Investors Day Strong focus on Group s value drivers. Eric Strutz Chief Financial Officer Frankfurt, September 20th, 2007

Transcription

1 Investors Day 2007 Strong focus on Group s value drivers Eric Strutz Chief Financial Officer Frankfurt, September 20th, 2007

2 Commerzbank is managed along three main Group performance indicators Net RoE ppts 22.1 Strong focus on Net RoE, CIR, EPS Realizing growth opportunities High exposure to German economy CIR EPS H H ppts H H % Enhancing organic growth in core divisions Expanding in regions and products with competitive strengths Increasing profitability Ongoing efficiency enhancement in all divisions Following active portfolio management Ensuring efficient capital management H H Note: 2006 figures based on stated results Following a balanced approach to profitability and growth 2 / 22

3 Commerzbank is fully in line to reach its FY 2007 targets Net RoE* in % CIR in % EPS in +3.9ppts -1.3ppts +33.8% H H H H H H Clean Net RoE* in % +4.1ppts 16.0 Clean CIR in % ppts Clean EPS in +48.0% H H H H H H * Annualized Note: 2006 figures based on stated results Clean: excluding net result on participations, restructuring charges 3 / 22

4 Steady growth in net interest income Net interest income (NII) 1,0601,0601, ,045 1, NII excl. PFT +5% Q1 Q2 Q3 Q4 Q1 Q NII PFT 2,120 2, ,874 1,969 +5% H H Comments NII excluding PFT improved by 5% Strong NII contribution from Mittelstand driven by increase in lending and deposit volume Deposit margins and lending volumes rose, while lending volume in PBC decreased due to further reduction of mortgage loan portfolio C&M and CRE increase in credit volumes and margins Spin-off of pension trust reduces NII since H2 06 Outlook H2: Within range of consensus estimates 2008: Growth of NII in Mittelstand, C&M and CRE overcompensates planned reduction in PBC; higher NII in PFT (dependent on level and steepness of yield curve) Consensus estimates H ( m) 1,952 2,065 2,193 Low Average High 4 / 22

5 Significant upward trend in commission income Commission income 1, % 1, H H Others (syndication, guarantee, etc.) Real Estate business Payment transactions Asset management Securities transactions Comments Commission income growth driven by strong underlying business in all segments PBC: High contribution from securities transactions and asset management German AuM up by 10% (H1-o-H1) Focus on fee generating products for MSB clients C&M driven by higher commissions from Corporate Finance and syndications CRE: High level of new business commitments at 22.5bn (+39%) as well as increase in AuM at CGG/CLI by 9% to 41.1bn Outlook (dependent on equity market development) H2: strong, but seasonally weaker than H1 2008: further increase (excl. Jupiter impact) Consensus estimates H ( m) 1,302 1,460 1,671 Low Average High 5 / 22

6 Client driven business boosting trading profit Trading profit % Q1 Q2 Q3 Q4 Q1 Q H % H Comments Corporates & Markets (H1 2007: 616m) Strong focus on client-driven business led to sustainable growth in trading profit Positive development across products with particularly strong results in equity derivatives Well-diversified client portfolio with increasing contribution from institutional clients VaR at historical low level 76m IAS 39 effect in H Outlook H2: Lower Sales & trading in H2 due to a) seasonally weaker business in equity derivatives b) difficult credit trading Sales & Trading Consensus estimates Net result on hedge accounting, measurement of derivatives and fair value option (IAS 39) H ( m) Low Average High 6 / 22

7 Cost discipline remains strong management focus, several growth projects underway Operating expenses 1,320 1,327 1,292 1,395 1,360 1,324 Q1 Q2 Q3 Q4 Q1 Q CIR in % Jupiter expenses +4% ,647 2,684 +3% H H Comments Expenses excluding Jupiter increased by 3% H1-o-H1 Increase in personnel expenses driven by strong group performance Investment in Eurohypo foreign expansion Marketing investments to support growth initiatives Clean CIR as of H1 2007: 58.6% Outlook Continued cost control Ongoing efficiency programs Investments in growth initiatives Consensus estimates H ( m) 2,526 2,609 2,736 Low Average High 7 / 22

8 Exceptionals 2007 H effects Disposal of Germanischer Lloyd 38m Deutsche Börse AG 48m BRE s AM-unit SAMH 23m Disposal of Jupiter Proceeds from sale of Jupiter 243m Release of Jupiter sundry provisions 94m External advisory fees -10m Expected H effects Positive: Disposal of CICM Japan Sale of real estate object in Berlin Gains in Mittelstand due to judgement of supreme tax court concerning reserve management Negative: H2 impairment of US subprime exposure Impairment of US subprime exposure -46m in Corporates & Markets Write-downs at Commerzbank Asset -23m Management Asia (CAMA) 8 / 22

