Deutsche Bank Aktiengesellschaft (DBK) Earnings Call Transcript & Summary

Well, good morning, and it's my pleasure to welcome Fabrizio Campelli, the Chief Transformation Officer and member of the Management Board of Deutsche Bank. And actually, I'm very pleased to say, second year in a row, welcome, Fabrizio.

Thank you very much before.

And before -- absolutely. Before we start our fireside chat, we've got a polling question for you. And it's actually quite simple. It's on your screens. And it says, what do you see as the single biggest driver for Deutsche Bank's share price in 2021? And of course, we've got the resilience of IP revenues. We've got the cost efficiencies, NII defense, capital resilience and M&A. We'll come back to the -- to that polling question maybe a little bit later.

So Fabrizio, let's start with the investment bank. Of course, the kind of the trends have been strong across the industry. We've heard about it over the last kind of 2 days. And of course, you yourselves, Christian at the year-end talked about a strong start to the year. So can I just ask how has the kind of quarter continued? And also, kind of how do you see the seasonality of the [ IB ] revenues as the year progresses?

Thank you, Magdalena. Very happy to be here again the second year in a row with you. We did have some of that language in our Q4 results. Christian did speak about good momentum being carried into 2021 from what was a strong 2020. And I have to say 6 weeks into -- later into the year, so towards the end of the first quarter, that momentum has continued quite strongly. And in fact, quarter-to-date, we're seeing revenues being up in the Investment Bank by about 20%. And this is across the franchise, so in Origination & Advisory, as well as in FIC and in particular, in Credit Trading. So a good performance across the Investment Bank.

Fabrizio, do you want to kind of take it a little bit kind of further for us? Because, of course, the investment kind of banking revenues are kind of also key to your overall group targets. Do you expect the year to be -- of course, so far, we've seen it very strongly. I mean, 20%, a very high number. But does -- do the comps get -- of course, the comps get much harder as we go through the year.

Yes. Of course. I mean we did describe our 2020 performance as one that had some out-performance related to market circumstances. That were not easy to replicate. And yet, we also were very clear in our Investor Day in December that we saw a substantial portion of that out-performance actually being resilient and sustained and sustainable into future years. And I think what we're seeing right now is exactly that strategy playing out. So it's early to tell how the full 2020 will play out, but clearly, we're very encouraged by this start of the year in the business. Also, because we see the performance, like I said, not focused on one particular business only, but distributed across our franchises, and that's true for LDCM, for the DCM franchise, obviously, for ECM, as well as in FIC. I think it speaks to not just the momentum in the Investment Bank, but the fact that we have our core businesses really having shown a great resilience last year and carrying resilience into this year. And it speaks to a certain amount of positive momentum that the bank is experiencing. And we expect that momentum not to abate due to seasonality, but in fact, to continue strongly. So notwithstanding the fact that some of our businesses obviously do experience seasonality, but the indicators we get, the pipelines, the activity, the volumes of inflows in those businesses in which it matters are actually quite positive. So 2021, it's early days, but so far, things are going quite well. And in fact, as I just told you, Investment Bank, better than well.

Perfect. Thank you very much. Very, very encouraging. Now let's kind of look into the transformation of the bank. You've kind of -- you've mentioned a little bit offered on the Investment Banking side kind of already. But you're in the job for 15 months. So what are your kind of key takeaways kind of so far? The greatest challenges, particularly last year, and particularly at the backdrop of the pandemic.

