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Deutsche Bank reports adjustments to its 2005 preliminary results
09.03.2006 -
FRANKFURT AM MAIN, 9 March 2006 - Deutsche Bank (XETRA: DBKGn.DE / NYSE: DB) today announced that the Management Board in finalizing the Bank’s 2005 accounts reviewed a number of recent developments and as a result increased legal provisions.
Significant new information related to certain legal exposures has emerged since the disclosure of the Bank’s preliminary, unaudited 2005 earnings on 2 February 2006. As a result of the new information, Deutsche Bank is obliged to change its estimate of contingent liabilities in order to comply with US GAAP, which requires that contingent liabilities be reflected in the financial statements when those liabilities are probable and estimable (Financial Accounting Standard Number 5). Any developments affecting such estimates must be reflected if they become known before the financial statements are finalized.
This adjustment mainly relates to certain tax-oriented transactions with US counterparties executed from approximately 1997 through 2001, which include transactions executed by a subsidiary of the former Bankers Trust, acquired by Deutsche Bank in 1999. The new information includes, among other things, the entry by another financial institution into a deferred prosecution agreement with the US Department of Justice in respect of that financial institution’s involvement in similar transactions.
The net increase in legal provisions will reduce the previously announced net income by EUR 250 million. Most of this adjustment is treated as not deductible for income tax purposes.
In addition, for unrelated reasons, revenues in the Private & Business Clients Corporate Division will be reduced by EUR 9 million, which will reduce the Group’s net income by EUR 5 million from the preliminary amounts previously published.
As a result of these changes, net income for 2005 will be EUR 3,529 million and the adjusted diluted earnings per share will be EUR 6.95. Pre-tax return on average active equity (according to the target definition) will be 25%.
For further details please refer to the Financial Data Supplement (Excerpt) which is either attached or available under www.deutsche-bank.de/ir/finanical-supplements.
The adjusted amounts will be reflected in Deutsche Bank's 2005 Form 20-F, its 2005 Annual Report, and the complete Financial Data Supplement. All documents are scheduled to be filed and published, respectively, on 23 March 2006.
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