Stuart Graham: Okay. Thank you. Thanks for taking my questions.
Operator: The next question comes from Nicolas Payen from Kepler. Please go ahead with your question.
Nicolas Payen: Yes. Thanks for taking my question. I have two, please. The first one will be on the litigation write back that you had. It was quite significant, so if you could have a bit more color on what is it related to, please. And the second question is coming back on your U.S. CRE CLP. It has doubled in Q4 versus Q3. So I’d like to know what kind of assumption you have backed in regarding U.S. CRE CLPs for 2024 and how does it fit into your cost of risk assumption of 25 bps to 30 bps for 2024? Thank you very much.
James von Moltke: Sure. Nicolas, it’s James. Happy to take the questions. Unfortunately, as you know, we don’t give detailed information about what goes in and out of the litigation provisions. Your point is, it’s a large one and that is fair. I can’t say more, really. It’s a long standing provision that we’ve held and now taken the view there isn’t any more basis to retain it. On CRE, look, I could imagine that the next couple of quarters, Q1, Q2, could remain elevated, but I can also – and my own expectation is that it would begin to sort of ameliorate towards the second half of the year and into 2025. You shouldn’t be surprised if it were in line with 2023 as sort of a baseline expectation, and in an ideal world, it might be a little bit better than 2023.
We will publish a revised stress scenario in our annual report. I’d say that’s probably deteriorated a little bit given the circumstances we see in the marketplace. And as you can see, cumulatively, we’re tracking closer to the level that we’d laid out in our Q2 and Q3 reporting. That said, and I think it’s important to say, as you think about our forward guidance, if you take out the €450 million across the various portfolios that we booked in commercial real estate in 2023 and take that out of the numbers, you can see a CLP level that is running actually in a relatively normalized range. And that’s in a year in which we actually incurred some losses, particularly in the Private Bank that went beyond what we would normally see in the Private Bank.
You recall a couple of idiosyncratic cases in the first quarter and then in the third and fourth quarter some amount of, what I call, excess provisioning associated with the operational backlog issue. So we think that all gives us confidence that as this cycle in commercial real estate abates over the next six quarters, you should see a much more normalized credit loss provision emerge.
Nicolas Payen: Thank you very much.
Operator: The next question…
Christian Sewing: Thank you.
Operator: Our next question is from Anke Reingen from RBC. Please go ahead.
Anke Reingen: Thank you very much for taking my question. Just two small number of questions. The first is just to clarify, the payment from the resolution fund, which you didn’t get in Q4. That’s not included in any of your commentary about costs 2024, 2025, and maybe you can give us a bit of an indication about the magnitude. And then lastly, sorry, just the numbers question. Given the many moving parts, can you help us a bit with your tax rate guidance? Thank you.
Christian Sewing: Anke, thank you for your question. Yes, we – on the [indiscernible], that’s the German word for the payment from the German resolution fund. We clearly expected the repayment into the banks because we feel from a legal analysis that this is our money. We also made various proposals to the German government together, by the way, with all banks, the saving banks, the cooperative banks, and the private banks, how we actually can use that money nicely in order to fund the transformation in Germany. It seems to be that the German government is going another route and obviously we need to review that from all kind of perspectives, as you can imagine. But to your clear question for the guidance of 2024 and 2025, this is not part of our plan, i.e. there is no cost plan where this is included because for the time being we assume that this is not coming our way. But of course, we need to review it from a legal point of view.
James von Moltke: Or capital plan for that matter. And then tax, I would use a 30% rate in your modeling for 2024. Obviously, always uncertainties and things that can change. One thing that we are now at the end of is the DTA valuation adjustments. We’ve essentially written back the tax attributes in actually three jurisdictions now, the United States, the UK, and Italy, and therefore where you should see a normalized level of taxation in the coming periods.
Anke Reingen: Thank you very much.
James von Moltke: Thank you, Anke.
Operator: Next question comes from Giulia Aurora from Morgan Stanley. Please go ahead.
Giulia Aurora: Hi, good morning, and thank you for all the new disclosure, in particular on NII and costs. I want to ask you, however, a question on capital. Specifically, there have been some headlines on potential M&A, which is something that you also looked at domestic M&A few years ago, but that seems to be at odds [ph] with what we hear today, your big commitment to capital distribution. So how do we square these two, and what would take you to pursue some big M&A? That’s the first question. And then the second question is more of a numbers question. Sorry. Going back to the costs again, I hear a lot of conviction on €20 billion by 2025 underlying and one-offs reducing. So what is a sort of run rate for restructuring costs? Do you expect it to be €400 million in 2024 and then down to €200 million? And, yes any similar comment on other potential one-offs? Thanks.
James von Moltke: Well, let me start. I’ll have a quick thing to say. Yes, it is at odds, and what you hear from us is a commitment to distribution. And on costs it’s hard to say with perfect accuracy what it is that these litigation and restructuring severance, obviously the latter is more in our control. If I look to 2025, I think €400 million collectively for the two would be a reasonable kind of planning assumption, and we’d like to do better than that. Clearly, one of the things that we’re working to do is put the remaining restructuring items behind us now in 2024, I’ve given you an estimate of what that looks like. And as I said earlier, one does looking at our litigation sort of portfolio, one does feel that it’s changing in terms of kind of number and size of events.
Now, it’s never a perfect forecast, but it’s certainly something that we’re hoping to work down to a more normalized level. So, I’ll give you €300 million to €400 million is probably a good planning assumption across the two.
Christian Sewing: Giulia, I just want to emphasize that what James said on the M&A, there is nothing we can do about headlines. We focus on ourselves, and distribution to shareholders is, at the heart what we are doing.
