Ladies and gentlemen, welcome to the Q2 2025 analyst conference call and live webcast. I'm Moritz, the Chorus Call operator. The conference is being recorded. 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 second 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. Our first half results demonstrate clearly where Deutsche Bank stands today. Our strategy has proven itself in different environments. Our Global Hausbank serves clients at times of elevated volatility in the second quarter, and thanks to our diversified model, we delivered resilient revenues, which grew 6% to EUR 16.3 billion, in line with our full-year goal of around EUR 32 billion. And while it is still early, we are encouraged by the strong start of the third quarter. Noninterest expenses declined 15% year-on-year to EUR 10.2 billion, in line with our full-year outlook, resulting in a cost/income ratio of 62%. This strong operating leverage produced a return on tangible equity of 11% in the first half year, which means we delivered returns in line with our target of greater than 10% in both quarters, including the second quarter that was impacted by increased volatility. Our CET1 ratio of 14.2% enables us to deploy capital to grow our business and to support clients, while increasing returns to shareholders. We are absolutely focused both on delivering our year-end targets and on preparing the next phase of our strategy to further boost returns and value generation for our shareholders beyond 2025. As you can see on Slide 3, we delivered a pre-provision profit of EUR 6.2 billion in the first half, nearly double the same period in 2024. Adjusting for Postbank takeover litigation impacts, pre-provision profit was up 29% year-on-year, on the back of strong operating leverage of 10%, resulting in a 37% increase in the pretax profit over what was already a strong operating performance last year. Robust revenues reflect our well-diversified business mix, with 74% from more predictable revenue streams in the Corporate Bank, Private Bank, Asset Management and FIC Financing. Net commission and fee income increased by 4% year-on-year, in line with our goal to boost revenues from fee-based and capital-light businesses. As anticipated, net interest income in key banking book segments and other funding also remained resilient. Excluding the impact of the Postbank takeover litigation provision in both periods, noninterest expenses declined 4%. Adjusted costs remained flat and, as we intended, significant progress on our operational efficiency measures is offsetting business investments and inflation. Now let's look at divisional developments on Slide 4. All four businesses delivered double-digit returns in the first half of this year. And we believe they will continue to build on this. Our diversified business mix is poised to perform in a fast-changing environment, particularly as our focused investments to serve clients are paying off across the platform. Our Corporate Bank has a leading market position in Germany and, with deep roots in our home market, is perfectly positioned to help clients capitalize on opportunities created by investment programs in Germany and Europe and the improving business momentum overall. We expect revenue momentum to pick up again once government investments and initiatives to support the economy show their impact. We are already preparing for this. As an example, we are cooperating with KfW and EIB to support clients in Germany with tailored solutions. Additionally, its global market presence positions the Corporate Bank well to support multinational clients as they respond to the rapidly evolving environment. The Investment Bank is focused on consolidating its position as the leading European FIC franchise, while Origination & Advisory is looking to grow market share, specifically in Advisory, aided by recent investments, driving further revenue diversification. Our platform is ideally placed to help institutional and corporate clients serve the German and European infrastructure and defense agenda, especially in Germany where we have the leading O&A franchise, including in aerospace and defense, where we have recently invested further in our dedicated sector coverage team. And our Investment and Corporate Banks have already seen increased demand for defense finance. Our O&A team has been involved in deals spanning Equity Capital Markets, M&A and financing, while the Corporate Bank sees growth potential, particularly in trade finance solutions for short-term and long-term financing. In the Private Bank, we are pleased to see the progress on our transformation, reflected in the improvement in returns seen year-to-date. Personal Banking continues to drive efficiency through workforce reductions and branch network optimization, mainly in Germany. These steps, combined with increasing digitalization, are enabling us to streamline operations and innovate our offerings. At the same time, we are focusing on investments in growth across Wealth Management and Private Banking, deepening segment coverage, leveraging the bank's broader product suite for our clients. Progress made and the fact that the Private Bank is well positioned to help clients take advantage of current trends make us confident we will see returns improve further in the medium term. Asset Management stands to build from its diversified assets under management of more than EUR 1 trillion, and we believe it is ideally placed not only to serve German and European investors but also to act as a gateway to Europe for global investors. Clearly, both our asset gathering businesses will support one of the strategic initiatives of the Savings and Investment Union, fostering citizens' wealth by broadening their access to capital markets as we are Germany's leading Wealth Manager and Retail Fund Manager in addition to being its leading capital markets bank. Before I hand over to James, let me conclude on the progress towards our 2025 delivery on Slide 5. Let me start with revenue growth. Since 2021, we have achieved a compound annual growth rate of 5.9%, in the middle of our target range of 5.5% to 6.5%. Second, we have achieved around 90% of our EUR 2.5 billion target for operational efficiencies, with EUR 2.2 billion in cost efficiencies either delivered or expected from completed measures. And we continue with our strict cost management approach, which includes strategic and tactical measures to deliver our profitability and efficiency targets. Third, capital efficiencies have reached a cumulative total of EUR 30 billion, already at the high end of the bank's target range for full-year 2025 and contributing to our strong CET1 ratio. We delivered another EUR 2 billion of RWA reductions this quarter through securitization transactions. And we are not stopping here. We already see opportunities to deliver further capital efficiencies in the second half of 2025. With the CET1 ratio of 14.2% this quarter, we feel very comfortable with our commitment to surpassing our EUR 8 billion target for total distributions to shareholders. In fact, we already applied for a second share buyback in addition to the previously announced EUR 2.1 billion distribution for this year. And James will shortly cover our pathways to materially reduce or potentially eliminate the impact of the output floor from the implementation of CRR3. To sum up, our first-half results demonstrate that we are on track to meet our 2025 financial targets, and we are fully focused on delivering them. In parallel, we are working on the next phase of our strategic agenda to further increase value generation beyond 2025. We see significant potential to unlock additional value from the combination of our strategic actions and market opportunities arising from growth stimulus, defense spending, and structural reform in Europe. The Made for Germany initiative, which we launched together with leading German companies earlier this week, underscores a shared commitment by both government and industry to prioritize growth and competitiveness. We also see increasing global investor demand to deploy funds into the German economy. All in all, given our unique domestic positioning and global reach, this is a clear net positive for us. We have built a resilient and diverse business mix and a strong capital base, and we are now in the sustainable growth stage. This allows us to fine-tune our business model and extract further value by strictly applying our SVA framework, targeted reengineering, and further developing our leadership culture. We look forward to updating you in more detail on our plans later this year. With that, let me hand over to James.

