Deutsche Bank Aktiengesellschaft (DBK) Earnings Call Transcript & Summary

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Good morning, everybody. [Operator Instructions] So with that, I'm very pleased to welcome James von Moltke, CFO of Deutsche Bank. Good morning, James, it's a pleasure to have you with us again this year.

Good morning, Rohith. It's a pleasure to be with you again this year. And of course, as we all would like to be live, hopefully, that's next year.

Yes. Let's very much hope so.

Perhaps we could start the discussion just by recapping the strategy. So the strategy and the overall 2022 financial targets have been pretty consistent since you set them, but the operating environment has changed a lot in the interim. So anything you could walk us through the key achievements to-date? And what needs to be done to meet your 2022 goals?

Sure. I'd be happy to, and thank you for the question, because it's something that we've tried to communicate, I think, consistently over the last sort of 2.5 years, that we've been pursuing a consistent strategy executing on that strategy faithfully, even as the market environment has changed actually several times as I think about the last couple of years. We've completed 8 of what was going to be 14 quarters of transformation of Deutsche Bank and nearly completed the ninth of those 14. And of course, we've all seen remarkable changes. But COVID, of course, the largest of those changes. But the interest rate and the economic environment has had several, sort of, shifts in that time. But we've held very firm to the targets that we've set out. So if I think about 2020, for example, we hit an absolute cost target of EUR 19.5 billion that we laid out. We kept our capital ratio well above a 12.5% ratio that we laid out. And we've guided, as you may recall, to -- even to credit loss provisions during the COVID environment in a range that we hit almost in the middle of it. While all of that's been going on, our capital Release unit has been executing on its strategy around deleveraging, de-risking and sort of -- and putting the non-core businesses off the balance sheet and out of our company. We've also been very focused, as you've heard us say about the -- what I'll call the non-financial transformation. So the investments in the control environment in our capabilities, regulatory remediation. And so all of those things, sort of, continue as we also drive the businesses forward. So yes, the market environment ended up very different from what we might have imagined 2.5 years ago, but it didn't at all distract from our execution. If I turn briefly to the businesses, obviously, we've seen all of us have seen a remarkable financial market environment really since April of last year, and that's benefited overall our investment banking and asset management businesses and the associated lower for longer interest rate environment, at least until very recently, has actually put a burden, particularly on the Private Bank and the Corporate Bank. Again, our strategy has not changed. And I actually have to say, I like the mix of businesses that we have. So that is -- as the shift, if you like, as financial markets normalize a little bit and we see the real economy growth, we'd expect the performance in Private Bank and Corporate Bank to pick up. Also, the interest rate environment is less of a headwind for them. And so we'd expect to see that shift move towards the Private Bank and Corporate Bank business in our mix. Again, the delivery, I think, has been very strong in the 12 months to June of this year, the core bank pre-tax profit was up 92%. And I think we've now, in other words, delivering and showing in our financial performance, the path that we have been working towards the financial targets for next year.

Thank you. And with the latest update, you've moved to a 70% cost income ratio from a hard cost target. That will require nearly another EUR 600 million of additional revenues. Could you give us an idea of where you see the key areas of strength by division that will deliver those additional revenues?

