in Switzerland. Is there anything to flag there? Or is there just nothing?

Thank you for your questions. Let me begin, and James will add to it. Regarding FINMA, we have clearly stated that there are no restrictions. Additionally, I hope you understand that we won't delve deeper into regulatory matters. We have provided all necessary information in writing. Therefore, we are able to onboard clients. Concerning Wealth Management and the Private Bank, since Claudio joined us, it has always been our goal to enhance our investment services. This is true not only for Wealth Management but also for the Private Bank. We see this as a significant growth area, particularly in the long term. As I have mentioned in previous calls, a crucial aspect moving forward in Germany is the management of retail clients' pensions. Claudio's focus on investment services, where we possess expertise that many other banks, especially in our home market, lack, is proving beneficial. Additionally, our recent rating upgrades have improved our standing in the market. The investments Claudio made in Wealth Management outside Germany, especially in parts of Europe and Asia, along with our significant investments in the Middle East, are yielding positive results. We are pleased with the growth, which is part of the strategy Claudio has developed over the next two to three years. As we experience success in Wealth Management, we aim to increase this focus within the Private Bank and Retail Bank, as there is a clear client demand. Thus, I expect to see similar growth rates moving forward, reinforcing my earlier point regarding the ongoing revenue growth driven by the continuous accumulation of assets under management in this business. This remains a clear priority for Deutsche Bank.

One thing just to add, I think the revenue profile is supportive, as you say, both fee and commission income and the interest income long term in Private Bank. I think the second thing is, as we talked about, the credit loss provisioning right now is more elevated than we would expect it to be sort of on a continuous basis. The last thing to also highlight is this quarter, I think, now shows the trajectory that we're on from a cost perspective with a significant year-on-year cost reduction that we expect to build on in terms of trajectory. So starting to see the restructuring, the technology investments, the distribution platform reductions come through, all of which should significantly enhance the pretax profit margin of PB over time.

The next question comes from Tom Hallett from KBW.

So the first one, just curious around the fee progression of the Private Bank. If I look at market levels, they're up sort of 8% on year-on-year. You've had a lot of inflows, and yet your revenues in the first quarter haven't really moved much. So if I kind of look at your guidance for the division, it would seem you're expecting quite a bit of a pickup over the next nine months. So I suppose what is driving that relative to the first quarter? And then secondly, just looking at the financing revenues where you could have really a powerful slide in there in the pack. I mean, look, it's been a major source of growth for you, but also your peers; I'm just curious about what's driving that kind of growth differential kind of versus pre-COVID levels and how sustainable that is? Because I suppose if I look at the leverage consumption of the IB, it's gone up considerably over the last four years. So maybe if you could provide a sense of kind of the margins of that business or the capital intensity, that would also be great.

So Tom, the way to think about fee and commission income in the Private Bank is that it serves as a measure of client business volume. As Christian mentioned, it's quite stable. As we accumulate balances, we also see increased activity. We've noted a year-on-year growth rate of 2%, and currently, the first quarter shows levels significantly higher than any quarter last year, especially the second, third, and fourth. We believe this trend will continue, resulting in an even greater year-on-year differential. However, this does rely somewhat on clients' investment and trading activities in any particular quarter. The steady revenue base we are observing in the Private Bank and the growth in fee and commission income is very promising, and I think it's positioned to keep growing. Regarding your question about resources in the FIC business, we have consistently focused on that over the years. We generally assess it based on revenue production related to risk-weighted assets. As you can see, our market risk RWA is relatively modest; primarily, it is credit risk RWA in both our balance sheet and derivative operations. We believe we have some of the best expertise in the industry for understanding and optimizing this area. The same applies to leverage exposure, where we navigate the constraints of our balance sheet while working to optimize how we utilize that leverage to benefit our clients and enhance our revenue profile. Occasionally, the business may be intensive in leverage exposure but not in RWA, and vice versa, which makes our optimization efforts both significant and complex. I'll pause there; let me know if you would like to add anything.

Yes. I mean just a follow-up just for myself on the private bank. Is it fair for us to assume that kind of an increased 1.5% year-on-year. Is that something similar we should be expecting for the rest of the year? Or are you more confident on that for the rest of the year? I think if you look at the prior quarter comparisons year-on-year for both CB and PB, what you'd expect is a relatively significant acceleration of the year-on-year growth in those fee and commission lines in the coming quarters.

The next question comes from Andrew Coombs from Citi.

I'll also echo the previous remarks, thanks for the additional disclosure on IB revenues as well. Two questions from me. Firstly, on costs, you drew out the FDIC charge in Q4. You haven't drawn out anything in Q1, but I know a number of the U.S. banks did take a top-up. So could you just say, is there anything costs for FDIC this quarter as well that you'd like to specify? And then the second question, just on the Corporate and Other division now that's been restated to include the legacy portfolios, I think you've got a loss this quarter, but includes quite a sizable benefit on timing differences or valuation and timing differences. So what should we think of it or what do you think would be usual quarterly run rate for that division going forward?

Thanks, Andrew. This quarter, we have €8 million related to FDIC. Due to a quirk in accounting, we cannot categorize it as bank levies, so we don't highlight it separately. However, looking at the net going into this quarter, there are likely more factors pushing it up than down, with FDIC being one of them. There's always some level of volatility. VNT was a factor this year and was relatively neutral quarter-on-quarter. This reflects changes in the interest rate curve, and we expect to recover some of that as the year progresses. It's difficult to predict the pretax profit impact. In our guidance, we mention the expected shareholder expense and the incremental treasury funding costs. For modeling, I suggest using a quarterly version of that annual guidance while accepting the inherent volatility in valuation and timing. Over the years, we have worked on reducing that volatility as much as possible. We've made considerable progress through hedge accounting programs and other strategies to manage the balance sheet risks while keeping the accounting as neutral as we can.

So it seems there are no further questions at this time. So I would hand back to Ioana Patriniche for any closing remarks.

Thank you, and thank you for joining us and for your questions. As ever, for any follow-up, please come through to the Investor Relations team, and we look forward to speaking to you at our second-quarter call.

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