Deutsche Bank Aktiengesellschaft · 2009-05-26 ·...

銷售說明書(10 月 11 日)

德商德意志銀行依據 20,000,000,000 歐元債券發行計劃(「發行計劃」)所發行之美金 230,000,000 元 4.85﹪西元 2006/2009 年之公司債(「本公司債」) 本公司債於西元 2009 年 11 月 1 日到期。本公司債利息自西元 2007 年 11 月 1 日起於每年 11 月 1 日支付一次。本公司債發行面額為美金 10,000 元。本公司債發行日預計為西元 2006 年 11 月 1 日（「發行日」）。自本銷售說明書刊印日起至西元 2006 年 10 月 31 日或安排機構及主辦承銷商共同公告本公司債募集完成之日(孰先屆至者為準)止(「募集期間」)，得向承銷商認購本公司債。本公司債由先行認購者優先承購，且於本公司債全數售出後，募集期間將不經事前通知提前結束。本公司債認購價格為本公司債本金之 100%。承銷商得超額認購本金總額不超過美金 270,000,000 元之本公司債，即本公司債得超額認購至本金總額不超過美金 500,000,000 元。發行人有權決定是否同意承銷商超額認購。詳情請詳本銷售說明書「認購與銷售」乙節第 3 頁。本公司債於中華民國境內辦理公開發行。有關本公司債之銷售限制，請詳公開說明書（定義如下）「銷

售限制」乙節。本公司債未依 1933 年美國證券法(United Sates Securities Act of 1933)辦理登記事宜。除特定情形外，本公司債不得於美國境內募集發行或移轉交付與美國境內人民。

安排機構

德商德意志銀行台北分行

主辦承銷商

兆豐國際商業銀行

主協辦承銷商一銀證券股份有限公司

寶來證券股份有限公司

統一證券股份有限公司

元大京華證券股份有限公司

協辦承銷商德商德意志銀行台北分行

大華證券股份有限公司

元富證券股份有限公司

建華證券股份有限公司

台証證券股份有限公司

（主協辦承銷商、協辦承銷商與主辦承銷商於承銷及銷售本公司債時，合稱「承銷商」）發行人及本公司債持有人就本公司債權利義務之準據法為德國法。

因本公司債而生之紛爭係以德國法蘭克福法院為管轄法院。

本公司債預計將由 Standard & Poor's Corporation 評定為 AA-級債券。本銷售說明書係根據公開說明書（詳后附之定義）作成，如與公開說明書內容有岐異，應以公開說明書

為準。本銷售說明書非公開說明書，不能視為證券交易法第 32 條及外國發行人募集與發行有價證券處理準則第 31 條所稱之公開說明書。

通知

德商德意志銀行（「本銀行」、「發行人」或「德意志銀行」）業向行政院金融監

督管理委員會（「金管會」）申報募集發行本公司債。金管會業於西元 2006 年 10 月 3日同意本公司債申報生效。德意志銀行擬向財團法人中華民國證券櫃檯買賣中心（「櫃

檯買賣中心」）申請上櫃買賣本公司債。

西元 2006 年 10 月 11 日刊印之公開說明書增補書（「公開說明書增補書」）係增補西元 2006 年 8 月 22 日為發行計畫所編製之原始公開說明書（「原始公開說明書」），投資人應詳閱公開說明書增補書、原始公開說明書、其相關附件及本公司債最終發行條

件稿（「最終發行條件」）。公開說明書增補書、原始公開說明書及最終發行條件合稱

為「公開說明書」。

德意志銀行經合理的諮詢，確認公開說明書已記載所有與本次發行有重大關係之資

料；公開說明書所載之資料實質上均係真實、正確，且無誤導之情事；公開說明書中所

未揭露之資料，亦不致使公開說明書有重大之誤導。

金管會對於本公司債發行之核准，不代表其認證公開說明書之內容，亦不表示其保

證本公司債之價值。本公司債於櫃檯買賣中心上櫃之許可不表示其對德意志銀行或本公司債之評估。

對於公開說明書未記載之任何資料或陳述，任何人均無權提供；對任何未於公開說

明書記載之資料或陳述，德意志銀行或承銷商均未予認可，且投資人不得信賴該資料或

陳述。本公開說明書之交付或本公司債之銷售，不表示公開說明書內所揭露有關德意志

銀行之資料自其刊載之日起未曾改變。

公開說明書增補書非為德意志銀行或任一承銷商對本公司債募集之要約或要約之

誘引行為。

公開說明書增補書中「美金」一詞，係指美國貨幣；「新台幣」一詞，係指中華民

國貨幣。

公開說明書之交付，及本公司債之募集、銷售與交付於特定管轄地可能將受到限

制。敦請公開說明書之持有人注意並遵守所有相關之法律。

投資人做成投資決策時，應評估公開說明書所提供之所有資訊，於必要時並應諮詢

其自行聘僱之專業顧問。

目錄

頁次

本公司債發行條件 ............................................................................................... 1 認購與銷售 ........................................................................................................... 3 債信評等機構評定等級之證明文件................................................................... 4 已發行未償還債券之發行情形 ........................................................................... 5 付款代理契約 ....................................................................................................... 6 交易限制 ............................................................................................................... 7 本公司債之租稅負擔 ........................................................................................... 8 一般事項 ............................................................................................................... 9 構成公開說明書一部之參考文件 ..................................................................... 12

本公司債發行條件

本公司債下述之發行條件僅係摘要說明。本公司債發行條件詳情請詳參原始公開說

明書及最終發行條件。 1. 發行人

德商德意志銀行。

2. 發行日西元 2006 年 11 月 1 日。

3. 發行總額美金 230,000,000 元。發行人保留是否同意承銷商超額認購至發行總額不超過美金500,000,000 元之決定權。

4. 債券種類及面額

本公司債為無記名式有價證券。面額為美金 10,000 元。 5. 受償順位

本公司債為無擔保非次順位債券。

6. 到期日

西元 2009 年 11 月 1 日。 7. 票面利率

每年 4.85% 。 8. 付息方式

本公司債付息方式為每年支付利息乙次。本公司債利息應依本公司債本金以美金計

算並以每月 30 天，每年 360 天為計算基礎計算。

9. 付息日期本公司債利息自西元 2007 年 11 月 1 日起於每年 11 月 1 日支付一次。

10. 償還方法及期限

於到期日以面額之 100%以美金贖回本公司債。 11. 營業日

台北、法蘭克福及紐約

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12. 主付款代理行德意志銀行.。

13. 擬掛牌處所本公司債擬於櫃檯買賣中心上櫃交易。

14. 承銷方式本公司債將由承銷商包銷並以洽商銷售方式出售。

15. 募集資金之用途及預期產生效益

本次募集資金擬支應德意志銀行一般資金需求。

16. 募集期間及逾期未募足之處理方式

本公司債之募集期間為自 2006 年 10 月 11 日下午 4 時(中華民國時間)起，至 2006 年10 月 31 日下午 4 時(中華民國時間)止，或安排機構及主辦承銷商共同公告本公司債已募集完成之日(孰先屆至者為準)止。並由承銷商包銷並以洽商銷售方式出售。

17. 準據法本公司債以德國法律為準據法。

18. 管轄法院

本公司債所生之紛爭係以德國法蘭克福法院為管轄法院。

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認購與銷售

發行人同意出售予承銷商且各承銷商同意依其個別承銷金額以包銷方式全額認購

本公司債。

除原始公開說明書「銷售限制」乙節另有約定外，承銷商擬以公開說明書增補書封

面所載認購價格募集本公司債。承銷商得保留其所承銷之本公司債於自有帳戶中。

發行人同意承銷商得於公開說明書增補書刊印日起 13 天內，超額認購本公司債本金總額不超過美金 270,000,000 元（即本公司債得超額認購至本金總額不超過美金500,000,000 元）。發行人有權決定是否接受承銷商超額認購之請求。於發行人同意承銷商行使超額認購請求權且承銷商提出超額認購之請求者，承銷商於符合特定條件時，得

向發行人以全額包銷方式超額認購雙方同意數額之本公司債。

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債信評等機構評定等級之證明文件

Standard & Poor's Corporation 就發行人債信評等所出具之證明文件請詳參附件 A。

本公司債預計將由 Standard & Poor's Corporation 評定為 AA-級債券。

信用評等並非就購買、出售或持有有價證券提出相關建議，且信用評等機構得隨時

修正或撤回其所評定之信評評級。發行人僅就重製上述債信評等證明文件之正確性負責，但就該證明文件所提供之資

訊不負任何責任。

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已發行未償還債券之發行情形

截至西元 2006 年 6 月 30 日止，德意志銀行於資本市場之未償餘額約為歐元 818

億，相關產品種類如下: 產品歐元(EUR) 已發行資本 16,473,927,566 SSD 4,223,072,335 定存單 14,139,419,450 中期債券 24,639,321,930 歐洲債券 18,308,814,786 存款 4,031,419,522 總額 81,815,975,589

註：SSD (或Schuldscheindarlehen) 係依德國法律訂定之可移轉及交易之借款契約（「可移轉貸款」）

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付款代理契約

發行人德意志銀行及主付款代理行（Fiscal Agent）德意志銀行及其他機構於西元2006 年 8 月 22 日就發行計畫簽訂發行及付款契約增補契約（「付款代理契約」）。