Thank you, Christian, and good morning. As you can see on Slide 7, we saw continued delivery this quarter against all the broader objectives and targets we set ourselves for 2025. Our revenue growth, cost/income ratio, and RoTE are developing in line with our full-year objectives. Our year-to-date performance continues to support our revenue and noninterest expense objectives, before FX effects, of around EUR 32 million and EUR 20.8 billion, respectively. Note, if current FX rates were to persist, the weaker U.S. dollar would result in a small headwind to pretax profit, as the negative impact on revenues would be slightly greater than the benefit on expenses. Our capital position is strong, and our liquidity metrics are sound. The liquidity coverage ratio finished the quarter at 136% and the net stable funding ratio was 120%. With that, let me now turn to the second quarter highlights on Slide 8. We continued to demonstrate strong franchise momentum across the bank. And our diversified and complementary business mix resulted in reported revenue growth of 3% year-on-year or 5% if adjusted for foreign exchange translation impact. Our cost/income ratio of 63.6% remained in line with our guidance for 2025. Second quarter nonoperating costs benefited from a modest provision release, mainly driven by further settlements related to the Postbank takeover litigation matter. Profit generation was robust, and our post-tax return on tangible equity of 10.1% continues to support the ambition to deliver sustainable returns of greater than 10% in 2025 and beyond. In the second quarter, diluted earnings per share was EUR 0.48 and tangible book value per share increased to EUR 29.50, up 3% year-on-year. The sequential development mainly reflects AT1 coupon and dividend payments as well as FX impacts. Before I go on, a few remarks on Corporate & Other, with further information in the appendix on Slide 38. C&O generated a pretax profit of EUR 28 million in the quarter, mainly from positive revenues in valuation and timing, partially offset by shareholder expenses and other funding and liquidity impacts. Let me now turn to some of the drivers of these results, starting with net interest income on Slide 9. NII across key banking book segments and other funding was EUR 3.4 billion, stable quarter-on-quarter despite headwinds from a weaker U.S. dollar. Private Bank continues to deliver strong NII supported by our structural hedge portfolio, while Corporate Bank NII remained stable, supported by the ongoing hedge rollover, loan income, and a one-off benefit from hedge portfolio optimization. FIC Financing benefited from loan growth in the first quarter, with strong lending margins offsetting FX effects. With respect to the full year, we confirm our prior guidance of EUR 13.6 billion. Underlying drivers of the year-on-year development continue to be an increasing contribution from the long-term hedge portfolio rolling at higher average rates, which we detail in the appendix on Slide 25, and volume growth combined with stronger lending income in FIC as well as lower funding costs. Together, these are more than offsetting margin normalization and FX headwinds. Turning to Slide 10. Adjusted costs were just over EUR 5 billion for the quarter. Cost discipline across the franchise remained strong. Compensation costs were slightly lower on a year-on-year basis as wage growth was more than offset by ongoing measures for workforce optimization and beneficial FX impacts. With that, let me turn to the provision for credit losses on Slide 11. Stage 3 provision for credit losses materially reduced in the second quarter to EUR 300 million, reflecting a model update mainly benefiting the Private Bank, while provisions for commercial real estate continue to be elevated. Stage 1 and 2 provisions remained at a high level at EUR 123 million and also included an impact from the aforementioned model updates as well as portfolio-related effects and moderate charges relating to forward-looking information, net of the overlay we built in the first quarter. The model updates mainly impacted CRE-related provisions and reflect updates to loss given default assumptions to align with the latest EBA requirements, incorporating a change in assumptions applied in portfolio-level calculations. On a year-to-date basis, overall CRE provisions stand at EUR 430 million. As guided in prior quarters, the impact from new nonperforming items is limited, but we are seeing ongoing valuation pressure on existing nonperforming exposures, particularly on the U.S. West Coast. While developments around CRE as well as the macroeconomic environment continue to create uncertainty, we feel comfortable with our broader portfolio performance and asset quality, and we currently anticipate provisions to ameliorate in the second half of the year. With that, let me turn to capital on Slide 12. Strong second quarter earnings net of AT1 coupon and dividend deductions, combined with diligent resource management, led to a CET1 ratio of 14.2%, up 42 basis points sequentially. Lower risk-weighted assets were driven by credit risk, benefiting from continued execution of capital efficiency measures, predominantly through two securitization transactions during the quarter. Market risk remains flat. Increases at the beginning of the quarter, reflecting market turbulence at the time, have been offset through strict risk management and hedging. Our second quarter leverage ratio was 4.7%, up by 8 basis points, principally driven by FX effects, as higher Tier 1 capital was mostly offset by higher trading inventory. With regards to bail-in ratios, we continue to operate with significant buffers over all requirements. Before we turn to our divisional performance, I want to offer my perspective on the bank's most recent CRR3 disclosure on Slide 13. We see clear pathways to materially reduce or eliminate the hypothetical impact of CRR3. And let me say upfront, our distribution policy and financial targets are unaffected. Before we go into detail, we need to remember that the implementation of CRR3 is a multiyear journey, including several transitional arrangements that are subject to review and will mostly apply through 2032, and we are not planning franchise-changing decisions today for an outcome that is almost certain to change. The hypothetical RWA inflation of EUR 118 billion in 2033 includes a EUR 64 billion impact from the output floor and EUR 54 billion from the potential expiry of the transitional arrangements in 2033 based on an unmitigated balance sheet as of March 31, 2025. We expect the output floor impact to decline by at least EUR 45 billion through a combination of low-cost mitigation measures and the full application of already final CRR3 rules not reflected in the March pro forma. We see this mitigation as virtually certain and without any meaningful cost. We will address the remaining RWA impact of around EUR 20 billion via additional mitigation measures like business mix reviews through the application of disciplined SVA-driven decisions on balance sheet optimization. As a result, the output floor will only become binding in 2030 at the earliest instead of 2028. Based on the March pro forma numbers, we would subsequently face a further RWA impact of EUR 54 billion if transitional rules expire, which you can see on the right side of the slide. Even at this early stage, we are confident we can reduce this impact by at least EUR 15 billion through additional measures, such as expanding private rating agency coverage for unrated corporates and further potential additional balance sheet optimization actions. In addition, considering developments in the U.S., rule changes in Europe are expected to ensure European banks can operate on a level playing field and continue to support lending to European corporates and overall economic growth. As an example, around EUR 30 billion of the EUR 54 billion RWA under the transitional rules relate to unrated corporates. It is crucial for the EU's bank financing-dependent corporate sector that banks continue to provide this funding at appropriate capital costs. If transitional arrangements are extended or made permanent, there would be no additional RWA impact. Let us now turn to the performance of our businesses, starting with the Corporate Bank on Slide 15. Corporate Bank revenues were essentially flat in the second