Deutsche Bank AG - Historische Gesellschaft der Deutschen Bank e.V.

In the light of the continuing international debt
crisis, provisions for country risks were increased fur-
ther.
Commitments in lending business were valued
with thc usual care. Appropriate adjustments and
provisions were formed Tor all discernible risks.
Latenl risks were taken account of by the forma-
tion of collective adjustments.
In addition, there is ;i taxed valuation reserve pur-
sut-int to Section 26a of the German Banking Act.
Remaining expenses
Other expenses, shown at DM 276.0 m (DM 21 3.0
m. in 1988), contain depreciation of leasing equip-
ment and allocations to provisions not relating to
lending business.
In 1989, the bank tookadvantageof aII possibilities
to form special items with partial reserve character.
The allocations came to an aggregate DM 114.9 m.
Pre-tax profitfor 1989 rose 12.1 %to DM 2,527.3 m.
Taxes on income and assets climbed DM 67.8 m.
or 4.8% to DM 1,485.7 m.
The other taxes amounting to DM 34.9 m. include
company tax of DM 21.7 m.
Proposed appropriation of profits
DM 450 m. of the net income for the year of DM
1,006.7 m. was transferred to revenue reserves. It is
proposed to the shareholders that a dividend raised
by DM 2 to DM 14 per share in the nominal amount of
DM 50 be resolved, i.e. DM 556,702,734 on the share
capital of DM 1,988,224,050. The new shares cre-
ated by the capital increases in 1989 have full
dividend entitlement for the 1989 financial year. The
dividend amount is up by DM 131.3 m. = 30.9% on the
previous year.
Together with imputable corporation tax of DM
7.88 per share, the total income for our domestic
shareholders is DM 21.88 per DM 50 share.
Outlook for 1990
In view of favourable forecasts for economic de-
velopment in the industrial countries in 1990, we ex-
pect further growth in our business volume and total
credit extended.
With continuing pressure on the interest margin,
we anticipate a further increase in our interest sur-
plus in view of continuing brisk demand for credit.
The ongoing development townrds the single Eu-
ropean market, coupled with market-oriented
changes in the GDR and East European countries, will
have positive effects on companies' growth. This, in
turn, should influence stock market sentiment. We
therefore assume that our commission business and
own-account trading in equities will remain brisk.
Bond dealing, on the other hand, is likely to be more
difficult in the face of a still uncertain interest rate de-
velopment.
We want to keep the rise in staff and other opera-
ting expenses within narrow limits again in 1990
through organizational measures, improved working
procedures and the use of modern computer tech-
nology.
In the current year, our strategic efforts will be
aimed in particular at integrating Morgan Grenfell,
the merchant bank we acquired at the end of 1989,
into our Group activities and at using rapidly the at-
tendant opportunities to improve our service offer-
ing.
We are confident that we shall again be able to
submit to our shareholders a satisfactory annual
Statement of accounts for 1990.
The charts do not form Part of thc Management Report.