依付款代理契約約定，發行人就發行計畫所發行之債券委任主付款代理行辦理支付

到期應付款項，及代理發行人通知債券持有人等相關事宜。

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交易限制

德意志銀行係依德國法律合法設立且仍有效存續之公司，且本公司債將於櫃檯買賣

中心上櫃交易。依德國法律規定，德國境外之人買賣本公司債並無任何交易限制。本公司債之移轉

及買賣將依櫃檯買賣中心相關規定辦理。有關銷售限制之更多相關資訊請詳基礎公開說明書「銷售限制」乙節。

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本公司債之租稅負擔

下述有關稅務法令之摘要係依據現行法律及實務所為，且僅具摘要性質，並非法律

意見或稅務建議。投資人（尤其是應適用特別稅務法令規範者，如銀行、證券商、保險

公司及享受租稅優惠之機構等）投資本公司債時請務必洽詢稅務顧問意見。本公司債之利息

支付於中華民國境內個人之債券利息，可免課徵中華民國所得稅。惟依中華民國法

律設立之營利事業之債券利息應課徵中華民國營利事業所得稅。

證券交易稅

本公司債係證券交易稅條例所規定之有價證券，故買賣本公司債應適用證券交易稅

條例之規定。惟依經濟部工業局西元 2006 年 9 月 6 日經授工字第 09520413260 號函，至西元 2009 年 12 月 31 日止，本債券免徵中華民國證券交易稅。

證券交易所得

依現行中華民國法令規定，有價證券之出售或及他處分所實現之收益免徵中華民國

證券交易所得稅。依財政部西元 2006 年 10 月 11 日台稅一發字第 09504109740 號函，本公司債之出售或處分所實現之收益亦得免徵中華民國證券交易所得稅。本公司債於德國之租稅負擔

依現行德國法令規定，除特定情形外，支付於德國境外之人之債券利息，可免課徵

德國所得稅及證券交易所得稅。

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一般事項

如何購買本公司債

承銷商將於發行日向發行人認購本公司債，並將辦理本公司債之銷售事宜。募集期間

本公司債之募集期間為自 2006 年 10 月 11 日下午 4 時(中華民國時間)起，至 2006 年

10 月 31 日下午 4 時(中華民國時間)止，或安排機構及主辦承銷商共同公告本公司債已募集完成之日(孰先屆至者為準)止。安排機構及主辦承銷商毋需於募集期間屆滿前寄發任何事前通知。

本公司債由先行認購者優先承購，且於本公司債全數售出後，募集期間將不經安排

機構及主辦承銷商事前通知提前結束。若投資人欲購買本公司債，請逕洽承銷商。除承銷商外，本公司債無從自發行人或

任何他人購得。銷售程序

投資人如欲購買本公司債，請洽承銷商索取申購書。於募集期間屆滿前，請將填妥

之申購書，連同本公司債之款項交付予承銷商。購買本公司債係依據公開說明書增補書及申購書之條款為之。發行人並未規範申購書之格式及內容，且申購書之格式及內容得因各承銷商之申請

與付款程序及其他相關操作程序之不同而有所差異。如以傳真方式寄送申購書，投資人

應將該申購書正本以郵寄方式轉交予相關承銷商。發行人或任何承銷商對投資人因傳真

或郵遞方式未收到申購書所生之損害不負任何責任。最低投資金額

本公司債最低投資金額為美金 10,000 元整。

付款程序

本公司債以美元計價，投資人應以美元向承銷商支付應付款項。承銷商應於募集期

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間最後一日下午 4 時前收到該購買金額之交割款(如有需要，應經匯兌)。建議投資人勿以支票付款，以免造成交割遲延。投資人將依各承銷商之ㄧ般作業程序付款。

除前段所述者外，投資人購買本公司債支付購買金額時應依各承銷商之一般作業程

序，依各承銷商指示之方式為之及/或支付至各承銷商指定之帳戶。各承銷商應將本公司債購買金額之付款及/或返還申購價金之作業程序相關細節提供予投資人。投資人僅就其所購得之債券支付款項。申請購買本公司債時應確認事項

於投資人向承銷商提交購買本公司債之申請時，視同投資人向承銷商及發行人確認

包括但不限於下列事項：

同意接受其所申請並購得之本公司債；同意就實際購得之債券全額支付購買金額；同意如其未能承購本公司債，或僅購得申購數額之部分債券，或如本公司債因任何

原因無法發行者，則所申購數額之一部或全部將無息返還予該投資人，且該投資人

應承擔返還之風險；授權收受其申請之承銷商將其所購得之債券存入該投資人之投資帳戶，且瞭解本公

司債為無實體發行且本公司債權利之表彰將以劃撥轉帳方式為之；已收到、閱讀並瞭解英文公開說明書(包含公開說明書增補書、原始公開說明書和

最終發行條件)及中文銷售說明書；知悉本公司債之準據法為德國法，且以德國法蘭克福法院為管轄法院；瞭解其係直接向銷售本公司債之承銷商購買本公司債，投資人與發行人間於投資人

申請購買本公司債時，就該債券無任何購買契約之契約關係；瞭解並同意發行人及承銷商無義務對投資人提供金融服務及保管服務，或就投資人

運用其於承銷商所開立之銀行帳戶、投資帳戶或保管服務所生之損失不負任何責

任；同意發行人或承銷商或其董事、經理人、代理人及代表人就承銷商依投資人於其開

戶之銀行帳戶或投資帳戶操作作業程序所為之銷售行為所致之任何損失，不負任何

責任；確認其非在美國境內且非美國證券交易法 S 規則（Regulations S）定義下美國人(包

括美國居民及依美國法律組織或設立之合夥或公司)；及瞭解投資本公司債之性質及投資本公司債所涉之風險。

投資人向承銷商申請購買本公司債時，應確認其已閱讀並瞭解前述確認事項。

- 10 -

交割程序

為買賣本公司債，投資人應於證券商處開設保管劃撥帳戶，並於銀行開設外幣存款

帳戶。

本公司債於初級市場之認購將透過臺灣集中保管結算所（「保管結算所」）於

Euroclear Bank S.A./N.V. （「Euroclear」）或 Clearstream Banking Luxembourg SA (「CBL」)等結算機構所開設之帳戶進行交割。保管結算所並將轉撥該等本公司債至初級市場投資

人指定之保管劃撥帳戶中。由於時差因素，保管結算所轉撥本公司債至投資人所指定保

管劃撥帳戶之日期預計為本公司債發行日之次一營業日。本公司債之買賣及交割應依保

管結算所及櫃檯買賣中心就本國債券之相關法令及處理程序辦理。

如投資人已於 Euroclear 或 CBL 開設帳戶，得填具相關申請書向保管結算所申請辦理跨國匯撥作業，將其存於 Euroclear 或 CBL 帳戶中之本公司債撥入保管結算所於Euroclear 或 CBL 所開設之帳戶，或將其存於保管結算所於 Euroclear 或 CBL 所開設帳戶中之本公債撥入該投資人於 Euroclear 或 CBL 已開設之帳戶。

本公司債之本金及/或利息分派，於保管結算所收受該等款項後（因時差關係，保

管結算所預計於分派日次一營業日收受該等款項），將由保管結算所指定之清算銀行扣

除匯費及其他相關費用後，於次一營業日前辦理撥付至投資人之外幣存款帳戶。投資人

實際收受匯撥款時間將視其開設外幣存款帳戶銀行之一般作業時間而定。

由於保管結算所目前委託兆豐國際商業銀行為美元清算銀行，故投資人如為兆豐國

際商業銀行外幣存款戶，則毋須負擔外幣匯出匯入款費用。投資人每年應支付保管結算所及 Euroclear 或 CBL 外幣債券帳簿保管費，分別為

新台幣 0.009%及歐元 0.0148%（約當一般銀行之信託保管費）。以每一萬美元投資金額計算，每年約新台幣 80 元，此費用由當時債券存放之證券存摺戶券商於台幣交割帳戶扣除之。

- 11 -

構成公開說明書一部之參考文件德意志銀行於西元 2006 年 5 月 15 日刊印之登記文件（Registration Document）及截至西元 6 月 30 日之半年報均構成公開說明書之一部。該等相關文件均業已上傳至盧森堡證券交易所之網站上（網址：www.bourse.lu）。

- 12 -

附件 A －債信評等機構評定等級之證明文件

- 13 -

: Reprinted from RatingsDirect Research

Deutsche Bank AG Publication date: 08-Dec-2005

Primary Credit Analyst: Bernd Ackermann, Frankfurt (49) 69-33-999-153; [email protected] Secondary Credit Analyst: Stefan Best, Frankfurt (49) 69-33-999-154; [email protected] CREDIT RATING

AA-/Stable/A-1+ Outstanding Rating(s)

Counterparty Credit AA-/Stable/A-1+ Certificate of deposit AA-/A-1+ Senior unsecured AA- Commercial paper Foreign currency A-1+ Subordinated A+ Junior subordinated Local currency A- Short-Term debt

Local currency A-1+ Credit Rating History May 10, 2002 AA-/A-1+ May 17, 1999 AA/A-1+ Sovereign Rating Germany (Federal Republic of) AAA/Stable/A-1+ Related Entities Bankers Trust International PLC Counterparty Credit A+/Stable/A-1 Certificate of deposit Local currency A+/A-1 Certificate of deposit Foreign currency A-/A-1 Senior unsecured Local currency A+ Subordinated Local currency A Blue Spice LLC

Page 1 of 15 Research: Deutsche Bank AG [08-December-2005]

mailto:[email protected]:[email protected]