quarter as interest hedging, higher average deposits, and growth in net commission and fee income have offset ongoing margin normalization. Revenues were impacted by adverse FX movements, which were compensated by one-off interest hedging gains from portfolio optimization. We continued to make good progress, further accelerating noninterest revenue development with 6% growth in reported net commission and fee income and a particularly strong contribution from our Institutional Client Services business. For the third quarter, we expect revenues to be slightly lower and in line with the prior year, reflecting the aforementioned FX headwinds and a lower level of one-offs. Adjusted for FX movements, loans increased by EUR 3 billion year-on-year and sequentially, with the growth primarily coming from our Trade Finance and Lending business. Deposit volumes remained strong as volumes were up by EUR 9 billion year-on-year and remained essentially flat sequentially. Noninterest expenses were lower year-on-year driven by a litigation provision release. Provision for credit losses declined to EUR 22 million as Stage 3 provisions remained overall contained while Stage 1 and 2 benefited from a model update. I'll now turn to the Investment Bank on Slide 16. Revenues for the second quarter increased 3% year-on-year despite a significant FX headwind, with strength in FIC more than offsetting a decline in O&A revenues. FIC revenues increased 11%, primarily driven by strong performances in both financing and macro products. FIC Financing continued its momentum with revenues again higher than the prior year period, reflecting an increased carry profile following targeted balance sheet deployment in line with our strategy, in addition to robust fee income. Excluding financing, FIC revenues increased versus the prior year period despite the extreme market volatility seen in early April, as we continue to support our clients through these uncertain times with year-on-year activity increasing across institutional, corporate, and our priority clients. Moving to O&A. Revenues were significantly lower when compared to a strong prior year, with the business impacted by market uncertainty, most notably in our areas of strength, combined with the delay of some material transactions into the second half of the year. Debt origination saw the biggest impact, with the leveraged debt capital markets industry pool declining year-on-year, while the business was also selective in relation to new committed transactions in a volatile environment. Advisory performance was robust with revenues increasing year-on-year, while the pipeline for the second half is encouraging. Noninterest expenses were 5% lower year-on-year, reflecting reduced litigation charges with adjusted costs essentially flat. Provision for credit losses was EUR 259 million, significantly higher year-on-year, with the increase driven by Stage 1 and 2 provisions, particularly in CRE due to the aforementioned model updates as well as forward-looking indicator impacts, while Stage 3 impairments declined. Let me now turn to Private Bank on Slide 17. In the Private Bank, disciplined strategy execution drove 10% operating leverage and a 56% increase in profit before tax. Return on tangible equity grew both sequentially and year-on-year to 10.8%. The Private Bank recorded stronger revenues as net interest income grew by 5% year-on-year while net commission and fee income rose by 1% year-on-year, supported by investment revenues despite market volatility. Sequential revenue trends reflect seasonal investment activity typically concentrated early in the year. Personal Banking benefited from better deposit and investment product revenues mainly in Germany, leveraging successful deposit campaigns as well as the bank's leading advisory product offering. The growth was partially offset by lower lending revenues following the strategic decision to reduce capital-intensive loans. Wealth Management and Private Banking revenues grew 2% year-on-year, driven by discretionary portfolio mandates, despite FX headwinds and market volatility. Good business momentum continued with the majority of net inflows of EUR 6 billion in the quarter coming from these businesses. The Private Bank continued the transformation of the Personal Banking business, closing a further 25 branches in the second quarter, bringing total closures to 85 this year. Workforce was reduced by 700 in the first half, continuing the trajectory in line with plan. Transformation effects more than offset inflationary pressure, leading to a 5% reduction in adjusted costs. Noninterest expenses declined by 8%, reflecting lower restructuring charges, with the cost/income ratio improving by 7 percentage points to 69%. Provision for credit losses benefited from updated loss given default model assumptions, while underlying portfolio performance remained stable. Turning to Slide 18. My usual reminder, the Asset Management segment includes certain items that are not part of the DWS stand-alone financials. Profit before tax improved significantly by 41% from the prior year period, driven by higher revenues and resulting in an increase in return on tangible equity of 8 percentage points to 26% for this quarter. Revenues increased by 9% versus the prior year. Higher management fees of EUR 630 million, driven by passive products reflected higher average assets under management. Performance fees saw a significant increase from the prior year period, mainly due to the recognition of fees from an infrastructure fund. Noninterest expenses and adjusted costs were essentially flat, resulting in a decline in the cost/income ratio to 60%. Quarterly net inflows of EUR 8 billion represent the fourth consecutive quarter of positive net flows, including a further EUR 3 billion into passive products. Cash and Alternatives saw combined net inflows of EUR 9 billion, which more than offset EUR 4 billion in outflows from active products and advisory services. Assets under management remained above EUR 1 trillion, an increase from positive market impact and net inflows was offset by negative FX effects. In the quarter, DWS and its partners received BaFin approval to issue Germany's first fully regulated euro-denominated stablecoin, and the division also extended its strategic partnership with DVAG for another 10 years. For further details, please have a look at DWS's disclosure on their internal relations website. Finally, let me turn to the group outlook on Slide 19. We are on track to meet our full year 2025 targets and remain comfortable with our trajectory to deliver an RoTE above 10% and a cost/income ratio of below 65%. Our year-to-date performance supports our revenue and expense objectives. Our diversified and complementary businesses are performing well and the strong revenues in the first half year put us on course to deliver our ambition for revenue growth. We remain committed to rigorous cost management, while maintaining our focus on controls and investments as we continue to benefit from ongoing delivery of our cost-efficiency initiatives. As outlined, the current FX rates marginally impact our return and efficiency ratios, but this has been more than offset by a greater-than-expected reduction in nonoperating costs, which we expect to carry into the remainder of the year. Our asset quality remains solid. And despite uncertainty from developments around CRE as well as the macroeconomic environment, we currently anticipate a reduction in provisioning levels in the second half year. Our strong capital position and second quarter profit growth provide a solid foundation as we head into 2026. As we plan capital distributions for 2026 and beyond, we also plan to return excess capital to our shareholders when sustainably exceeding a 14% CET1 ratio. To date, we have announced EUR 2.1 billion of capital distributions, including the EUR 1.3 billion dividend paid in May and the 2/3 complete EUR 750 million share buyback announced in January. And we await approval for our second share buyback. In short, we remain comfortable with our capital position and reiterate our commitment to outperforming our EUR 8 billion distribution target. We are also steadfast in our commitment to further improved profitability and increasing shareholder returns beyond 2025. With that, let me hand back to Ioana, and we look forward to your questions.