9 H2 2007: One-off effect in Mittelstand segment due to supreme tax court judgement Structure 2000: Foundation of 8 companies for reserve management (GfR) for Commerzbank's corporate customers to avoid disadvantages of corporate tax reform in 2001 Loans by Commerzbank to GfR Legal situation Initially: no acceptance of structure by tax authorities No intermediation fees paid to Commerzbank 2006/07: Positive decision by German supreme tax court regarding the main issue and subsequent application by one lower tax court Expected positive one-off effect in H2 2007: > 100m * GfR = Gesellschaft für Rücklagenmanagement 9 / 22

10 New guidance for tax rate 2007: 25-27% Composition of taxes H Expected tax effects H Net pre-tax profit according to IAS/IFRS 1,983 Group income tax rate (initial position) 39.6% Calculated income tax 785 Effects of: differences between tax rate of top entity and effective tax rate of local entity -73 non-deductible operating expenses 45 tax exempt income -259 others 52 Taxes on income 550 Tax Rate 27.7% Tax reform Eurohypo Tax loss carryforwards -149 m 150 m > 100 m One-time tax effect due to tax rate reduction of deferred taxes in Germany One-time effect due to capitalization of deferred taxes on tax loss carryforwards as a result of the Profit Loss Tax Agreement Expected additional capitalization of deferred taxes on tax loss carry-forwards due to assumed improved forecast of taxable income for the next years Outlook 2007: expected FY tax rate of 25-27% 2008: expected tax rate of approx. 25%, positively affected by reduced tax rates in Germany ( 31%) and capitalization of tax loss carry forwards 10 / 22

11 Outlook CB group: Further increase in growth and profitability Value drivers ( m) 2006 H Value drivers: current figures and outlook 2007p (vs. 2006) p Outlook Revenues incl. LLP s 8,049 4,667 Ongoing internal and external growth Costs 5,334 2,684 Continued cost discipline Investment in growth programs Net profit 1) 1,597 1,377 Positive profit dynamics over time Average equity Clean net 2) RoE 12, % 13, % >12% 1) 2006 figure based on stated result 2) Clean: excluding net result on participations and restructuring charges As of 01/01/2008 Basel II conversion - projected capital release of ~10% Proactive capital management: investment in growth, return of potential surplus capital Continuous improvement in RoE above 15% to achieve standards compared to international peers 11 / 22

12 Key take-aways from today s Investors Day 1. Strategy Further strengthening Commerzbank's position as the leading German commercial bank Expansion of core competencies in products and geographic areas 2. Segments PBC: Profitability improvement based on organic growth MSB: Further expansion of our leading position in Germany and selective growth areas C&M: Customer focused strategy driver for high sustainable profits CRE: Developing an integrated value chain in Real Estate PFT: Building an integrated public finance platform, prudent Treasury Management in stressed markets 3. Financials Record profitability level in H targets to be overachieved In : continuous improvement in RoE above 15% to achieve standards compared to international peers Commerzbank with shareholder-minded strategy and capital management 12 / 22

13 Appendix 13 / 22

14 Good performance especially in Private & Business Customers, Mittelstand and Commercial Real Estate Operating profit Private & Business Customers % % Mittelstand % +97% Corporates & Markets % % -231 Q1 Q2 Q3 Q4 Q1 Q H1 H Q1 Q2 Q3 Q4 Q1 Q H1 H1 Q1 Q2 Q3 Q4 Q1 Q H1 H Commercial Real Estate % % Public Finance & Treasury % % Others & Consolidation Q1 Q2 Q3 Q4 Q1 Q H1 H1 Q1 Q2 Q3 Q4 Q1 Q H1 H1 Q1 Q2 Q3 Q4 Q1 Q H1 H / 22

15 Details of profitability by segment H Private & Business Customers Mittelstand Corporates & Markets Commercial Real Estate Public Finance & Treasury Operating profit ( m) Average equity ( m) 2,514 3,025 2,215 4,232 1,173 Operating RoE (%)* Economic capital ( m) 1,412 1,694 1,064 1, RoRaC (%)* Avg. RWA ( bn) Avg. lending volume ( bn) ** Net LLP per lending volume (bps)* * Annualized ** incl. public finance bonds Average equity defined as risk-weighted assets (BIZ) times 6% plus debit differences Economic capital comprises credit risk, market risk, operational risk and business risk at 99.95% level confidence 15 / 22

16 Private & Business Customers: Deposits volume and margins increasing, ratio of commission income to net interest income increased Value driver analysis Change in operating profit from H to H H1 '06 H1 '07 Change Customers (in m) % Total lending (in bn) % Margin on total lending (in %) bps Volume of customer deposits (in bn) % -12 Margin on customer deposits (in %) bps Risk-weighted assets (in bn) % Commission income / net interest income 114% 127% +13ppt. FTE 9,284 9,438 +2% revenues without LLP LLP costs operating profit Gross revenue/fte (in 000) % Operating expenses/fte (in 000) % 16 / 22

