Trading Idea - Long Deutsche Bank

Tuesday, October 2nd 2012

Investment Case

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Company Description

Analysts Recommendations:

Source: Bloomberg

Market Price Data

52-week High (€) 39.51

52-week Low (€) 22.11

Last Price (€) 32.075

YTD Change 8.97%

Mkt Cap (€bn) 29.8137

Float 96.1%

Source: Bloomberg

Market Multiples

P/B 2013 ROE 2013 DY 2013

Est. Est. Est.

Deutsche Bank 0.50 7.41% 2.39%

UBS 0.76 9.28% 3.43%

Credit Suisse 0.73 9.93% 3.84%

Source: Bloomberg

H2 2012 Report

Summary (in € m.) H1 2012 H1 2011

Total net revenues

17,214

19,014

Prov. for credit losses

733

837

Net Income 2,063

Core Tier 1 cap. ratio 10.2% 9.5%

ROE (Post Taxes) 7.4% 13.1%

Source: DB´s interim Report Q2 2012

Last month, Deutsche Bank held its investor day. The Management

announced some aggressive financial targets, well above existing

consensus estimates.

Deutsche Bank will continue strengthening capital ratios. The bank

has identified non-core RWAs. Non-core assets will be sold. This is

positive, but we’ll need to see exit costs. Some strong cost measures

are expected to be implemented. But the consensus is cautious. It is

considering only a small part of the company´s targeted cost saves.

Transaction banking, retail banking and asset management should

progressively become the bank’s biggest drivers. The company is

targeting for higher profits from its non-Investment Banking

activities.

The stock has rebounded from its lows. ECB’s more aggressive stance

has supported a higher allocation to risk, and to the European

banking sector.

We acknowledge the bank’s challenges, the transformational nature

of its business plan and its high total asset leverage. But, for now, in

the current environment, the last investor day could have been what

was needed to allow the upward movement to go on.

We define as a stop loss €29.79. We´ll close our trading idea at

€36.47.