Investors Day Mittelstandsbank: Building on our leading position in Germany and CEE

Transcription

1 Investors Day 2007 Mittelstandsbank: Building on our leading position in Germany and CEE Martin Blessing Member of the Board of Managing Directors Frankfurt, September 20th, 2007

2 Agenda 1. Overview of Mittelstandsbank segment as Commerzbank`s key value driver 2. Building on our leading position in Germany 3. Very positive development of BRE in Poland 4. CEE as key future growth market 5. Outlook 2/ 38

3 Segment Overview Mittelstandsbank a key driver of Group value of Commerzbank Operating profit 2007 in m, part of total result in % 13% 27% 19% 16% 5% 20% Mittelstandsbank with highest profit contribution Private- & Business Customers Mittelstandsbank Corporates & Markets Commercial Real Estate Public Finance & Treasury Others Average Equity in m Operating RoE in % ,232 2,514 3,025 2,215 1, Mittelstandsbank key value driver for Commerzbank Private- & Business Customers Mittelstandsbank Corporates & Markets Commercial Real Estate Public Finance & Treasury Others 3/ 38

4 Segment Overview demonstrating strong growth record Operating profit in m 535 Operating RoE in % % ppt 19 Q1 Q2 Q3 Q4 Q1 Q `07 Q1 Q2 Q3 Q4 Q1 Q `06 `07 Interest income & commission income in m Commission income Interest income Average Equity in bn LLPs in m Q1 Q2 Q3 Q4 Q1 Q2 Q1 Q2 Q3 Q4 Q1 Q ` `06 55 `07 4/ 38

5 Segment Overview Operating profit contribution by business unit Central & Eastern Europe in m 31 Poland - BRE in m x Mittelstandsbank Germany in m x Q1 Q2 Q3 Q4 Q1 Q ` Q1 Q2 Q3 Q4 Q1 Q `07 Asia in m x % Q1 Q2 Q3 Q4 Q1 Q `07 Financial Institutions in m x Q1 Q2 Q3 Q4 Q1 Q `07 Q1 Q2 Q3 Q4 Q1 Q `07 5/ 38

6 Segment Overview Segment structure based on our customers needs Main focus on our corporate clients in Germany Accompanying them into selected markets in CEE and Asia Supported by Financial Institutions service offerings specialised in corporate banking, trade finance & payments Poland Germany CEE Asia BRE Bank Business Focus Operating Units SME Large Corporates Specialised Business Schiffsbank 144 sales offices and units for SME 5 Large Corporate Centers Centers of Competence for Renewable Energies & Global Shipping Czech Republic / Slovakia Hungary Russia Ukraine (after the closing of the transaction) Service offering: Expansion of InnoBanking to Czech Republic / Slovakia Project- & external trade financing Leasing Syndicated loans Retail Banking Corporations & Financial Markets Further growth in all customer segments Using emfinanse to increase share of wallet in customer credits Increased sales activities to strengthen our growth path Identification of attractive markets North China: Establish a branch-structure Eastern Asia: Establish regional desks & servicing Financial Institutions Business activities with more than 6,000 clients Cash & transaction services Trade, finance & bank loans Supporting SMEs in transition countries & strengthening our position Enhancing our position as Germany s leading trade finance bank 6/ 38

7 Agenda 1. Overview of Mittelstandsbank segment as Commerzbank`s key value driver 2. Building on our leading position in Germany 3. Very positive development of BRE in Poland 4. CEE as key future growth market 5. Outlook 7/ 38

8 Germany Mittelstandsbank Germany - Key financials Operating profit in m % Operating RoE in % ppt Q1 Q2 Q3 Q4 Q1 Q `06 `07 Q1 Q2 Q3 Q4 Q1 Q `06 `07 Interest income & commission income in m Commission income Interest income Average Equity in bn LLPs in m Q1-21 Q2 Q3 Q4 Q1 Q2 Q1 Q2 Q3 Q4 Q1 Q `06 ` `06 `07 8/ 38

