Commerzbank - Clear objectives for the future

Transcription

1 Merrill Lynch: Banking and Insurance CEO Conference 2006 Commerzbank - Clear objectives for the future London, October 4, 2006 Klaus-Peter Müller Chairman of the Board of Managing Directors

2 Agenda 1. Improved Performance: Good progress in key figures 2. Clear Strategic Positioning: Leading Commercial Bank in Germany 3. Management Agenda: Growth & Profitability 4. Targets: Increase net RoE to 15% by / 19

3 Investors Day 2006 Commerzbank has delivered a strong track record of value creation for shareholders and improved operating performance Value creation Net earnings per share in Dividend per share p >0.5 Full year planned CB-share vs. MSCI Jan. 03 Jul. 03 Jan. 04 Jul. 04 Jan. 05 Jul. 05 Jan. 06 Jul. 06 Profit improvement Operating profit in m ,011 1,717 1H H p One off gains due to sale of participations* - - * Without refinancing and related items; 2002 and 2003 not published Full year planned 1H 06 1,659 Operating RoE in % CIR in % H 06 3 / 19

4 Core segments making good progress Operating profit in m Private & Bus. Customers Nearly stable operating profit Note: Before one-offs due to harmonization of provisioning standards CB/ EH in 2006p Full year 2006p Asset Management Higher commission income * Op. RoE annualized Mittelstand Continues upward trend H H 2006 Op. RoE 15.5% 14.8%* 120 Op. RoE 22.4% 23.8%* H 2006 Op. RoE 19.2% 18.9%* Corporates & Markets Excellent and stabilized result Commercial Real Estate Good progress Public Finance & Treasury Stable result but in a difficult environment H H H Op. RoE 12.2% 27.0%* Op. RoE 9.2% 13.7%* Op. RoE 14.2% 33.1%* 4 / 19

5 Agenda 1. Improved Performance: Good progress in key figures 2. Clear Strategic Positioning: Leading Commercial Bank in Germany 3. Management Agenda: Growth & Profitability 4. Targets: Increase net RoE to 15% by / 19

6 Clear strategic position: The Leading Commercial Bank in Germany The Leading Commercial Bank in Germany PCAM (Private & Business Customers and Asset Management) CIB (Mittelstand and Corporates & Markets) CREPT (Commercial Real Estate, Public Finance and Treasury) Best Retail Bank in Germany The best nationwide Bank for Corporate Customers Europe s leading specialist for Real Estate and Public Finance 6 / 19

7 Core segments: Well positioned in defined segments Objectives PCAM Best Retail Bank in Germany CIB The best nationwide Bank for Corporate Customers Status Quo market position No 3 German Retailbank with 5 m customers: Strong market share among affluents No 1 in Online Brokerage further customer growth planned No 2 home finance provider Among top 3 in Private Banking Approx. 40% of German (S)ME -clients and 80% of large customers with CB account Top 10 player in CEE (BRE one of the leading banks in Poland and No 1 Internet bank, new Russian participation planned) Investment Bank leading issuer of structured products in Germany CREPT Europe s leading specialist for Real Estate and Public Finance No 1 in Commercial Real Estate in Germany No 1 in Public Finance No 1 in Jumbo Covered Bonds 7 / 19

8 Core region: Commerzbank with focus on Germany and selected international business Focus Germany Claims on customers in % Operating profit in % Abroad Germany Employees in % 23 Year end 2005 only CB 77 Selected international business Supporting German Mittelstand in international business Supporting international corporate customers in Germany/Europe Utilization of profitable growth opportunities in areas of core competence and selected regions, i.e. CRE (Eurohypo), CEE 8 / 19

9 Commerzbank benefits from recovering German economy Q strong GDP growth Germany: Gross domestic product real, seasonally adjusted, change in ppt qoq (LS) yoy (RS) Business climate: improving sentiment Germany: ifo business situation seasonally adjusted monthly figures Noticeable progress has taken place German business structures more flexible, especially wages and working time German companies with noticeable increase in competitiveness (world champion in exports): Moderate development of unit labour costs Debt reduction leads to larger scope for investments Reforms of social fallback systems have been initiated 9 / 19

10 Agenda 1. Improved Performance: Good progress in key figures 2. Clear Strategic Positioning: Leading Commercial Bank in Germany 3. Management Agenda: Growth & Profitability 4. Targets: Increase net RoE to 15% by / 19

11 Management agenda: enhancing growth & profitability Growth and increase in profitability Stabilization Capital base strengthened Costs cut rigidly Loan portfolio and business model de-risked Liquidity prudently managed Profitability Non-core participations sold Restored profitability in Retail Banking and Asset Management Major turnaround in Mittelstand segment De-risked and stabilized Investment Banking, significant turnaround Strengthening position by selected acquisitions: Playing active part in German consolidation and selected acquisitions abroad Accelerated organic growth by investments in defined core segments Continuous efficiency enhancement in all divisions Active capital management 11 / 19

