Analysts conference Commerzbank

Transcription

1 Analysts conference Commerzbank Q results Dr. Eric Strutz Chief Financial Officer London August 3, 2005

2 Chart 1 Earnings quality in Q2 improved significantly Q2 05 vs. Q2 04 H1 05 vs. H1 04 Interest income ( m) 847 1, % % Provisioning ( m) % % Commission income ( m) % 1, % Trading profit ( m) % %

3 Chart 2 Core figures reflect Commerzbank s progress Q2 05 vs. Q2 04 H1 05 vs. H1 04 Net profit ( m) % % RoE (after tax, %)* ppt ppt Cost/income ratio in operating business (%) ppt ppt * annualized

4 Chart 3 Interest income in Q2 shows superb performance Net interest income Operational units maintained interest income on high level Dividend payments, e.g. Linde, Banca Intesa Earnings contribution of Deutsche Schiffsbank 5% Net interest income from affiliated companies such as BRE Bank and Essenhyp Σ 3,013 Σ 1,568 Q1 Q2 Q3 Q4 Q1 Q Interest income of 1,568m in H1 exceeds last year s level by 1.4%

5 Chart 4 High loan portfolio quality permits further reduction of LLP Loan-loss provisions Loan-loss cover ratio 238 In excess: 1,066m 7,459 In excess: 1,085m 7, % 5, % 5,407-17% 6,393 6,202 Σ 836 Σ ,723 1,539 Q1 Q2 Q3 Q4 Q1 Q Q Loan-loss provisions Country LLP and general provision Collateral Non-performing loans Q2

6 Chart 5 Strong commission income in Q2 Commission income Increase of 15m q-o-q Asset management fees up Securities transactions up Payment transactions up +6% Syndicated business down Σ 2,250 Σ 1,171 Q1 Q2 Q3 Q4 Q1 Q Due to upcoming German election, stock-exchange turnover should maintain pace

7 Chart 6 Disappointing trading profit in Q2 Trading profit Sales & Trading achieved 68m in Q Σ 539 Σ 273 Q1 Q2 Q3 Q4 Q1 Q Tough bond markets Losses in non-client related prop trading Negative trading result in Mortgage banking ( 36m) was offset by high net results on AfS and interest income Sales & Trading Net result on measurement of derivatives and fair value options (IAS 39)

8 Chart 7 Revaluation reserves increased due to our equity portfolio Revaluation reserves 1,253 1,213 1,600 1,430 1,509 15m through disposal of remaining MAN stake in Q2 Revaluation reserves increased by 80m q-o-q 1, % ~40% Disproportionately strong growth of equity portfolio ~60% 31 Mar 30 Jun 30 Sep 31 Dec 31 Mar 30 Jun Equities Bonds

9 Chart 8 Costs reduced further despite investments in growth areas Operating expenses 1,112 1,136 1,086 1,159 1,107 1, Costs are well under control Further reduction despite investments in growth areas such as comdirect and private banking Σ 4,493 Σ 2,195 Q1 Q2 Q3 Q4 Q1 Q Revenue-based expense strategy Personnel expenses Other expenses Depreciation on fixed assets

10 Chart 9 Net profit up by more than 17% in the first six months Net profit Σ Σ Σ 362 Σ 570 Q1 Q2 Q3 Q4 Q1 Q Earnings per share in Private & Business Customers as well as Mittelstand on a good course Excellent performance in Mortgage Banking Unsatisfactory trading result EPS reached 0.96 in the first six months exceeding the level of full year 04 by 57%

11 Chart 10 Solid balance sheet and strong Tier 1 ratio Risk weighted assets in bn Tier 1 ratio in % Equity 11,296 11, ,226 Minority interests 1, Consolidated profit 1,430 1, net profit Revaluation reserve Capital reserve, 7,683 retained earnings, 7,696 reserve arising from currency translation 31 Mar 30 Jun 30 Sep 31 Dec 31 Mar 30 Jun ,548 Subscribed capital 1,548-1,136 Measurement of cash -1,314 flow hedges 31 Mar 30 Jun 2005 Tier 1 ratio