9 Germany Best Mittelstandsbank in Germany - business model leads to success Move to the top New business model Enhanced customer segmentation Optimized sales processes New customer acquisition Product innovation & initiatives Process optimization End-to-end credit Optimization of Documentary Business Value-based steering of business Employee development program Managing capital Cutting operating expenses Achieve optimal credit provisioning CIR in % Operating RoE in % Q Clear reduction in Cost-Income Q2 Q3 Q4 Q1 Q2 Ratio due to strict cost management Increase in operating RoE due to focussing on value added products Slight increase in average equity tied up driven by our growth strategy 9/ 38

10 Germany Income statement of German business demonstrates impressive success Key financials in m 2006 FY Net interest income Loan loss provisions Net interest after provisioning Net commission income Other result Total Revenues 536 1, Operating expenses Operating profit Average equity 1,933 1,918 1,996 Operating return on equity (%) Cost-Income Ratio in operating business( %) / 38

11 Germany Best Mittelstandsbank in Germany delivered based on customer opinion ASU German grading system ranking based on the criteria Mittelstand orientation, quality of relationship and competitive terms (from 1 = very good to 6 = very poor) Sparkassen Volksbanken HypoVereinsbank Sparkassen Volksbanken Commerzbank Commerzbank (2.67) Sparkassen (2.88) Dresdner Bank (2.88) Dresdner Bank Commerzbank HypoVereinsbank Dresdner Bank Volksbanken (2.93) HypoVereinsbank (2.96) Deutsche Bank Deutsche Bank Deutsche Bank (3.37) We are grateful for our customers trust we take it as a challenge for the future Source: Corporate Survey "Mittelstandsfinanzierung durch Banken conducted by Arbeitsgemeinschaft Selbständiger Unternehmer (ASU), December / 38

12 Germany Our financial result is driven by macroeconomic factors as well Corporates` profits on a historically high level* Corporates investments mostly self-financed** 18% 17% 16% 15% 14% 13% 12% 11% 10% 9% 8% Fixed Investment./. Cap. Resources Participations Giro/Securities Lending External financing Market Outlook: German banks with limited growth of corporate lending volume despite positive economic background due to: Strong equity capitalisation of corporates Vacant capacities Disintermediation due to alternative financial products offered by foreign banks & capital market Outlook Mittelstandsbank with a planned above-average growth in lending volume based on: Stronger positioning as reliable partner of our customers Focusing on growth in high potential branches & products Further set-up of alternative forms of financing, e.g. private equity for SME Expansion of cross-selling * Corporate profits & income on investments adjusted of salaries in % of GDP ** External financing requirement of non financial corporate in bn 12 / 38

13 Germany Increase in volumes and decrease in margins in line with overall market environment Domestic corporate lending in bn Domestic corporate customers deposits in bn % % 2006 FY 2006 Q Q FY 2006 Q Q Margins (avg.) on domestic corporate lending in % Margins (avg.) on domestic corporate customers deposits in % bp + 12 bp 2006 FY 2006 Q Q FY 2006 Q Q / 38

14 Germany Growth 2008 & beyond: Our approach to growth & excellence Innovation shaping innovation in a dynamic market environment Internationalisation of SMEs following our customers into future markets Small Cap Business Approach offering individualised financing solutions for SMEs Financial Engineering accompanying key milestones in our customers corporate development Specialised Business investing in growing industries of Global Shipping and Renewable Energies Large Corporates focussing on capital market driven products in cooperation with IB Active portfolio management supporting our growth path Generating scope Focussing on high potential segments Optimizing equity usage 14 / 38

15 Agenda 1. Overview of Mittelstandsbank segment as Commerzbank`s key value driver 2. Building on our leading position in Germany 3. Very positive development of BRE in Poland 4. CEE as key future growth market 5. Outlook 15 / 38

