Good morning from Frankfurt. I’d like to welcome everyone to this morning’s Earning Call. I’m joined this morning by our CEO John Cryan, our CFO Marcus Schenck. John will open the call with some brief comments and then Marcus will take you through the analyst presentation, which is available on the website www.db.com. As we did last quarter, I would ask for the sake of efficiency and fairness that questioners please limit themselves to their two most important questions so that you can give as many people a chance to participate in the Q&A session as possible. Also let me pre-warn you that due to scheduling obligations we will need to end the call no later than 9:30 CET this morning. And let me finalize with the normal health warning as can you all to pay particular attention to the cautionary statements regarding any forward-looking comments that you will find at the end of the Investor Presentation. With that out of the way, let me hand it over to John. John?

Thank you, John, good morning, everyone. Let me make a few brief comments before handing over to Marcus to take you through the details of our results. The outcome for the quarter showed the strength and the resilience of our operating businesses in a tough environment. And it showed the progress we’re making towards restructuring the bank. However, the quarter was clearly overshadowed by the attention paid to our negotiations concerning the U.S. Department of Justice’s initial settlement of proposal relating to RMBS matters. This has created uncertainty, uncertainty that affects the markets’ view of Deutsche Bank as an investment, uncertainty that affected some clients’ views of Deutsche Bank as a counter party and uncertainty that even affects our financial planning and strategy execution. We remain keen to settle and are other open matters with the U.S. authorities. We also continue to focus on the execution of our plan. We took advantage of accommodating markets to cut RWA largely through the promised accelerated rundown of our non-core unit. We’re now confidently on-track to wind-up the NCOU at year-end. We’re beginning to see the positive impact of our simplification and cost management measures so these will only really come through in earnest in 2017. The macroeconomic and geopolitical outlook has worsened over the past year, that’s particularly true as the challenging interest rate environment in Europe seems unlikely to change in the short-to-medium term. And the demands for regulatory capital continue to build. We’re acutely aware of these changing contours of the operating environment and we are responding. As I said in the last quarterly call, we need to restructure and modernize the bank faster and with higher intensity. We’re taking steps now particularly to achieve additional cost savings in RWA reductions. But we’re also addressing the more challenging outlook in our planning to ensure we achieve our financial goals. But first and foremost, we must remove the overhang by litigation cases and the regulatory investigations by settling those matters. This remains our and my top priority. In the meantime we’ll continue to execute our restructuring and adjust our planning and most importantly remain focused on serving our clients. Now, Marcus would review the quarterly results.

Thank you, John. Good morning, and welcome also from my side. For the quarter, we reported an EBIT of €619 million and a net income of €278 million. Compared to prior year third quarter, revenues are slightly up to €7.5 billion and non-interest expenses decreased substantially. Clearly this is driven by the material negative one-off items we had in Q3 last year, in particular with the goodwill write-downs. Looking just at the adjusted cost base, costs were down €300 million for the quarter. Risk-weighted assets at quarter-end were at €385 billion and leverage exposure was at €1,354 billion. With that, fully loaded Core Tier 1 ratio came in at 11.1% and 12.6% on a phased-in basis. Hence, 30 to 40 bps up versus last quarter. This does not yet include the effects from the sale of our stake in Hua Xia, which will add another 50 - around 50 basis points to the full-loaded ratio in Q4 of 2016. The leverage ratio is slightly up to 3.5%. Let me guide you through the net income bridge for the third quarter compared to prior year. At constant exchange rates, revenues for the Core Group including the non-core unit - excluding the non-core unit and Hua Xia slightly increased by €150 million versus Q3 2015. Global market revenues were up €227 million compared to prior year quarter. The main driver is the solid performance in debt sales and trading which increased 14% year-over-year driven by strong performance in rates and credits. For CIB we saw minor decline in revenues of €20 million. This is a result of continued weakness in primary fee-pools as well as lower revenues in GTB compared to prior year quarter. PWCC revenues were up €293 million year-over-year. However, prior year quarter included a negative valuation impact on the…

Marcus, thank you. Operator, we’d like to start the Q&A session please. And if I could remind everyone to ask just two questions, so we can try and get through as many in the queue as possible. Thank you.

[Operator Instructions]. And the first question is from the line of Daniele Brupbacher of UBS. Please go ahead.