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

And the first question comes from Flora Bocahut from Barclays.

I have two questions, one on the revenue outlook, one on the distribution policy. On revenues, you've reiterated today the full-year target of EUR 32 billion. Consensus, I think, is a little bit below that level, so basically skeptical that you can get there. If I think of the moving parts, you just did in H1 just over EUR 16 billion, but that was helped by a seasonally strong Q1. And then in Q2, the strong print you had in FIC as well as C&O. You're guiding for a slowdown, I think, in Q3 in the Corporate Bank revenue. So yes, if you could elaborate on what gives you the confidence that you'll make that target and you expect H2 to basically be as strong as H1, and whether there is also already there in H2 a contribution from the German fiscal stimulus or if it's something that is more helping from '26 onwards? The second question is on the distribution policy. I just want to make sure I understand correctly. So the idea is that you have a payout ratio of 50%. But then if you close the year with the CET1 ratio that is above 14%, then you would consider distributing that excess even if it would take the payout above 50%. So just checking that the payout ratio is not abiding constraint, so it could be seen as a minimum kind of, but also effectively that you're telling us that the distribution threshold is now 14% CET1.

Thank you, Flora. Let me take the first question on revenues and also the German stimulus program. So first of all, I'm really happy with the first half of revenues because in particular in Q2, that was a complex quarter. We have seen in particular in the O&A business a softer Q2 than we thought and initially expected. But the good thing about that is that actually these are delayed deals and a good part of that is actually moving into Q3 and into Q4. And I think you have seen it from the prepared remarks from James, that actually we started pretty well in July, one of the reasons also that O&A actually had a very good start in July, not only FIC. So also having that in mind, I'm really happy with Q1 and Q2 in aggregate. It shows that actually the franchise and the business model is working. And even if you have slightly softer revenues in one subsegment, the bank is strong enough and robust enough to compensate it with a good outperformance in other parts. Now why am I confident that we will achieve our EUR 32 billion also with Q3 and Q4? To be honest, I expect, first of all, that fixed income remains very, very strong. Now very early again to say what we have seen so far in July, but I'm sure also if you take exchange rate changes in Q2 into account, we again gained market share in the fixed income business. We can see actually also with the whole reallocation of funds from U.S. to Europe, Deutsche Bank is the gateway to Europe. And we see it simply in the flows. And I can't see that stopping in Q3 and Q4, if I look at our financing pipeline. So FIC will remain strong. I just told you about O&A. I'm absolutely convinced that O&A will be stronger in H2 than in H1. And again, we see that some of the delayed transactions are now coming through and already were booked in July. You're right, Corporate Bank, slightly weaker potentially in Q3, but we are not talking actually big numbers here. But this will be not only be fully compensated but more than compensated by stronger Asset Management and the Private Bank. So if I think about Asset Management and the Private Bank, what I see in Q3 and Q4, also compared with Q1 and Q2, clearly better and more than offsetting the potential softer quarter in the Corporate Bank. So if I put this all together, to be honest, I don't see actually the concern that we are not achieving our EUR 32 billion. Now on top of that is coming something which you just raised in your second part of your question, i.e., for the first question, and that is the stimulus program in Germany. I think the bulk of that, to be honest, we will see then the impact in '26. Very bullish on '26. Actually, we, as Deutsche Bank, changed our outlook for the GDP growth for Germany to 2% growth in '26, i.e., we upsized it with all that what is coming. But you can see a clear sentiment change in Germany. The level of discussions we have with our corporate clients, whether it's on financing, whether it's actually on investment plans is a completely different one than before. I think we have seen from this government the first wave of reforms in particular on the taxation side and on the energy side. There will be a second round of reforms in the second half of the year. And that also all kind of supported this Made for Germany initiative, which we announced on Monday. And to be honest, after the Monday, we got a number of additional companies actually joining this initiative with more investments. And these investments, Flora, at the end of the day, need to be financed, and there is a huge opportunity. Now this kind of potential upside for the second half of 2025 is in no numbers, I just quoted for you, because that was the base case without that. Now again, most of that will come in 2026. And we will show you then later in the year when we come out with our targets for '26, '27, '28 with a detailed layout of what that means. But clearly, it's tailwind. Last but not least, I really do believe it's not only the Corporate Bank which will benefit from that and the Investment Bank, but I'm absolutely convinced that Germany will address in one way or another our pension system. And I always said, never underestimate what that means for our retail business. We have 19 million clients. And obviously, we will hopefully go into a more capital-covered pension system. That is our chance. And that is why I'm so positive that also over '25 and beyond, we have real chances to grow there. Therefore, from a business mix, no concern on the EUR 32 billion. Really, really good pipeline, very good momentum in the bank but even more upside from all that what is happening in Germany for '26 and beyond.