Yes. So I have been in the job for 15 months. And the job was established to actually support the consequent execution of our strategy. We announced a strategy in July 2019. Shortly thereafter, the Transformation Office was set up. And the purpose was really to give us that systematic focus on executing on a strategy, which was predicated on focusing on businesses in which we wanted to compete to win. The execution clearly has gone to our plan in 2020. And I think it has been the result of a number of ingredients. A lot of effort that has gone into the preparation of the strategy, and the Transformation Office there has contributed to creating the structure around it. I spoke a bit about it at the investor detail. We've broken the executional strategy down into 20 initiatives, about 70 key deliverables, 800 milestones. We monitor 130 risk, 130 dependencies between initiatives. It's to create structure and to mitigate the risk of the execution of those long-term strategic building blocks of our execution in any way to go off-track. We also built a lot of mechanisms as part of the Transformation Office to stay on track on shorter-term measures, and in a way that would allow us to stay focused on the long-term priorities, but also respond tactically to short-term challenges. Little did we know when we set the office up that way, that COVID would really force us into a lot of these short-term management of difficulty. But things have gone particularly well in 2020 because we have been able to stick to the longterm priorities. As I indicated at the end of the year in our Investor Day, over 90% of our milestones were met, over 130% of the custom -- that we were targeting to reduce as part of the key deliverables of the specific transformation initiatives were achieved. And so the program is clearly delivering its goals. And on the short term, more tactical measures, we've also been able to support the bank quite proactively in countering the effects of the crisis, which clearly did have an impact on our ability to execute. And there were some challenges. Think about, for example, where in the spring, we announced that we had to put a restructuring on hold, not to plunge our employees into what was at that point in time an untenable uncertainty. And when we did that, we had to found countermeasures to stay on track on costs, as we did because we did end up closing the years at a EUR 19.5 billion of cost. I have to say, a very important aspect of this was really creating, and then riding on the positive momentum that was good generated within DB. I think the whole market in 2020 and in '21 has seen some things that have supported, particularly banks with our business model. But what was specific about Deutsche Bank is that, that momentum we saw from employees, from our clients has really supported us into making these changes. And we see the momentum being stronger now than it was just a year ago. And the measure of that is, when we call our employees, 90% of our staff stands behind the strategy, understands what we're trying to do, and they are actively supporting it. And those are the kind of small things that make a difference. This is the difference between 2, 3 years ago, the effort that was put into these transformation measures, and now seeing our clients starting at 7 in the morning, making those phone calls until late at night, supporting us to execute on what we want to do. And an example of that is also in Germany. The standing of the bank, the feedback we get from our retail and commercial banks -- sorry, commercial clients in Germany is at a 10-year high on what we are receiving. And again, showing that -- the big effort and the heavy lifting that has happened in the past years is starting to pay off in the results that Deutsche Bank is showing. So my job was also to channel a lot of this energy, keep us organized, come up with new ideas. And we intend to carry that momentum firmly into '21 and '22.

Perfect. At the investment, kind of deep dive, in December, you've also announced a partnership with Google. And could you just elaborate what are the benefits of it? And how should we think about it from the perspective of financial impact? Is it a net positive kind of on the revenue side? Is it net negative on the cost short term because of the, I suppose, upfront Investment? Could you give us a sense of what's happening there?

Sure. The Google partnership we signed, which made us the primary financial partner to Google and is actually designed to actually play right into the spirit of the transformation I outlined. Transformation, we always -- we often think about it being a cost play, when in reality for DB, it's a revenue growth play, a cost play, a culture play. And on the cost side, I mentioned a few examples. But on the revenue side as well, we are really aiming to build momentum around our growth, particularly by harvesting more of this cross-divisional capability, which are, in turn, built on deepening and leveraging better our client relationships. And the Google partnership plays right there. So we have signed this partnership with the 3 fundamental objectives in mind. The first one is to really change the way we develop technology going forward at Deutsche Bank. And the spirit there, Bernd has been quite open about it in his speech in -- at investor event in December. The spirit there is to change the way we develop our applications and using better technology that Google can make available to us in the way we architect, develop and use technological infrastructure to get to a more flexible, better architect and more scalable, safer set of technology and application solutions to clients faster. The second part is innovation. Because, thanks to a joint recruiting of engineers, the co-creation of solutions, we will be able to develop applications and make them available to clients in ways that were not possible before to us alone. And the third part actually is a cost effectiveness play because we are effectively moving to a much more variable cost base. If you think about it, we move from a world in which we would buy and use our infrastructure to actually having, thanks to the hyperscale model, a model in which we pay for what we use. And all of this will actually contribute to making us more innovative, better client responsive, and obviously, enhance growth, and come up with new products and new ideas that will make revenue solutions to our clients and reaching new clients possible, and over time, also achieve a higher level of cost efficiency. We're talking about a 10.5 year partnership we have signed. So the time horizon for many of these benefits will distribute over that period of time. And they play right into the spirit of making the strategy of Deutsche Bank a long-term one and making us sustainably profitable and competitive in the long term.

