the leading commercial Bank in Germany

Transcription

1 the leading commercial Bank in Germany Cheuvreux 5 th German Corporate Conference Frankfurt, January 17, 2006 Dr. Eric Strutz Chief Financial Officer

2 Agenda Highlights of Commerzbank and Eurohypo: A powerful combination 3. Outlook 1/20

3 Top 5 highlights of 2005 Commerzbank produced one of its best results ever 2. Improved underlying business led to an overall increased earnings quality 3. New structure of divisions is paying off 4. Mittelstand, Corporates & Markets and Mortgage Banks ahead of expectations 5. Acquisition of Eurohypo 2/20

4 Core figures reflect consistently strong performance Q3 05 vs. Q3 04 Jan-Sep 05 vs. 04 Operating profit, in m 419 >100% 1, % Net profit, in m 262 >100% 832 >100% EPS, in 0.44 >100% 40 >100% ROE after tax, in % pps pps Cost/income ratio in operating business, in % pps pps 3/20

5 Achievements in de-risking the bank Loan-loss provisions: Clear positive trend in m Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q Q3 Loan-loss provisions in bps < e Gross LLP Net LLP Releases Average net LLP /20

6 Good performance of equity portfolio boosted revaluation reserve Revaluation reserve in bn pre-revaluation post-revaluation Major participations of Commerzbank as of Sep 30, % KEB ~ 10% Linde (DAX) % Generali (strategic) Mediobanca (strategic) ThyssenKrupp Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Nov (1) Sold in Nov ` % Banca Intesa SpA 1 Excluding Banca Intesa 5/20 equities bonds equities and bonds

7 Solid capital base and strong Tier 1 ratio Risk-weighted assets in bn No hybrid capital issued With consolidated profit for the first nine months included, Tier 1 ratio would be 7.2% Capital increase boosted Tier 1 ratio (7.7% as of Nov 30, 2005) Mar Jun Sep Dec Mar Jun Sep Tier 1 ratio, in % 6/20

8 Strong business performance some units exceeded expectations Operating profit in m Private & Business Customers Asset Management Mittelstand Σ 323 Σ 233 Q1 Q2 Q3 Q4 Q1 Q Σ 177 Σ 100 Σ 131 Σ 274 Q3 Q1 Q2 Q3 Q4 Q1 Q Q3 Q1 Q2 Q3 Q4 Q1 Q Q3 7/20 International Corporate Banking Σ 311 Σ 156 Q1 Q2 Q3 Q4 Q1 Q Corporates & Markets 149 Σ -75 Σ Mortgage Banks Σ 139 Σ Q3 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q1 Q2 Q3 Q4 Q1 Q Q3

9 Commerzbank s path to stability and growth Progressing: Stability and focused growth Strong standalone position Restored: Corporate financial strength ( ) Management changes implemented Costs cut rigidly Liquidity prudently managed Capital base strengthened Regained: Improved core business ( ) Significantly de-risked loan portfolio and VaR Non-core participations sold Restored profitability in PBC Major turnaround in Mittelstand De-risked Corporates & Markets, significant turnaround Active role in the consolidating German banking market Enhanced profitability in all divisions Focus on regions and products with competitive strengths Focused investments for internal and external growth Increasing capital efficiency Continuing tight cost management 8/20

10 Agenda Highlights of Q Commerzbank and Eurohypo: A powerful combination 3. Outlook 9/20

11 Key rationale and transaction highlights of acquiring Eurohypo Strategic rationale Reinforcement as the leading German commercial bank Revenue enhancement through a broader customer base and improved product range Exploring new market opportunities Active role in consolidating the fragmented German real estate market Higher leverage to economic turnaround in Germany Financial rationale Significant EPS and RoE accretion starting 2006 Value enhancing with identified synergies More stable and predictable earnings stream Limited integration risk due to complementary businesses Increased leverage through capital management 10/20

12 Commerzbank and Eurohypo a major player in commercial banking Germany No. 1 Commercial real estate bank - market share increased from 17 to 22% No. 1 Public sector financing in combination with Essenhyp No. 2 Residential real estate financing - market share doubled to 6% No. 2 German bank by total assets and profit before taxes (2004) No. 2 Mittelstandsbank No. 3 Retail bank with 5m customers International No. 1 originator of Commercial Mortgage-Backed Securities No. 1 Jumbo Pfandbriefe Europe (jointly with Essenhyp 26% market share) Top 5 Real estate banking in USA Leading position in securitization and syndication in Europe No. 10 CEE bank with BRE and strong presence in Moscow, Prague and Budapest 11/20