And Flora, it's James. Just to add one thing to Christian's point on revenues and tie it back to both our outlook statements and the consensus. FX, as we've talked about since our fourth quarter results, plays a role in that. If you simply applied the current FX rates to the second half, the implied number is revenue pressure of a little less than EUR 400 million for the full year. So that would translate into something a little bit higher than EUR 31.6 billion. And the numbers Christian just went through with you, EUR 7.8 billion for the second quarter, are at an FX rate of 1.15 on an average basis euro-dollar. So there's a decent chance that we get the EUR 32 billion on a reported basis, so no impact from FX, and again, against where the consensus is right now, which is about 31.4%. So we've been trying to give you very clear sort of guideposts along the way as to how to compare the revenue forecast that we had for the year as it's influenced by FX. But in principle, the ingredients Christian just gave you would potentially represent an outperformance if all we did was repeat the second quarter in each of the next 2 quarters.

The next question comes from Nicolas Payen from Kepler Cheuvreux.

I have two questions, please. The first one on the outlook floor and the outlook for mitigation measures. Could you clarify how the final application of FRTB, the capital relief for the outlook floor, please? And also, SVA measures seem to be a very large part of your mitigation actions. So if you could provide maybe some colors on what actions you can actually take within this framework to offset the impact. And then the second question would be on your CLP outlook. With your guidance of H2 provisions being actually lower than H1 provisions, what does that mean for the full year guidance for CLP? And how does this still elevated CRE provision fit into that guidance?

Thank you, Nicolas. I will address both parts of your question. First, regarding the output floor mitigation path, for your modeling needs, you can consider 0 as a suitable figure since we're confident that the binding point has been moved well into the future. In terms of phase 1, we believe we can significantly reduce that number, possibly to 0. Next, we will focus on phase 2, which involves addressing the impact of transitional arrangements that may soon expire. At this point, we've identified EUR 15 billion, and we're working from there. We are confident, but as we get further into the transitional arrangement, we might start seeing costs and changes to the balance sheet. The starting point remains strong, and 0 is a reasonable number to use for now. Regarding the FRTB and its relevance to the output floor, one significant factor contributing to our unique impact is the capital market business mix within our balance sheet. I want to emphasize that mitigating the FRTB-related impact is relatively simple and low-cost. However, these mitigation strategies should not be implemented until the full or final version of FRTB is officially in effect. Therefore, simultaneous hedging of the standardized and IRB approaches shouldn't occur as long as the standardized isn't operational. This aspect will unfold in the future and contributes to our confidence, making it a key element of phase 1. Now, concerning the CLP outlook and guidance, H1 clearly exceeded our expectations at EUR 900 million, primarily driven by commercial real estate. Overall, the outlook seems relatively stable, although the commercial real estate sector, generating about EUR 430 million this year, has outperformed our predictions. For full-year guidance, our original estimate suggested a high end of around EUR 1.6 billion, implying an additional EUR 700 million needed in the second half. While it's feasible, it will be more challenging, particularly if commercial real estate continues to face pressure. If you adjust the second-half estimate upward, aiming for it to surpass the first half, that would lead to a range closely aligned with current consensus, which suggests approximately EUR 1.7 billion. This figure should be considered in your models for now, acknowledging that it heavily depends on developments in commercial real estate. That sector has been the primary area of pressure in our CLP landscape, while many other factors have been normalizing as we discussed last year.

The next question comes from Anke Reingen from RBC.

The first question is about the stress test and the output floor. Looking at previous stress tests, this could lead to a low ratio on a fully loaded basis. Are you worried that a low ratio might affect regulators' perspectives on your MDA or capital guidance and influence your capital distributions? Or are they more focused on the drawdown during the stress test period? Additionally, if the ratio is significantly low, how might credit markets respond? Moving on to costs, adjusted costs were EUR 5 billion in Q2, aided by FX effects. Should we consider EUR 5 billion as the adjusted cost run rate for the second half of the year, bringing the total adjusted costs for the year close to EUR 20.1 billion? This figure relates to the EUR 31.6 billion in revenues you mentioned earlier. However, could the EUR 20.1 billion also increase if revenues approach EUR 32 billion?

Thank you, Anke, for the questions. Regarding the stress test, the short answer is no. We believe it's not relevant to disclose the stress test results on a fully phased-in basis. Those rules don't apply during the stress test period we're discussing, and they are far removed from the current context. Therefore, we doubt that supervisors will concentrate on the fully phased-in results. They will evaluate the drawdown instead, which is valid. In fact, our drawdown is lower on the fully phased-in numbers due to starting with a higher denominator, making it somewhat of a positive. However, we strongly believe it's inappropriate to focus on those numbers. In terms of credit markets, there will be communication challenges tied to figures that aren't typically referenced. We find them irrelevant since they are hypothetical, far into the future, and unmitigated, primarily referencing the starting point as of December 31. It's important to note that the forthcoming disclosure will align with the stress test outcomes that we won't prematurely announce, but it will showcase improvements in our risk profile and profitability over recent years. We hope the market will pay attention to those aspects. On the cost run rate, the short answer is yes. As I mentioned, we are factoring in the currency exchange at a 1.15 dollar-euro rate, which is slightly higher for the euro now, impacting costs as the rate fluctuates. We intend to maintain a stable run rate consistent with our earlier guidance throughout the year.

Anke, regarding the stress test question about whether it limits us or if the regulator has concerns about share buybacks or distributions, I think we are in a good position. The transparency we are providing about our capital plan, not just for 2025 but also for the coming years, is at a level that is appreciated. We are having positive discussions with the regulators, so I don't expect any issues. Based on how we have managed capital in the past and our discussions leading into 2025, I believe they understand our trajectory, so I am not concerned at all.

The next question comes from Tarik El Mejjad from Bank of America.

I have two questions. First, I want to follow up on the growth aspect. Thank you for the detailed answer earlier. There is significant skepticism regarding the execution risk of the fiscal stimulus package, and a lot needs to be done before we see its effects on the real economy. Could you provide some concrete measures or actions the German government is taking to ensure that spending is effectively directed towards growth? Additionally, you mentioned the CMD, but in this context, what do you believe the multiplier effect on GDP will be in terms of growth that Deutsche Bank can achieve, especially given its pan-European presence and exposure to Germany? My second question is about capital. Your clarification regarding the 14% was very insightful. Now that we can assume no impact from the Pillar 3 new disclosure, I was surprised by your increase of CET1 to 13.5% or 14%, which is significant in the European context. Does this mean that 14% is a firm threshold? Will you be making additional distributions throughout the year to maintain this level, or is there the possibility of exceeding it and then adjusting later? In summary, can we expect more buybacks than what you've already announced, or is there potential for upside compared to what the consensus has for the current top-up buyback?

