Company: ADZCF
Filing Date: 2025-03-13
Form Type: 20-F
Source: 0001159508-25-000020
Chunk: 59

Company: DEUTSCHE BANK AKTIENGESELLSCHAFT
Filing Date: 2025-03-13
Form: 20-F
Chunk 59
---
 a material adverse effect on the bank’s profitability and results of operations. In addition to the bank’s traditional banking businesses of deposit-taking and lending, the bank may also engage in nontraditional credit businesses in which credit is extended via transactions (e.g., holding of securities of third parties or engaging in complex derivative transactions) that may materially increase the bank’s exposure to credit risk. As a bank and provider of financial services, the bank is exposed to the risk that third parties who owe claims to the bank will not perform on their obligations. Many of the bank’s businesses in beyond the traditional banking businesses of deposit-taking and lending also expose the bank to credit risk. In particular, much of the business the bank conducts through the Investment Bank entails credit transactions, frequently ancillary to other transactions. Nontraditional sources of credit risk can arise, for example, from holding securities of third parties; entering into swap or other derivative contracts under which counterparties have obligations to make payments to the bank; executing securities, futures, currency or commodity trades that fail to settle at the required time due to non-delivery by the counterparty or systems failure by clearing agents, exchanges, clearing houses or other financial intermediaries; and extending credit through other arrangements. Parties to these transactions, such as trading counterparties, may default on their obligations to Deutsche Bank due to bankruptcy, political and economic events, lack of liquidity, operational failure or other reasons. Many of the bank’s derivative transactions are individually negotiated and non-standardized, which can make exiting, transferring or settling the position difficult. Certain credit derivatives require that the bank delivers to the counterparty the underlying security, loan, or other obligation to receive payment. In several cases, the bank does not hold, and may not be able to obtain, the underlying security, loan or other obligation. This could cause the bank to forfeit the payments otherwise due to it or result in settlement delays, which could damage the bank’s reputation and ability to transact future business, as well as impose increased costs on the bank. Legislation in the European Union (EMIR) and the United States (the Dodd-Frank Act) requires standardization, margining, central clearing and transaction reporting of certain over-the-counter derivatives. While such requirements aim at reducing the risk posed to counterparties and the financial system by such derivatives, they may reduce the volume and profitability of the transactions in which the bank engages, and compliance with such provisions may impose substantial costs on the bank. In the past, exceptionally difficult market conditions severely adversely affected certain areas in which the