Commercial paper Local currency A-1+ BTAB Holdings Funding Corp. Counterparty Credit A-1 Commercial paper Local currency A-1 Deutsche Bank Capital Funding Trust I Preferred stock Foreign currency A Deutsche Bank Capital Funding Trust II Preferred stock Foreign currency A Deutsche Bank Capital Funding Trust III Preferred stock Local currency A Deutsche Bank Capital Funding Trust IV Preferred stock Local currency A Deutsche Bank Luxembourg S.A. Counterparty Credit AA-/Stable/A-1+ Certificate of deposit AA-/A-1+ Senior unsecured Foreign currency AA- Subordinated A+ Junior subordinated Foreign currency A- Deutsche Bank Trust Corp. Counterparty Credit A+/Stable/A-1 Senior unsecured Local currency A+ Commercial paper Local currency A-1 Subordinated Local currency A Preferred stock Local currency A- Deutsche Securities Ltd. (Tokyo Branch) Counterparty Credit AA-/Stable/A-1+ BT Capital Trust A Preferred stock Local currency A- BT Institutional Capital A Preferred stock Local currency A- BT Institutional Capital B Preferred stock Local currency A- BT Overseas Finance N.V. Preferred stock Local currency A- Deutsche Bank National Trust Company Counterparty Credit A+/Stable/A-1 Certificate of deposit A+/A-1


Deutsche Bank Trust Company Americas Counterparty Credit A+/Stable/A-1 Certificate of deposit A+/A-1 Senior unsecured A+ Subordinated Local currency A Deutsche Bank Trust Company Delaware Counterparty Credit A+/Stable/A-1 Certificate of deposit Local currency A+/A-1 BTC Capital Trust I Preferred stock

Local currency A-

Major Rating Factors Strengths:

• Strong franchise in global corporate banking and securities business;

• Strong improvements in group profitability; and

• Improvements in credit and market risk profile through derisking.

Weaknesses:

• Less business diversification into retail and private banking compared with some other global universal banks;

• Low revenue momentum in asset management and retail banking; and

• Need for repositioning in some areas of asset management.

Rationale

The ratings on Deutsche Bank AG are based on the group's strong global franchise in the corporate banking and securities business, a track record of strong earnings improvements coupled with a derisking strategy, and sound risk management and liquidity. This is partly offset by its lower business diversification into retail and private banking compared with some other global universal banks, placing Deutsche Bank's profile somewhat more in line with leading U.S. brokers. Other offsetting factors are the low top-line revenue growth outside investment banking and the need to reposition some of its asset-management activities. This is a precondition of further bottom-line growth in these areas. Deutsche Bank benefits from one of the world's leading franchises in investment banking, particularly in Europe. As a result, it should be able to withstand strong competition and continue to experience sound earnings growth through the cycle. Group profitability has demonstrated a tremendous turnaround from earlier modest levels, and is now broadly in line with similarly rated peers. Investment banking remains the key driver for growth, but all business lines have experienced improvements in 2005. Nevertheless, on a business-line comparison, profitability in the group's Private Clients and Asset Management (PCAM) business is still weaker than at some of its peers, and revenue growth in this segment remains modest. To some degree, this reflects the need to reposition some of its asset-management activities, and the continued difficult operating environment in Germany. Standard & Poor's still considers Deutsche Bank's group earnings to be more susceptible to potentially more challenging financial-market conditions compared with higher-rated global universal banks. Nevertheless, the bank has made significant progress in limiting the fluctuations in earnings by scaling down its industrial holdings and alternative investments, reducing the importance of corporate loan exposures, cutting loan


concentration risks, and scaling down proprietary trading activities. This strategy is coupled with continued good risk management, including sound liquidity.

Outlook The stable outlook reflects Standard & Poor's expectation that Deutsche Bank should be able to maintain sound earnings in a less favorable capital-market environment given the diversification achieved within Corporate Banking and Securities (CB&S), and the enhanced absolute bottom-line contribution from its other business lines. Management is expected to remain committed to further progress in businesses outside investment banking. Moreover, the bank's drive to manage capital more aggressively is expected to be curbed, and the agreed disposal of its stake in Eurohypo AG (A-/Stable/A-2) is likely to lead to a sustainable improvement in adjusted common equity (ACE) and adjusted total equity (ATE). Significant and sustainable progress in delivering continued profitable growth across business lines—-but most importantly in the noninvestment banking divisions--would have positive rating implications. A failure to demonstrate the sustainability of sound earnings, particularly in its investment-banking division, would be considered negative. A significant increase in leverage would also have negative rating implications, including if litigation risk were to affect the bank's capital position significantly. Deutsche Bank is increasingly eager to grow retail operations in emerging markets. If the bank were to embark on a major acquisition, such a transaction would have to be assessed in light of the impact on its financial profile, the strategic fit, and Deutsche Bank's track record in the respective markets.

Profile Deutsche Bank's market position in its key product areas is strong, and its diversification is adequate considering the breadth of products across business lines. Like major U.S. brokers, however, its investment-banking activities account for a relatively high proportion of revenues (54% of underlying revenues at Sept. 30, 2005), which renders Deutsche Bank's business mix less diversified into retail and private banking than some other large global universal banks. The bank's regional diversification is sound, with particular strength in European markets. In contrast to its German competitors, Deutsche Bank has successfully reduced its reliance on the difficult domestic environment, benefiting from the global expansion in Corporate and Investment Banking (CIB). In 2004, its German operations accounted for 32% of total underlying revenues. Corporate and Investment Banking Corporate Banking & Securities. Deutsche Bank captures strong market positions globally in many areas of corporate and investment banking based on excellent distribution power, strong product expertise, and a highly recognizable brand. This is underlined by its persistent top-tier positions among global investment banks in terms of revenues. Consistent focus on improvements over several years is paying off in higher market shares and profitability. It has high league-table rankings in European debt underwriting and equity capital markets, and an average position in U.S. bond underwriting. Its relative position in U.S. equities and mergers and acquisitions has remained underdeveloped compared with its other activities, but is gradually progressing. Global Transaction Banking (GTB). Deutsche Bank holds a leading position in the euro cash-clearing business, and offers a full product range of trade finance, cash management, and trust and securities services to its customers. The business line has emerged successfully from a re-engineering of its cost base. Private Clients and Asset Management Private & Business Clients (PBC). Deutsche Bank offers a comprehensive product range to about 13 million private and small corporate customers mainly in Germany, Italy, and Spain. In Germany, it maintains a sound position in the affluent, advisory-driven customer segment, whereas its market share in the mass-retail business is low. Its network has been streamlined in recent years, which was intended to increase productivity and foster sales initiatives, allowing the bank to achieve a sustainable improvement in bottom-line earnings despite the continued sluggish growth in Germany. Its position in growth countries in emerging markets is still modest.


Asset and Wealth Management (AWM) In AWM, the bank runs one of the leading mutual funds operations in Europe through its subsidiary DWS. In areas such as U.K. institutional asset management or Scudder in the U.S., however, its market position has eroded, mainly in the wake of investment underperformance, poor management, or increased regulatory scrutiny. Efforts to reposition the business and to optimize its cost base are under way with a new management. It is likely to take another one or two years, however, to see the full earnings benefits if this program is successful. Meanwhile, net new money outflow appears to be drying up. The segment also includes Private Wealth Management (PWM), which caters to high-net-worth individuals globally. With €160 billion in invested assets, the business is still in a build-up phase with further growth potential, but it is likely to continue to lack the scope of the big Swiss banks, which grow by much more significant volumes. Corporate Investments (CI) This division manages the majority of the group's alternative assets--including private equity and venture capital investments--and Deutsche Bank's traditional industrial shareholdings. The importance of these relatively capital-intensive legacy investments has been significantly reduced in recent years.

Ownership and Legal Status Deutsche Bank is a joint-stock company. Its shares are widely held--with no shareholder owning more than 5%--and are listed on all major stock exchanges worldwide.

Strategy Deutsche Bank's strategic direction has gained clarity in recent years through its focus on organic growth in its core business lines, combined with a scaling down of underperforming and capital-intensive activities. The major wave of restructuring should now be complete, and improvements in individual business lines have become more visible. Management has delivered on its targets set in 2002, and is on track to achieve its earnings goal of 25% ROE before tax in 2005. While it focused on internal development in recent years, the bank has been less active in pursuing external growth compared with some of its European universal bank competitors, some of which identified opportunities in retail or corporate banking outside Western Europe. Investment banking is set to remain the group's growth engine, but management remains committed to continued profitable investments in its retail-banking and asset-management activities. This has been underpinned by several add-on acquisitions for AWM, and an array of initiatives within PBC to enhance its distribution network in Europe. In addition, the bank is increasingly eager to expand retail operations in emerging-market countries in Europe and Asia. The majority of measures under the group's realignment program (BRP) announced in February 2005 have meanwhile been implemented without any negative impact on revenue or market share growth. In an attempt to enhance cost structures and client coverage, the bank reinvests part of the BRP cost savings in growth opportunities. At this stage, the repositioning of some areas of asset management remains the main challenge. Key loss-making activities have been sold recently, however. In addition, in recent years management has established a track record of successfully implementing necessary changes. Deutsche Bank's top management team has been very stable in the past few years under the leadership of Josef Ackermann. Some uncertainties remain, however, should a legal dispute involving Mr. Ackermann about alleged undue compensation payments to former managers of telecom operator Mannesmann be reopened.