Brilliant. Because that actually leads me to a couple of cost questions. And I think before I go into those cost questions, I think you'll be -- you'll be pleased to know that our poll has closed and the highest answer to the share price question, almost 40% is still continuing cost delivery. So no pressure on the cost questions. So of course, you've lowered your 2022 cost target. And what do you see as the contribution of the Transformation Office here?

Well, we did see very strong momentum on costs. And we have often spoken about the 12th consecutive quarter of adjusted cost reductions. And again, that shows a very thoughtful execution of how we intend to go about the delivery of the efficiency, which is one of the core tenets of the Compete To Win strategy we have announced. And we intend to keep driving that into '21 and '22. I think the further reduction of our target, from EUR 17 billion to EUR 16.7 billion in 2022, and -- obviously reflects the fact that as a team, we continue to see opportunities to harvest on investment made to date, investments we are continuing to make in 2021. And obviously, we are contributing with some of those ideas. And I described some of them. If you think about how the Transformation Office is playing into this, we look at adding and catalyzing new ideas, building on the cost catalyst initiative that James von Moltke started a a few years ago and continuing to drive new thoughts. And some of these are relatively small, like a more consistent use of tools and workflow tools to optimize our expenses. For example, when it comes to our vendor professional service expenses, some are medium-sized and larger size. We have been speaking about end-to-end process re-engineering as a mechanism by which we can EUR 60 million of incremental cost in 2022 by using artificial intelligence technology partners that enable us to much faster engineering of end-to-end processes. And some are more fundamental, more transformative, like -- as the shift of attention is focusing from cost reduction in the businesses to infrastructure, as much of the heavy lifting in the business has already occurred, a much higher focus on end-to-end process realignment and the re-architecting from front-to-back perspective becomes a big enabler of further savings. So if you think about it, the big blocks, we're targeting a EUR 1.4 billion of compensation -- so compensation and benefits reductions as we continue to reduce our workforce costs, EUR 900 million or so of IT cost reductions that come from a number of measures from application decommissioning to more efficient application development. And there continues to be focus on those professional service costs that we are optimizing in terms of how we relate to our vendors. Our COO, Frank Kuhnke, has worked hard on optimizing those costs, and we expect another EUR 200 million or so of costs. Incrementally, we're looking at new ideas that cover, for example, an optimized use of our space, and an incremental EUR 100 million or so is being targeted in 2022. And it will be facilitated by a number of measures we've made, which include, for example, the consolidation of campuses in London and New York. We're moving our footprint to new and more efficient buildings which will help us reduce the overall cost target in 2022. So overall, we remain confident in those. And this is countering also other effects that we're seeing. And for example, when it comes to single resolution fund, based on latest guidance, we are getting from the SRB. We are expecting in 2021, at least, an increase to the funding of the similar solution fund relative to our assumptions. And so we expect in 2021, the charges to be to be closer to the level they were last year, so just under EUR 600 million.

Perfect. And then, Fabrizio, you gave us some of the numbers, but let's kind of simply come back to some kind of yearly staging of your cost declines. Because, of course, your cost trajectory kind of looks like a hockey stick. So we've got EUR 1 billion in 2021. Of course, at the same time, with all necessary investments. We've got EUR 2 billion cost cuts in 2022. Now can you kind of talk to us about your level of confidence that, that 2022 cost target, that EUR 16.7 billion, is -- I mean how difficult is it to achieve? Because in real -- in absolute numbers, these are big saves.

Yes. Magdalena, I would point to one thing, which is I wouldn't really see it as a hockey stick in the sense that, from 20 -- end of 2018 to end of 2020, we reduced costs by EUR 3.3 billion on an adjusted basis. And between end of 2020 to end of '22 is now only EUR 2.8 billion left. So in a way, we have already -- if anything is an inverse of that we've done the heavy lifting upfront, and we're now benefiting from the enormous effort that has gone into previous years. We said very clearly, I think James has also provided some transparency on this, that in '21, we decided to accelerate some of the investments that will help us make '22 and beyond more efficient. For example, we transparently show that in '21, we decided to invest an incremental EUR 300 million on the integration of our German IT platform. And this is an investment that will give us a benefit into '22, but into '23 and beyond, it will be an even larger investment. We decided to invest more through the use of the driver based cost management in the reduction of the stranded cost into our Capital Release Unit, which is why our -- from the original assumption of approximately EUR 1 billion, the Capital Release Unit stranded cost expected at the end of '22 have now dropped to EUR 800 million. But thanks to the investment we're making this year, it would also carry momentum into '23 and beyond. So overall, I would say, we have a strong conviction, obviously, into our 2022 targets. The EUR 16.7 billion remains absolutely the number we are committed to. And we see and we have a strong plan on how to achieve that, which is predicated on not just the work done so far. The fact that many of the initiatives we have carried out in 2020 and '21 will run rate into future years, and so will help us get there. But also, because we continue to replenish the book with new ideas. That's what my office is also very heavily involved in, which is giving us a comfort that the plan we have, we intend to navigate with the same discipline that we have shown for the last 3 years with kind of the intent to continue the last 12 quarters of meeting or exceeding promises on costs to be maintained for the next 8 quarters.