Thank you, Tarik. Let me start with your first question on, sort of, say, execution risk on the German fiscal stimulus. First of all, it is a real mindset change when you talk to the German government these days. And I can tell you also from the discussions we had this Monday with the Chancellor, by the way, accompanied by the finance minister and the Minister of Economic Affairs, growth and competitiveness is at the core of the agenda what they are doing. And that is key because, obviously, this goes also into the sentiment of the private sector. And only because of that, it is possible to launch an initiative like with it. Now on the plumbing and execution risk of the fiscal measures, I think we need to a little bit differentiate. On the one hand, defense starts as we speak. And you have seen all our announcements how we have fostered actually our defense financing capabilities and capacities over the last 3 or 4 months. I think Fabrizio has done a tremendous job in Germany but also in Europe actually to further increase our resources, whether it's capital resources, whether it's people, in order to make sure we are organized, we are set up in order to actually respond to the asks which we are getting. And here, we can see while we speak, we can see a different level of engagement with the corporates, with institutions, with actually public institutions where the orders are going out now and the financing questions are coming in. On the infrastructure side, you have seen that actually the budget has been proposed to the parliament before the summer break, the '25 budget. '26 is coming soon after that. It's actually something for September. And I think in the second half, you will see that the EUR 500 billion of infrastructure funds, which has been created, which actually looks into different subsegments, housing is one, digitalization and technology is second one, key infrastructure is the third one. That is all launched in the second half. And also there, you can see that the preparation is well underway, but I would say the main effect of that is coming in '26. Now there is the one or the other order already coming in. But you can also see that it has a positive impact actually on the corporates who are now rethinking their investments into Germany saying, well, we want to be prepared for the day that it's coming in. And therefore, you can see much more engagement level on the German corporate side and also, again from a sentiment point of view, much better results over the last, I would say, 2 to 3 months. When the corporate owners asked, what's going on in Germany? The response rate is a much better one. And therefore, I do believe that actually we will already see a slight uptick in the second half, in particular driven by defense. On the infrastructure side, the EUR 500 billion, the main impact is coming in 2026. And that's what we will show you then when we have the Investor or Capital Markets Day later in the year, how it actually impacts the one or the other business.

Tarik, regarding your second question, I'd like to add to Christian's comments about the multiplier. This reminds me of my early days as a bank analyst focused on the private side. In the U.S., we used to discuss the multiplier for bank sector growth being around 1.3 times GDP growth. While I haven't thought about it that way recently, I believe that’s relevant to your question. Germany, especially Deutsche Bank, has an opportunity to significantly outperform that multiplier. The changes we’re discussing are really about reallocating savings into investment activities, which relates to the idea that European capital currently tied up in bank deposits is underutilized. If the banking sector, particularly Deutsche Bank, shifts our deposits and the trillions in bank sector deposits from less productive uses into capital markets, investment, and innovation, I believe the multiplier could be much higher than it was 30 years ago. Regarding capital, we decided to update our language around capital policy as our previous wording about being 200 basis points above MDA was outdated. We have moved past that, and it was necessary to communicate our current situation more effectively. We recognize that the bank has operated with a thinner buffer than some of our peers, and our shift addresses that in a positive manner, aligning with our current capitalization. We believe MDA is too high and should decrease over time for various reasons, which means our buffer to MDA will be perceived as a strength. Initially, some may have underestimated that aspect. As I mentioned before, our goal is to make the tangible equity we need for a certain ratio, say 14%, more efficient over time. Following Flora's earlier point, our distribution policy will see the 50% as a minimum, with any excess capital distributed incrementally, ideally with greater freedom and predictability regarding outcomes. Lastly, I want to highlight that there is a timing lag involved. The ECB process takes about four months, and they are considering shortening it to three months. Consequently, the ratio at any quarter-end is a lagging indicator of what management assessed at the time of the application. This is also the reason we describe our plans for buybacks as a forward-looking approach. Naturally, supervisors would want to see sustainability, not just momentary compliance. However, for a company that is growing its earnings and capital generation organically, we should see an upward trend over time. I hope this helps clarify some of the timing lags you notice between announcements and the spot ratio.

The next question comes from Chris Hallam from Goldman Sachs.

Just two quick ones for me. On O&A, so announced M&A volumes are up around 30% on a global basis. It's up nearly 20% in Europe. But Germany is nearly plus 60%. So if we couple that with the fiscal backdrop, we're sort of into uncharted territory. So I just wondered how we should think about O&A momentum heading into H2 and into next year, particularly in the context of the comments you made earlier on the strength of your franchise in Germany, in particular. And then second, on CLPs. You referenced earlier some further pressure on U.S. commercial real estate, especially on the West Coast. Just looking at the CLP number on Slide 31, it picked up quite a bit Q-on-Q. So how should we think about that for the balance of the year? I know you mentioned being at an advanced stage of the down cycle, but I guess just sort of how advanced?

Yes, Chris, your point about mergers and acquisitions in Germany illustrates the potential impact related to Tarik's question regarding the multiplier effect and its relation to revenue generation from economic growth and fiscal expansion. The current environment is favorable, but the timing, pace, and size of transactions remain uncertain. The discussions with clients are very positive. We've mentioned the defense industry, but there are additional opportunities beyond that, supported by both domestic and foreign investors for various strategies. In short, we believe there is a significant opportunity in our home market where we hold a clear leading position, allowing us to benefit more than others. Regarding the U.S. commercial real estate portfolio presented in the appendix, it's important to highlight that we separated the Stage 1 and 2 figures this quarter due to the model adjustment discussed earlier. The increase this quarter was largely due to a more conservative loss given default setting in Stage 2, which impacted commercial real estate. This is in addition to the higher-than-expected Stage 3 number, particularly concentrated in the West Coast, related to valuations of already defaulted positions. Future valuations will depend on leasing activity, market comparables, and sponsor behavior. I want to emphasize the significance of Stage 1 and 2 in this quarter's commercial real estate figures, given the changes in the loss given default model.