Accounting Accounting principles Deutsche Bank prepares its financial statements under U.S. GAAP. The bank will have to apply IFRS by 2007.


Equity method accounting: Eurohypo AG Deutsche Bank will sell its 38% stake in German mortgage bank Eurohypo AG (A-/Stable/A-2) to Commerzbank AG (A-/Stable/A-2) in two tranches on Dec. 15, 2005, and March 31, 2006. The sale will have a positive effect of about €2.5 billion on Standard & Poor's calculation of Deutsche Bank's ACE. This is because at Sept. 30, 2005, Deutsche Bank still accounted for the stake under the equity method, and in its calculation of ACE, Standard & Poor's has fully deducted the carrying amount of this investment of about €2.5 billion. The deduction has been made to adjust for the double leverage effect, given that regulators treat this stake as a risk asset only. Pensions Standard & Poor's has not adjusted ACE for unrecognized losses relating to pension and other employee benefit plans. Deutsche Bank recognized a net asset of €792 million in its consolidated balance sheet at year-end 2004 relating to pension and postretirement benefits. Adjusting this amount to the €87 million funding deficit of benefit obligations in excess of plan assets would require a gross charge of €879 million at year-end 2004. This gross charge would be mitigated by an appropriate incremental deferred tax benefit. The gross charge equals the unrecognized net actuarial losses resulting from the 10% "corridor" approach applied by Deutsche Bank, prior service costs, and transition obligations. Legal proceedings Like other institutions, Deutsche Bank continues to be subject to various legal proceedings involving IPO allocation and the former Enron Corp. and Parmalat. The banks concerned have stated their intent to defend their cases vigorously, but could follow the example of certain North-American groups and reach a settlement.

Asset Quality Deutsche Bank's credit exposure quality is solid and well managed. Asset quality has improved in recent years, with about 80% of corporate credit exposure internally rated investment grade per year-end 2004, benefiting from the benign global credit environment, workout of problem loans, and structural portfolio changes. Such changes include a shift in credit exposure to tradable assets, retail lending, or derivatives exposures. At the same time, concentration risk in the corporate loan book has been substantially reduced through systematic exposure hedging. These measures should lead to a sustainable reduction in the volatility of credit-related losses in the future. Although the bank uses its balance sheet to accommodate sizable client transactions, its strong ability to sell down such exposures mitigates these risks. Reserves for existing problem credit exposures are adequate, taking into account collateral positions. Moderately higher levels of credit loss provisions are expected, however, given that loan-loss provisions are below their statistically expected losses. Only about €52 billion of Deutsche Bank's credit exposure as of Dec. 31, 2004, is in the form of CIB corporate loans. The volume has declined by about 42% since year-end 2002, mainly due to the reduction in single-name concentration risk—-the major driver behind ballooning loss provisions in 2002--and active management of the distribution of credit risk. This has been achieved by pursuing hedging strategies in which all CIB loans are hedged if they exceed a predefined threshold level under a rating and risk bucket-based matrix. Although some hedges might result in basis risks, the level and sophistication of the bank's loan hedging, in combination with its industry-based risk management approach, greatly reduce loan portfolio concentration risks. About 90% of Deutsche Bank's total corporate credit exposure at Dec. 31, 2004, was in the form of tradable assets, derivatives, and contingent liabilities. Holdings in tradable assets are also subject to matrix-based maximum limits, and are subject to stress testing to reflect specific single-name issuer risks in the bank's economic capital calculation. Underwriting commitments can be sizable, but are generally sold down rapidly. Loan-book growth is displaying a bias toward smaller-balance, homogeneous retail loans with relatively low unexpected losses, comprising mainly mortgage lending. As a result, total loans to retail and small business clients accounted for 55% of the group's total loan book at Dec. 31, 2004. Consumer finance in Germany and Italy is expected to remain a growth area for Deutsche Bank.


The level of problem and potential problem loans has fallen constantly by about 60% since year-end 2002 to about €4.3 billion (gross of collateral) at Sept. 30, 2005, of which provisions cover 49%. The decline reflects the benign environment prevalent in recent years, and successful workout, but also a catch-up effect in charge-offs to U.S. GAAP practice. After nine months of 2005, net new credit-loss provisions are at a very low 24 basis points (bps) on average for customer loans, or €252 million. This low level will not be sustainable because it benefits from the benign corporate credit environment and reversals of provisions that are no longer necessary. The only portfolios that require net new additions are retail and MidCap Germany, reflecting the continued high level of private and corporate insolvencies in Germany, and formula-driven provisions tracking the underlying loan growth in small-balance homogeneous loans.

Profitability Deutsche Bank's earnings continue to demonstrate a significant turnaround from the disappointing results in 2002 and 2001, reflected by increased momentum at group level after nine months of 2005 and improvements in each business segment. Although favorable markets for investment banking and a benign credit environment were clearly supportive of the turnaround, it also reflects improved cost structures and the benefits of its more focused strategy. As a result, group profitability ratios at Sept. 30, 2005, have reached levels broadly in line with similarly rated peers. Full-year ratios are likely to be somewhat weaker than interim numbers, due to expected fourth-quarter seasonal effects in sales and trading. Earnings should remain sound even if the capital markets environment becomes less favorable. The bank should also benefit from the effects of its BRP on costs and revenues, which have not yet reached the full rate in 2005. Top-line growth outside CB&S remains low, however. Given that the bank's major cost restructurings--apart from remaining measures under the BRP--are complete, and given that credit-loss provisions might inch up again, such top-line growth is a precondition for further progress on bottom-line earnings. Moreover, potential liabilities arising from legal suits could adversely affect Deutsche Bank's earnings over coming quarters. Reliance on investment-banking revenues remains a negative factor, given that the industry has experienced marked revenue swings in past market cycles. The group's ability to absorb potential swings in this business line has improved, however, given that PCAM and GTB together should reach operating pretax profits of about €2 billion in 2005. Furthermore, the bank has taken measures to reduce the group's earnings volatility with its comprehensive loan exposure hedging, and by materially reducing the level of principal investments. The group has enhanced its cost base through outsourcing and trimming its noncompensation expenses. Performance of Strategic Segments CB&S: €3.4 billion underlying pretax profit at Sept. 30, 2005. CB&S is diversified across products, and should benefit from the longer-term underlying growth momentum in international capital markets. It weathered the market turmoil in the second quarter of 2005 remarkably well, with year-on-year flat second-quarter revenues in debt products, and a 9% increase overall. With an operating pretax margin of 31% after nine months of 2005, its profitability is in line with that of international peers, in particular when considering the less favorable cost-to-revenue environment prevailing in European investment banking. GTB: €412 million underlying pretax profit at Sept. 30, 2005. Earnings improvements in transaction services mainly result from cost restructuring. Reported operating income increased by 76% to €412 million by Sept. 30, 2005. Standard & Poor's earnings expectations for GTB are moderately positive unless the division's modest revenue momentum accelerates. PBC: €745 million underlying pretax profit at Sept. 30, 2005. Retail banking performance is held back by sluggish loan demand and investor confidence in Germany. Therefore, the 3% per year top-line growth to date in 2005 is mainly driven by operations in Italy and Spain. Its €1 billion pretax profit in 2004 was already a remarkable achievement given the environment, and its ability to sustain that level in 2005 despite investment expense for further growth initiatives is positive. The division has a strong 61% operating pretax return on equity based on reported allocated average active equity, which mainly takes into consideration economic capital consumption. On some other indicators,


however, such as its cost-to-income ratio of 72%, it still compares unfavorably internationally, which partly reflects its focus on counseling-driven products. AWM: €493 million underlying pretax profit at Sept. 30, 2005. AWM continues to be the underperformer of the group, with 81% operating costs to income, despite 26% bottom-line growth by Sept. 30, 2005. Moreover, operating pretax profits remain largely driven by its fund operator DWS, and by PWM. The business does have upside potential in the medium term, depending on the success of its current repositioning, but as yet this is uncertain. In the short term, the disposal of its loss-making U.K.-based business at the end of the third quarter of 2005 should have positive effects.