Fabrizio, let's move a little bit forward because, of course, when we originally spoke about, of course, the strategy back in 2019. 2022 just seemed very far away. And of course, 2022, now it's just kind of next year, and we've talked about your -- the confidence in that EUR 16.7 billion target. When you kind of -- when you cast your eye 3 years further, how should we think about a cost base that Deutsche needs to operate with?

It's really important to understand. We -- let's start with the transformation, and it was healthy for many reasons to attach absolute targets to many aspects of our plan. And so that's why there was an absolute cost target laid out for us for 2020, for 2022, and those are serving a certain purpose. As we normalize the transformation cycle, we moved back to being a bank that can deliver and will deliver 8% return on tangible equity, which is what our target is as we move back to having the heavy portion of the therapy behind us, it will also be important to move back to a more relative measurement of cost efficiency. So we intend after '22, our appetite would be to move back to our cost income ratio target. And we see that for 2023, for example, a level of 70% would be the level that we would target. And of course, improve from there based on a number of metrics that we can see. I mentioned earlier, we already see that for '23, there will be pressure upwards on cost from a number of things, but also we have a lot of measures already lined up, which will blossom only fully in 2023. I mentioned the stranded costs in the CRU, the full impact of having a single platform supporting the technology of our private bank in Germany. All of these will continue to generate positive momentum. But again, we will have the heavy part of transformation behind us at that point and not giving up any discipline because we will be very focused on sticking to this consequential execution of strategy. We would want to carry this momentum into '23 and beyond, but looking at the right balance between cost and revenues. And the 70% cost-to-income ratio is really what we are currently looking at as SR hypotheses.

Okay. Well, that's -- so let's -- so of course, cost to income ratio, there's cost, there's revenues. Let's go back on to the revenue side. We talked about the strength of IB revenues. But of course, this is the kind of the second big discussion on the revenue side is, of course, the trajectory of net interest income. And you have been quite vocal over the last quarters, about a defense of the net interest income by, of course, loan growth, particularly kind of domestically in Germany, but also repricing, again, kind of corporate commercial deposits across Europe. Could you give us a sense of kind of where we are, kind of any context you can give to that kind of broad NII trajectory?

Sure. It has remained a very central part of our strategy to counter the negative drag of interest rates with active measures that we've embraced in our businesses. Perhaps, let's start with the Corporate Bank. The starting point for the Corporate Bank is already quite strong, with 40% of the revenues there are fee income based already. So it's a pretty solid starting point. But nonetheless, we do have exposure to net interest income, and the negative interest rate environment has clearly been a challenge. In that sense, Stefan Hoops and his team have done a formidable job at actually continuing to work on the conversion and the establishment of charged arrangement. And currently, we have about EUR 78 billion of our accounts which actually have a charging agreement attached to them, which has helped us really increase and enhance revenues relative to where we were at the end of 2019 by about EUR 200 million a year in that business. And with momentum that, again, we expect to carry into '21 as more of that activity care -- is carried out. In the private bank, focus has been on rounding out the business, and it has been done quite successfully. We have increased volumes in 2020 of loans by about EUR 13 billion of net inflows were approximately EUR 18 billion in 2020, of which EUR 5 billion were actually deposit conversions. So we have achieved a good reduction of deposits, enhancement of invested assets, which obviously is good for the bank, is good for our clients. And if you take into account the fact that we have continued on repricing activities on all of our products, we have, for example, continue to create these new accounts, over EUR 100,000 are applied on a charge basis. This has generated approximately EUR 100 million of incremental revenues for the Private Bank in 2020 and we expect that same level of incremental revenue to continue into 2021 as these measures continue to be applied. And so when you look at the growth rates expected in these businesses, it's actually looking like we are holding, for example, in the Private Bank in Germany, quite steady. But in the interest rate environment we have in Europe, steady is actually a strong performance, as shown in the performance of our retail bank in 2020 relative to peers. That was actually quite resilient, thanks to all these measures that have been put in place.