Sure. Happy to [indiscernible]. Absolutely, we -- essentially, our guidance in July around second quarter was in moving our target language to the cost income ratio. We also indicated that we are very comfortable revenues were running ahead of our earlier plans. And so we'd expect for next year at least EUR 25 billion of revenues at a group level. And that's driven by, frankly, all 4 core business running either inline with or in most cases ahead of the, sort of, frame work that we provided in December of last year at our last Investor Deep dive. So let me give you a little bit of color on all that. Again, 4 core businesses: asset management, private bank, corporate bank, investment bank, I'll go in that order. Asset management right now is running at a -- or at least in June was running about EUR 860 billion of assets under management. So again, ahead of our planning and a run rate of about EUR 2.5 billion of revenues on an annualized basis. So well ahead of where we expected them to be. And is continuing to execute on their strategies and grow. Private Bank, we talked about very strong business volumes. So loan growth, AUM growth from -- in their franchise, 14% AUM growth in year-on-year in Q2 and also very strong loan growth of about EUR 4 billion. So we're seeing the driver growth in Private Bank. So that's running, if you exclude the impact of the high court ruling, our annualized revenues there would be about EUR 8.2 billion, again, well in line with -- and frankly, ahead of where we needed to be to position for next year. Corporate Bank, we've been talking for a while, has been executing on a number of core initiatives around businesses with platform, e-commerce providers, growing the German business banking franchise, positioning for growth in Asia, and of course, has been very clear on its deposit re-pricing strategies and has executed well on those. And despite all of the headwinds that they faced, we think they're well on track to be on a run rate basis in the fourth quarter at the step off we were looking to, to support their revenue target for next year. And then the investment bank, of course, investment bank has had a very strong run. It's grown market share or gained market share over the past year, really, 1.5 years. And we're seeing clients come back to the platform, engage with Deutsche Bank, that's been fueled, by the way with the recent Moody's upgrade, so even further. And we've recovered our market share, for example, in FICC to be, I think, solidly number 3 again globally, and have seen more market share gains than really any of our peers over the last little while. And so as Mark Fedorcik outlined at an investor communication last week, we do expect -- continue to expect to see revenues in '21, in line with the very strong revenues of 2020. So around the EUR 9.3 billion level. So the summary is all businesses are executing on their strategies, as I say, running ahead of or in line with our planning, which is what gives us the confidence about the EUR 25 billion. And actually, one other point to make is we've been making investments. So the market's seen us reducing costs. Of course, there's a fear that we're not making appropriate investments in the businesses, but we are making those investments to support growth and sustainable revenues. We've been making selective hires in our business divisions. We've been upgrading systems. We've been making investments in our control environment, as we've talked about. And so we're -- I think in the execution of the strategies, we're making sure that the businesses are positioned, not just for '22, but of course, for the period after.

Thank you. If we can maybe spend a little bit more time on some of those divisions, perhaps starting with the investment bank, which is, as you said, has benefited from market share gains, particularly in FICC, as well as a strong market. How do you plan to sustain or grow market shares as the revenue pull normalizes? You mentioned investments, major competitors are investing in both costs and capital. So do you need to do the same? And then you also just touched on the revenue environment for the rest of the year. I was wondering, if you could expand on that a little bit, perhaps touching on Q3?

Sure, sure. Happy to. So it's interesting. We -- of course, we benefited from the environment that's been very strong for investment banking over the last 5 or more quarters. But the sort of the idiosyncratic Deutsche Bank story, after the transformation we announced in '19 was one of focus in our franchises, and that's actually paid off more than we might have expected 2 or so years ago. And again, as Mark talked about last week, I think one of the drivers or something that's easy to underestimate is just the consistency of strategy, the consistency of leadership in the business and the sustained client engagement, which -- when you're distracted in restructurings, you're not focused on clients and clients are uncertain about dealing with you, that hasn't been the case now for really 2 years. And so you're seeing that sort of build in terms of market share, as I say, client engagements. And you mentioned we're making investments in FIC and O&A, that's origination advisory, the corporate finance franchise for us. And that's absolutely true. That's enabled us to grow revenues and actually market share without seeking more resources on the balance sheet. So RWA have basically been flat if you exclude the impact of regulatory inflation. And we do think that revenue performance is sustainable. We all will rise or -- with the tide, but we think that their market share gains and the performance improvements are sustainable. Now I'll go into a little bit more depth on what those investments look like, Rohith, it's -- in FICC, we're continuing to invest in the drivers of market share. And that's -- revenues are driven by, again, consistency of coverage, consistency of pricing that we deliver to clients and the technology platform. And those are all things that we've been investing in, as Ram outlined to investors back in December. As Mark said last week, we've also been making strategic investments in our -- particularly in our M&A franchise, where we think there's real scope for growth. We punch below our weight today in M&A. So we've made some strategic hires in industry verticals like health care, industrials, also private equity and technology coverage during the year. We're focused on cross-border M&A, and also developing and growing our very strong relationships with private equity firms and also the C-suites of our clients. And again, the doors are open today to Deutsche Bank, which was a more difficult, sort of, road for our bankers a couple of years ago. Mark, we talk weekly about client intensity in our engagements. And it's really gratifying to see last year, in particular, as I think many of our competitors did saw a very high degree of engagement of bankers with clients as clients needed to work with their trusted partners to navigate through the crisis. But interestingly, over the last several quarters, we've seen intensity metrics at or above those levels. So we're very comfortable with the progress we've made and frankly the sustainability of the revenues, we delivered EUR 9.3 billion of revenues in 2020. We've indicated a similar level in '21, and that's up from about EUR 7 billion in the investment bank in 2019. I talked in June about trying to get to a sustainable level of quarterly revenues in the investment bank between EUR 2 million and EUR 2.5 billion, and that would at least support our ambitions for next year or exceed them. And so -- and that's what we're working towards. And also making that a sustainable revenue base as possible. To the last part of your question, Rohith, the quarter, we're close to the end of the quarter, and we're looking at a quarter against a very strong Q3 2020 of down 10% only, which we think is strong, that 10% would translate to up 30% from Q3 of '19, which I think, again, underscores the strength of the franchise.