16 BRE Poland - BRE development demonstrated by profit growth Operating profit in m 112 Operating RoE in % % ppt Q1 Q2 Q3 Q4 Q1 Q `06 Interest income & commission income in m Commission income Interest income Q ` Average Equity in m Q2 Q3 Q4 Q1 Q2 Q1 Q2 Q3 Q4 Q1 Q `06 ` Q1 Q2 Q3 Q4 Q1 Q ` `06 ` `07 LLPs in m 16 / 38

17 BRE Segments of BRE Bank in Poland Corporations & Financial Markets Operating profit* in PLN m 231 Retail Banking Operating profit* in PLN m % x Financial result mainly driven by Corporates & Institutions (profit contribution 73.5%) Corporate SME customers deliver nearly one half of total segment result Trading result is influenced by underwriting activity as well as proprietary gains and equity trading * Before adjustment for consolidation MBank with highest profit contribution (PLN 75.1 m) guarantees for financial success Significant growth driven by accelerated loan portfolio development Positive impact from cards and bank-linked products 17 / 38

18 BRE Strategic growth of mbank & MultiBank-models in future markets mbank & MultiBank as parts of BRE`s Retail Banking segment Customers* Deposits** Loans** 1,278 1,627 7,068 1,818 7,953 mbank as a leader in Internet banking & in personal finance Distribution based on cheap electronic access channels Transparent & straightforward range of top-quality products Bank for demanding customers representing the middle class Modern products tailored to customers Multi-channel service leader 5,134 4, , , Opening of additional 4 mkiosks Increase of more than 40% in client base Growth of deposits and loans in balance Credit card customised to individual needs Innovative products for entrepreneurs Expansion of successful business model to target market Czech Republic and Slovakia * in thousands ** in PLN m 18 / 38

19 Agenda 1. Overview of Mittelstandsbank segment as Commerzbank`s key value driver 2. Building on our leading position in Germany 3. Very positive development of BRE in Poland 4. CEE as key future growth market 5. Outlook 19 / 38

20 CEE CEE with impressive growth path in main branches Operating profit in m Operating RoE in % x ppt 12 Q1 Q2 Q3 Q4 Q1 Q Key financials per Q2/2007 in m Czech Rep. Operating Profit Operating RoE 06 `07 Average Equity `06 `07 `06 `07 `06 ` % 24% Hungary % 55% Russia % 48% Q1 Q2 Q3 Q4 Q1 Q Average Equity LLPs in m in m Q1 Q2 Q3 Q4 Q1 Q `06 `06 `07 `07 20 / 38

21 CEE Strategic fit of Bank Forum Top 10 Bank in Ukraine Acquisition of majority stake (60 % + 1 share) Next Steps Market Booming market with huge upside potential Dynamic GDP development Comparably low banking penetration Low market share of foreign owned banks Target Top 10 Ukrainian universal bank Acquisition of majority stake with step-up plan to reach qualified majority Clear ownership structure Room to build a strong and viable market reputation CB`s market presence Enlargement of Commerzbank CEE presence for further growth opportunities Nationwide branch network as excellent platform to serve German clients and develop Retail Banking Business lines Universal bank with focus on corporate and retail banking Corporate Banking is largest segment focussed on SME business with room for product development Retail Banking: Possibility of nationwide market penetration 2 Call Options: up to +25 % Participation in fast growing Ukrainian market Attractive pricerisk profile First German bank in Ukrainian market Fitting business model with room for improvement 21 / 38

22 Agenda 1. Overview of Mittelstandsbank segment as Commerzbank`s key value driver 2. Building on our leading position in Germany 3. Very positive development of BRE in Poland 4. CEE as key future growth market 5. Outlook 22 / 38