13 No. 2 in commercial banking in Germany Operating profit (Jan-Sep `05) in m 5,515 1,703 1,634 1,296 1, (2) Deutsche Bank (1) CB + EH HVB (2) Dresdner Bank Commerzbank (3) DZ Bank Eurohypo Postbank Depfa Hypo Real Estate 12/20 Without our at-equity consolidated profit of Eurohypo ( 92m) 2. Adjusted for restructuring expenses 3. Jan-Jun 2005

14 High RoE and EPS accretion RoE improvement (1) in percentage points up to 2.3 EPS accretion (1) in % up to 26% up to 2 up to 17% up to 0.3 up to 6% (3) (2) (3) 2006 (2) Return on Investment in 2007: 12.4% 13/20 vs. IBES estimates for Commerzbank 2. including restructuring charges 3. excluding restructuring charges (assumption 150m)

15 Leverage of the transaction Retail RE Commercial RE Corporate Center Cost synergies Revenue synergies Retail RE Commercial RE Corporates & Markets / RE IB Hybrid leverage Basel II capital reduction from 2008 Capital effects & Basel II Other synergies Use of tax loss carry-forwards To be detailed in joint teams by April /20

16 Synergies add up to 100m- 130m Preliminary evaluation Retail real estate Commercial real estate Others Cost synergies Optimizing credit process Better scale Optimizing credit process Better scale Corporate center (administration and IT functions) 80m- 100m Revenue synergies Increase of agency sales Cross-selling access to ~ non-cb retail customers Enhancing competitiveness Cross-selling to Eurohypo customers and extension of product range for Commerzbank customers Pfandbrief-refunding can be used immediately Synergies in investment banking products (hedges, currencies, etc.) 20m- 30m Σ 100m- 130m in /20

17 Comfortable financing capacity Core capital increase Accelerated bookbuild offering Volume of 36bn Hybrid capital Existing Eurohypo volume 900m Estimated additional volume available up to 2.5bn 2. capacity up to 7.5bn 3. Revaluation reserves/ Securitisation Revaluation reserve: up to 69bn total (ex Intesa) Capital management Securitisation > 200m Release of excess capital Volume: up to 900m (Tier 1-ratio reduction from 7.1 to 6.5%) 4. 16/20

18 Capital increase was well received by investors CBK share price performance: Nov 10 25, 2005 in CBK outperformed DAX and German financial sector in Nov 15, 2005 Commerzbank +71% Confirmation of talks 25 Sale of CBK s Banca Intesa shares HVB +52% Dt. Postbank +50% 24 Nov 17, 2005 Allianz +31% 23 Announcement of acquisition of Eurohypo DAX +27% ABO by CBK selling 10% stake 22 Nov 16, 2005 Closing price Offering price ABO completed within 2 hours 3 times oversubscribed DJES Banken Munich RE +26% +26% 21 Nov 11 Nov 15 Nov 17 Nov 21 Nov 23 Nov 25 Deutsche Bank +25% 1 Opening price Jan 03, `05 vs closing price Dec 30, `05 17/20

19 Higher profitability leads to Tier 1 build-up Planned evolution of Tier 1 ratio % > 6.5% > 6.3% Including interim profits for Q Mar 31, 2006e Dec 31, 2006e Dec 31, 2007e post closing (1) 18/20

20 Agenda Highlights of Q Commerzbank and Eurohypo: A powerful combination 3. Outlook 19/20

21 Commerzbank s challenges in 2006 Market positioning Building on position as the leading German commercial bank Playing an active part in consolidating the German banking market Additional Eurohypo shareholder value Strengthening our divisions Completion of acquisition Successful integration Exploring synergy potential on a joint basis Keeping strong momentum in Mittelstand and Corporates & Markets Profitability enhancement in International Corporate Banking 4. Capital management Launching hybrid capital Regaining solid Tier 1 ratio Rising trend for dividend payout 20/20

22 For more information, please contact: Commerzbank Investor Relations Jürgen Ackermann Head of Investor Relations P: M: Sandra Büschken P: M: Ute Heiserer-Jäckel P: M: Simone Nuxoll P: M:

23 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