Thank you. And so moving to other parts of the business. As you highlighted, loan growth, deposit charging and asset management fees have been good. There are still some residual interest rate headwinds that you flagged, and Corporate Bank and Private Bank, in particular, look like they have the highest hurdles to overcome to meet your '22 revenue targets. And you touched on corporate, in particular, a little bit earlier, but what are the key initiatives to get those 2 businesses to the 2022 target level?

Yes. It's a great question, Rohith. And something we're extremely focused on. I mentioned earlier, the financial market and if you like, more balance sheet driven and perhaps real economy driven businesses, we're very focused on delivering now the financial profile in our Corporate Bank and private bank that I think investors want to see. And again, we think they're on track to achieve their goals. As I said at the outset, they've been executing on their strategies very faithfully. It's been hard to see, because the year-on-year interest rate headwinds, of course, have been pushing down their revenues and so they have to work hard to stay in the same place. But they have been executing on offsetting measures, you know, throughout. If I give you some sense of scale, this year as in '21 relate to 2020, the business will face respectively EUR 300 million and EUR 400 million of interest rate-driven pressure, CB and PB, because of the interest rate environment essentially as old deposit hedges run off. But in some respects those are the last of the deposit hedges that were put in place at a higher revenues, so that headwind becomes much less impactful in '22. It is less than half in the Private Bank next year and is immaterial in the Corporate Bank. And so you will get an opportunity to see the underlying growth come through to the topline finally next year. And so let's talk about those drivers. As you say, I mentioned a number of drivers in the Corporate Bank, sort of, growth strategies that Stefan and his team have been busy executing on and that they often start small and grow to larger businesses over time. Most impact fully, as you've seen, they've been able to pursue deposit re-pricing, and that's really been very successful. Our last disclosure was that we've re-priced or got into customer contracts on accounts representing about EUR 87 billion of our deposit base. And that's a run rate of about EUR 85 million of revenues per quarter, and we're building from that. So we think that still has some room to run, as I say, in addition to the other measures that we talked about. Private Bank, as I said earlier, running ahead of our plans based on really the driver growth. And so -- and while it's had the impact of the high court ruling, it's loan growth, it's investment product growth, it's insurance products. And generally, sort of, business volumes building the kind of the installed base of activity there. So we're quite pleased with that performance and that it's running ahead of plan. So with their -- those businesses, it's very much about building the businesses on a run rate basis to the targets that we've set and, of course, continuing to work on the cost base while we drive the revenues.

And so then on costs, we -- you sort of talked earlier that you moved from a hard cost target to a cost income ratio. How have your cost plans evolve, given that you now expect expenses outside of your control to be higher than previously anticipated, but also more income. And has there been any change in the focus of your -- or cost of your investment in controls?