12 Investing: selected acquisitions and investment in core segments Examples External growth Eurohypo Russia Strategically and financially attractive acquisition Integration process fully on track Acquisition of stake in Promsvyazbank planned to participate in fast growing Russian market Investment Organic growth PCAM CIB CRE Focus on customer growth is upper Retail/Affluents, Direct Banking (comdirect) and Private Banking AM: Focussed investments in German AM MSB: acquisition of new clients, increase wallet share/ Cross selling BRE/ CEE: check rollout of m bank/ Multi bank C&M: Selective investments in core competencies, i.e. equity derivatives Significant growth in international CRE markets Increase profitability of German CRE portfolio Strong focus on origination strategy Playing active part in German consolidation; only selected acquisitions abroad Investing in growth in key areas of competence 12 / 19

13 Divesting: active capital management and continuous efficiency enhancement Examples Capital management Capital measures Active credit portfolio mgt. Disposals Capital increase ( 1,3 bn), Hybrid Capital ( 2,2 bn) and Lower Tier II ( 1,25 bn); each 3x oversubscribed Securitizationof 4,5 bn CLO (C&M) and 0.5 m loans via TSI (Mittelstand) Sale of non-strategic participations, e.g. KEB, Heidelb. Druck, Banca Intesa Review Jupiter IPO Divestment Efficiency enhancement Private & Bus. Customers Service-toperform Mittelstand Further improvement in cost efficiency of branches Optimizing credit administration via new credit centers Lean processes: optimisation of IT and transaction banking services Optimizing credit process => reaching cost leadership Active capital management to increase capital efficiency Continous efficiency enhancement Eurohypo Back office cost reduction Exploring further synergy potential 13 / 19

14 Eurohypo: integration process on track, net synergies above preliminary evaluation, positive effects on cost of capital Rationale Strategic position: Corporate Real Estate/PF strong new pillar Profitability: Acquisition RoE accretive Stability: Net interest income +30% (as stable earning component) Growth: Enhanced growth in new business segments 14 / 19 Integration All integration projects fully in line with plan Required actions initiated Joint business processes established Key functions centrally managed Total synergy potential reconfirmed First revenue synergies realized Strong identification of staff with new Group creating new business momentum Synergies Additional benefits Net synergies in m Preliminary evaluation Cost synergies Revenue synergies * Including 15 m funding synergies * Current synergy assumptions Further synergy potential 118m restructuring costs (vs. announced 150 m premerger) Lower EH market volatility (betafactor) leads to lower cost of capital for consolidated Group EH s tied up equity significantly benefits from Basel II

15 Russia: acquisition in Promsvyazbank planned to benefit from Russia s attractive market Strong strategic fit Attractive market: Upside potential via catch-up of banking penetration level, additionally supported by dynamic GDP development Attractive target: Promsvyazbank, currently ranked number 12 in terms of assets, is one of the fastest growing banks within the Russian banking sector Attractive price: Price in relation to risk profile is reasonable in current market conditions Improving CB s presence Branch Network: Extension of existing market presence with CB (Eurasija) with nationwide branch network Corporate Banking: Enlargement of existing large customers portfolio Retail Banking: Nationwide penetration of retail business/ if applicable combined with successful BRE business model for private clients Investment Banking: Widening of existing activities 15 / 19

16 Agenda 1. Improved Performance: Good progress in key figures 2. Clear Strategic Positioning: Leading Commercial Bank in Germany 3. Management Agenda: Growth & Profitability 4. Targets: Increase net RoE to 15% by / 19

17 CB objectives: growth and profitability Revenues Revenue growth due to investment programs in defined core segments Risk Costs Operating profit Decrease of operating LLP run-rate e: ~ 700 m One offs due to methodology changes in risk provisions: LLP incl. one-offs 2006 below 930 m, 2007 below 900 m Costs well under control - cost discipline remains strong management focus Significantly increasing profit until 2010 Well on track to reach net RoE target of 15% in 2010e! Capital Stabilisation Tier 1 ratio, Target: 6.5% -7.0% Wherever applicable active capital management 17 / 19

18 Commerzbank: the leading Commercial Bank in Germany - strongly positioned to continue profitable growth Financial target on track RoE: % 2006p 10% 2007p 11% 2010e 15% Long-term RoE goal RoE after tax adjusted of one-off positions CIR: 67% 65% 63% 60% As of 1H 2006 As of 1H / 19

19 Disclaimer / investor relations / This presentation has been prepared and issued by Commerzbank AG. This publication is intended for professional and institutional investors. / 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 19 / 19

20 For more information, please contact: Jürgen Ackermann (Head of IR) P: M: Sandra Büschken (Deputy Head of IR) P: M: Ute Heiserer-Jäckel P: M: Simone Nuxoll P: M: Andrea Flügel (Secretary) P: M: