Good morning, ladies and gentlemen, and welcome to the Q1 2025 Analyst Conference Call and Live Webcast. I am Yousaf, the Chorus Call operator. This conference is being recorded. This conference must not be recorded for publication or for broadcast. At this time, it's my pleasure to hand over to Ioana Patriniche, Head of Investor Relations.

Thank you for joining us for our first quarter 2025 results call. As usual, our Chief Executive Officer, Christian Sewing, will speak first; followed by our Chief Financial Officer, James von Moltke. The presentation, as always, is 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. Before we turn to our performance, I want to offer my perspective on recent events. The geopolitical landscape is rapidly evolving and uncertainty and volatility are likely to stay elevated for the time being. This will likely impact the world economy. We still believe globalization will persist, but we expect to see a substantial reordering of trade corridors and supply chains, and this may accelerate some of the long-term trends we have spoken about for some time. And we are particularly encouraged to see what is happening in our domestic market with regards to fiscal changes and structural reforms leading to a much-needed economic boost for Germany and Europe. All of this underscores why we believe our Global Hausbank business model and four strong businesses position us very well to support clients through these unsettled times. And already, since the start of the second quarter, we are seeing clients increasingly seek our expertise and advice. Now let me turn to our results. We are very pleased with a very strong first quarter performance. We delivered revenues of €8.5 billion, up 10%, a strong start towards our full-year revenue objective of around €32 billion. Our cost/income ratio was 61% with adjusted costs of €5.1 billion, in line with full-year guidance. Our loan portfolio quality remains solid; Stage 3 provisions are down nearly 30% year-on-year, normalizing as expected while Stage 1 and 2 provisions were higher, including overlays in this more uncertain environment. Our pretax profit of €2.8 billion was up 39% year-on-year. And with net profit of €2 billion, our return on tangible equity was 11.9% in the first quarter. Our CET1 ratio of 13.8% sets us up well for the rest of the year, both to support our clients and reward shareholders. To summarize, the start of the year was very strong. We believe that we have the right business model both to face uncertainties in the environment as well as to steer the bank towards delivery of our 2025 targets. Beyond that, we have a clear management agenda for further developing our Global Hausbank offering for our clients and sustainably increasing returns for shareholders beyond 2025, which I will talk about shortly. Let's now turn to our resilient operating performance.

Thank you, Christian, and good morning. As you can see, we saw strong delivery this quarter against all the broader objectives and targets we set ourselves for 2025. More importantly, we've done so without compromising on our investments, be it to support operating performance or our controls. Our capital position is robust after absorbing deductions for dividends, share buybacks, and AT1 coupons and the CRR3 impact. Equally, our liquidity metrics are sound. The liquidity coverage ratio was 134% in line with our target, and the net stable funding ratio was 119% at the upper end of our target range. And while we recognize that the last few weeks have been turbulent and resulted in a significant amount of volatility and uncertainty, reflecting on the path ahead, our balance sheet remains strong. As shown in the appendix, asset quality is sound. The bank's liquidity profile is strong. And together with our robust capital position and strong earnings momentum, we believe that we are well equipped to continue to support our clients globally and to provide advice and solutions as they navigate this time of uncertainty. Our prudent approach to managing our trading book also paid off in April. Our trading P&L has stood up well throughout the market volatility and developed in line with the bank's risk appetite.

Let’s now look at the progress with our 2025 delivery. Since 2021, we have achieved a compound annual growth rate of 6.1% within our target range of 5.5% to 6.5%. Double-digit first quarter revenue growth contributed €700 million towards our target of €2 billion incremental revenues in 2025. Second, in respect of operational efficiencies, we have reached 85% of our €2.5 billion target with €2.1 billion in cost efficiencies either delivered or expected from completed measures. Third, we have made further progress with our capital efficiency measures, delivering €4 billion of RWA reductions this quarter through a combination of data and process improvements and the securitization transaction. This brings us cumulative RWA benefit to €28 billion at the high end of the bank's target range of €25 billion to €30 billion by the end of this year. We have announced capital distributions of €2.1 billion this year, including the 2024 dividend and our recently launched share buyback program. This will take cumulative capital returns to €5.4 billion since 2022, and we remain committed to surpassing our capital distribution target of €8 billion in respect of the years 2021 through 2025. Put simply, our 2025 targets are in sight. Let me now turn to our long-term management agenda. Our aim is to deliver a sustainable increase in returns through three levers: Increasing value generation for shareholders, reengineering our target operating model, and reinforcing leadership.