Good morning and thank you. I wanted to ask about cost and also the IHC. On costs, I mean, at the Q2 results, you were guiding for basically flat cost versus 2015 for this year. And I think year-to-date of the nine months underlying costs were somewhere around €19 billion, so that implies either a very significant pick-up in the fourth quarter close to €8 billion or the cost guidance is now too conservative. Could you just update us on your expectations for the cost base this year? And then secondly, on the IHC, which I think is now live since July 1. Could you, would you be able to share with us a few numbers regarding the size, profitability and capitalization that was, of that unit? Thank you.

Okay, so, thanks for the questions. On your first question, with regards to outlook for our adjusted cost base for the group. We do indeed expect for the full-year to come out below where we were last year which is where we had originally guided towards. As you will be able to tell from my comments on the various pages, a big driver of that is in particular also lower compensation costs but there are also first effects from cost cutting measures which at this stage largely affect in particular external headcount but we do indeed expect our adjusted cost base to come out below where we were last year? On your second question, with regard to the IHC, we’re not disclosing specific numbers in relation to that unit. So, I will at this stage stick to that policy.

Thank you. And is it correct that you will have published those numbers at some point in time like mid-November I believe 45 days after the?

That is correct. And we prefer to comment once we have published them.

Okay, great. Thank you.

And the next question is from the line of Jernej Omahen of Goldman Sachs. Please go ahead.

Good morning from my side as well. I’ll limit myself to one question actually. And it’s going to be on the liquidity position of the bank. So, I think that the quarterly results suggest that the liquidity reserve was down broadly €20 billion between Q2 and Q3. And I just had two sub-questions on that. So, the first one is, in your mind, is it fair to say that the bulk of the volatility on the liquidity side of the equation was captured with the Q3 results. I believe I’m correct in saying that the share price troughed on the 29 September and then rose subsequently. I just want to confirm with you that you haven’t seen acceleration on the deposit and liquidity side of the equation post the quarter end. And the second question I had still on liquidity, the unsecured wholesale balance is down €12 billion Q-on-Q. And I think the last time there was turbulence with Deutsche Bank during the first quarter of this year, was the prime brokerage deposit suffered as they did this quarter, unsecured wholesale didn’t, it was actually up Q-on-Q. I was just wondering what’s driving that. Can you also confirm that the U.S. dollar liquidity position is as robust as the consolidated liquidity position reported for the group? Thanks very much.

Thank you, Jernej. So, on your first question, with regard to our liquidity reserves, it clearly, the last two weeks in September post the unfortunate leak of an initial, ask from the Department of Justice has caused a lot of speculation around the bank. And that certainly took to some extent its toll. That’s probably continued for another week in October, and since then the situation has stabilized our liquidity reserves as of today, largely where they were at the end of September. And our prime brokerage business certainly has suffered and we show that in the numbers. But the development with regards to that business is, quasi has followed what we have seen with regard to liquidity development namely there was probably another week of speculation into October and since then the situation as that also for liquidity, the liquidity reserve has stabilized. The U.S. dollar liquidity is basically at it’s actually even slightly better by now but that’s more a function of how we have managed the situation.

Okay, Marcus, this is great. Can I just go back to one thing you said, because I think it’s all important, so, if I understood you correctly, you’re basically saying the liquidity position as of now is pretty much, or the liquidity reserve is flat on where it was at the end of the quarter?

So, the liquidity reserve as of today is broadly unchanged. As I said, we have seen in October, in particular in the first one week, maybe first 10 days, further noise. We have seen some more deposit outflows. As you can see, we have them and I commented on that in the last two weeks of September. But by now we’re looking at a stabilized situation.

Okay, perfect. Thank you very much.

Next question is from the line of Kian Abouhossein of JPMC. Please go ahead.

Yes, thanks for taking my questions. The first question is related to numbers, and maybe you could just clarify if you’re still on track with what was announced previously in terms of targets. Basically you mentioned risk-weighted assets should be ex-Basel IV harmonization about €320 billion, €100 billion plus for harmonization. So, are these numbers still intact? And in that context, is the IPO/sale of Postbank still on track? So that’s the first question. The second question, just on counter party risk. If I look at your funding cost, it has more or less doubled relative to last year. And I’m trying to understand what other businesses besides PB is it impacting? And in this context, how are you John, spending time, these clients, do you actually have to get involved and talk to clients to calm them down, discuss this on the position of Deutsche. I’m just wondering from a corporate perspective how they’re interacting with you?