Brilliant. Thank you. Thank you very much for that. Now let's move on to kind of onto the CRU kind of run-down path, because you've mentioned the stranded costs, and of course, they have been revised. They have been revised down. But also the prime finance transfer to BNP. Is it on track? When is this transaction finishing?

So we are very pleased with the progress we're making on the CRU. We have halved the RWA exposure since inception, we have reduced the leverage exposure by 3 quarters since inception, costs have been halved to EUR 1.8 billion or so. And we actually see really good progress towards those targets we have laid out for 2022. And in fact, even improved, for example, on the cost side, numbers further, by virtue of us focusing quite systematically on the continued extraction of a number of charges. Now the performance of the CRU is predicated on a lot of activities, from de-risking, to a successful execution of the sale of our Prime Finance business to BNP, that transaction is fully on track. In fact, we're really quite pleased of how it's playing out. I think it's a positive transaction for us, for BNP and for our clients. It's actually playing out in the way we had envisaged. And we have continued to offer to our clients those services, obviously, now after the transaction has closed quite successfully. As it relates to the outlook for the CRU, we do expect the targets for 2022 of a reduction of RWAs down to approximately EUR 32 billion to stay on track. We have been quite transparent on the composition of those EUR 32 billion. The vast majority will be operational risk-weighted assets, which we'll pay down over time, approximately 9 million related to credit and market risk. And those are going to have a stickier profile. And so while we do not see a particularly adverse risk profile from those, we expect that it will take some time to unwind. It's things like structured repos with sovereigns, which obviously are safe positions that will nonetheless take a longer period of time to unwind. And so in that sense, we feel that the trajectory of the CRU, the liberation of capital strategy has worked well, will continue to serve us very well until 2022, and we remain on track on all fronts.

Perfect. I think maybe one of the kind of last things. We've -- we haven't touched upon, of course, the credit cycle and your outlook on provisions into 2021.

I can say a few words on that. We were quite pleased with how 2020 played out. In fact, I remember, Magdalena, you asked me the question just last year when we were actually still physically on stage at Park Lane Hills at Hilton in Central London. And you asked me about how do we see loan losses. At the time, I think we had just started to give guidance of the 25 to 45 basis points for 2020. And we were pleased to actually land in a 41 basis points number for the year, which was within that guidance. And I have to say this was down to a strong risk management framework that Deutsche Bank had embraced and strong discipline in the portfolio. We went into the crisis with and then continued to work with strong discipline to continue to de-risk as the year unfolded. If I look at 2021, that strength has continued to show. So for example, for Q1, we expect our credit loss provisions to come in at properly around half of the current consensus of EUR 360 million. And we expect overall for 2021, that the overall CLP profile to be materially lower than we had for 2020. And then we expect for '22 onwards to see a more normalized CLP environment of around 25 to 30 basis points. But for '21, like I said, for Q1, our current outlook is about half of current consensus for DB.

Very, very encouraging to hear the numbers. All right. Superb. And then -- and before we move to questions, Fabrizio, let's talk about something slightly different. You have been the best performing banking stock in SX7P in 2020. And so how do you continue to build that kind of shareholder value into this year?

