Group financial report 9M 2021

Group financial report

9M 2021

Munich, 11 November 2021

Contents › Financial performance

› Appendix

2

3

› Highlights

› Key figures

Financial performance

4

Performance highlights 9M 2021

Net interest and netcommission income

EUR 1.7 bn

CET1 ratio

16.4%

Pre-tax profit of EUR 644 m due to good operating earnings

performance in all customer segments, net positive risk provisions

and the bonus from ECB tender participation

Administrative expenses held stable by savings at BayernLB core

Bank, despite investing in growth especially at DKB

Capital base remains solid: CET1 ratio of 16.4%

+

+

+

Net interest and net commission income up at EUR 1.7 bn+

Profit before taxes

EUR 644 m

Earnings for the full year expected to exceed the forecast of

EUR 500 – 700 m made in the half-yearly financial report+

5

Earnings growth thanks to good operating profit, net positive risk provisions and the tender bonus

276

644

9M 20219M 2020

Profit before taxesEUR m

Consolidated profitEUR m

CIRin %

RoEin %

9M 2020

65.4 59.8

9M 2021

179

361

9M 2020 9M 2021

9M 20219M 2020

3.7

8.4

6

Capital base on a solid footing

Total assetsEUR bn

RWAsEUR bn

CET1 capital EUR bn

CET1 capital ratioIn %

256

Sep 2021Dec 2020

2931 65.0

Dec 2020 Sep 2021

64.3

Dec 2020 Sep 2021

10.3 10.5

15.9

Dec 2020

16.4

Sep 2021

1 Increase in total assets in particular due to participation in ECB tender (current volume of EUR 39.8 bn)

7

Net interest and net commission income buoyed additionally by tender bonus

Net interest incomeEUR m

› The increase on the year-before period is due to the tender bonus of EUR 187 m

› Earnings shifted to gains or losses on fair value measurement as a result of the derivatives transfer from LCH to EUREX (approx. EUR 59 m)

1,445

9M 2020 9M 2021

1,324 224267

9M 2020 9M 2021

Net commission incomeEUR m

› Higher earnings contributions from DKB’s securities business and the asset management activities of subsidiaries Real I.S. and

BayernInvest

8

Results bolstered by fair value and risk provisions

Gains or losses on fair value measurementEUR m

› Earnings mostly driven by good operating customer business in the markets segment, precious metals trading, and measurement gains

as a result of market performance

› Positive market performance of DKB sustainability funds

› Derivatives transfer: contra position to net interest income, growth of approx EUR 59 m

73

187

9M 20219M 2020

Risk provisionsEUR m

(175)52

9M 20219M 2020

› First half buoyed by persistently good asset quality, releases of risk provisions and recoveries on written down receivables

› There remains a high amount of the post model adjustment of EUR 292 m (Dec 2020: EUR 325 m)

9

Administrative expenses stable while bank levy and deposit guarantee scheme rise sharply

(488) (511)

(1,135)

9M 2020

(1,148)

9M 2021

BayernLB

DKB

Administrative expensesEUR m

› Costs cut due to successfully implementing a focusing strategy at BayernLB core Bank

› DKB posted higher expenses as part of its growth strategy

(83)(107)

Deposit guarantee

scheme

(150)

9M 2020

(182)

Bank levy

9M 2021

› The contributions to the deposit guarantee scheme increased in line with higher customer deposits at DKB

Expenses for the bank levy and deposit guarantee schemeEUR m

(67) (75)(647) (637)

10

Earnings improved in all customer segments

DKB

234

356

Real Estate & Savings

Banks/Financial

Institutions

(64)

137

Corporates & Markets

148225

Central Areas &

Others

(42) (74)

Profit before taxes by segmentEUR m

9M 2020 9M 2021

› Real Estate on growth trajectory in line with strategy; earnings in the precious metals and state-subsidised business remained high

› C&M: Good operating business and measurement gains along with lower risk

provisions; costs lowered by streamlining in the capital market business

› DKB posted considerably higher earnings thanks to the tender bonus and net positive risk provisions, growth in credit volume and successful new

customer acquisition

› Central Areas & Others: Expenses for the bank

levy and deposit guarantee scheme and the tender bonus impacted earnings

Real Estate & Savings Banks/Financial Institutions

EUR m 9M 2020 9M 2021

Net interest income 247 273

Risk provisions in the credit business (30) (2)