Asset-Liability Management Funding and liquidity Standard & Poor's regards Deutsche Bank's funding mix as well diversified by products and types of investors and regions. Core funding sources--such as retail and fiduciary deposits, and long-term bond issues in the capital markets--represent the bulk of the group's unsecured funding. Deutsche Bank's trading portfolio--with a high proportion of liquid unencumbered securities--provides the bank with additional flexibility. Overall, treasury and asset-liability operations are conducted within strict and prudent parameters. Deutsche Bank has implemented a fully integrated liquidity-risk framework. Important tools include the funding matrix, which models and maps all funding-relevant assets and liabilities in time brackets to determine potential funding mismatches. Short-term liquidity is assessed by a system that tracks net cash outflows from off- and on-balance-sheet transactions globally by products and by currency over an 18-month horizon. Deutsche Bank applies extensive stress testing and scenario analysis to evaluate the effect of unforeseen events with a potentially unfavorable impact on the group's liquidity. Trading-book market risk Deutsche Bank has a conservative risk appetite and its risk-management capability is sound by industry standards. The stature and quality of risk management within the bank is strong, and it appears to have sufficient dialogue with lines of business. Although the risk management function does not set limits down to desk level, the limit-setting process is a combination of a bottom-up and top-down approach. The bank also employs a comprehensive, Web-based new-product approval process. Quantitatively, the firm expresses risk appetite through a trifocal approach capturing product-specific sensitivities, value at risk (VaR), and customized stress-test scenarios including event-risk scenarios for trading positions within specific countries. These stress-test measures are used for calculating economic capital requirements for market risk. There are more than 100 business-level stress tests performed weekly, which are aggregated across the group, taking into account correlations in a hectic market environment. They are complemented by top-down macro scenarios. The extensive use of stress testing is considered positive, given that Deutsche Bank takes on positions in illiquid, credit-sensitive assets and nonlinear risks, whose risks are not sufficiently captured by VaR. Based on these stress-test scenarios, which are calibrated to a one-year holding period, the bank reports an economic capital requirement for trading market risk positions of about €1.5 billion, which is moderate for the size of its sales and trading activities (this number excludes nonmarket risk components related to trading activities). The bank's trading units also demonstrated relatively resilient earnings in the mixed environment in the second quarter of 2005 compared with peers. Moreover, the risk efficiency of the bank (measured by quarterly revenues to average VaR) has improved in 2005, given that higher revenues were achieved with relatively stable VaR exposure. VaR benefited, however, from lower market volatility, and from the transfer of its proprietary trading unit (DB Advisor) into AWM, where it is now run with third-party funds. Nevertheless, the still relatively strong seasonality of first-quarter to second-quarter earnings in 2005 compared with previous years also emphasized that market-risk exposure should depend more on the negative impact that difficult market conditions could have on the bank's revenues rather than on a one-off heavy loss. Nontrading book market risk Nontrading market risk has long been more substantial to Deutsche Bank than market risk from its trading


activities. Nontrading market risks mainly relate to a few remaining, although sizable and undiversified, principal investments in the CI division. With the agreed sale of its entire stake in Eurohypo and the recent reduction of its stake in DaimlerChrysler to less than 5%, however, Deutsche Bank has vastly reduced its risks from large industrial holdings. Alternative assets (private equity, hedge fund, or real estate) across the group have also been scaled down. The exposure of €2.7 billion book value is modest because it comprises a share of indirect diversified investments, and about 40% of the total relates to seed investments for PCAM client business. Unlike many other banks, Deutsche Bank has only marginal additional interest-rate risk in its banking book from asset-liability management. This is because substantially all interest-rate risk positions arising from the banking book are internally hedged with CIB trading units, and are therefore captured and managed within market-risk positions of the trading book.

Capital Deutsche Bank's capitalization is satisfactory for its risk profile and compared with similarly rated peers. Although the bank is managing its shareholders' equity base more aggressively than in the past through share buybacks and higher dividends, this has been coupled with improvements in internal capital generation and a derisking of its loan book and principal investments. In addition, ACE to risk assets has slightly improved in 2005 after continued declines since year-end 2002. The sale of its stake in Eurohypo is expected to lead to another sustainable improvement in ACE. Deutsche Bank is committed to maintaining a regulatory Bank for International Settlements (BIS) Tier 1 ratio in the range of 8%-9%. The shift from loans to trading and asset management, or a stronger use of hybrid capital, could lead to an increase in the group's leverage without a formal breach of the capital target, however. At Sept. 30, 2005, the BIS Tier 1 ratio was 9.0%, compared with ACE to risk assets of 6.3%. The major difference between these two measures of capital strength is the treatment of hybrid capital instruments totaling about €4.2 billion, which are partly included in Standard & Poor's extended definition of total equity, and the treatment of Deutsche Bank's stake in Eurohypo. Like for like, ACE to risk assets should improve by about 90 bps through the sale of Eurohypo.

Bank Subsidiaries Deutsche Bank Luxembourg S.A. The ratings on Deutsche Bank Luxembourg S.A. (DB Lux) reflect Standard & Poor's view of the bank as a core subsidiary, given its strategic importance to and close integration with Deutsche Bank, and its good risk profile. DB Lux is a wholly owned subsidiary of Deutsche Bank. DB Lux's main business is derived from its intensified European central function for Deutsche Bank's international refinancing activities and liquidity management, complemented by private banking and euro market lending. Serviced by about 330 staff, DB Lux had total assets of €52.7 billion, representing 5.4% of the parent's consolidated assets under U.S. GAAP, and tangible common equity of €1.2 billion at year-end 2004.

Table 1 Balance Sheet Statistics --Year ended Dec. 31-- Breakdown as a % of assets (adj.) (Mil. €) 2005* 2004 2003 2002 2001 - 2005* 2004 2003 2002 2001 Assets Cash and money market instruments 257,899 215,219 206,500 189,928 192,377 26.76 25.85 25.95 25.37 21.16 Securities 367,589 326,311 304,542 252,952 304,697 38.14 39.19 38.27 33.79 33.51

Trading securities (marked to market) 343,482 305,976 279,911 231,333 233,031 35.64 36.75 35.17 30.90 25.63

Nontrading securities 24,107 20,335 24,631 21,619 71,666 2.50 2.44 3.10 2.89 7.88 Mortgage-backed securities included above N.A. 41 2,708 164 1,083 N.A. 0.00 0.34 0.02 0.12 Loans to banks (net) N.A. 7,787 10,521 10,720 26,398 N.A. 0.94 1.32 1.43 2.90


Customer loans (gross) 148,299 130,978 137,766 160,999 239,578 15.39 15.73 17.31 21.50 26.35 Public sector/government N.A. 3,278 2,309 4,584 23,569 N.A. 0.39 0.29 0.61 2.59 Residential real estate loans N.A. 35,292 33,861 32,502 39,001 N.A. 4.24 4.25 4.34 4.29 Other consumer loans N.A. 21,784 21,076 20,705 21,382 N.A. 2.62 2.65 2.77 2.35 Commercial real estate loans N.A. 14,104 13,606 18,360 38,257 N.A. 1.69 1.71 2.45 4.21 Commercial/corporate loans N.A. 23,558 27,979 37,012 47,772 N.A. 2.83 3.52 4.94 5.25 All other loans 148,299 32,962 38,935 47,836 69,597 15.39 3.96 4.89 6.39 7.65 Loan loss reserves 2,109 2,345 3,281 4,317 5,585 0.22 0.28 0.41 0.58 0.61 Customer loans (net) 146,190 128,633 134,485 156,682 233,993 15.17 15.45 16.90 20.93 25.73 Earning assets 766,777 672,716 652,693 605,620 752,658 79.57 80.79 82.02 80.89 82.77 Equity interests/participations (nonfinancial) 5,871 5,436 6,170 9,068 11,997 0.61 0.65 0.78 1.21 1.32 Inv. in unconsolidated subsidiaries (financial co.)¶ 2,500 2,500 2,400 1,700 N.A. 0.26 0.30 0.30 0.23 N.A. Intangibles (nonservicing) 8,152 7,427 7,817 9,683 8,886 0.85 0.89 0.98 1.29 0.98 Fixed assets 5,131 5,225 5,786 8,883 9,806 0.53 0.63 0.73 1.19 1.08 Derivatives credit amount 80,380 67,173 65,460 65,729 60,622 8.34 8.07 8.23 8.78 6.67 Accrued receivables 4,626 3,854 3,612 4,208 5,907 0.48 0.46 0.45 0.56 0.65 All other assets 93,493 70,503 56,321 48,802 63,539 9.70 8.47 7.08 6.52 6.99 Total reported assets 971,831 840,068 803,614 758,355 918,222 100.85 100.89 100.98 101.29 100.98 Less nonservicing intangibles (8,152) (7,427) (7,817) (9,683) (8,886) Adjusted assets 963,679 832,641 795,797 748,672 909,336 100.00 100.00 100.00 100.00 100.00 Breakdown as a % of liabilities + equity 2005* 2004 2003 2002 2001 2005* 2004 2003 2002 2001 Liabilities Total deposits 360,329 329,469 306,154 327,625 374,089 37.08 39.22 38.10 43.20 40.74 Public sector or total pfandbriefe 0 0 0 0 56,716 0.00 0.00 0.00 0.00 6.18 Repurchase agreements 153,262 118,173 117,250 99,499 80,919 15.77 14.07 14.59 13.12 8.81 Other borrowings 151,812 128,275 121,173 117,309 141,741 15.62 15.27 15.08 15.47 15.44 Other credit reserves 349 345 416 485 496 0.04 0.04 0.05 0.06 0.05 Other liabilities 273,477 236,261 227,864 182,094 222,253 28.14 28.12 28.35 24.01 24.20 Total liabilities 939,229 812,523 772,857 727,012 876,214 96.65 96.72 96.17 95.87 95.43 Total shareholders' equity 32,602 27,545 30,757 31,343 42,008 3.35 3.28 3.83 4.13 4.57 Preferred stock and other capital 3,565 2,520 3,287 2,108 2,615 0.37 0.30 0.41 0.28 0.28 Common shareholders' equity (reported) 29,037 25,025 27,470 29,235 39,393 2.99 2.98 3.42 3.86 4.29 Share capital and surplus 1,416 1,392 1,490 1,592 1,591 0.15 0.17 0.19 0.21 0.17 Revaluation reserve 2,670 1,796 1,934 149 9,278 0.27 0.21 0.24 0.02 1.01 Reserves (incl. inflation revaluations) 7,628 8,029 8,820 9,916 11,673 0.78 0.96 1.10 1.31 1.27 Retained profits§ 18,787 16,227 16,926 18,288 15,959 1.93 1.93 2.11 2.41 1.74 Other equity (1,464) (2,419) (1,700) (710) 892 (0.15) (0.29) (0.21) (0.09) 0.10 Total liabilities and equity 971,831 840,068 803,614 758,355 918,222 100.00 100.00 100.00 100.00 100.00 Less revaluation reserve, intangibles (10,822) (9,223) (9,751) (9,832) (18,164) Tangible total equity 21,780 18,322 21,006 21,511 23,844 Tangible common equity 18,215 15,802 17,719 19,403 21,229 Less equity in unconsolidated subsidiaries (2,500) (2,500) (2,400) (1,700) N.A. Adjusted common equity 15,715 13,302 15,319 17,703 21,229


Plus preferred stock and other capital 3,565 2,520 3,287 2,108 2,615 Adjusted total equity 19,280 15,822 18,606 19,811 23,844 *Data as of Sept. 30, 2005. Ratios annualized where appropriate. ¶Equity method investment in Eurohypo AG. §Adjusted for accrued or declared dividend. N.A.--Not available.