Yes. Well, look, as you said at the outset, of course, there have been changes as there always would be over a 3.5-year period in terms of the environment that you're working in. And what the management team has been very focused on is this faithful execution of the strategy and delivering on the targets we set for '22. You mentioned the target language change on cost to income ratio that we talked about at the second quarter earnings. I do, again, want to emphasize, it's the same cost income ratio that we'd initially targeted, which is the 70%. And we just removed the absolute cost that was associated with that in recognition of 2 things. One is some uncontrollable expenses that had come in, but where we felt we could offset those in the cost income ratio and ultimately, the RoTE target with better-than-expected revenues, as I've described. But again, I want to emphasize, it's no change in terms of the management's focus on cost management and driving efficiencies in the company. I did mention, Rohith, at the time, and we had some disclosure on this, that we were working on additional measures to help offset volume-related and other pressures that we see. We've talked also about the investments that we now continue to need to make in our control environment, which are also running above our earlier expectations. And it's important in that context that we not sacrifice control investments to hit financial targets. But equally do everything we can within our power to preserve those financial targets. And so we had been working earlier this year on some additional measures to drive down expenses next year. And those measures included further workforce optimization accelerating further our real estate reductions, and systems rationalization, so going deeper and further into some of the areas we've been working on for several year. We did say at the time in our disclosure that those measures might require additional restructuring charges and what we're calling transformation charges. And so I do want to provide an update to our earlier guidance. And that now expect to see about EUR 400 million of additional IT charges, transformation charges, again, relative to the overall project that we began back in July of '19. In other words the guidance that we've provided throughout of the transformation effects, an additional EUR 200 million of restructuring and severance changes, an additional EUR 100 million in round numbers of additional real estate-related charges. And so by taking these charges, I think, again demonstration the focus on expenses and where we can going deeper and accelerating. Our goal, given, again, next year is a measurement year against our targets. Obviously, our goal is to book these charges by the end of the year, the incremental charges and stay on track. But we also expect the benefits of those charges to start as soon as the fourth quarter and obviously impact '22 and beyond. If I think to the third quarter, some of these charges will fall in the third quarter. And so you should expect our transformation charges to be significantly higher, compared to the recent run rate or the Q2 level. And this would largely be reflecting the IT-related expenses that I mentioned a moment ago. It may be partially offset by better DTA over time, but that's still sort of in the final analysis. Overall, we'd expect these movements not to change our outlook or frankly consensus materially from what we see today. So we do see some outperformance against consensus in revenues and CLP as offsetting or more than offsetting the incremental charges in Q4 -- in Q3, I'm sorry. And the last thing I'd like to say is that, again, these incremental charges, which will take the whole compete to win strategy that we announced in July '19 to a total of about EUR 8.8 billion, again, on consistent disclosure, which we'll update in our 3Q numbers. Our goal is to have almost all of that -- those charges now booked by the end of the year. So we would have the impact of this transformation essentially fully booked by the end of the year. Remember, in all of this, where one of the things we're seeking to do is ensure that we have the room to support some of the control investments that we've talked about. But I hope in this, you see, again, a management team that will course correct when we see challenges and take sort of quick and aggressive action to offset our pressures.

Thank you. That's a helpful update. And just coming back to revenue, sorry, briefly. One of the things that you've had to deal with is the German current account fees. Just -- could you give us an update in terms of how the customer response there is going in terms of the outreach and contact process? And your level of confidence that those revenues can be recovered?

Sure. Happy to. And it's -- progress we're actually quite pleased with. Obviously, we're disappointed with the federal court -- the high court results, but we moved very quickly to then execute on what, again, I'll call, remediation of that situation. Our current view is that by the end of this quarter, so essentially next week, almost 2-thirds of the impacted client base will have consented. And that's on track with our expectations that we outlined in June and again in July. If I take you back to the financial impact of this event, we booked about EUR 220 million related to this, what we're calling our disclosure, BGH ruling in Q2, of which about EUR 130 million related to a litigation provision, essentially the restitution costs, both of the operational and the client restitution costs and then foregone revenues of about EUR 94 million. That revenue hit is something that repeats until we have the signed client consents. And hence, the reason we worked so quickly and hard to bring the consent process forward. We'd outlined it would be EUR 94 in Q2, again in Q3, and we expect a much smaller impact in Q4 as we try to bring the last of those client consents across the line. Remember, it's a sector issue, so it's something that we and our competitors in Germany are all dealing with at the same time, but we're quite happy with the progress we've made and frankly, the customer response. And so I think in short, we're on track with the actions that we outlined in June and July to address this matter.

Thank you. And you mentioned when we were talking about costs in terms of your expectations versus Q3 consensus from one of the areas of outperformance being credit quality. So Q2, the full-year guidance implied a 30 basis point credit loss provision in the second half of the year. I mean, it sounds like, which make economic activity gives you more confidence around that number? And so just wondering there, if you give an update in terms of what you're seeing, particularly given the evolving new flow around China? And also what your expectation are for asset quality beyond this year, in terms of both the upside and the downside risks that you're seeing?