Well, let me do that first. To dispel any myths, I don’t just sit pouring over spreadsheets, which is, some people define my personality. I actually like to spend I’ve got a personal rule that I have to spend at least an hour a day with clients. And I do spend an awful lot of time with people who are sometimes, counterparts, competitors, vendors, all sorts of stakeholders in the bank. And you’re right, particularly latterly, but also back in the sort of late January February, you do spend part of the meeting explaining the position of Deutsche Bank. Generally speaking that then dispels the more lurid of the myths about the bank. But we do engage a lot with corporate clients, as I said the €14 billion number when it became public was a cause for disquiet amongst lot of people who work with the bank. And clearly, I think what I should do on this call is thank all of the staff in the bank who have spent a lot of time engaging with clients, to make sure that they understand the fact as opposed to some of the section. So, yes, we have been spending time with clients. On the targets that you mentioned, they remain targets. We are working hard to try to achieve them. As I said in my remarks, the environment hasn’t got any better. A year ago, we didn’t expect interest rates to do what they’ve done, we didn’t expect the bake, expect the Brexit. And the bank’s been through the ringer a couple of times. But I think we still believe that we’re on track, we’re doing the right things. We have picked up the pace, picked up the intensity of it. We do see the costs coming down, to the Daniele’s…

On your question with regard to funding costs and how businesses are impacted, you’re just being mindful of the fact that what we’re talking about in terms of where we raise money is €28 billion which we’ve done year-to-date out of our total external funding of €957 billion. So you’re right, our funding cost for that €28 billion out of €957 billion has gone up. But you have to put it little bit into context. That means that we are pleased with the funding cost that we currently have, of course not. This is something that we need to work on and something that we would expect once we have resolved the major matters to also normalize and get back into the overall pack. But again, it’s €28 billion out of €957 billion.

For me it’s more a marginal impact in terms of doing business on a long-dated basis. And my spread level is increasing or doubling. I’m just wondering how is, it impacting just your PB business, because the marginal return is declining on each dollar if you’re using long-dated funding. That’s what I’m trying, I’m just thinking about it from a what is my marginal cost am I getting, gives a certain business that it’s much more difficult for me to do due to doubling of spreads that’s what I’m trying to understand in the market business.

So, again, we have many sources for our funding not just this one. But I agree with you longer term, we certainly have to take this number down. What I guess my point is that we can manage the situation right now, longer term, as I said before we’re clearly mindful of the fact that we have to bring this number back into where the competition raises money.

And just to be clear, Postbank is still on track to be IPOed/sold?

Yes, so, just coming back to your last question. When you said on-track, it’s sort of on-track. We’re still in a position we were in at the end of Q2, which is, the company is ready for sale and available for sale, but we don’t want to sell it until we get an attractive price for it. And we have considerable amount of time and flexibility to try to achieve that.

Thank you very much for your time.

Next question is from the line of Stuart Graham of Autonomous Research. Please go ahead.

Hi, I had one question and maybe a follow-up. John, you had two near-death experiences on the share price within eight months. What lesson do you see or draw from that? It seems to me like the market has lost faith in your strategy and requires a fundamental change. But maybe you see it differently? Thanks.

I do see it differently. And I don’t try to manage the share price every, I try to manage the bank.

Okay. So, in the outlook statement in the interim report, it sounded like you’re still committed to the 10% ROE in 2018 and 70% cost income ratio. Firstly, is that right? And given consensus is a long way away from that, what if all got wrong that you see that we don’t see?

Those are still the targets. And we always said we need to be able to execute and demonstrate we can get there, rather than just talk. So what we’ve tried to do is deliver. And on the first-year plan we set ourselves, we’re pretty comfortable that we’ve been delivering most of what we said we’d do. Environment has been harder but we’ve picked up as I said the pace and intensity of what we’re doing. And it’s not for lack of hard work or commitment from our people. So, we’re trying as best as we can to meet the target.

With all these stories about re-litigating prospect and all that sounds like you think the plan is fine, there is, no dramatic changes needed. It’s just about executing on what you talked about?

That’s correct.

Okay. Thank you.

Next question is from the line of Jon Peace of Credit Suisse. Please go ahead.

Yes, good morning. So my first question was just on global markets. In the original RWA deleveraging bridge, you said you were targeting €30 billion net reduction in risk-weighted assets. Is that still the number and how far through that are we given the reduction you see in this quarter? And the second one is just on your C1 target of 12.5% at the end of ‘18. Do you feel any pressure to get to that number sooner? And I wonder whether you might comment on recent press stories about possible partial floatation of Deutsche Asset Management to accelerate that? Thank you.