Table 2 Profit And Loss Statement Statistics --Year ended Dec. 31-- Adj. avg. assets (%) (Mil. €) 2005* 2004 2003 2002 2001 - 2005* 2004 2003 2002 2001 Profitability Interest income 30,373 28,023 27,583 35,781 53,639 4.50 3.44 3.57 4.32 5.87 Interest expense 26,101 22,841 21,736 28,595 45,019 3.87 2.81 2.81 3.45 4.92 Net interest income 4,272 5,182 5,847 7,186 8,620 0.63 0.64 0.76 0.87 0.94 Operating noninterest income 14,168 16,056 16,046 15,569 16,699 2.10 1.97 2.08 1.88 1.83 Fees and commissions 7,352 9,506 9,332 10,834 10,727 1.09 1.17 1.21 1.31 1.17

Equity in earnings of unconsolidated subsidiaries 178 240 516 310 917 0.03 0.03 0.07 0.04 0.10

Trading gains 6,052 6,186 5,611 4,024 6,031 0.90 0.76 0.73 0.49 0.66 Other market-sensitive income 133 59 204 (136) (743) 0.02 0.01 0.03 (0.02) (0.08) Net insurance income (34) (137) 2 (15) (285) (0.01) (0.02) 0.00 0.00 (0.03) Other noninterest income 487 202 381 552 52 0.07 0.02 0.05 0.07 0.01 Operating revenues 18,440 21,238 21,893 22,755 25,319 2.73 2.61 2.84 2.74 2.77 Noninterest expenses 13,218 16,244 16,555 18,970 22,108 1.96 2.00 2.14 2.29 2.42 Personnel expenses¶ 8,324 9,740 9,793 10,887 12,896 1.23 1.20 1.27 1.31 1.41

Other general and administrative expense 4,894 6,504 6,762 8,083 9,132 0.72 0.80 0.88 0.98 1.00

Amortization of intangibles 0 0 0 0 80 0.00 0.00 0.00 0.00 0.01 Net operating income before loss provisions 5,222 4,994 5,338 3,785 3,211 0.77 0.61 0.69 0.46 0.35 Credit loss provisions (net new) 252 307 1,063 1,908 994 0.04 0.04 0.14 0.23 0.11 Net operating income after loss provisions 4,970 4,687 4,275 1,877 2,217 0.74 0.58 0.55 0.23 0.24 Nonrecurring/special income 628 420 494 4,230 2,592 0.09 0.05 0.06 0.51 0.28 Nonrecurring/special expense 491 1,075 2,016 2,513 2,921 0.07 0.13 0.26 0.30 0.32 Pretax profit 5,107 4,032 2,753 3,594 1,888 0.76 0.50 0.36 0.43 0.21 Tax expense/credit 1,700 1,437 1,327 372 434 0.25 0.18 0.17 0.04 0.05 Net income before minority interest 3,407 2,595 1,426 3,222 1,454 0.50 0.32 0.18 0.39 0.16 Minority interest in consolidated subsidiaries 32 3 (3) 45 85 0.00 0.00 0.00 0.01 0.01 Net income before extraordinaries 3,375 2,592 1,429 3,177 1,369 0.50 0.32 0.19 0.38 0.15 Extraordinary Income (333) (120) (64) (2,780) (1,202) (0.05) (0.01) (0.01) (0.34) (0.13) Net income after extraordinaries 3,042 2,472 1,365 397 167 0.45 0.30 0.18 0.05 0.02 Core earnings§ 3,022 2,850 2,544 1,141 1,397 0.45 0.35 0.33 0.14 0.15 2005* 2004 2003 2002 2001


Asset Quality Nonperforming assets 4,327 4,835 6,623 10,799 12,654 Nonaccrual loans 4,029 4,499 6,042 10,098 11,528 Restructured loans 102 89 201 192 279 Loans in arrears but accruing 196 247 380 509 847 Net charge-offs 542 1,242 1,727 2,616 1,988 Average balance sheet Average customer loans 137,412 131,559 145,584 195,338 236,371 Average earning assets 719,747 662,705 629,157 679,139 765,768 Average assets 905,950 821,841 780,985 838,289 923,608 Average total deposits 344,899 317,812 316,890 350,857 362,321 Average interest-bearing liabilities 620,660 560,247 544,505 598,949 651,671 Average common equity 27,031 26,248 28,353 34,314 41,138 Average adjusted assets 898,160 814,219 772,235 829,004 914,426 Other data Commitments and contingencies 161,150 132,065 112,684 137,951 167,395 Number of employees (end of period, actual) 63,751 65,417 67,682 77,442 86,524 Number of branches 1,576 1,559 1,576 1,711 2,099 Total assets under management 553,000 536,000 567,000 726,000 630,000 Assets under administration 933,000 901,000 956,000 1,122,000 1,117,000 Off-balance-sheet credit equivalents 161,150 132,735 129,028 153,565 193,359 *Data as of Sept. 30, 2005. Ratios annualized where appropriate. ¶Adjusted for severance payments (reclassified to nonrecurring/special expense). §Net operating income after loss provisions + goodwill impairment/amortization--tax at statutory tax rate.

Table 3 Ratio Analysis --Year ended Dec. 31-- 2005* 2004 2003 2002 2001 Annual growth Customer loans (gross) 17.59 (4.93) (14.43) (32.80) (2.41) Loss reserves (11.47) (27.24) (23.01) (21.03) (15.52) Adjusted assets 20.93 4.63 6.29 (17.67) (1.11) Tangible common equity 20.31 (10.82) (8.68) (8.60) 5.30 Total equity 24.42 (10.44) (1.87) (25.39) (7.45) Operating revenues 15.48 (2.99) (3.79) (10.13) (3.12) Noninterest expense 8.22 (1.88) (12.73) (14.19) (4.03) Net operating income before provisions 39.07 (6.44) 41.03 17.88 3.65 Loan loss provisions 9.17 (71.12) (44.29) 91.95 123.37 Net operating income after provisions 41.03 9.64 127.76 (15.34) (16.43) Pretax profit 68.46 46.46 (23.40) 90.36 (72.51) Net income 74.62 81.98 (55.74) 121.60 (65.59) 2005* 2004 2003 2002 2001

PROFITABILITY

(%)


Interest Margin Analysis Net interest income (taxable equiv.)/avg. earning assets 0.79 0.78 0.93 1.06 1.13 Net interest spread 0.02 0.15 0.39 0.49 0.10 Interest income (taxable equiv.)/avg. earning assets 5.61 4.23 4.38 5.27 7.00 Interest income on loans/avg. total loans N.A. 4.90 4.90 5.49 6.57 Interest expense/avg. interest-bearing liabilities 5.59 4.08 3.99 4.77 6.91 Interest expense on deposits/avg. deposits N.A. 2.24 2.08 2.66 4.34 Revenue Analysis Net interest income/revenues 23.17 24.40 26.71 31.58 34.05 Fee income/revenues 39.87 44.76 42.63 47.61 42.37 Market-sensitive income/revenues 33.54 29.40 26.56 17.09 20.89 Noninterest income/revenues 76.83 75.60 73.29 68.42 65.95 Personnel expense/revenues 45.14 45.86 44.73 47.84 50.93 Noninterest expense/revenues 71.68 76.49 75.62 83.37 87.32 Noninterest expense/revenues less investment gains 72.20 76.70 76.33 82.87 84.83 Expense less amortization of intangibles/revenues 71.68 76.49 75.62 83.37 87.00 Expense less all amortizations/revenues 71.68 76.49 75.62 83.37 87.00 Net operating income before provision/revenues 28.32 23.51 24.38 16.63 12.68 Net operating income after provisions/revenues 26.95 22.07 19.53 8.25 8.76 New loan loss provisions/revenues 1.37 1.45 4.86 8.39 3.93 Net nonrecurring/abnormal income/revenues 0.74 (3.08) (6.95) 7.55 (1.30) Pretax profit/revenues 27.70 18.98 12.57 15.79 7.46 Net income/revenues 18.48 12.22 6.51 14.16 5.74 Tax/pretax profit 33.29 35.64 48.20 10.35 22.99 2005* 2004 2003 2002 2001 Other Returns Pretax profit/avg. risk assets (%) 2.92 1.89 1.23 1.33 0.62 Net income/avg. risk assets (%) 1.95 1.21 0.64 1.19 0.48 Revenues/avg. risk assets (%) 10.56 9.93 9.75 8.41 8.37 Net operating income before loss provisions/avg. risk assets (%) 2.99 2.34 2.38 1.40 1.06 Net operating income after loss provisions/avg. risk assets (%) 2.85 2.19 1.90 0.69 0.73

