050914 Müller final€¦ · solutions Examples: • Global Investment Bank & Asset Manager •...

Investors‘ Daycommerzbank – quo vadis?

Frankfurt, 14.09.2005 Klaus-Peter MüllerChairman of the Board of Managing Directors

Investors’ Day 2005

2/23

Source: Reuters

Share price development 01/01/2005 – 09/07/2005

Commerzbank stock in 2005 has outperformed the DAX and German financial sector…

Commerzbank 44%

Deutsche Bank 16%

DAX 16%

Allianz 11%

Münchener Rück 1%

HVB-Group 40%


3/23

…accompanied by significant increase in profitability

RoE after taxin %

-2.3

-19.6

4.3

> 8

Operating profitin € m

192

559

1,011

2002 2003 2004 2005e

as of H1 `05832

2002 2003 2004 2005e


4/23

Financial Highlights

Core financial figures reflect continuous improvement

* restated** annualized, after profits/ losses attributable to minority interests

2004* H1 `05 Comments20032002

Cost/income ratio (%) Sharpened business profile77.3 73.3 70.9 64.5

Tier 1 ratio Stabilized at target range7.3 7.3 7.5 7.0

Operating RoE** (%) Positive momentum1.6 4.9 9.9 16.5

Revenues (€ m) Increased revenues5,100 5,070 5,504 3,027

Dividend (per share in €) On course to dividend growth0.10 0 0.25


5/23

Roadmap: Four steps to solidify Commerzbank

Stability

Profitability

Growth

Capital

1.

2.

3.

4.


6/23

We are: a bank focussed on core strengths

Business model: focussed on core strengths

Core Regions• Germany (priority)• West and East European

Markets• Selective: Rest of World

Where we are coming from:

Core Customers• Corporate Customers• Private & Business Clients

Core Products• Lending• Deposit management• Innovative and structured

solutions

Examples: • Global Investment Bank & Asset Manager • Member Deutschland AG• Target clients from global blue chips to retail

Universal Bank with Global Aspirations


7/23

Revaluation reservein € bn

0.65

1.24 1.211.25

-0.26

-1.10

1.60 1.43

1.04

03/03 06/03

09/03 12/03 03/04 06/04 09/04 12/04 03/05 06/05

Spinning-off non-core assets, strengthening core assets

pre-revaluation post-revaluation

equities bonds

Major participations of Commerzbankas of now

≥ 10% KEB

~ 10% Linde (DAX)

1 - 5% Banca Intesa SpAGeneraliMediobancaHochtief (MDAX)ThyssenKrupp (DAX)

equities and bonds

Quarters Q1 `04 Q2 `04 Q3 `04 Q4 `04 Q1 `05 Q2 `05 Q3 `05

MAN saleIntesa sale** Unibanco sale

** sale of non-shareholder-pact-shares and cancellation of shareholder pact

Strategicparticipations

SCH sale

1.51

Number of major listed participations

Purchase of comdirect shares (t-online)BRE capital increase SchmidtBank acquisition

Heidelberger Druck sale

1.69+ €654m

07/05*

117*

* Excluding Heidelberger Druck


8/23

Operating expensesin € bn

1.15 1.11 1.091.081.13

1.081.141.181.221.23

1.311.40

1.491.461.481.43

1.62

1.381.27

1.201.101.11

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

Cost management: costs reduced and well under control

2002 2003 200420012000 2005

* Employees added: 580 from Schmidtbank, 328 from BRE Bank; approx. 300 apprentices (“Azubis”)

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2

Σ Σ Σ Σ 5.5 Σ Σ Σ Σ 2.2Σ Σ Σ Σ 5.9 Σ Σ Σ Σ 5.2 Σ Σ Σ Σ 4.5 Σ Σ Σ Σ 4.5

Start costinitiative II

Start costinitiative I

32.6

*32.8

32.732.4

33.9

35.4

37.2

38.639.5

36.4

35.6*

33.232.732.4

40.139.5

38.0

36.6

33.3

39.0

35.3

40.4

Employees in ‘000

∆ ∆ ∆ ∆ - €40m


9/23

Loan-loss provisions: Clear positive trendin € m

Loan-loss cover ratio comfortablein € bn

0.25

1.541.831.86

5.415.51 5.356.206.297.08

Non-performingloans

Loan-lossprovisions

Country LLP andgeneral provision

Collateral

12/03 12/04

7.71 1.220.63

06/05

1.097.29

De-risked: Commerzbank - a safer bank

273303

177198185199214

256 238

Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2

Trading portfolio de-risked (principle I risks)in € m*

66.8

54.7

32.9

12/03 12/04 06/05

* holding period 10 days, confidence level 99%

New Target 05:< €700m

109%

2003 2004 2005

119.3% 117.5%

0.340.33

7.51In excess:


10/23

Risk-weighted assets in € bn vs. Tier I capital ratio*

Capital & Liquidity: RWA stabilized, capital base strengthened and liquidity status comfortable

* Incl. market risk position ** New “Finanzkonglomeraterichtlinie” requires inclusion of KAGs in consolidation

Liquidity prudently managed

• Liquidity ratio Q2 impacted by Corporates & Markets´ repo transactions („dividend-season“)

• Structural shift / improvement: more customerdeposits, less interbanking deposits

206

178160 155 150 149

141 146 148 143 140141 143

199

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2002 2003 2004 2005

Targetcorridor

Q4 Q1 Q2 Q3 Q4 Q1 Q2

6.0%

5.9%

6.7%7.4%

7.7% 7.8%

7.2%7.5%

7.0%

7.2%

7.0%7.1%

7.3%

Reduction in ratio due to enforcement of “FKR”**

Targetcorridor

07

7.3%

2003 2004 2005

1.20

1.10

1.14

1.16

1.131.131.12

1.17


11/23


Stability

Profitability

Growth

Capital

1.

2.

3.

4.


12/23

Mortgage Banks Others and Consolidation

New customer oriented organization: clear segmentation and responsibilities

Private & Business

CustomersAsset

Management MittelstandInternational

Corporate Banking

Corporates & Markets (C&M)

•Retail Banking•Private Banking•comdirect

•Asset Management

•Real Estate Fund Management

•MittelstandGermany

•Central/Eastern Europe

•Leasing

•Europe West•USA, Asia, Africa•Financial Institutions

•Multinational and selected larger German corporates

•Securities

PCAM CIB

Patig TellerBlessingKassow

Commerzbank

CRO: Hartmann CEO: Müller CFO: Strutz


13/23

All segments on course to improved profitability levelsoperating profit in € m

Private & Business Clients:Marked by investments

139 159

2004 2005e

as of H1 `05

323

153

2004 2005e

as of H1 `05

17754

2004 2005e

as of H1 `05

Earn

ings

gen

erat

ors

abov

e co

stof

cap

ital

Turn

arou

nd s

tart

ed/

on th

e w

ay

44

-75

2005e2004

as of H1 `05

131 171

2004 2005e

as of H1 `05

311

76

2004 2005e

as of H1 `05

11.6% RoE H1 `05

16.3% RoE H1 `05

Mittelstand:Significant progress

Int. Corporate Banking:´05 weak treasury, solid core,

optimisation kicked-off

11.7% RoE H1 `05

Corporates & Markets:Successful restructuring

4.8% RoE H1 `05

Asset Management:Decrease due to

one-offs in H1 `04

20.7% RoE H1 `05

Mortgage Banks:Strong pillar

See nextpages

32.1% RoE H1 `05


14/23

Nov. `04: What did we promise?

C&M´s Investmentbank - The Restructuring Progress: Break-even in < three quarters, costs lowered by > €100m already!

Adjustments for new segment reporting

RoE (%)

Operating profit

Costs

Target post-restructuring

31.07.2004

-11

-76

443

Equity tied up

Operating profit (adjusted)

Value at Risk

Revenues

In € m(pro rated 7 months)

-349

12

57

406

-85

15

1,191

-9

48

9

844

-9

% of targetreached

31.07.2005

1

5

416

64

52

61

>100

-4

8.5

896

-9

61

>10085

What have we reached so far?

Outlook on 2006

Full run rate front-office/Cost-savings back-office

Detailed program

-520 -411

Publ

ishe

d 11

/200

4R

esta

ted


15/23

Revenues*/VaR** per monthin €

Revenues*/headcount per monthin €

VaR €m

VaR development 2004-2005

FTE

C&M´s Investmentbank - The Restructuring Progress: Efficiency up, risk down!

* Revenues according to MAH reporting ** VaR overnight, 97,5%

Previous areas of concern adressed...

FTE

Frankfurt London09/04 07/05 09/04 07/05

425 387576

279

New York Tokyo09/04 07/05 09/04 07/05

118

24 310

0

10

20

30

2.1.04 2.7.04 2.1.05 2.7.05

Overnight, 97,5%

08/20052004 2004 08/2005

...and despite substantial headcount reduction: revenues retained!

Effic

ienc

y

~ 50%+ ~ 100%+

Total headcount: from ~1.275 to ~760R

isk

Regional set-up too broad

Productivity gap between locations

High earnings volatility


16/23

Mortgage Banks/Eurohypo: the recurring question on recurring earnings...