Yes. It was a very positive run for Deutsche Bank in 2020. We believe the best thing we can do is to continue to execute on the plan we have laid out. We are very focused on that 8% return on tangible equity in 2022. And we're doing this by everything we discussed today. On revenue, continuing growth to the level at which we are expecting it. That level, by the way, if you look at 2020, would imply a 0.4% compounded annual growth rate for '21 and '22, which seems to be at reach given the momentum we're seeing, in fact, already in the first few weeks in the year. And on cost, we spoke about it. There is a lot of discipline and a lot of focus on achieving those goals in a very systematic and very disciplined manner. And frankly, when we look at revenues being closed and had reached 12 consecutive quarters of cost reductions, which we intend to carry forward into the year; a robust credit position and framework that is making us comfortable around the plan, notwithstanding maintaining a lot of mitigants and maintaining overlays which we had in the second half of last year and carried into '21 to mitigate for risk. We see that, that 8% return on tangible equity and the fact that we will be working our way to reach it quite consistently, and with the momentum we're seeing right now inside the bank, around the bank, is giving us confidence that the Deutsche Bank share price will continue to raise. At 8% return on tangible equity, we would be talking about a 0.8x tangible book or, call it, EUR 18 to EUR 19 per share, if you assume that the price to -- the tangible book per share value remains the same. And so obviously, we are very focused on not disappointing on our target. This is a management team that has really in the last 18 months delivered against everything it promises, and the intention will be to maintain that focus. If on top of that, you add the fact that we did speak about going back to capital returns from '22 onwards, and we have spoken about the EUR 5 billion capital return strategy that would come on top. And of course, we would hope that all of this would be enough to continue to build that momentum on Deutsche Bank.

Perfect. Thanks very much. And let's take a couple of questions from the audience. Let's -- the first one is about capital markets performance kind of year-to-date and your view of the phenomenon of SPACs. I suppose you wouldn't have avoided this one.

Yes. SPACs are performing really well. It's a predominantly in the U.S. They're benefiting, I think, all banks, and they're benefiting DB as well. We are seeing a great momentum in that part of the business ourselves. And it is a kind of product we're looking at because we obviously want to build on long-term momentum. And of course, these are the kind of products that tend to live more on cycles rather than long-term outlooks. And so we are looking at quite closely at how we can continue to support clients on the product, but we continue to also focus on having a long-term capital strategy -- market strategy that builds on all legs of capital markets. And in that sense, as I outlined earlier, we were actually quite pleased with the fact that our overall performance in capital markets was well balanced across all products and asset classes within it. And it was not just one product.

And one more question on IB. And I -- and it's a little bit kind of one sided. So kind of -- so bear with me. You're the second bank this -- at this conference which gave actually the kind of the year-to-date Investment Banking revenue growth number. So of course, you talked about 20%. And Crédit Suisse yesterday talked about 50%. So the question is, is that -- do you feel of course, it's literally -- it's a comparison one-on-one. But do you feel that you're actually kind of losing market share if some of your peers are showing that type of momentum?

We are actually looking at our market shares quite closely. And we have looked at our market share, and the momentum on market share we had in the second half of 2020 was actually quite positive, as the idiosyncrasies that particularly benefits U.S. banks normalize in the second half of that year, DB benefited quite a bit. I think we gained across Investment Banking over -- almost 0.5 percentage points of market share. And we see that momentum having continued actually in 2021. It's also worth saying that the number I quoted earlier didn't have any particular one-off effect in it. So it's a fairly consistent comparison year-on-year.

Okay. Is there any -- when you think about the kind of the IB side, and of course, you have a stated objective of growing share within the IB overall, which -- I suppose which bits are you hoping to kind of gain share the most?

So we -- our strategy was to refocus our franchise. And therefore, when you think about how our Investment Bank has developed, it was in the context of the broader strategy in which we want our core bank and all of it's -- and partly, to be focused on areas in which we can compete to win. What we are seeing -- and 2020 was a good display of that, and '21 is actually very positive in confirming that, is that, that strategy of refocusing our franchise away from equities and much more into the origination advisory capital markets pieces and within FIC, on our financing, trading and the macro businesses, is actually paying out, because those are businesses in which DB has gained market share, has strengthened its position in ways that actually play right in the hand of the rest of the bank and in the rest of the franchise where we can truly become more client-centric and operate in businesses, in Investment Bank in which we can continue to support our, for example, corporate client base into '21 and beyond. So the areas in which we're seeing momentum are exactly the areas in which we have invested since 2019. And those are the areas of Investment Bank that have been quite systematically performing since -- particularly strongly since the beginning of 2020.

Perfect. Now there's a couple of kind of NII questions. And I suppose the one which is most -- which is kind of asked pretty much to every single bank is, how should we think about the steepening of the curve for you, in terms of how does it translate broadly into your NII?