For your first question in terms of taking down RWA in global markets, we’re still pursuing the €30 billion cuts where I would say at this stage, more than half way through. And as I indicated and also John has just alluded to, we’re constantly looking at where we might have more possibility to free up capital. So, this is a continued exercise and we’re still firmly committed to delivering I would say at least €30 billion. Secondly, with regards to the core Tier 1 targets, I mean, look here, the situation is, we will have our minimum regulatory requirements which would be communicated to us very shortly through the SSM. So, when we get our final SREP letter, we will know what our new MDA and what our new SREP level, is going to be. And we were at every point in time aspired to be north of those levels, so that we meet the requirement. And that’s how we need to manage the situation. And on your, what was your third question?

Asset management.

On asset management, Nicolas Moreau joined to lead that business on 1 October this year. And if you think Marcus and I had a baptism of fire mid-year last year, imagine how Nicolas felt. He’s been on-board 27 days, so, we’ve asked him to review the business. And he will be coming back to the board recommending his views. Asset management is bit of a dynamic industry. If you look at our flows, our U.S. business particularly money markets, given the changes there has come under pressure. So we’ve asked him to look at the individual constituent businesses and come up with a capital allocation plan for it. And as I’ve said many times before, we like asset management a lot, maybe return on equity is not the right metric for it, but it’s very high, it was 33% in the quarter. It’s a great contributor to the profits and the cash flow of the bank. And we’d like to keep it an integral part of the group. That’s not to say we don’t manage it actively and that’s Nicolas’ job. But we’d like to give him a little longer than 27 days in which to come up with his plans to how we take the business forward. But it’s important for us as part of the group, and we want to keep it as an integral part of the group.

That’s great. Thank you.

Next question is from the line of Al Alevizakos of HSBC. Please go ahead.

Hi, thank you for taking my questions, two questions from my side. I just wanted to know first of all what would be the mid-term target for the ROT post the NCOU unwinding at the end of the year. And at the same time, do you still want to compete with the 5% leverage ratio given that now if you need to raise AT1 securities, probably it’s going to be at higher funding cost? And the second question was basically on the U.S. I understand that you’re currently on ongoing deleveraging kind of route. Can you provide the number on the size of the deleveraging even on an absolute basis on a relative basis? Thank you very much.

So, I’m not sure what exactly your first question with regards to ROT is. I think there I can in a way only echo what John said, our targets. So what we’ve put out in October of last year still remains our target that we aspire to achieve. On leverage ratio, I think we’ve made that clear throughout the year, being north of 5% is not a holy-grail for us. If we fall short of 5% that’s from our point of view that’s perfectly all right as long as we have it at a level which I would say for European standards is perfectly acceptable. And as said before, the real metric that we need to manage is our core Tier 1 ratio. As long as we secure our core Tier 1 ratio being north of our regulatory requirements, we will actually naturally take our leverage ratio up and it will not be a bottleneck for the bank. I mean, I expect it to be clearly north of 4%, when we achieve our core Tier 1 ratios north of the SREP requirements. So it will not be a bottleneck for the bank or a metric against which we need to manage actively. With regards to the U.S., I would at this stage prefer to stick to what I said before namely we were not going to comment on specific actions in the U.S. and how that business is managed. Deleveraging is an overall target we have for the bank. And yes, a portion of that is applicable to the U.S. but we’re not breaking this down specifically. I think that’s our belief at this stage.

Okay. Thank you very much.

Next question is from the line of Jeremy Sigee of Barclays. Please go ahead.

Thank you, good morning. These are kind of follow-on questions now. The first is, you’re cutting assets and costs across the group, particularly in the global markets business. Are there any specific activities there that you’re exiting or downsizing more than your original plan that you outlined a year ago, that’s the first question? And then the second question is, I just wonder if you could come back on the comments around Postbank, I’m not sure I fully understood what you were saying. The extent to which it’s on-track as originally planned or whether you are looking at other options including reintegration or other possibilities?

