Funding

Following a normalisation with regard to the Covid-19 pandemic, multiple macro topics emerged during 2023 and weighed on markets. Particular impactful were the high inflation countered by unprecedented rate hikes, continued geopolitical uncertainties, the default of regional US banks and the takeover of Credit Suisse by UBS in March. Against this backdrop, markets became more volatile but looking at the whole year, credit market show a constructive performance with indices trading tighter vs. year end 22. The Group already issued € 7.5 billion in Q1, including our full regulatory capital requirements for the year. In the following months and despite elevated uncertainty, the bank demonstrated its capacity to raise liquidity. Towards end of the year, the Group narrowed the issue target for 2023 from € 13 - € 18 billion to € 14 - € 16 billion and concluded the issuance activity at € 17 billion euros. After deducting the $ 1.5 billion senior-non preferred note issued in November as pre-funding, the overall volume was within the guidance of € 14 - € 16 billion.

In light of the macro events, DB’s 5-year Credit Default Swap (referencing non-preferred debt) contract peaked on March 24, 2023 at 305bp and closed on December 29, 2023 near the full-year low at 122 bp. In the bond markets, our senior non-preferred 5.75 % EUR benchmark maturing in January 2029 closed at 168bp over Euro Mid Swaps at the end of 2023, 69bp tighter than at the beginning of the year.

The total of € 17 billion euros funding was broadly spread across the following funding sources: Tier 2 issuance (€ 1.4 billion), senior non-preferred plain-vanilla issuance (€ 6.7 billion), senior preferred plain-vanilla issuance (€ 6.0 billion), covered bond issuance (€ 3.1 billion). From a currency perspective, the total issuance volume is divided as follows: Euros (€ 8.5 billion), US dollars (€ 6.9 billion), Pounds Sterling (€ 0.8 billion) and other currencies aggregated (€ 1.0 billion). The Group’s investor base for 2023 issuances was as follows: asset managers and pension funds (34%), retail customers (17%), banks (16%), insurance companies (7%), Corporates (1%), Governments and agencies (4%) and other institutional investors (20%). The geographical distribution was split between Germany (41%), rest of Europe (24%), U.S. (26%), Asia/Pacific (8%) and Other (1%).

The average spread of issuance over 3-months-Euribor/RFR (Risk Free Rate) was 164bp for the full year. The average tenor was 5.1 years. The Group issued the following volumes over each quarter: Q1: € 7.5 billion, Q2: € 2.0 billion, Q3: € 3.1 billion and Q4: € 4.7 billion. Deutsche Bank’s issuance plan for 2024 is € 13-18 billion and similar to 2023. It comprises capital instruments, senior non-preferred, senior preferred and covered bonds. We also plan to raise a portion of this funding in U.S. dollar and may enter into cross currency swaps to manage any residual requirements. We have total capital markets maturities, excluding legally exercisable calls, of approximately € 11 billion in 2024.