17 Mittelstand: Lending volumes and deposit income increased, improvement of credit quality Value driver analysis Change in operating profit from H to H Total lending (in bn)* Loan-loss provision ratio (in %)* Domestic lending (in bn) Margin on domestic lending (in %)* H1 ' H1 ' Change +12% -47bps +3% -8bps 175 Domestic customers deposits (in bn) % Margin on domestic customers deposits (in %)* bps Risk-weighted assets (in bn) % Commission income / net interest income 55% 52% -3ppt. revenues without LLP LLP costs operating profit FTE Gross revenue/fte (in 000) 6, , % +13% Operating expenses/fte (in 000) % * Annualized 17 / 22

18 Corporates & Markets: Improvement driven by NII and trading profit, revenues per FTE significantly up with moderate cost increase Value driver analysis Change in operating profit from H to H H1'06 H1'07 Change Total lending (in bn) % Margin on total lending (in %) bps Loan-loss provision ratio (in %)* bps Risk-weighted assets (in bn) % FTE 1,635 1,665 +2% Gross revenue/fte (in 000) % thereof Markets: Trading profit/fte (in 000) % revenues without LLP LLP costs operating profit Operating expenses/fte (in 000) % * Annualized 18 / 22

19 Commercial Real Estate: Increase of lending volume and margins, high new business commitments Value driver analysis Change in operating profit from H to H H1`06 H1`07 Change Total lending (in bn) % Margin on total lending (in %) bps 18 New business commitments (in bn) % Loan-loss provision ratio (in %)* bps -17 Risk-weighted assets (in bn) 71, % FTE 1,571 1,522-3% Gross revenue/fte (in 000) % revenues without LLP LLP costs operating profit Operating expenses/fte (in 000) % * Annualized 19 / 22

20 Public Finance & Treasury: Increased margin on a lower lending volume basis, results suffer from interest rate development Value driver analysis Change in operating profit from H to H H1`06 H1`07 Change Total lending (in bn)* % Margin on total lending (in %) bps Loan-loss provision ratio (in %)** bps Risk-weighted assets (in bn) % Av. EONIA (in %) bps Av. 10-year bund yield (in %) bps FTE % revenues without LLP LLP costs operating profit Gross revenue/fte (in 000) % Operating expenses/fte (in 000) % * Volume of lending and bonds; excl. Treasury ** Annualized 20 / 22

21 Others & Consolidation: Operating profit driven by KEB sale in 2006 and disposal of Jupiter in 2007 Value driver analysis Change in operating profit from H to H Others & Consolidation includes: International Asset Management Units Funding costs and proceeds from group holdings Facility management, e.g. under-utilised office space Group cost, e.g. for Board of Managing Directors, Supervisory Board, annual general meeting +48 Consolidation Δ Revenues Δ Costs Δ Operating profit 21 / 22

22 Group equity definitions Reconciliation of equity definitions Equity basis for RoE Equity definitions Jun-2007 Jan-Jun 2007 Subscribed capital 1,708 Capital reserve 5,705 Retained earnings 5,122 Reserve from currency translation -51 Investors capital excluding minorities 12,484 Minority interests (IFRS)* 1,063 Investors Capital 13,547 1,707 5,702 5, ,434 1,059 13,493 Basis for RoE on net profit Basis for operating RoE and pre-tax RoE Change in consolidated companies; goodwill; consolidated net profit minus portion of dividend; others -7 BIS core capital excluding hybrid capital 13,540 Hybrid capital 3,096 BIS Tier I capital 16,636 * excluding: Revaluation reserve Cash flow hedges Consolidated profit 22 / 22

23 Disclaimer All presentations shown at Investors Day based on new group reporting as published per H This presentation has been prepared and issued by Commerzbank AG. This publication is intended for professional and institutional investors only. 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 AG and/or its subsidiaries and/or affiliates (herein described as Commerzbank Group) with regard to the accuracy of the data. This presentation also contains forward-looking statements that reflect our current views and expectations about future events. The words anticipate, assume, believe, estimate, expect, intend, may, plan, project, should and similar expressions are used to identify forward-looking statements. These statements are based on plans, estimates and projections as they are currently available to the management of Commerzbank AG. Forward-looking statements therefore speak only as of the date they are made, and we undertake no obligation to update publicly any of them in light of new information or future events. By their very nature, forwardlooking statements involve risks and uncertainties. A number of important factors could therefore cause actual results to differ materially from those contained in any forward-looking statement. 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 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

24 For more information, please contact Commerzbank s IR-team: Jürgen Ackermann (Head of IR) P: M: juergen.ackermann@commerzbank.com Sandra Büschken (Deputy Head of IR) P: M: sandra.bueschken@commerzbank.com Wennemar von Bodelschwingh P: M: wennemar.vonbodelschwingh@commerzbank.com Ute Heiserer-Jäckel P: M: ute.heiserer-jaeckel@commerzbank.com Simone Nuxoll P: M: simone.nuxoll@commerzbank.com Stefan Philippi P: M: stefan.philippi@commerzbank.com Karsten Swoboda P: M: karsten.swoboda@commerzbank.com Andrea Flügel (Assistant) P: M: andrea.fluegel@commerzbank.com