First question, the business is that we’re exiting, I refer to the page in I think it might actually almost have been - almost exactly a year ago. It’s still the same businesses. Clearly the most pronounced and which actually has cost us quite some revenues this year is pruning our securitized trading business which has come down substantially over the last 12 months. Our RMBS business and so, it still holds true what we communicated a year ago. With regards to Postbank, clearly the situation with that bank is that it is in 2016 going through cost restructuring as is the case for Deutsche Bank that burdens the P&L because there is, a lot of one-off effects in there, which take profitability down. And we’ve also said that Postbank during 2016 and I expect that to also be the case at the beginning of 2017 is aiming to improve its own ability to generate assets that give a higher yield than just residential mortgages. And we think the combination of cost cutting and improving the yield on the asset side, and particularly demonstrating that they can do so are key prerequisites for us to sell that business be that by way of an IPO or by way of a trade sale. And hence this is a 2017 topic. I think those were your two questions.

Okay, thank you.

Next question is from the line of Amit Goel of Exane. Please go ahead.

Hi, thank you. Two questions from me. The first, if you can just clarify on the capital kind of guidance, I think Group’s targeting still something like 11.1% CET1 ratio as the year ends. Clearly at Q3 you’re 11.1% and you say that in Q4 you still expect to close Hua Xia getting another 40 to 50 basis points. It seems like there is still a bit more RWA reduction to come from NCOU to get down to the €10 billion. So, I just want to check where the other kind of I guess minus 50 bps or so is coming from, are you expecting more significant losses to come through in the fourth quarter? And the second question relates to the costs where the costs are bit better, the guidance is slightly better on the back of the variable comp, on the comp inflation. I just want to check what your, kind of thinking is, what you’ve done in terms of the variable comp accrual. And what you’re thinking in terms of costs if on an EBIT level, the group is close to a breakeven performance at the end of the year which may impact some of the deferred compensation? Thank you.

On your first question, yes, indeed, I mean, predicting where we’re going to land with regards to core Tier 1 ratio by year-end, is not an easy task against the backdrop of some material litigation cases, still being out there and open as to where we will be able to settle them. And please don’t forget that the year actually ends on March 16, because on March 17 we will be publishing our full-year results. And the sort of the litigation books which is always a great pleasure for our reporting guys that they unfortunately closed a night before we publish. So there is, still several months to go. And your analysis is perfectly correct. We do expect we firmly expect the closing of Hua Xia. And we are certainly working on further RWA reduction, but we also do expect additional burden from the litigation side because we are fully committed as John has said several times to try to resolve more of the outstanding cases, so that’s - we hopefully soon get to a position where the bank can look into the future and stop looking backwards. With a non-core unit, in three months we think we can stop looking backwards there. But we very much like to also get to a point where we with regards to litigation can stop looking backwards. And then, your second question regarding cost and EBIT outlook and how that impacts bonus and compensation, this is something that obviously where have to be looked at, at year-end. I think we’ve made it very clear that against the backdrop of the development that we see and also our expectation on the litigation side. And we have taken down the course for variable compensation where exactly that is going to land that will depend on where we land for the year. But it took its tolls during the first three quarters. And I mean, we’ve commented on that in almost every segment that costs are largely down because we’re taking compensation down for the year.

Thank you. So, just to clarify, so 50 bps is roughly or kind of best guess to the overall impact of the litigation settlements that you’ll be doing for 2016?

I’m not going to give you a precise number there. Our target is to be on the core Tier 1 ratio, broadly where we were last year which is in this 11%, and we’re not exclusively driving where settlements are going to land. There are others involved as well.

Sure. Thank you.

Next question is from the line of Andrew Coombs of Citi. Please go ahead.

Good morning, I have two questions, both follow-ups to the previous one actually. The first is within the last quarter, you said that you expected to resolve four or five major litigation cases by year-end. I just wanted to confirm if that was still the case, and also by year-end do you therefore mean March rather than December? That’s the first question. The second question is coming back to compensation, if I look at global markets’ compensation it’s down 25% year-on-year in the first nine months. If I look at headcounts front-off, this is only down 4% year-on-year, total headcount actually up 1%. So, I just wanted to check the count and variable compensation accrued you talk about, how much of that is actually due to a genuine underlying cut versus is there any change in your deferral policy assumptions or anything else we should be thinking about there? Thank you.

Shall I take the first one on the litigation item? We still would like to resolve all of our major litigation items. I assume it’s possibly. Ideally that’s before year-end. As we found we’re not in control of the time-table on this. But it’s what we’re trying to achieve and it’s the best guidance we can give you but we don’t control the matter. But yes, it probably would now stretch to amounts that would be incorporated in our 2016 results. So until we file 20-F, the books remain open for any preexisting litigation item.