12 Chart 11 Overall positive trend in Private & Business Customers Operating profit Abridged P&L Q Q H H Net interest income Provisioning Commission income Other items Q1 Q2 Q3 Q4 Q1 Q Ø equity, 1,882 1,880 operating RoE*, in % CIR, in % Equity allocation within Group * annualized Σ 323 Σ 153 Q Q % Operating expenses Operating profit Net interest income maintained its high level Deposit margins slightly improved from their low Despite investing in growth areas, operating expenses declined by 6m In the first six months, PBC achieved more than half of proposed 2005 target of more than 280m Boosted stake in comdirect to 80%

13 Chart 12 Sound underlying profit in Asset Management Operating profit Abridged P&L Q Q H H Σ 177 Σ 54 Net interest income Provisioning Commission income Other items Operating expenses Operating profit Q1 Q2 Q3 Q4 Q1 Q m Q Q Ø equity, operating RoE*, in % CIR, in % Extraordinary expenses overly burdened division Overall positive earnings trend Operating RoE of 21% after six months Equity allocation within Group 5.2% * annualized

14 Chart 13 Performance in Mittelstand gathering pace Operating profit Ø equity, 2,945 2,973 operating RoE*, in % CIR, in % Equity allocation within Group Σ 131 Σ 171 Q1 Q2 Q3 Q4 Q1 Q m Q Q % Abridged P&L Q Q H H Net interest income Provisioning Commission income Other items Operating expenses Operating profit Jump in net interest income High earnings contribution from Dt Schiffsbank and BRE Bank Derivatives and payment transactions (TFTS) boosted commission income Mittelstand division becoming core profit contributor Operating profit in H1 higher than full year 2004 * annualized

15 Chart 14 International Corporate Banking picking up Operating profit Abridged P&L Q Q H H Net interest income Provisioning Σ 311 Σ 76 Commission income Other items Operating expenses Operating profit Q1 Q2 Q3 Q4 Q1 Q2 m Q Q Ø equity, in m 1,251 1,339 operating RoE*, in % CIR, in % Equity allocation within Group * annualized % Operating profit rose by 45% q-o-q Treasury result of foreign units remained disappointing New business lifted interest income Further decrease in provisions, reversal of provisions in the course of the year most likely Operating RoE increased to 13.4%, further improvement expected

16 Chart 15 Corporates & Markets suffered from tough market conditions and Special Situation Desk Operating profit Ø equity, 1,832 1,848 operating RoE*, in % CIR, in % Equity allocation within Group Q1 Q2 Q3 Q4 Q1 Q2 * annualized Σ 75 Σ 44 m Q Q % Abridged P&L Q Q H H Interest income after prov Commission income Trading profit Other items Operating expenses Operating profit Sound credit quality in multinational clients Securities business revealed mixed picture Credit Trading and shut-down of Special Situation Desk hit profitability Encouraging performance in Interest Rate Trading, Equity Derivatives and FX Trading Significant reduction of operating costs

17 Chart 16 Excellent performance in Mortgage Banking Operating profit Abridged P&L Q Q H H Interest income after prov Trading profit Σ 139 Σ 159 AfS result Other items Operating expenses Operating profit Q1 Q2 Q3 Q4 Q1 Q2 m Q Q Ø equity, in m operating RoE*, in % CIR, in % Equity allocation within Group % Jump in interest income by 42m q-o-q Profit contribution of Eurohypo Negative trading result offset by high net result on AfS and interest income positive net balance rose by 18m to 115m in Q2 Operating RoE exceeded 36% * annualized

18 Chart 17 Main takeaways Earnings quality significantly improved Private & Business Customers as well as Mittelstand on a good course Excellent performance in Mortgage Banking Operating profit 625 1/2 of FY 05 target 832 H % Substantial decrease in provisions from current level of 750m likely After-tax RoE of 8% is within reach Net result 375 1/2 of FY 05 target 570 H % Continuing our tight grip on costs Pursuing a revenue-based expense strategy Expanding in areas with substantial growth CIR In % ppt 1/2 of FY 05 target H1 05

19 Chart 18 Appendix

20 Chart 19 Private and Business Customers [ m] Q1 / 2004 Q2 / 2004 Q3 / 2004 Q4 / 2004 Q1 / 2005 Q2 / 2005 Net interest income Provision for possible loan losses Net interest income after provisioning Net commission income Net result on hedge accounting Trading profit Afs result Other operating result Total income Operating expenses Operating profit Regular amortization of goodwill Restructuring expenses Expenses arising from special factors Pre-tax profit Average equity 1,866 1,888 1,910 1,912 1,882 1,880 Operative return on equity (%) 21.2% 17.2% 15.3% 14.6% 14.7% 17.9% Cost/income ratio (%) 75.4% 77.0% 75.6% 74.3% 78.5% 76.1%