Net income before minority interest/avg. adjusted assets 0.50 0.32 0.18 0.39 0.16

Net income/avg. assets 0.50 0.32 0.18 0.38 0.16

Net income/employee (currency unit) 70,161 38,994 19,652 39,301 15,733 Personnel expense/employee (currency unit) 171,419 146,357 134,960 132,796 139,541 Personnel expense/branch (mil. currency unit) 7.06 6.21 5.96 5.72 5.88 Noninterest expense/branch (mil. currency unit) 11.22 10.36 10.07 9.96 10.08


Cash earnings/avg. tang. common equity (ROE) (%) 26.64 15.48 7.68 15.86 7.41 Core earnings/avg. tang. common equity (ROE) (%) 23.63 17.00 13.70 5.62 6.75 2005* 2004 2003 2002 2001 FUNDING AND LIQUIDITY (%) Customer loans (net)/assets (adj.) 15.17 15.45 16.90 20.93 25.73 2005* 2004 2003 2002 2001

CAPITALIZATION

(%) Adjusted common equity/adjusted assets 1.63 1.60 1.93 2.36 2.33 Adjusted common equity/risk assets 6.28 6.21 7.18 7.51 6.96 Adjusted common equity/customer loans (net) 10.75 10.34 11.39 11.30 9.07 Internal capital generation/prior year's equity 17.94 6.24 2.38 6.15 1.33 Tier 1 capital ratio 9.00 8.60 10.00 9.60 8.10 Regulatory total capital ratio 13.90 13.20 13.90 12.60 12.10 Adjusted total equity/adjusted assets 2.00 1.90 2.34 2.65 2.62 Adjusted total equity/risk assets 7.70 7.38 8.72 8.40 7.82 Adjusted total equity plus LLR (specific)/customer loans (gross) 14.42 13.87 15.89 14.99 12.28 Common dividend payout ratio N.A. 33.91 51.22 23.80 58.44 2005* 2004 2003 2002 2001 ASSET QUALITY (%) New loan loss provisions/avg. customer loans (net) 0.24 0.23 0.73 0.98 0.42 Net charge-offs/avg. customer loans (net) 0.52 0.94 1.19 1.34 0.84 Loan loss reserves/customer loans (gross) 1.42 1.79 2.38 2.68 2.33 Credit-loss reserves/risk assets 0.98 1.26 1.73 2.04 1.99 Nonperforming assets (NPA)/customer loans + ORE 2.92 3.69 4.81 6.71 5.28 NPA (excl. delinquencies)/customer loans + ORE 2.79 3.50 4.53 6.39 4.93 Net NPA/customer loans (net) + ORE 1.52 1.94 2.49 4.14 3.02 NPA (net specifics)/customer loans (net specifics) 1.52 1.94 2.49 4.14 3.02 Loan loss reserves/NPA (gross) 48.74 48.50 49.54 39.98 44.14 *Data as of Sept. 30, 2005. Ratios annualized where appropriate.

#########


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SUPPLEMENTAL PROSPECTUS (dated October 11, 2006) Deutsche Bank Aktiengesellschaft (Frankfurt am Main, Germany)

U.S.$ 230,000,000 4.85 % Notes of 2006/ 2009 ("the Notes") Issued pursuant to the Euro 20,000,000,000 Debt Issuance Programme (the "Programme")

The Notes will mature on 1 November 2009. Payment of interest on the Notes will be made annually in arrears on 1 November of each year, beginning 1 November 2007. The denomination of each Note will be U.S.$10,000. The date on which the Notes are to be issued (the "Issue Date") is expected to be 1 November 2006. Sales of Notes by the Managers may be made from the date of this Supplemental Prospectus until 31 October 2006 or such earlier date on which the Arranger and Lead Manager jointly announce that the offering of the Notes has completed (the "Offering Period"). The Notes are being offered on a "first come, first served" basis and the Offering Period may end earlier, without prior notice, if all the Notes are sold before expiry of the scheduled Offering Period. The purchase price of the Notes will be 100 per cent of their principal amount. The Issuer has granted the Managers a right to purchase additional Notes in an aggregate principal amount of up to U.S.$ 270,000,000, such that the total issuance amount of the Notes may be increased to U.S.$ 500,000,000. Whether to approve the request is at the Issuer’s sole discretion. For additional information, see "Subscription and Sale" on page 3. The Notes are offered for sale by means of a public offering only in the Republic of China ("ROC"). For other selling restrictions, please refer to section entitled "Selling Restrictions" in the Base Prospectus (as defined below). The Notes have not been and will not be registered under the United Sates Securities Act of 1933 (the "Securities Act"). Subject to certain exceptions, the Notes may not be offered, sold or delivered within the United States or to United States persons.

Arranger Deutsche Bank AG, Taipei Branch

Lead Manager

Mega International Commercial Bank

Co-Lead Managers First Taisec Securities Co., Ltd.

Polaris Securities Co., Ltd. President Securities Co., Ltd.

Yuanta Core Pacific Securities Co., Ltd.

Co-Managers Deutsche Bank AG, Taipei Branch

Grand Cathay Securities Corporation Masterlink Securities Corporation Sinopac Securities Corporation

Taiwan Securities Co., Ltd. (the "Co-Lead Managers", "Co-Managers" and together with the Lead Manager, each in its capacity as

distributor as well as underwriter of the Notes, the "Managers")

The Notes, as to form and content, and all rights and obligations of the noteholders and the Issuer, shall be governed by German Law. The place of jurisdiction for any action or other legal proceedings arising out of or in connection with the Notes shall be Frankfurt am Main, Germany.

NOTICE

Application has been made by Deutsche Bank Aktiengesellschaft (the "Bank," "Issuer" or "DB") to the

Financial Supervisory Commission of the Republic of China (the "FSC") for the issue and offer of the Notes.

The FSC has granted its approval to the issue and offer of the Notes on October 3, 2006. Application will be

made by the Bank to the GreTai Securities Market (the "GreTai") for the listing and trading of the Notes on

the GreTai.

This Supplemental Prospectus is a supplement to the base prospectus dated August 22, 2006 (the

"Base Prospectus") in relation to the Programme and shall be read and understood in conjunction with the

Base Prospectus, any other documents incorporated therein and the draft final terms and conditions of the

Notes (the "Final Terms"). The Supplemental Prospectus, the Base Prospectus and the Final Terms are

hereby collectively referred to as the "Prospectus".

The Bank, having made all reasonable enquiries, confirms that the Prospectus contains all information

with regard to the Notes and the Bank which is material in the context of the issue of the Notes, that the

information contained in the Prospectus is true and accurate in all material respects and is not misleading,

and that there are no other facts or the omission of which makes the Prospectus as a whole or any such

information misleading in any material respect.

Approval granted by the FSC shall neither be taken as verification of the contents of the Prospectus nor

guarantee the value of the Notes.

Admission to the listing and trading of the Notes on the GreTai shall not be taken as an indication of the

merits of the Bank or the Notes.

No person is authorized, in connection with any offering made hereby, to give any information or to

make any representation not contained in the Prospectus; and, if given or made, any information or

representation not contained herein must not be relied upon as having been authorized by the Bank or any of

the Managers. Neither the delivery of the Prospectus nor any sale of any of the Notes shall, under any

circumstances, create any implication that there has been no change in the affairs of the Bank since the date

hereof.

This Supplemental Prospectus does not constitute an offer of, or an invitation by or on behalf of the

Bank or the Managers or any of them to subscribe for or purchase, any of the Notes.

In this Supplemental Prospectus, all references herein to "United States Dollars," "U.S. Dollars," "U.S.

dollars" and "U.S.$" are to United States dollars and all references to "New Taiwan Dollars," "NT Dollars,"

"NT dollars" and "NT$" are to New Taiwan Dollars.

The distribution of this Supplemental Prospectus, any Final Terms and the offering, sale and delivery of

the Notes in certain jurisdictions may be restricted by law. Persons into whose possession this Supplemental

Prospectus or any Final Terms come are required to inform themselves about and to observe any such

restrictions.

In making an investment decision, prospective investors should consider all information provided in the

Prospectus and consult with their own professional advisers if they consider it necessary.

TABLE OF CONTENTS

SUMMARY OF THE TERMS AND CONDITIONS OF THE NOTES ....................................................................... 1

SUBSCRIPTION AND SALE................................................................................................................................... 3

CREDIT RATING CERTIFICATE ............................................................................................................................ 4

SUMMARY OF OTHER OUTSTANDING BONDS.................................................................................................. 5

ISSUING AND PAYING AGENCY AGREEMENT................................................................................................... 6

TRADING RESTRICTIONS..................................................................................................................................... 7

ROC TAXATION...................................................................................................................................................... 8

GENERAL INFORMATION ..................................................................................................................................... 9

DOCUMENTS INCORPORATED BY REFERENCE............................................................................................. 13

SUMMARY OF THE TERMS AND CONDITIONS OF THE NOTES

The following summary of the Terms and Conditions of the Notes does not purport to be complete and is

subject to, and is qualified in its entirety by reference to, the detailed provisions of the Terms and Conditions

of Notes as described in the Base Prospectus and the Final Terms, including the definitions of certain terms

therein.

1. Issuer

Deutsche Bank Aktiengesellschaft (Frankfurt am Main).