23 Outlook Further improving ties between Mittelstandsbank units Central & Eastern Europe Intensified cooperation between units in CEE & Germany to guarantee broad customer approach Germany Asia Developing North-China as new target region for customers expanding as German subcontractors of Multinationals Additional branch opening in Tianjin Poland BRE Bank Link up between BRE Bank and Commerzbank headquarters to tap customer potential in respective markets Financial Institutions Build-up of specialised unit in Dubai Presence in United Arab Emirates due to economic growth & increased market access for foreign investors 23 / 38

24 Outlook Outlook Mittelstandsbank: Further increase in growth Value drivers ( m) Revenues incl. LLPs 2006* ,896 1,082 Value drivers: current figures and outlook 2007p (vs. 2006) 2010p Outlook Further growth in core markets Anticipation of growth trends in potential segments and markets Costs 1, Stable cost development Investing in growth programs Operating profit Operating profits above 1.0bn in 2007 Average equity 2,869 3,025 Focussing on efficient capital allocation due to active portfolio management Operating RoE 28.0% 35.4% > 30% Normalisation of operating RoE level Convergence to international standards 24 / 38

25 Appendix 25 / 38

26 Acquisition of Bank Forum Analyst/Investor information 26 / 38

27 Agenda 1. Transaction highlights 2. Ukrainian banking market 3. Bank Forum top 10 player in Ukraine by assets 4. Strategic fit and transaction details 27 / 38

28 Transaction summary of Bank Forum acquisition Transaction First step: Majority holding initial acquisition of 60% + 1 share Second step: Call options (after 36 months) to acquire a further up to 25% to reach qualified majority The pricing of the call options will be based on the company value applicable at that time Facts Purchase of US-$ 600m (approx. 435m) including capital increase Financing out of own capital strength Strategic fit Acquisition of Bank Forum fits with CB s CEE-strategy to enlarge its presence by selective growth in the most important and attractive CEE markets Bank Forum fits with CB s criteria for investments Opportunity to improve on our top 10 position in the booming Ukraine market 28 / 38

29 Agenda 1. Transaction highlights 2. Ukrainian banking market 3. Bank Forum top 10 player in Ukraine by assets 4. Strategic fit and transaction details 29 / 38

30 Ukrainian Banking Market Share of international investors bank capital in % 9 Russia 19 Slovenia 29 Ukraine Serbia Poland 76 Bulgaria Source: KPMG: Banking in CEE Bank sellers windfall 10/2006 Hungary Growth of Banking Assets in EUR bn Czech Rep. CAGR : 46% H 2007 Romania 33 Croatia Slovakia 61 Booming market with huge GDP growth development (6% expected for 2007) Banking sector size by total assets with an average compounded annual growth of more than 50% in the last five years Low banking penetration Well developed regulatory framework Low level of market share of foreign-owned banks Commerzbank is already present in Kiev with a representative office since 1994 The purchase of Bank Forum provides Commerzbank with access to the attractive SME and retail customer markets Source: Association of the Ukrainian Banks 30 / 38

31 Agenda 1. Transaction highlights 2. Ukrainian banking market 3. Bank Forum top 10 player in Ukraine by assets 4. Strategic fit and transaction details 31 / 38

32 Profile Bank Forum Branch Network (as of June 2007) Nationwide branch network All main cities / regional centres are covered Representative office in Czech Republic and Kazakhstan Source: Bank Forum Shareholder structure (before acquisition) Top 10 market player by assets with 2.3% market share Clear ownership structure 12,000 corporate clients thereof 9,500 SME clients 230,000 retail clients Nationwide branch network with 230 sales units Other individuals* 6.4% TOV Elmak* 11.6% Bank of New York** 7.8% Around 3,100 employees Julius Bär IEF 5.8% * Controlled by Mr. Yurushev and his family ** Bank of New York is a Nominee holder of the GDRs, ultimate owners portfolio investors Provita Insurance* Company 66.5% At present Bank Forum finds itself in an intensive growth and investment phase Source: Bank Forum 32 / 38