21 Chart 20 Asset Management [ m] Q1 / 2004 Q2 / 2004 Q3 / 2004 Q4 / 2004 Q1 / 2005 Q2 / 2005 Net interest income Provision for possible loan losses Net interest income after provisioning Net commission income Net result on hedge accounting Trading profit AfS result Other operating result Total income Operating expenses Operating profit Regular amortization of goodwill Restructuring expenses Expenses arising from special factors Pre-tax profit Average equity Operative return on equity (%) 36.8% 32.6% 25.9% 31.3% 27.8% 13.3% Cost/income ratio (%) 64.4% 67.1% 73.9% 70.4% 72.0% 87.3%

22 Chart 21 Mittelstand [ m] Q1 / 2004 Q2 / 2004 Q3 / 2004 Q4 / 2004 Q1 / 2005 Q2 / 2005 Net interest income Provision for possible loan losses Net interest income after provisioning Net commission income Net result on hedge accounting Trading profit Afs result Other operating result Total income Operating expenses Operating profit Regular amortization of goodwill Restructuring expenses Expenses arising from special factors Pre-tax profit Average equity 2,646 2,692 2,660 2, Operative return on equity (%) 2.7% 5.9% 7.5% 3.5% 9.2% 13.9% Cost/income ratio (%) 58.0% 55.7% 52.6% 70.6% 56.1% 52.8

23 Chart 22 International Corporate Banking [ m] Q1 / 2004 Q2 / 2004 Q3 / 2004 Q4 / 2004 Q1 / 2005 Q2 / 2005 Net interest income Provision for possible loan losses Net interest income after provisioning Net commission income Net result on hedge accounting Trading profit Afs result Other operating result Total income Operating expenses Operating profit Regular amortization of goodwill Restructuring expenses Expenses arising from special factors Pre-tax profit Average equity 1,363 1,399 1,318 1,268 1,251 1,339 Operative return on equity (%) 13.2% 24.0% 20.3% 36.3% 9.9% 13.4% Cost/income ratio (%) 42.6% 39.0% 47.5% 46.4% 55.4% 53.9%

24 Chart 23 Corporates & Markets [ m] Q1 / 2004 Q2 / 2004 Q3 / 2004 Q4 / 2004 Q1 / 2005 Q2 / 2005 Net interest income Provision for possible loan losses Net interest income after provisioning Net commission income Net result on hedge accounting Trading profit Afs result Other operating result Total income Operating expenses Operating profit Regular amortization of goodwill Restructuring expenses Expenses arising from special factors Pre-tax profit Average equity 1,957 2,093 2,067 1,971 1,832 1,848 Operative return on equity (%) 30.5% -7.3% -28.4% -7.9% 21.6% -11.9% Cost/income ratio (%) 62.6% 113.8% 282.9% 112.2% 68.0% 137.5%

25 Chart 24 Mortgage Banking [ m] Q1 / 2004 Q2 / 2004 Q3 / 2004 Q4 / 2004 Q1 / 2005 Q2 / 2005 Net interest income Provision for possible loan losses Net interest income after provisioning Net commission income Net result on hedge accounting Trading profit Afs rersult Other operating result Total income Operating expenses Operating profit Regular amortization of goodwill Restructuring expenses Expenses arising from special factors Pre-tax profit Average equity 1,039 1, Operative return on equity (%) 14.6% 11.6% 10.1% 19.1% 27.9% 36.3% Cost/income ratio (%) 15.7% 20.9% 23.1% 18.6% 11,5% 9.3%

26 Chart 25 Others & Consolidation [ m] Q1 / 2004 Q2 / 2004 Q3 / 2004 Q4 / 2004 Q1 / 2005 Q2 / 2005 Net interest income Provision for possible loan losses Net interest income after provisioning Net commission income Net result on hedge accounting Trading profit Afs result Other operating result Total income Operating expenses Operating profit Regular amortization of goodwill Restructuring expenses Expenses arising from special factors Pre-tax profit Average equity , Operative return on equity (%) Cost/income ratio (%)

27 For more information, please contact: Commerzbank Investor Relations Tel. +49 (69) ir@commerzbank.com

28 Chart 27 Chart 18 /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