The next question comes from Máté Nemes from UBS.

Two questions, please. The first one is on the change in revenue outlook for full year '25. So it seems like you've downgraded just a bit your revenue outlook in the Corporate Bank and upgraded fixed income in the IP. Could you give us a bit more color on what drove that downgrade for the Corporate Bank? And what sort of revenue mix shift, if any, should we expect from next year onwards in the business given the opportunities you are seeing on the back of the fiscal stimulus? That's the first question. And the second question would be on the Corporate Bank and again linked to the fiscal stimulus. Can you talk about the capital consumption implications of the fiscal stimulus-driven opportunity, specifically for the Corporate Bank? If I listen to you, Christian, clearly there's an opportunity to leverage up the infrastructure fund and bank debt kind of play a role in that. But obviously, you have quite a few ways to provide capital, be it outright bank lending, be it securitizations. I would be interested to hear your thoughts on how you intend to tackle that from a capital consumption perspective.

Thank you, Máté. Those are interesting questions. I believe your inquiries were primarily directed at the Corporate Bank, but please correct me if I'm mistaken. The downgrade was mainly due to foreign exchange issues, but it also reflects a decline in net interest income compared to our previous expectations. We're experiencing increased pressure on deposit margins and less loan growth than we anticipated for the year, which has impacted net interest income in the Corporate Bank. On a positive note, fee and commission income has shown strong growth, up 6% year-on-year. As we have mentioned, we are investing to maintain this momentum in fee and commission income in the Corporate Bank. Looking ahead, we are optimistic about the trends related to the Corporate Bank's balance sheet and the favorable conditions that may arise towards the end of the year and into 2026. While deposit volumes have been stable, there has been top-line growth that is somewhat mitigating the impact of other trends, including the decrease of large concentrated deposit positions. Overall, the situation is more favorable than it appears at first glance. The critical question remains whether loan growth will rebound, which ties into your inquiry about fiscal measures and how they might reshape our business. We experienced loan growth, albeit impacted by foreign exchange fluctuations, amounting to around EUR 3 billion in the quarter, which we view as a positive development. We have been looking for signs of recovery in this area. It's evident, as Christian mentioned earlier, that fiscal stimulus will drive future loan growth, and we expect net interest income momentum to strengthen toward the end of this year and into 2026. This connects to your subsequent question regarding capital consumption. We anticipate that capital usage will increase to some extent in the business. However, we believe our strong capital ratios position us well to support clients in this growth scenario. Additionally, considering our focus on balance sheet efficiency and the performance metrics of the business, we recognize that changes in the market, particularly regarding private credit and securitization opportunities, as well as potential adjustments to European securitization regulations, will significantly enhance our ability to boost the velocity of our balance sheet. In summary, we do not perceive ourselves as capital constrained in terms of supporting growth, and this could ultimately reshape the business in ways beyond just net interest income and fee income, focusing instead on the balance sheet's capacity to promote revenue growth.

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

Just really one follow-up for me. You're starting to talk about the next business plan, which I was finding quite interesting, some of the comments you're making there. I know we've got to wait for the details, but could you just tell us about the sort of guiding priorities as you do the work for that plan and what success will look like for you?

Yes, certainly. While I can't provide specific details as we're currently working on it, I can share a couple of guiding principles. First, we believe that maintaining our strategy of operating four distinct businesses is the right approach. We also feel that the balance of our business aligns well with what we currently have. Looking ahead over the next three years, especially considering developments in Europe and Germany, we anticipate solid growth in both the Corporate Bank and the Private Bank. This belief is why we have begun investing in various areas, including defense and team expansion, while also planning to reallocate some capital. Focusing on these four businesses is imperative for us. From a regional perspective, we see significant growth potential in both the corporate and private banking sectors within our home market and the broader European region. Secondly, it's crucial for us to continue being recognized as a global bank originating from Europe. Clients are increasingly seeking out European alternatives in the global banking landscape, so our future strategy will certainly emphasize growth in regions such as Asia, the Middle East, and the U.S., ensuring we provide our clients with the necessary access. Lastly, our main focus now is on growth and optimization. As James mentioned, we are not constrained by capital, and frankly, when we evaluate our capital allocation and the returns we’ve achieved, there is ample room for improvement. Therefore, the next three years will be dedicated to optimizing the capital we've deployed after restructuring the bank. We are prepared to engage in discussions about clients who have not provided expected returns over the past few years and we are ready to adjust accordingly. Additionally, enhancing our target operating model and reducing costs will be another key aspect of our strategy moving forward. You'll receive more detailed updates later this year, but I hope you can sense the optimism regarding our starting point.

And the next question comes from Matthew Clark from Mediobanca.

Two questions for me. One again on the corporate center. I mean you guided revenues roughly 0 at the start of the year, and you've obviously come in better than that in the first half. I'm just wondering whether based on the foreseeable elements of the corporate center, you still see an outlook as being 0 for the coming quarters? Or is there any reason to think above or positive or negative for the quarters ahead to the extent that you can foresee these factors? Second question is on risk-weighted asset growth. What is your kind of midterm ballpark expectation for risk-weighted asset growth for the group given you have new investment opportunities clearly coming and then some lingering regulatory headwinds presumably as well?

Sure, Matthew. I would expect no change in the third and fourth quarters for the corporate center. We see some advantages and disadvantages. In response to Stefan's question, while there is still some disparity between the dollar and euro exchange rates, there are also factors regarding treasury and funding that we believe will balance it out. So, no change is a reasonable assumption. This means we would maintain the progress we made in the first half, which is overall positive. It's difficult to assess risk-weighted assets. Just to reiterate, the foreign exchange impact is relatively low for us and will fluctuate. We hedge the CET1 against foreign exchange for risk-weighted assets. Additionally, this ties into our growth scenario. We anticipate some business growth and client support, so an estimate of EUR 10 billion by year-end seems appropriate. As we've discussed previously, we expect growth in the upcoming years, leading to a bigger business and stronger support for clients.

And the next question comes from Andrew Coombs from Citi.