EssenHyp Impact Eurohypo on CB´s H1 `05 resultsin € mEEPK Eurohypo

Shareholding 51% 75% 31.8%

Consolidation At-Equity

Impact on P&LInterest Income (at taxed pro-

rata-profit)Additional corporate items

Refinancing Cost

All line items

Full

• EssenHyp/EEPK traditionally strong and growing contributors to CB´s results

• Eurohypo with regular profit contribution since beginning 2005

CB total income

• Disposals of participations excl. carry costs

3,027

234

• Available for sale Result (AfS)

144

Non-recurring, not taxable at CB AG*

Recurring, taxable

Net income (after tax) 570Disposals of Participations excl. carry costsNet Income w/o non-recurring disposals

336

Eurohypo net result after refinancing cost

3610.7%

6.4% 234

thereof

* except 5% minimum tax requirement


17/23


Stability

Profitability

Growth

Capital

1.

2.

3.

4.


18/23

Commerzbank´s future growth: three principal paths

Cross-Border Merger

In-Market Merger

Stand-alone Optimization• Organic growth• Acquisitions• RoE-efficiency (cost, capital, earnings)

Through optimization of existing business model (defined programs)

Organic growth:

Acquisitions:► core regions

► core products► core customers

Prudent criteria:

• EPS accretion• RoE improvement• Strong capital ratios• Low execution risk• Rating stability

Goals needto be met in 2 years


19/23


Stability

Profitability

Growth

Capital

1.

2.

3.

4.


20/23

Tier 1 Ratio European banksin %

Core Tier 1 – 06/05(without hybrid positions, incl. market risk)

Tier 1 (BIS) - 06/05(with hybrid positions,incl. market risk)

4.34.0

6.2

5.26.1

5.87.2

5.85.9

7.15.8

6.96.7

7.47.0

7.47.5

9.910.6

7.0

7.5

5.76.66.87.0

7.47.57.67.67.77.77.87.87.87.98.08.2

8.79.1

9.610.9

12.2UBSCredit Suisse

ABN AmroDeutsche Bank

HSBCHBOS

UniCreditSEB

Banca IntesaSocGen

Lloyds TSBPostbank

Allied IrishBarclays

BBVABNP Paribas

SantanderCommerzbank

Nordea BankRBoSHVB

Core Tier 1Ø: 6.7%

Tier 1 (BIS)Ø: 8.1%

CB´s Tier 1 not excessive in European terms

Source: Company data


21/23

in %

Development of Tier 1 capital ratio (BIS) Capital management

7.5

7.0 ≥≥≥≥ 7.2

Q4 `04 Q2 `05 Q4 `05e

target corridor

Capital management: Tier 1 ratio in line with target range

* New “Finanzkonglomeraterichtlinie” requires inclusion of KAGs in consolidation

Projected Tier 1 ratio (BIS) in line withCB target range

CB main focus: realize further growth potential (organic and acquisitions)

Additional measures (dividend policy, share buyback) depending on:

• Acquisition opportunities• Satisfactory earnings stability• Rating considerations

• Disposal of participations: cont´d• Optional: securitizations

negative: comdirectshare purchasepositive: earningsretention

In particular due to enforcement of„Finanzkonglomerate-richtlinie“*

6.8

07/05


22/23

Target Return on Equity (after tax) Analyst Consensus: CB net profit 2005-2007e in € m

… meet our goals? Of course! … beat your score? You bet!

2005e 2006e 2007e

Source: I/B/E/S Aggregated Forecasts

780

956

1,076

2004

4.3%

Big step towards our current cost of

capital

2005e

> 8%

Current cost of capital target pre

net gains on disposals

2006e

> 10%

Long-term cost of capital

Return on equity: Commerzbank targets earnings qualityWe want to ….


23/23

Commerzbank - a team determined to win!

For more information, please contact:Commerzbank Investor Relations

Jürgen Ackermann Head of Investor RelationsP: +49 69 136 22338M: [email protected]

Sandra BüschkenP: +49 69 136 23617M: [email protected]

Ute Heiserer-JäckelP: +49 69 136 41874M: [email protected]

Simone NuxollP: +49 69 136 45660M: [email protected]/ir


Disclaimer

/ investor relations /

This presentation has been prepared and issued by Commerzbank AG. This publication is intended for professional and institutional customers./Any information in this presentation is based on data obtained from sources considered to be reliable, but no representations or guarantees are made by Commerzbank Group with regard to the accuracy of the data. The opinions and estimates contained herein constitute our best judgement at this date and time, and are subject to change without notice. This presentation is for information purposes, it is not intended to be and should not be construed as an offer or solicitation to acquire, or dispose of any of the securities or issues mentioned in this presentation./Commerzbank AG and/or its subsidiaries and/or affiliates (herein described as Commerzbank Group) may use the information in this presentation prior to its publication to its customers. Commerzbank Group or its employees may also own or build positions or trade in any such securities, issues, and derivatives thereon and may also sell them whenever considered appropriate. Commerzbank Group may also provide banking or other advisory services to interested parties./Commerzbank Group accepts no responsibility or liability whatsoever for any expense, loss or damages arising out of, or in any way connected with, the use of all or any part of this presentation./Copies of this document are available upon request or can be downloaded from www.commerzbank.com/aktionaere/index.html

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