And let me try to answer your question on comps. First of all, I would like to highlight that for 2016 we had group-wide introduced a let me call it, a pay-mix shift, i.e. we have moved in particular for the more junior population variable compensation into fixed compensation. So, that is one of the reasons why also VC comes down. And then, be mindful of the fact that in particular the deferred compensation how it actually hits our P&L, it doesn’t hit it’s all in the year when we sort of allocate it to people but it hits when it’s being - when invests. So this year, we are to some extent seeing the reduction in variable compensation which we had last year, which impacts then the following years, i.e. ‘16, ‘17 onwards. But clearly, we also have taken down also the cash component that we expect to payout to people for the year 2016, so it’s a combination of those three effects, pay-mix, secondly lower delivery due to the fact that 2015 bonus came down. And then thirdly the fact that the cash bonus to be that we currently plan the 2016 we have also taken down.

Thank you. There are some press reports out there that are discussing the possibility that you might pay more compensation stock-vest cash this year. I presume if that was the case you could then defer those compensation costs as and when they vest. Is that the case or are you expecting keep stock versus cash proportion similar to history?

In what form variable compensation will be paid is not yet decided. I mean, clearly I would say that given the situation of the bank and the profitability situation of the bank. In particular thinking about the senior population of the bank having more, tight towards the share price development in the future, seems to make sense to us. But there are no decisions yet taken as to how exactly the composition is going to look like. And as said before, we in particular first need to wait and see how the profitability is going to evolve over the remainder of the year.

Thank you very much.

Next question is from the line of Magdalena Stoklosa of Morgan Stanley. Please go ahead.

Thank you very much, good morning. I’ve got two questions. My first is about the regulatory inflation of risk-weighted assets. In Strategy 2020 you’ve talked about €100 billion, so my first kind of question would be, is this guidance staying put? And but also, if you could give us your take on the evolution of kind of the Basel IV discussion particularly now when you’re kind of looking for some guidance in the beginning of the year? So that would be my first question. And my second question is a little bit more conceptual. Could you kind of help us think about the trajectory of your fixed revenues going forward, of course this was a very strong quarter for you, very strong quarter for the industry. But how should we think about it going forward particularly taking into account that of course the balance sheet shrinkage is happening at the same time? And I suppose how does it impair the business and effectively whether the risk-weighted assets kind of taken out, are kind of lazy potentially from businesses, as I think have discussed earlier today which were very, very kind of heavy capital usage, just conceptually if you could help us? Thank you.

On your first question regarding what the market calls Basel IV and the regulators call full implementation of Basel III. My first comment would be our guidance that we do expect at least €100 billion of inflation remains intact. Clearly, the developments I would say in the last eight weeks that’s we hear from what the technical people in the Basel committee are looking into is going more in the direction of trying to be more in line with the stated political objective namely that there shall not be a significant increase in the capital requirements for the banks. So, relative to the initial consultation papers, there are now features being explored that we understand will take the inflation down. We still however do expect inflation in the €100 billion at least €100 billion still remains our best estimate. And so I wouldn’t want to depart from that. It is probably bit on the conservative side at this stage but the best number that we have. Now as it relates to our FICC business, indeed it has been a pretty decent quarter now. We would expect our business clearly be impacted by the fact that we have exited a number of places in particular as it relates to our emerging market footprints. As we pointed out we have taken conscious decisions to pull-out a number of markets and concentrate our activities in the big hubs that, has cost us some business this year. And combined with exiting some activity such as securitized trading, my estimate would be that for the first nine months, the decline in revenues that we have seen is probably somewhere around a quarter of that decline is basically explained through those activities. Going forward, I think our fixed business is going to be likely a bit more stable and less seasonal than it was in the past. We still expect this to be one of our strongholds going forward.

Okay, perfect. And can I just follow-up, within that €100 billion estimate, what in your mind is likely to hit the most and some credit operational market risk force kind of on the revisions if you like?

As we - whilst we didn’t put any specific numbers to this chart that we published a year ago, you can tell from the optics that we’re putting highest weight on credit. And that’s certainly is the one that we expect to have the biggest impact. I mean, we know it by now on market risk because FRTB is decided, so that one is clear. And on the other two, clearly, on Op risk, the development in Basel seem to point towards the direction that the impact there is going to be a bit more muted than what was originally expected. Credit risk, we clearly expect to be the biggest driver of inflation.

Perfect. Thank you very much.

Next question is from the line of Andy Stimpson of Bank of America Merrill Lynch. Please go ahead.