Yes. Well, it's obviously a hot topic. We have -- we continue to see a very benign credit environment. Our guidance this year started high-ish at 25%, and on a relative basis, low, I think, to many of our peers, but -- and we've continually taken it down really on the basis that we wanted to be conservative. There was uncertainty in the environment given how the pandemic would continue to evolve, the end of moratoria and other support programs. But as we actually said in July, it would continue to improve if that is the CLP guidance for the year would continue to improve if the credit environment remained as benign, and it has. So at this point, I think for the full-year, we'd probably be at around 15 basis points or perhaps even a little bit better. For the quarter, we'd expect -- it's always hard to tell, but around EUR 150 million in this quarter or perhaps a little better than that. So overall, benign in credit. As you say, the economic environment, you've heard this from some of our peers and obviously, economists remains quite robust. It's changed a little bit based on expectations with the delta variant and other considerations. But in principle, it's a very strong environment. And you've seen very low default rates, including in high-yield and other parts of the market, where you might look for potential signs of credit deterioration. So while we're all vigilant about vulnerability to downside risks and remaining uncertainties, the environment remains quite benign. You mentioned China, and it's probably worth -- I'd sort of give you a couple of comments about that. The headlines that you've seen about one obligor. We don't have any exposure to that obligor directly and de minimis in an indirect sense. So we're not really directly affected at all by the events of the last week or so. And actually, the indirect effects at this point, we don't see any really impact indirectly at this stage. We're seeing the economic environment in China of course slowed from the very high levels that it has recorded over the last several quarters, driven by both the slowdown and the property sector and also, you know, the impact of recent government interventions and thing like tech, you know, education, and the real estate market and that's driven some volatility. If I think about our portfolio, you know, it is a very high portfolio and we are focused in our China exposures, our exposures tent to be to stay to an enterprises, Tier 1 financial institutions and also particularly subsidiaries and multi-nationals and so we are very comfortable with that portfolio. Real estate, of course, is an area of focus and will be for a little while now. But there, our exposures, as is typical of our below are conservatively structured and it relatively low LTV. So we would continue to see the fallout, if you like, in the real estate sector as being -- at least manageable with -- for us and maybe better than that.

Thank you. Moving back to strategy briefly. ESG has clearly moved up your agenda. So what progress have you been making there? And how does it fit with the broader transformation strategy?

You're absolutely right. Right, it was one of the, in -- if I think back to July of '19, there was a management agenda that we articulated, it didn't get a lot of focus understandably, because the restructuring was the focus at the time both of investors and of the management team, but we're very pleased in the way we've been able to advance that broader management agenda. And that included ESG, which is, at this point, really a very high, if not top priority for Deutsche Bank. And as you'll recall, we did a sustainability deep dive to try to apply the same rigor in terms of dialogue with stakeholders, metrics and transparency to the sustainability agenda as we do with you and our investors. So our focus here is the transformation journey. So supporting our clients as the economy transforms, I think that's the critical role for a financial institutions. And moving the economy, financing the economy's transition to climate friendlier ways of doing business and supporting the economy. We have set targets for that financing. As many of our peers have done. In our case, it's EUR 200 billion, we initially had that target for '25. In May, we brought it forward to '23, and we're continuing really to outperform our targets, which to my mind, is a signal of how well we've been able to engage and how successful once we really focused on this agenda, how successfully we were able to drive it forward. And it's across the businesses, so you will have seen that we've set targets, not just for the group, but also over time for each of the business, so it's financing in the Corporate Bank and Investment Bank, obviously, underwriting in the investment bank and the private bank, it's generating sustainable assets in their investment products. Again, at this point, we -- the last number we disclosed was EUR 99 billion. So we're essentially halfway to the EUR 200 billion target. The strategy, though, goes beyond just environmental and sustainability, as we talked about in May, it goes into diversity inclusion. Obviously, we're focused on governance, and we're focused as a management team on driving all of the various elements, the dimensions if you like, that -- that our extra stakeholders look at and we've tied that to management compensation, so it's a quite far-reaching initiative. I do want to take the opportunity, Rohith to speak to the recent press that DWS has had, because that's obviously being -- been very painful for us as a group and DWS is a -- as a company. And what I want to highlight is, it's very important to understand DWS stands by it's disclosures, it's been very clear that the 2020 annual report disclosures of both ESG managed assets of ESG, integrated assets, our numbers and processes that we stand by. DWS has a 20-year history of focusing of sustainable investments and building it's capabilities and we believe it's been a leader in this regard and hence, you know, I think we have to go through the process of the investigations that's entirely appropriate under the circumstances, but we are working hard then to move as quickly as possible through those investigations and as I say we stand by the disclosure that we have made of both our sustainable assets and our processes. I will say just from a performance perspective, at this point, we're not seeing an impact in terms of inflows or assets under management at DWS. We're very focused on managing through this communication with clients and ensuring that the impact is as small as possible, but speaking sort of for the third quarter performance at this point, we don't see a measurable impact.

Thank you. That's very clear, James. If we can move on to capital, there's now a direct link between the stress test and capital requirements and this is draw down, looks consistent with the regulatory minimum CET1 ratio between 11.4% and 13.2%. So do you expect any change in Pillar 2 guidance that would impact your CET 1 target?