Net commission income 174 192

Other earnings components 61 59

Administrative expenses (303) (298)

Profit/loss before taxes 148 225

Risk-weighted assets (RWAs) 12,033 12,195

11

CIRin %

RoEin %

63 57

9M 20219M 2020 9M 20219M 2020

11.717.9

Highlights

› Real Estate posted higher net interest income in line with strategy

› Savings Banks & Financial Institutions continued to benefit from high fair value gains in the

previous metals business and good commission income, including in state-subsidised business

› Good operating performance at BayernLabo and the asset

management companies Real I.S. and BayernInvest


EUR m 9M 2020 9M 2021


Risk provisions in the credit business (165) 7

Net commission income 70 61



Profit/loss before taxes (64) 137


12

Highlights

› Earnings were lifted by the streamlined customer business and net gains on measurement resulting from market trends.

› Positive net risk provisions of EUR 7 m

› Administrative expenses cut due to streamlining in the

capital market business

› Decline in RWAs reflects the

concentration on focus sectors and good portfolio quality

CIRin %

72 62

9M 20219M 2020 9M 2021

(2.5)

9M 2020

5.6

RoEin %

DKB segment

EUR m 9M 2020 9M 2021


Risk provisions in the credit business 17 37

Net commission income (1) 33



Bank levy and deposit guarantee scheme

(46) (66)

Profit/loss before taxes 234 356


13

Highlights

› Very good earnings performance, mainly due to the

EUR 128 m bonus from tender participation

› Increase in net commission income, partly driven by

positive performance in the securities business

› Net positive risk provisions reflect good portfolio quality

› Rise in RWAs, esp. due to growth in credit volume in all customer segments

CIRin %

65 57

9M 2020 9M 2021

13.9

9M 20219M 2020

8.9

RoEin %

Central Areas & Others

14

Highlights

› Net interest income includes tender bonus of EUR 59 m

› Earnings shifted from net interest income to gains or losses on fair value measurement as a result of the

derivatives transfer from LCH to EUREX (approx. EUR 59 m)

› Costs for transformation projects are reflected in administrative expenses

› Expenses for the bank levy and deposit guarantee scheme climbed further

EUR m 9M 2020 9M 2021


Risk provisions in the credit business 3 10

Net commission income (20) (19)



Bank levy and deposit guarantee scheme

(104) (116)

Profit/loss before taxes (42) (74)


Earnings forecast raised

15

OUTLOOK Adjusted forecast

for 2021 (30 Jun 2021)

Adjusted forecast

for 2021 (30 Sep 2021)

Profit before taxes EUR 500 - 700 m > EUR 700 m

Return on equity (RoE) >5% >6%

Cost/income ratio (CIR) 60-65% 60-65%

CET1 ratio >15% >15%

Leverage ratio >4% >4%

16

Appendix

17

Year-on-year earnings comparison

EUR m 9M 2021 9M 2020 Change in %

Net interest income 1,445 1,324 9.1

Risk provisions in the credit business 52 (175) –

Net interest income after risk provisions 1,498 1,149 30.3

Net commission income 267 224 19.1

Gains or losses on fair value measurement 187 73 >100.0

Gains or losses on hedge accounting (3) 0 >100.0

Gains or losses on derecognised financial assets 5 4 28.4

Gains or losses on financial investments 8 62 (86.7)

Administrative expenses (1,148) (1,135) 1.2

Expenses for the bank levy and deposit guarantee scheme (182) (150) 21.5

Other income and expenses 13 49 (73.7)

Gains or losses on restructuring 1 0 >100.0

Profit/loss before taxes 644 276 >100.0

Income taxes (281) (97) >100.0

Profit/loss after taxes 363 180 >100.0

Profit/loss attributable to non-controlling interests (2) (1) >100.0

Consolidated profit/loss 361 179 >100.0

18

Quarterly earnings comparison

EUR m Q3 2021 Q2 2021 Q1 2021

Net interest income 439 530 476

Risk provisions in the credit business 7 13 32

Net interest income after risk provisions 447 543 508

Net commission income 78 95 94

Gains or losses on fair value measurement 42 60 85

Gains or losses on hedge accounting 0 (9) 6

Gains or losses on derecognised financial assets 0 2 3

Gains or losses on financial investments 1 1 6

Administrative expenses (393) (361) (394)