Thank you, Christian. On Slide 9, we've demonstrated strong franchise momentum across the bank. Investments across businesses continue to pay off, which drove a significant increase in revenues, both sequentially at 18% and year-on-year at 10%. The balanced portfolio mix enables us to weather times of uncertainty. Our cost/income ratio of 61.2% benefited both from continued cost discipline and a normalization of nonoperating costs. Noninterest expenses in the first quarter are in line with our guidance for 2025. Profit generation was strong, and our post-tax return on tangible equity of 11.9% underpins the bank's ambition to deliver sustainable returns of greater than 10% in 2025 and beyond. Our tax rate in the first quarter came in at 29%. In the first quarter, diluted earnings per share was €0.99 and tangible book value per share increased to €30.43, up 4% year-on-year.

In Germany and across Europe, we see fresh commitment to support growth, boost competitiveness, and accelerate reform. We believe Germany's loosening of the debt break will unlock considerable investment opportunities and the proposed pension reforms are expected to boost activity in the capital markets. At the European level, we see commitments to invest in defense and infrastructure and much-needed embrace of structural reforms, for example, the Savings & Investment Union and measures to boost securitization.

As for the current macroeconomic environment, while uncertainty has increased, we need to remain vigilant. But considering our strong financial performance and levels of client activity, we remain comfortable with our trajectory to deliver an RoTE of above 10% and a cost/income ratio of below 65% in 2025. Our strong capital position and first quarter results also give us a solid step-off for our distribution objectives.

Thank you, James. Operator, we're now ready to take questions.

The first question comes from Chris Hallam from Goldman and Sachs.

I have two, both on revenues. So first, for this year, clearly, Q1 was strong run at well ahead of the €32 billion guide. But obviously, a lot has changed in terms of the operating environment in the past few weeks. In some of the businesses, I suppose that's supported higher activity levels, but in other parts of the group, client activity would have cooled meaningfully. So how does that picture look for you across the group? And where are there, I guess, substitution opportunities for you? For example, let's say, a CapEx-related loan is delayed, but now the client needs additional short-term working capital finance. And then second, more medium term. On Slide 6, you outlined these kinds of big emerging trends, which look set to determine the competitive landscape over the coming years. I guess, simply, what gives you the confidence that following the transformation of the business, Deutsche Bank has the right footprint and the right risk and control setup to succeed against this backdrop, i.e., to take market share and to capitalize on those growth opportunities?

Thank you, Chris. Let me take your questions first, and James should add, of course. Look, like we said in the prepared remarks regarding the full-year revenue picture and our goal and our confidence in the €32 billion, obviously, the first quarter helps a lot. We outperformed not only the consensus, we are actually ahead of our own plan in the first quarter, which gives us all the confidence that we can keep the momentum and that we will see the €32 billion also at year-end. The nice thing is actually that the Corporate Bank will accelerate from here.

Just to add to Christian's thoughts, I think it's also important to mention that the corporate banking environment remains resilient despite the fluctuations in certain areas. As we navigate through these uncertain times, we remain committed to providing clients with tailored solutions that meet their specific needs.

The next question comes from Kian Abouhossein from JPMorgan.

The first question concerns the slowdown in FIC. Can you provide context for that? In April, you mentioned it on Bloomberg, and Christian brought it up as well. Could you clarify the time frame you are comparing? Additionally, within that context, which subsegments of FIC are currently weaker? Is it credit or rates? If possible, could you also provide geographical insights? We would like to understand whether this is a direct response to recent market changes following tariffs or if it is a persistent issue that we should consider in our modeling. The second question is about your outlook. With U.S. GDP assumed at 1.7% and China at 4.5%, what would be the implications if these figures were significantly lower? They seem a bit high compared to market consensus or forward curves. Can you discuss this in relation to your 10% RoTE plus target and whether there are potential negative impacts we should be mindful of?

Sure. Thanks, Kian. I'll start on the fixed guidance that we've given or commentary about the market. Look, I think one important thing is to say is that the second half of April, and it isn't precisely in halves, but I think the easiest way to think about it is second half of April, resumed a pattern that looked very much like what you see in the disclosure on daily trading results in the FIC business for much of the first quarter. So to your question about ongoing, it isn't a concern for us at the moment at all. In fact, I think we're well positioned to recapture the foregone revenues from the first half of April, as in the balance of the quarter. In fairness, we're actually up year-on-year still in April.

If I compare that with the numbers which we have seen from our peers, Q1 was another example that Deutsche Bank took market share in the FIC business. Similar good momentum in Asset Management, very happy with the first quarter results. We remain confident in our ability to provide value as conditions stabilize.