Short version, I don't think so at this point. A, we're not -- we don't know this for sure; and b, it's not disclosed. But to give you a little bit of color, there's always been a link between the EBA stress test results and/or depletion in the EBA stress test and the P2G setting. As you'll be aware, the ECB has come up with a revised methodology and framework for essentially translating not just the stress test, but other considerations into the P2G setting. It's not part of the minimum CET or the MDA, as you know. But it's a threshold that drives dialogue between the supervisors and the supervised companies. But looking at where we are today, the depletion didn't really materially change between our 2018 stress test and the '21 stress test. And while it's early to say, we just -- we don't see any impact on our capital targeting or our distribution plans.

Thank you. So that leads us on nicely to distribution. And how are you thinking parameters would you consider when you think about distributions potentially starting at the end of this year? And how should we think about the scale of those in the context of the EUR 575 million accrual that you made in the first half of the year?

Yes. Well, so it's early to have that conversation, to be honest. I mean, it's a decision that late this year and into next year with our supervisory board and obviously, with our regulators, we would make final determinations. So the short answer is too early to say. What we are very pleased about though is that the profitability that we have been able to show this year, notwithstanding, still being in a transformation phase, has supported this accrual, I'll call it an accrual as really a deduction from our capital ratio for purposes. And it's a mechanical one, but it enables us to pay out on a running basis now, in other words, in the first half, almost EUR 600 million without affecting the capital ration. And obviously, as we go into the determinations at the end of the year, the accrued number, as well as a number of other considerations will factor into our thinking. I think the important thing from my perspective is we made a promise to investors to distribute EUR 5 billion of capital back in July of '19 and even while we are still going through the period of transformation this year in 2021, we have been able to get ready for. But I think is a meaningful down payment on that EUR 5 billion and you know, it's above 10% at this point of the EUR 5 billion. So you know, that's very encouraging.

And over what period do you anticipate returning that EUR 5 billion?

It's always been hard to say. And so we've been, sort of, deliberately vague about the period, but our goal is to make it as quickly as possible. And as I said last December, it is within our planning horizon, and it remains within the planning horizon we had in December, which is 5 years. Again, our goal is to make it is -- to bring it out as quickly as possible, while at the same time, supporting business growth and building for the next wave of regulatory inflation, which will come with the Basel III final framework.

Thank you. And then a quick question on M&A, if you don't mind, you've mentioned previously that you've -- you're open to acquisitions once you've completed your own transformation. What attributes would you look for when you're considering M&A, both for Deutsche Bank and also for the asset management business?

Yes. Well, no, I think our -- yes, our messaging has been consistent on this, that we see the industry logic that there should be consolidation in European banking. And I think you've seen that in terms of regulators encouragement and then some activity typically in market activity last year. And it's something that we see in the future for our company. But as you've also heard Christian and me say, our focus on transformation, I think, is part of the preparation that we need to do for that eventuality. And that's getting the businesses ready for performance. It's the control environment, it's investing in our technology, all the things that we're doing to build, I think, a stronger and more competitive platform and that's a platform that I think will enable us to engage in strategic activity. Hard to speak to the specific attributes. It's -- there's so much that goes into it, Rohith, and I'd probably be giving more away than I ought to, but obviously we want to do thing that are -- we want to ultimately engage in discussions where we think there's a transaction that can be value additive to our shareholders and further the strategies and our relative competitive position in the market place and that's while being very cognizant incidentally of capital allocation, where we made some very clear, sort of, direction of travel statements back in '19, and that's, you know, reason to change those. Just quickly to asset management, you know, you have heard us again speak to the level of preparedness that I think that DWS is at to pursue it's own strategies. The support from the parent to do that, and the industrial login that I think is also true there. What that will look like when the transaction is, as there's been some commentary, they've been actively seeking the right alternatives. But both for them and for the group, I would say, you know the discipline with which we would approach inorganic activity will be the same discipline with which we have conducted ourselves in our transformation over the last 2 and change years.

Thank you very much for that, James. So we are going to have to wrap it up there. We've come out -- we've run out of time. But thank you, as always, for your time this morning. And very much hope to see you in person in the not-too-distant future.

I look forward to it as well. Rohith, thank you for having me, I'm sorry we didn't get to questions, but we'll do so perhaps in some of the group sessions that are coming.

Great. Thank you.

Thanks.