Expenses for the bank levy and deposit guarantee scheme (12) (26) (144)

Other income and expenses (1) 14 0

Gains or losses on restructuring (1) 3 (1)

Profit/loss before taxes 159 321 164

Income taxes (46) (184) (51)

Profit/loss after taxes 114 137 112

Profit/loss attributable to non-controlling interests (1) (1) –

Consolidated profit/loss 113 136 112

19

Segment overview

EUR m

Real Estate & Savings Banks/

Financial Institutions


DKBCentral Areas

& OthersGroup

Net interest income 273 237 818 117 1,445

Risk provisions in the credit business (2) 7 37 10 52

Net interest income after risk provisions 271 244 855 127 1,498

Net commission income 192 61 33 (19) 267

Gains or losses on fair value measurement 48 45 35 58 187

Gains or losses on hedge accounting 0 1 0 (4) (3)

Gains or losses on derecognised fin. assets 0 0 5 0 5

Gains or losses on financial investments 0 0 5 3 8

Administrative expenses (298) (214) (511) (126) (1,148)

Expenses for the bank levy and deposit guarantee scheme

0 0 (66) (116) (182)

Other income and expenses 10 1 (1) 3 13

Gains or losses on restructuring 1 0 0 0 1

Profit/loss before taxes 225 137 356 (74) 644

Return on equity (RoE) (%) 17.9 5.6 13.9 (5.2) 8.4

Cost/income ratio (CIR) (%) 56.9 62.1 57.0 79.4 59.8

20

Segment overview 9M 2020

EUR m

Real Estate & Savings Banks/

Financial Institutions


DKBCentral Areas

& OthersGroup

Net interest income 247 225 711 141 1,324

Risk provisions in the credit business (30) (165) 17 3 (175)

Net interest income after risk provisions 217 60 728 144 1,149

Net commission income 174 70 (1) (20) 224

Gains or losses on fair value measurement 53 52 0 (32) 73

Gains or losses on hedge accounting 1 2 0 (3) 0

Gains or losses on derecognised fin. assets 0 6 (2) 0 4

Gains or losses on financial investments 1 0 34 27 62

Administrative expenses (303) (254) (488) (89) (1,135)

Expenses for the bank levy and deposit guarantee scheme

0 0 (46) (104) (150)

Other income and expenses 6 0 8 35 49

Gains or losses on restructuring 0 0 0 0 0

Profit/loss before taxes 148 (64) 234 (42) 276

Return on equity (RoE) (%) 11.7 (2.5) 8.9 (4.0) 3.7

Cost/income ratio (CIR) (%) 63.0 71.6 65.0 59.9 65.4

21

Balance sheet overview

EUR bn Sep 2021 Dec 2020 Change in %

Loans and advances to banks 55.6 56.2 (1.0)

Loans and advances to customers 156.9 152.4 3.0

Assets held for trading 9.4 12.1 (22.2)

Financial investments 20.1 21.9 (7.9)

Total assets 292.9 256.3 14.3

Liabilities to banks 94.0 76.0 23.6

Liabilities to customers 124.5 109.8 13.4

Securitised liabilities 48.4 43.0 12.4

Liabilities held for trading 8.1 9.4 (13.4)

Subordinated capital 2.2 1.7 32.5

Equity 12.2 11.6 5.0

22

Key capital figures

Sep 2021 Dec 2020

CET1 capital (EUR bn) 10.5 10.3

CET1 ratio (%) 16.4 15.9

Total capital (EUR bn) 12.6 11.8

Total capital ratio (%) 19.6 18.2

RWAs (EUR bn) 64.3 65.0

Leverage ratio (%) 4.9 4.3

Data as reported.

Disclaimer

23

This publication constitutes research of a non-binding nature on the market situation and the investment instruments cited here at

the time of the publication of this information, November 2021. It is, to the best of our knowledge, based on generally accessible

sources which are reliable and accurate. However, no liability can be accepted for any errors or inaccuracies in information derived

from these sources. The information used in this publication has not been checked for accuracy, completeness or relevance to

current events. We therefore cannot assume any liability as to the accuracy and completeness of this information. This public ation

is for the purposes of general information only and does not substitute in any way a personal consultation suited to your ind ividual

investment needs. For further information and updates, please feel free to contact us.

Group financial report 9M 2021

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