33 Development and Strategic Goals 100% 80% % % % % Source: Bank Forum 7% 28% 12% 20% 20% 22% 26% 25% 32% 29% 28% % % 63% 48% 51% 50% % m2007 4m Р 72 Funds f rom IFO, own debt securities, subordinated loan Branch Network Development Funds f rom other banks p 2008p 2011p Regional Funds branches of clients Operational offices Growth of Loan Portfolio in EUR m CAGR : 48% p 2008p 2011p Strategic Goals Efficiency in customer service and product development Strategic focus on high-margin retail segment and SME franchise Develop branch network to 370 outlets by 2009 and 410 by 2011 Development of client related securities business Development of data warehouse and CRM system Commerzbank is planning for an investment phase taking place over the next 3 to 5 years Medium term goal: Strengthening market position with market share ~ 4% 33 / 38

34 Agenda 1. Transaction highlights 2. Ukrainian banking market 3. Bank Forum top 10 player in Ukraine by assets 4. Strategic fit and transaction details 34 / 38

35 Impact of transaction on Commerzbank Group Impact on Tier 1 ratio No material impact on Tier 1 ratio Consolidation full consolidation after closing Impact on segment Mittelstandsbank ( ) Operating income after risk provisions: slight increase envisioned Pre-tax profit: small decrease due to Forum s planned investments CIR: increase by 1% Bank Forum acquisition creates shareholder value for Commerzbank 35 / 38

36 Strategic fit of Bank Forum acquisition Market Target CB group presence in Ukraine Business lines Booming market Dynamic GDP development Comparably low banking penetration Low level of market share of foreignowned banks Top 10 Ukrainian universal bank Acquisition of majority stake with step-up plan to reach qualified majority Clear ownership structure One of the very limited opportunities to reach a top position in this booming market Good platform for retail development Improved capacity to serve German clients Universal bank with focus on corporate and retail banking Corporate Banking focussed on SME business with room for product development Retail Banking: Possibility of nation wide market penetration supported by CB and BRE knowledge Huge upside potential Attractive price-risk profile Nationwide branch network/ first German Bank in Ukrainian market Fitting business model with room for improvement 36 / 38

37 CB presence in CEE / CIS - strong platform for further growth Poland BRE Bank* (70.2%) Headcount: 3,878 Total assets: 11,099m Pre tax profit: 135m Russia CB (Eurasija) SAO* (100%) Headcount: 83 Total assets: 1,070m Pre tax profit: 34m Czech Republic/ Slovakia Hungary Prague branch incl. Bratislava* (100%) Headcount: 148 Total assets: 2,101m Pre tax profit: 16m CB Budapest Rt* (100%) Headcount: 113 Total assets: 843m Pre tax profit: 12m Ukraine Promsvyazbank (15.32%) Financial investment Bank Forum* (60%) Headcount: 2,506 Total assets: 1,102m Pre tax profit: 2.5m Representative offices Belarus / Croatia / Kazakhstan / Romania / Russia / Serbia- Montenegro / Ukraine / Uzbekistan * Data as per 12 / 2006 ProCredit Banks Albania / Bosnia-Herzegovina / Bulgaria / Georgia / Kosovo / Romania / Serbia 37 / 38

38 Key financials of Bank Forum Total assets m ,102 1,393 Totals loans m Total equity m Clients (Corporate / Retail) 5,400 / 55,000 7,000 / 106,000 11,000 / 191,000 12,000 / 230,000 Employees 856 1,530 2,506 3,118 Operating revenues m Operating expenses m Profit before tax m Net income m Cost/Income ratio 42.2% 58.4% 70.0% 65.4% RoAE* 9.8% 7.7% 1.9% 2.6% ** *Calculation based on local currency **Extrapolated for the whole year 38 / 38

39 Disclaimer All presentations shown at Investors Day based on new group reporting as published per 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 39 / 38

40 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 40 / 38