Two follow-ups, if I may, please. One on capital return, and one, coming back to the Corporate Bank. So on capital return, I just wanted to understand the interaction between 50% payout ratio and then this new commentary around distributing capital when sustainably exceeding a 14% core Tier 1 ratio. And which of the 2 do you see as the floor, as it were? So in the event that a 50% payout ratio took you to a 13.8% core Tier 1 ratio, would you be happy with that? Or would you have to trim back the buyback on that basis? So if you could just clarify. And then my second question on the Corporate Bank. What I'm struggling with is the positive rhetoric versus what we've actually seen on 2025. So as you alluded to, there's been this step change in the German government mindset. You've got all of the fiscal stimulus coming onboard. It's going to increase loan demand in the second half in 2026. At the same time, your full-year '25 guidance for the Corporate Bank has been slightly lower. If we look at the loan growth, it's slightly distorted by FX but there is no loan growth at the moment. So I guess how quickly can that change is my question. And when you look at, say, Commerzbank targeting an 8% CAGR in their corporate bank loan growth over the next 4 years. Could you do something similar? Or is the business mix just very different and that's not a feasible target?

Thanks, Andrew. Regarding the payout ratio, I believe we can maintain it between 13.5% and 14%. It’s important to note that with the 50% payout ratio policy, we ignore earnings that exceed that threshold in our calculations. For instance, if we end the year at 14%, the entire payout for that 50% in the following year would not be included in the ratio. We would then begin the new year earning towards the next annual 50% payout, and any capital generated above the 14% can potentially be invested or distributed, which ties back to sustainability. We need to demonstrate that we can sustainably exceed that level. Just a reminder, the interim profit recognition means that the concluding ratio already factors in that entire 50%. There may be some pressure in the first quarter, but as the year progresses, we should be accumulating excess capital. Regarding the Corporate Bank and its lag, there is indeed a delay. The business is tied to the asset and deposit side of the balance sheet, and it depends on securing new contracts and relationships. There is a dynamic between how much effort goes into replacing existing business and how much new business contributes to revenue. Currently, we're making some progress but facing certain pressures. However, I believe that by the year-end, we will start to gain momentum, and revenue growth will begin to improve, reflecting the effects of fiscal policies on business volumes.

Yes. There's not a lot to add from my side. I mean, James already alluded to it that we actually saw a little bit of loan growth in the second quarter, and it's start of that, what we see as a recovering economy which is also confident enough to start investing again, number one. I think sometimes we are underestimating the time to invest. Last year, we were talking about, for instance, the transaction and the long relationship transaction we won with Lufthansa on Miles & More. That had a preparation time of 2 years. We are coming to an end of this preparation that will have then the impact actually in particular from 2026 on. Of those kinds of transactions and new relationships, it's not only that one, we are working on various on that, and that all is coming back. And then last but not least, I really do think that if I see how many investments have been held back in the German economy, in particular in the mid-cap family-owned corporates, that is actually being reversed. And that means absolutely upside for us. And therefore, I think it's actually well explainable what we are seeing now and what we potentially see in Q3 but clearly with the upside in '26 and '27. And therefore, we're actually very bullish and will invest in this business. We have a long-term view here.

Then the next question comes from Tom Hallett at KBW.

Firstly, look, well done on the capital performance. So in that light, kind of given the excess that is emerging, I'm just wondering how you balance the potential investment opportunities arising from the fiscal stimulus with buybacks and potential acquisitions. What are the hurdle rates or conditions needed to prefer one over the other? And then secondly, sorry to go back to revenues again. But on fees, if I recall at the start of the year, you had expected an increase of EUR 800 million across the Corporate and Private Banks in the Asset Management division. And with the half year gone, this is running at under half of that on an annualized basis, and that's despite record markets. So I suppose my concern is when I look at the original group revenue building blocks for the year versus today, your revenue target is becoming increasingly dependent on trading, which is obviously not ideal but it also leaves you kind of up against it if you look out to 2026 and beyond. And finally, sorry if I missed it, but is there a date set for the potential strategy update for later this year?

Tom, thank you. I'll address both points, and Christian may want to add. The threshold is an important question. It's a key aspect of the shareholder value-add discipline we have implemented at the bank. Any business activities or investment programs we pursue must meet a certain criteria, specifically our cost of capital and the opportunity cost of potentially distributing profits instead. This creates a competitive environment for allocating capital within the company, balancing organic growth versus acquisitions and distributions. We are committed to fulfilling the distribution promises we've made while also aiming for growth. Looking ahead to 2026, we are in a strong position to sustain our dividend payments and implement a substantial buyback. Over the past several years, we have shown consistent progress, which we aim to maintain by generating excess capital. There is a clear focus on fulfilling this objective as we decide on our capital deployment. Regarding fees, I agree with your point. I had hoped for higher fee and commission income than we are currently seeing. However, the Corporate Bank is not where we face shortfalls, as it's performing well year-on-year. The main shortfall comes from the O&A segment, which is crucial for generating fees and commissions. As Christian mentioned earlier, we anticipate a recovery in the second half of the year that should help bridge this gap, along with some improvement in the Private Bank and Wealth Management from high net worth clients, which has been somewhat stalled due to current conditions. I am optimistic that we will narrow the gap towards achieving $3 billion a quarter in fee and commission income next year. I would have preferred to be closer to that goal this year, but let's see how we finish in the latter half of the year regarding that ambition. I hope that clarifies things, Tom.

Yes, and Tom, I just want to come back on what you mentioned. Our clear discussion with this management team is to create value and achieve that ambition all together. And therefore, we want to give a clear signal to you that we are absolutely dedicated to returning more capital than we have over the last years, while again continuously investing in the growth of this franchise. So if I hear your comment on the revenue targets becoming dependent on trading, let me say again, we got to a level where we have a balanced diversified bank and sorry that you don't see it visibly. So I, for my part, I’m convinced about the trajectory in this bank, and I accept that there are different views on this, but I’m excited about the upcoming time actually. And I think the financial targets we give are absolutely achievable. One is for sure, we will show you the new strategy at our CMD, which will take place in December this year.

Ladies and gentlemen, this 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 on our third quarter call.

Ladies and gentlemen, the conference has now concluded, and you may disconnect. Thank you for joining, and thank you for choosing Chorus Call. You may now disconnect your lines. Goodbye.