Our revenues were € 6.6 billion – growth of 10% over the first quarter of 2004, adjusting for exchange rate movements. Income before income taxes for the quarter was € 1.8 billion, after restructuring expenses of € 168 million. Net income was € 1.1 billion, a rise of 17% over the first quarter 2004. Before restructuring expenses, pre-tax return on average active equity was 33%. This is substantially above our published target of 25% for the full year, although we recognise that the first quarter is typically strong for us. Diluted earnings per share for the quarter were € 2.09, a rise of 25%.

The strong growth of the Group was predominantly attributable to the performance of the Corporate and Investment Bank (CIB). CIB’s underlying revenues grew by 14%, and underlying pre-tax profits by 40%, compared to the first quarter of 2004. In particular, revenues in debt sales and trading, adjusted for currency movements, grew 30% – clearly outperforming our peer group. As a result, we ranked no. 1 globally in sales and trading in the first quarter, as measured by revenues. This achievement was driven by positive market conditions, a business model which emphasises higher-value, ‘intellectual capital’ products, and revenue synergies we are already deriving from the integration of our debt and equity platforms as part of our Business Realignment Program.

Our origination and advisory business also delivered underlying revenue growth of 16%, adjusted for currency movements, over the same quarter of 2004, and ranked top-5 globally as measured by share of fee pool, according to Dealogic.

In Private Clients and Asset Management (PCAM), we attracted net inflows of € 28 billion of customer money for investment. All three businesses – Asset Management, Private Wealth Management and Private and Business Clients – saw positive inflows of new money. PCAM’s revenues and underlying profitability were comparable to the strong first quarter of 2004, while underlying pre-tax profits rose 12% compared to the fourth quarter 2004.

Both revenue and profit growth was driven predominantly by our international business, and this reflects our operating environment. On international markets, conditions were favourable. However, our home market, Germany, remains challenging, given the weak economic climate.

Implementation of our Business Realignment Program, which we launched at the end of last year, is proceeding on schedule. Our goal is to drive profitable growth and further enhance our position in the market. The alignment of our CIB businesses, and investments in key parts of our franchise, are important elements of this program. However, competition is relentless. If we are to safeguard our future, we must also tackle the issue of cost-efficiency in those parts of our business where we still need to match our world-class competitors. There can be no let-up in our determination to meet this challenge. The measures we have had to take are painful, but there is no alternative. Only by taking this course can we invest in the long-term success of the bank, in innovation and quality for our clients, and in growth and jobs for our employees.

Credit quality continues to improve. Problem loans continued to decline as a proportion of our loan book, accounting for 3.3% of total loans at the end of the quarter, compared to 4.2% at the end of the first quarter 2004. Provision for credit losses was € 81 million, down by € 60 million compared to the first quarter of 2004.

In the last few days, we completed our third share buyback program. This involved the repurchase of 45.5 million shares, or 8.3% of the total outstanding. At the same time, our Tier 1 capital ratio rose from 8.6% at the end of 2004, to 9.2% by the end of the first quarter this year.

All of us at Deutsche Bank are proud of what we have achieved in the first quarter. This excellent result underlines our leading position, both in Germany and internationally. Conditions in international financial markets became more challenging in mid-March. However, given the strong platform we have, combined with the progress we are making in our Business Realignment Program, I have great confidence in the mid-term prospects for the continued growth of our business.

I look forward to meeting many of you at our Annual General Meeting in Frankfurt, on 18th May, to discuss with you our strategy and outlook for the future.

Yours sincerely,

Josef Ackermann
Spokesman of the Board of Managing Directors and
Chairman of the Group Executive Committee

Frankfurt am Main, April 2005