The next question comes from Nicolas Payen from Kepler Cheuvreux.

Two questions, please. One on distribution and one follow-up on CLP please. The first one on distribution. You mentioned that you were continuing to assess the scope for additional share buybacks. So I wanted to ask you whether you have started discussions with the regulator regarding the second tranche of buybacks and if we could have any indication regarding the potential size of the second tranche? And is there any particular indicator that you and the regulators are looking at to be able to launch that second tranche? On CLP, so you just mentioned overlays on tariffs, so is it possible to know what was the size of this overlay? And what are the underlying assumptions that you are taking regarding the tariff impact and the whole tariff situation? And with the development situation that we see on the CLP front, how does it impact your full year guidance?

Thank you, Nicolas. Look, on the distribution, I stay to that which we said at the end of January because that was a clear outlook statement that, a, obviously, we have the approval for the €750 million, which started the program early April. We clearly said that we want to deliver two quarters where we show that we are on track for our 10% RoTE. Now we are very happy with what we have seen in Q1. I feel overall pretty good about all this. But now we are focusing on delivery of a strong Q2.

The overlay represents about €70 million broken into two parts. One is €50 million for macroeconomic variables, reflecting forward-looking indicators related to performance. The balance relates to collective staging for areas particularly exposed to tariffs. We believe that this prudent approach helps us manage the ongoing uncertainty.

The next question comes from Matthew Clark from Mediobanca.

So a few questions. Firstly, thanks for the commentary on April, from a P&L perspective in FIC. I'm just wondering, should we be worried about a risk-weighted asset impact from Value-at-Risk reaches or counterparty risk or liquidity drawdowns by customers or anything like that? Would you expect a material impact in the second quarter that could possibly affect your second buyback decision? Secondly, can you provide us with an update on the U.S. commercial real estate outlook? When can we expect some more concrete targets for future years rather than simply a continuous improvement?

There is a risk, but we think we've managed that down. So the VaR outliers, we haven't triggered at this point over the threshold at which sVaR outliers would produce an increase in market risk RWA. As for the CRE side, the market indicators are mixed, but we continue to see opportunities without dramatic declines, which will support our ongoing targets.

You can expect to receive concrete targets in the second half of 2025 as we align with the incoming management. We want to ensure a smooth transition and continuity in our messaging and expectations.

The next question comes from Stefan Stalmann from Autonomous.

I wanted to clarify one of your comments, please, James. You mentioned that fixed income trading was still up year-on-year in April. Does that literally mean April year-on-year? Or does it mean year-to-date up in fixed income for the full four months?

The answer is both on FIC revenue. We are obviously up big year-on-year in the first quarter. We're up slightly in April, in the month of April, and therefore, we remain up significantly year-to-date in FIC.

The next question comes from Flora Bocahut from Barclays.

The first question I wanted to ask is about the cost guidance. You've clearly made a good start in the first quarter regarding your cost base, with about 18% of it in U.S. dollars. So, would you say there is a positive risk to your cost guidance for this year? The second question is about O&A revenues.

On reported expenses, yes, the current FX rate would represent downward pressure on the reported expenses. There's a little bit of tracking error, but by and large, the U.S. dollar nets out when you get to the cost/income ratio.

We do believe that here, if we compare 2025 with 2024 that we will see an increase in O&A despite what we see in the markets right now. Therefore, I think it's really important to look at the probability-weighted pipeline, which is still very robust.

The next question comes from Anke Reingen from RBC.

My first is on Personal Banking. The headwind you saw in the quarter from the run-off of the capital-intensive loan products. Should we expect that to continue?

Given our strategic view as well as the decision to close the DSL channel, I think you'd expect to see some of that also persist in the year.

I'm really happy with what I'm seeing now in the Private Bank... All the hard work is flowing through the P&L of the Private Bank.

The next question comes from Mate Nemes, UBS.

I have three of them. The first one is still continuing with the SVA.... Can you share perhaps other clear opportunities for the SVA Bank to increase resource allocation in certain areas?

I'm delighted that this topic of SVA focus... We will do this. Secondly, if you think about SVA, it's not only about whether we allocated capital in the wrong way, it's about the underlying cost and process cost of running the business.

One of the levers beyond what Christian just talked about is looking at more capital relief transactions through securitization to help various businesses.

Ladies and gentlemen, that was the last question. I would now like to turn the conference back over to Ioana Patriniche for any closing remarks.

Thank you for joining us and for your questions. For any follow-ups, 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 is now over. Thank you for choosing Chorus Call, and thank you for participating in the conference. You may now disconnect your lines. Goodbye.