Opportunity and risk report Deutsche Bahn 2021

Capital markets and taxes

The international nature of our business creates a currency risk. This, however, is largely limited to the so-called translation risk since there is usually a high regional congruence between the production and sales markets. Among other things, we hedge interest rate and currency risks from our operating business through primary and derivative financial instruments. Their use is only permitted in DB Group for hedging purposes. There is a risk that these hedging measures will not pay off, or not in the way expected.

To prevent counterparty default risk from financial and energy derivatives, we conclude credit support agreements (CSA) for all longer-term hedges.

Due to the long-term capital employed, we also use long-term, fixed-interest financial instruments. As a result, only new issues are exposed to the risk of rising interest rates.

Liabilities from pensions and similar retirement benefit obligations are partially covered by plan assets from stocks, real estate, fixed-interest securities and other investments. Losses of value in these assets reduce the cover of pension obligations by plan assets, potentially resulting in DB Group having to provide additional cover.

In addition, there are potential risks from back-tax payments from tax audits that are in progress and from amendments to tax laws. In order to minimize tax risks, we pursue the prompt processing of tax audits and have introduced a tax compliance management system in DB Group.

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