Finance Monthly - November 2021 Edition

15 Finance Monthly. Fron t Cove r Fea t ur e processes, our ways of working and our culture in order to help the bank reach its goals. Some of Finance’s key contributions were: • Re-focusing Deutsche Bank around core businesses. Finance led the analysis which identified businesses or activities not generating adequate returns and led the due diligence on business exits – for example, transferring Global Prime Finance to another leading European bank, which offers continuity for clients and core employees. We were instrumental in setting up the Capital Release Unit and re-engineered our reporting around the bank’s new segmental structure. • Instilling a culture of accountability and delivery. Finance spearheaded the introduction of Balanced Scorecards, initially for Management Board members and progressively further rolled out across around 300 of the bank’s senior leaders. This established a transparent, verifiable link between objectives, actual performance, and senior executive compensation. We re-engineered the planning and quarterly review process to reinforce management discipline and identify potential issues at an early stage. This owed much to the efforts of Rebecca Short, then Head of Planning and Performance Management, who has now been elected to the Management Board as Chief Transformation Officer. • Transforming Deutsche Bank’s cost culture. Finance launched a multi-year Cost Catalyst programme, harnessing employee ideas and contributing hundreds of millions of euros in annualised cost savings. We set up and co- led an External Spend Council to manage around € 9 billion of annual spending with external vendors, driving better deals with external providers and reducing fragmentation in our vendor base. We rolled out Driver-Based Cost Management, which gives managers in our businesses more transparency on drivers of their infrastructure costs. That enables them to make better-informed spending decisions. • Helping managers make better, faster decisions: from monthly to daily close. Finance is radically accelerating our close process from monthly to daily. We’re re- engineering six general ledgers into a single, state-of-the-art general ledger platform that is compatible with Cloud and other technology environments. We’ll make a step-change in straight-through processing, and produce faster, more accurate information at a lower cost with better data quality. Given the upheavals caused by COVID-19, it’s been crucial for our leaders to make fast and accurate decisions based on high-quality, up-to-date information. • Funding transformation and supporting balance sheet strength. Growing recognition for Deutsche Bank’s progress and supportive capital market conditions enabled our Treasury team, led by Group Treasurer Dixit Joshi, to get ahead of our capital market funding plan. In 2021 to date, we have completed nine successful issues of senior debt or Additional Tier 1 (AT1) and Tier 2 capital. This strengthened Deutsche Bank’s capital and funding base by € 11 billion at favourable prices. We have also supported the bank’s sustainability agenda, issuing two green bonds to support clients’ sustainable activities. This year, we issued a Diversity and Inclusion Bond in partnership with co-underwriters led by minority groups and service- disabled veterans. In commenting on its recent upgrade of Deutsche Bank’s credit ratings, Moody’s made clear that strong capital and liquidity were positive factors. • Installing rigorous ESG performance management. Companies across the world are striving to reinforce their sustainability credentials, so disciplined performance management is all-important. There can be no place for ‘greenwashing’, or indeed ‘greenwishing’ – that is, setting grandiose targets with no clear monitoring of delivery against them. Under the leadership of Gerald Podobnik, CFO of the Corporate Bank and Co-Chair of the bank’s Sustainability Council, Finance has installed performance management systems to monitor delivery on targets which are near-term, granular, based on a clear ESG taxonomy, verified independently of the businesses, and directly linked to senior executive compensation. Our aim is simple: to ensure that the transition to a more sustainable Deutsche Bank is verifiable, transparent, and rigorously managed. • Working in more agile ways. We’re adopting agilemethodologies in many areas across Finance. That means working more closely in teams with our partners in Technology, being less monolithic but more frequent in our systems releases, and giving our people the opportunity to drive change and take responsibility for it. In a matter of months, we doubled the proportion of our Change budget which is delivered through agile methodologies.