Well, we do have -- we expect looking into our models that the vast majority of the adverse effect of the drag to revenues caused by the current curve environment will be digested by 2022. And so for us, the effort continues to be that of defending our NII through the strategies I outlined earlier, on deposit charging, on repricing, on systematic conversion of deposits into investments, focusing on inflows. All of these measures are going to contribute to maintaining as resilient and steady revenue outlook in our core bank, until we see more of that momentum kicking in later in '20, hopefully, '21 and into '22, where we believe that, thanks to all this effort, combined, obviously, with the heavy lifting that is happening behind the scenes on costs, staying very disciplined on credit risk, it will help us to really turn those businesses into strong profitability momentum businesses into '22 and beyond.

Perfect. And a couple of clarification kind of questions coming through. Fabrizio, you've talked about the potential for a higher SRF fee? Can you just repeat that? You thought it could be EUR 600 million? And that does not -- and that does not impact your cost target. I mean that was the question. Whether the change in that charge impact your target at all?

Sure. I did mention that. So you remember that at the end of last year, James described our expectation on the SRF bank levy to be approximately EUR 300 million for 2021. And that was predicated on the assumption of a fund being capped -- the overall Single Resolution Fund being capped at approximately EUR 55 billion. With the latest guidance of -- from the Single Resolution Board, that the fund may be expanded to over EUR 70 billion, we are obviously adjusting our charges accordingly, which we, therefore, believe will be just under EUR 600 million for 2021. We obviously do not expect that this is already a decision for 2022 as well, and we'll continue to advocate that, given that expansion of the base for the calculation of the levy is also driven by an expansion of deposits across European banks, driven by the very strong peculiarities of 2020 and the pandemic, that, that should be resolved or should be addressed in future calculation, that will remain our focus. But either way, we remain committed to the EUR 16.7 billion target. And of course, we will do everything to -- even in 2021 to counter the effects of that and -- of that incremental charge relative to our original plan by basically targeting the same level of profitability we had before.

Okay. Perfect. So thank you very much for that clarification. Now there's also a quick question, again, press topical, from the perspective of any impact from Greensill Insolvency.

Thank you. We do not have as a bank any direct exposure to Greensill or the GFG Alliance. We obviously are a German bank and are large contributor to the German deposit insurance schemes, and so there will likely be an impact from that perspective. But those schemes are fully funded, and so there is no expectation of any imminent impact deriving from those events. Of course, over time, there may be the need to replete -- to refund those funds, certainly on the statutory, the voluntary side, there's to be decided. So it's still unclear and -- when and how much this would result into. But we don't see this as being an imminent situation on DB.

And the last question is really quite longer term. It kind of asks, we've got -- we're in a period of a very good investment banking performance. We've talked about it a lot. Of course, 2022, and it's expectations for kind of 2021. As you look at your kind of revenue diversification going forward, so kind of medium term, do you think that there is a situation where the other parts of the group are likely to increase their revenue mix? So a lot of moving parts, but kind of -- but longer term, how do you see the revenue mix?

Well, our strategy has not changed to what we had announced in 2019. In fact, what is happening right now, it's clearly been more beneficial to the Investment Bank and the environment, particularly the adverse interest rates have really made it harder for the rest of our core bank businesses to perform to the level that is their potential. But based on everything we're doing and the things I was describing to you earlier, actually, there is a lot of untapped momentum, untapped potential in those businesses, which in a normalized interest rates environment, as we really think about that reflation wave that may come across will really benefit precisely those businesses that we see as the remaining part of our core strategy. So as you look into '22, '23 and beyond, the strategy we laid out, to want to compete to win on 4 businesses, obviously, the Investment Bank, but also the Corporate Bank, a well-rounded Private Bank, which sits on our pillar in Germany and a pillar internationally, and our Asset Management franchise with BWS, we believe that all of them will actually behave quite strongly. The best thing we're doing right now is to ensure that, relative to competition, those businesses perform well. And already in 2020, in a year in which everybody, in our continent in particular, suffered quite markedly from the macroeconomic environment around us, our franchises in Corporate Bank and in the Retail Bank actually performed quite strongly. So we expect all of that to then pay off all the effort and the confidence that we have, as a management team, our people, our clients, to help us navigate exactly the strategy we laid out, so that we can make Deutsche Bank sustainably profitable in the long term.

Well, perfect. I couldn't have kind of finished our session on a better summary. So Fabrizio, thank you very much. Thank you for your time. It's always a very insightful conversation. And of course, thank you to everybody that's joined us on the web.

Thank you. Thank you very much.