2. Issue Date

1 November 2006.

3. Issuance size

U.S.$230 million. The Issuer reserves the right to accept over-subscriptions and to increase the total

issuance size of the Notes up to U.S.$ 500 million.

4. Form and denomination

Bearer form. Denomination of each Note shall be U.S.$ 10,000.

5. Status

Senior and unsecured.

6. Maturity Date

1 November 2009.

7. Interest Rate:

4.85 per cent per annum

8. Method for Payment of Interest

Annual payment; all coupon payments shall be calculated on the U.S. dollar principal amount of the

Notes and paid on a 30/360 day count basis.

9. Interest Payment Date(s)

Interest shall be payable in arrears on 1 November each year. The first payment of interest shall be

made on 1 November 2007.

1

10. Method for repayment and the deadline for repayment

Redemption at 100 per cent in U.S. dollars at Maturity.

11. Business Days

Taipei, Frankfurt, and New York City.

12. Fiscal Agent

Deutsche Bank Aktiengesellschaft.

13. Listing

Application will be made to list the Notes on the GreTai.

14. Method of underwriting

The Managers will subscribe for the Notes from the Issuer on a firm commitment basis. The Managers

will place out the Notes to the investors on a negotiated basis.

15. Use of proceeds and estimated benefits

The net proceeds from this offering will be used for financing the business of the Bank

16. Offering period and approach to be taken in case of under-subscription

From 4:00 p.m. (ROC time) on 11 October 2006 to 4:00 p.m. (ROC time) on 31 October 2006, which

may be shortened by the Arranger and Lead Manager jointly in their absolute discretion. The

Managers will subscribe for the Notes from the Issuer on a firm commitment basis. The Managers will

place out the Notes to the investors on a negotiated basis.

17. Governing law

The Notes shall be governed by, and construed in accordance with, German law.

18. Place of jurisdiction

The place of jurisdiction for any action or other legal proceedings arising out of or in connection with the

Notes shall be Frankfurt am Main, Germany.

2

SUBSCRIPTION AND SALE

The Issuer has agreed to sell to the Managers, and each of the Managers have severally but not jointly

agreed to purchase the Notes in the amount of its commitment on a fully underwritten basis.

Subject to the restrictions on offers and sales of the Notes as set forth in the Base Prospectus under

"Selling Restrictions", the Managers propose to offer the Notes at the Purchase Price set forth on the cover

page of this Supplemental Prospectus. The Managers may retain Notes for their own account.

The Issuer has granted the Managers a right to purchase additional Notes for an aggregate principal

amount of up to U.S.$270 million (such that the total issuance amount may be up to U.S.$500 million) within

13 days from the date of this Supplemental Prospectus. Whether to approve the Managers' request is at

the Issuer’s sole discretion.

To the extent that the Issuer approves of the exercise of this option and the Managers exercise the

option, the Managers will have a firm commitment, subject to certain conditions, to purchase from the Issuer

the agreed principal amount of the Notes.

3

CREDIT RATING CERTIFICATE

Please refer to Appendix A for the credit rating certificate issued by Standard & Poor's Corporation with

respect to the rating on the Bank. The Notes are expected to be assigned a rating of AA- by Standard &

Poor's Corporation.

A credit rating is not a recommendation to buy, sell or hold securities and may be subject to revision or

withdrawal at any time by the rating organization.

The Issuer accepts responsibility for accurately reproducing the above credit rating certificate but

accepts no further or other responsibility in respect of such information.

4

SUMMARY OF OTHER OUTSTANDING BONDS

As of 30 June 2006 Deutsche Bank's capital markets outstandings totaled EUR 81.8 billion. The

relevant product categories are displayed below:

Product EUR Capital Issues 16,473,927,566 SSD 4,223,072,335 Certificate of Deposit 14,139,419,450 Medium Term Notes 24,639,321,930 Euro bonds 18,308,814,786 Deposits 4,031,419,522 Total 81,815,975,589

Note: SSD, or Schuldscheindarlehen, is an assignable and tradable loan agreement under German law ("Assignable Loans")

5

ISSUING AND PAYING AGENCY AGREEMENT

The Amended and Restated Issuing and Paying Agency Agreement dated 22 August 2006, (the

"Agency Agreement") in relation to the Programme is entered into by and between Deutsche Bank

Aktiengesellschaft as Issuer and, amongst others, Deutsche Bank Aktiengesellschaft as Fiscal Agent.

The Agency Agreement provides for the appointment of the Fiscal Agent in relation to notes issued

under the Programme, for the purpose of, inter alia, paying sums due on the notes and arranging on behalf

of the Issuer for notice to be communicated to noteholders.

6

TRADING RESTRICTIONS

Deutsche Bank Aktiengesellschaft is a corporation duly incorporated and validly existing under the laws

of Germany, and the Notes will be listed on the GreTai.

Under German law, there are no restrictions on the trading of the Notes by persons resident or domiciled

outside Germany.

The Notes will be traded pursuant to the applicable rules of the GreTai.

For more information on selling restrictions, please refer to the section "Selling Restrictions" in the Base

Prospectus.

7

ROC TAXATION

The following summary of certain taxation provisions under ROC law is based on current law and

practice. It does not purport to be comprehensive and does not constitute legal or tax advice. Investors

(particularly those subject to special tax rules, such as banks, dealers, insurance companies and tax-exempt

entities) should consult with their own tax advisers regarding the tax consequences of an investment in the

Notes.

Interest on the Notes

Payment of interest under the Notes to the ROC individual investors will not be subject to ROC income

tax. However, as a corporate entity will be taxed on a worldwide basis, the payment of interest under the

Notes to an ROC corporate entity will be subject to income tax.

Securities Transaction Tax

The types of securities subject to securities transaction tax under the Securities Transaction Tax Act

include the Notes. However, pursuant to a letter issued by the Industrial Development Bureau, the Ministry of

Economic Affairs on September 6, 2006 (Ref. No.: Jing-Shou-Kong-09520413260), the Notes will be

exempted from the securities transaction tax until December 31, 2009.

Capital Gains Tax

Under current ROC laws, gain realized upon the sale or other disposition of securities is exempted from

ROC income tax. This exemption applies to a sale or other disposition of the Notes pursuant to a letter of

the Ministry of Finance dated October 11, 2006 (Ref. No. Tai-Shui-(1)-Fa-09504109740).

8

GENERAL INFORMATION

How to Purchase Notes

The Managers will subscribe for the Notes from the Issuer on the Issue Date.

The Managers will also act as distributors for the sale of Notes to prospective investors.

Offering Period

The Notes are being offered to prospective investors during the period from 4:00 p.m. (ROC time) on 11

October 2006 to 4:00 p.m. (ROC time) on 31 October 2006, or the time on such earlier date on which the

Arranger and Lead Manager jointly announce that the offering of the Notes has been closed. The Arranger

and Lead Manager do not undertake to give any advance notice of the closing of the Offering Period.

The Notes are being offered on a "first come, first served" basis and the Offering Period may be closed early,

without prior notice, if the Arranger and the Lead Manager decide that all the available Notes are sold before

the scheduled end of the Offering Period.

If investors wish to purchase any Notes, they must contact one of the Managers. Notes may not be

purchased from the Issuer or any party other than the Managers.

Sales Procedure

Investors wishing to purchase Notes will be required to complete an application form which can be obtained

from the Managers, and return it to a Manager, together with payment for the Notes, prior to the close of the

Offering Period.

Purchases are subject to the terms of this Supplemental Prospectus and the provisions of the application

form.

The form and content of the application form are not prescribed by the Issuer and may differ from one

Manager to another to accommodate the relevant Manager’s application and payment procedure and other

applicable operating procedures. The original of any application form sent by facsimile should be forwarded

to the relevant Manager by post. Neither the Issuer nor any of the Managers shall be responsible to a

potential investor for any loss resulting from non-receipt of any application form sent by facsimile or by post.

Minimum Investment

The minimum investment in the Notes is U.S.$10,000.

9

Payment Procedure

The Notes are denominated in U.S. dollars. Payments must be made to a Manager in U.S. dollars.

Payment of purchase monies must be received by the Managers in cleared funds (after conversion, if

necessary) prior to 4:00p.m. (ROC time) on the last day of the Offering Period. Arrangements for the

payment of purchase monies by an applicant to the relevant Manager will be subject to the normal operating

procedures of the Manager.

Save as described in the previous paragraph, the purchase price for the Notes to be purchased by a

prospective investor will be payable to the Manager in the manner and/or to the account as separately

designated by the Manager to the Noteholders in accordance with its normal operating procedures. Each

Manager will be required to provide the prospective investor with details relating to the relevant operating

procedures for payment and/or refund of the purchase price of the Notes. Prospective investors will only be

required to pay for Notes which have been allocated to them.

Confirmations Required to be Given on Application for Notes

By giving application instructions to any Manager for the purchase of any Notes, each investor will be

deemed to confirm to the Manager and the Issuer that, among other things, such investor:

• Undertakes and agrees to accept the Notes applied for, or any lesser number (if at all) allotted to

him;

• Undertakes and agrees to pay in full the purchase price of the Notes allotted to him;

• Agrees that if he is not allotted any Notes, or if his application is successful only in part or if the

Notes are not issued for any reason, the whole or an appropriate portion of the application amount

will be returned to him without interest and at his own risk;

• Authorizes the Manager to which he gives his application instructions to credit any Notes allotted to

him to his investment account and understands that no certificates of title will be available for his

Deutsche Bank Aktiengesellschaft · 2009-05-26 ·...

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