Good morning guys, thanks for taking my questions. Two from me. And when you think about your capital levels and buffers about the regulatory minimum. Do you ever look at what your transitional capital levels are, I know, actually we tend to look at the fully loaded? But maybe if you could just tell us how the regulator looks at those transitional numbers, does it matter? And because it looks as if you could be quite close to those levels, come January 1, depending on what litigation costs are and what the threat is the phase-in [indiscernible] pushes the minimum up at the same time as your transitional capital number comes down? And then secondly on your internally developed software, clearly are making a huge amount of investments there. And could you just talk about how much of that is just to make regulatory demands and implement a lot of this regulation, how much is genuine innovation as we might all think of it inside of AI or global chain or anything much more, juicier? I just want to understand how much of that spending which as you point out is some of it gets deducted straight from capital. How much of that is kind of a positive NPV projects and how much of it is just to take the boxes from the huge amount of new rules that we’ve all got to comply with? Thank you.

Thanks for your questions Andy. So, the first question, we do indeed primarily actually look at phased-in. the point is, I think it’s, I think for the outside world it’s always easier to compare fully loaded metrics. The phased-in is the one that matters for regulatory purposes which is why that clearly is the one that we always look at and so, it is important. As you rightfully point out, the numbers for January 1 are tight. I think at this stage it’s also important to highlight that the model that the regulator applies will change to some extent because we were going forward, have a MDA, which includes the pillar 2 requirements. And then there will be the SREP level which adds to the MDA, the pillar 2 guidance. The automatism that existed in the past is hence then changed a bit. You absolutely have to be north of your MDA because if you’re south of your MDA then clearly certain metrics are triggered automatically as in for example you could not be paying your AT1 coupons. That MDA level as we pointed out, we do expect to come down substantially relative to the SREP level for 2016. As it relates to the SREP level in 2017 which will then include the pillar 2 guidance, yes, I mean, with our guidance for a fully loaded around 11% core Tier 1 ratio, will be at around the level of last year’s SREP levels. We have not yet received the final numbers on MDA and pillar-2 guidance. We’ll have to see where that stands. But you’re right, we will certainly, we do not expect to be substantially north of our SREP level we certainly expect to be north of our MDA. Secondly, on the software developments, I’m not so sure you’re going to like my answer but the truth is, let me give you just an example, there are clearly reg projects that we are pursuing such as the implementation of FRTB where you could argue, there is a lot of IT spend just to make sure that we will be compliant with new regulation. But of course, when implementing those changes, you use those projects to also make sure that you have some efficiency gains. So it is quasi impossible to separate completely what is purely just a reg IT spend and what improves efficiency and makes us in a way a better and safer bank. They go in a way hand-in-hand. I know this doesn’t really help you. Technically speaking, I would say that about 40% of our current change the bank spends is for regulatory projects. I could see that rise in the coming three years to something like 50%. But again, that 50%, it doesn’t mean that that doesn’t bring any improvements from an, efficiency from a controls point of view. So bit careful on how you interpret this 40% to 50%. Does that answer your question?

Yes, that was - I did like your answer, you’d be pleased to know. And just to go back on capital level. So, I understand MDA I’m not sure to include that in my question part, I understand that there wouldn’t be an implication there. But for equity holders, if we said you did go below even just slightly, what happens, maybe you could talk us through what the regulators, what would happen, what do the regulators do? Clearly, automatic AT1 coupon offset, but is there anything else that happens presumably there is something that happens between you and the regulator at that stage or maybe not?

So, just to make sure I don’t answer a question that you haven’t asked. You are referring to what if we are below our pillar 2 guidance?

The pillar 2G yes, yes.

So, the way we understand this is that then you need to sit down with the regulator and convince the regulator that you have a firm plan that gets you back north of your SREP level which is the sum of MDA and pillar 2 guidance. Yes, whilst if you’re below your MDA, there are automatically certain things triggered. So, an example would be you could not be paying a dividend. Now you all know that we don’t contemplate any way to pay a dividend for 2016. But so there are no automatic triggers when you break your pillar 2 guidance but you need to sit down and present a plan, how you get back to north of your SREP level.

And do they say, within three months, 12 months or we don’t know?

We don’t know.

Okay, fine. Thank you very much.

Next question is from the line of Jacques-Henri Gaulard of Kepler Cheuvreux. Please go ahead.

Yes, good morning gentlemen. Thanks for taking my questions. Two very quick questions. First of all, well done on killing on the non-core operations unit by the end of the year that will be a relief for everybody, I guess the question is, your level of losses there has been very consistent over the first three quarters. Can we expect roughly the same level of loss in Q4 or is it likely that it’s going to be heavier as assume what’s left to get rid of is more difficult to get rid of? And the second question is really more generic, I mean, since the second half of September, we’ve seen an insane amount of communication from bloggers from anybody from press. But unfortunately a lot of leaks, we have the feeling came also from the bank. Is there anything you can do to effectively control that or effectively convince people that it’s not the right solution to add fuel to the fire? Thank you.

I’ll take the second question first. Yes, it’s infuriating. There are all sorts of speculation and it really is non-sensical some of it. On the same day we can have people buying shares in our company and selling shares. And I don’t know if it comes from internally or externally, we just don’t know where some of this speculation, where these leaks come from. We have looked but we never find. But unfortunately the only way to combat this is actually to deliver what we say we’re going to deliver and improve the bank and where possible meet our targets. And hopefully people get immune to the fact that there is, all sorts of non-sense spoken about the bank from time to time. And they listen to the official communications and not to speculations.

On your first question with regard to the non-core units, we actually would expect the losses in that entity to be lower in the fourth quarter. And the reason for that is that a number of the assets that still sit there for example our remaining position in Red Rock Resorts, our assets where we actually would expect we can sell them without generating a loss and in the case of [indiscernible], I mean there was a transaction that has been signed. And we do expect closing in the fourth quarter. And then there is a bunch of roll-offs that we still have. So from a de-risking cost point of view, we certainly do expect this to be a quarter that will not be burdened as much as the previous quarters. However, don’t forget the result of the non-core unit is the one that is probably large, the one that is largest exposed to the ongoing litigation procedure. In particular our RMBS matter, technically sits in the non-core units, yes. So think of the non-core units as in before and after litigation, before litigation will be better, after litigation to be seen.

Super. Thank you very much. Very clear.

Just some figures and the fact, but the non-core, in the first nine months of the year, the non-core had cost us €1.7 billion against the core bank making €3.3 billion. And if that €1.7 billion you’ll see in the pack its €400 million of that has been from litigation pages 31.

And the last question is from Andrew Lim of Societe Generale. Please go ahead.

Hi, sorry. Sorry for the background noise. I’ve got three questions please. One on capital, and sorry, first question on capital is what you think, what do you think is the adequate capital target that you should be aiming for? I know we’ve talked a lot about the SREP target of probably 12.25%. And I think you’ve given the share price, the markets informing you that maybe more capital is needed. So, just wondering what your targets for the CET1 leverage ratio? I know you’ve talked about the leverage ratio of 4% being achieved. But big part of that increase would come from extra issuance of AT1 capital I presume. So, maybe another €5 billion. So actually within that your CET1 leverage ratio, were simply quite weak, and have 3.3%. So, I was just wondering what your thoughts are on that please? And then the second question is, actually on Postbank, you talked about an adequate price being achieved. But given that the RITs only 3%, I was wondering what kind of price you actually hope to achieve? Thank you.

On your second question, we will of course not be pointing out to the world what our price expectations are before we have stopped any process. So sorry, that one we will not answer. On your first question, medium-term our targeted core Tier 1 capital remains to be at least 12.5%, which we aspire to achieve in the coming years. And us achieving that number as said before will take our leverage ratio comfortably north of 4%. That does not require us to issue AT1 paper in the near future as in the coming one or two years.

Right. If I run through the calculations then, if you hit 12.5% on the CET1 ratio, then your CET1 leverage ratio would, might only be 3.3%, perhaps 3.4%, which strikes me still on the weak side, I don’t know if your calculations entirely?

I would then like to refer you also to the presentation that we gave a year ago, just one example selling Postbank will represent a material lever for further deleveraging because they actually carry given the big mortgage book they have, quite a bit of leverage, RWA it’s maybe not as pronounced. That’s combined with the ongoing deleveraging in our markets business. We take our overall leverage down. And then, if we manage to get to at least 12.5% core Tier 1 ratio with €400 billion of risk weighted assets when you then do the math you can see that we’ll be comfortably north of 4%. But happy to do this in a follow-up and walk you through the details there.

Thank you. We have no further questions. I hand back.

Great, thank you everybody. Thank you for listening today. And obviously if you have follow-up questions the IR team is standing by. Thanks.