Cheuvreux German Corporate Conference. Commerzbank: Enabling future success. Dr. Eric Strutz Chief Financial Officer Frankfurt January 17, 2005

Transcription

1 Cheuvreux German Corporate Conference Commerzbank: Enabling future success Dr. Eric Strutz Chief Financial Officer Frankfurt January 17, 2005

2 CHART 1 Agenda Overview Group Strategy New Corporates & Markets Division Financials Where are we going?

3 Overview Group Strategy CHART 2 Commerzbank successfully restructured Restored: Corporate financial strength Management changes implemented Costs cut rigidly Liquidity prudently managed Capital base strengthened Risk-weighted assets reduced Regained: Improved Core Businesses Loan portfolio improved Margins increased Non-core participations sold Retail: profitability restored play to win AM: successfully restructured shrink to grow Corporate Bank: move to the top kicked off Costs cut further

4 Overview Group Strategy CHART 3 Strong earnings improvement in core activities we are over-delivering on our promises Operating profit, in m Retail banking Asset management Corporate customers and institutions Securities m 2004 Operating profit will increase by 25% in m 2004 Operating profit will improve by more than 40% m 2004 Operating profit will exceed 500m m 2004 (No statement made) Statements made by Commerzbank s CEO Klaus-Peter Müller at AGM, May 12, 2004

5 Overview Group Strategy CHART 4 Retail Banking: grow to win programme results in growth and peer class profitability Revenues m 9m2003 9m2004 Loan loss prov. Op. expenses Operating profit Goodwill amort. + extraord. items Pre-tax profit 1, , , , Change in % +6% +4% -2% +64% n/a +64% From shrink to grow Status Growth strategy Private Customers Comments on results Earnings Higher net commission income (+9%) and net interest income (+4%); (grow to win programme) Operating expenses reduced even though SchmidtBank has been integrated Focused growth programmes operative ROE 13.8% 22.6% CIR 79.0% 72.5% Equity allocation within Commerzbank Group 18% Retail Banking: grow to win programme for excellence and continued growth: products, marketing, branding, branches Acquisition of new business and retail customers, e.g. SchmidtBank Private Banking: Top 3 programme com one programme for the future

6 Overview Group Strategy CHART 5 Asset Management: Higher revenues following shrink to grow Revenues m 9m2003 9m2004 Loan loss prov. Op. expenses Operating profit Goodwill amort. extraord. items Pre-tax profit operative ROE 14.7% 31.5% CIR 76.5% 65.7% Equity allocation within Commerzbank Group Change in % +18% n/a +1% +73% -38% n.m. 5% Comments on results Net commission income up 15% Operating expenses flat Amortization of goodwill down from 63m to 44m Some one-time effects in 2004 CCR/Jupiter contributing strongly From shrink to grow Status Further rise in profitability Continuing focus on core markets and product excellence Leverage strength and synergies of CB Asset Management Group Focused business model: asset classes, countries, distribution Best-of-production strategy Full leverage of synergies Upgrade of Cominvest production & distribution Open to selective acquisitions: operational synergies, complementary products, expanded distribution

7 Overview Group Strategy Corporate Banking & Institutions set to benefit from customer-segment oriented organisation CHART 6 m 9m2003 9m2004 Revenues Loan loss prov. Op. expenses Operating profit 1, , Change in % +1% -27% +1% +72% Comments on results Operating profit 72% higher Loan loss provisions 27% lower Interest income flat due to smaller credit volume Commission income and operating costs virtually unchanged Goodwill amort. extraord. items % Organisational split and focused growth programme Pre-tax profit % Operative ROE 6.6% 12.5% CIR 49.4% 49.6% Split Corporate Banking & Institutions : Mittelstandsbank, International Corporate Banking, Corporates and Markets Move to the top : Immediate action plan, EVA perspective Mittelstandsinitiative : 4,276 new clients, productivity programme Equity allocation within Commerzbank Group 46% Further customer segmentation & value-based performance management Expansion in Central and Eastern European growth markets

8 Overview Group Strategy CHART 7 Securities: Rightsizing programme developed m 9m2003 9m2004 Change in % Comments on results Revenues Loan loss prov. Op. expenses % n/a -5% Income 19% lower disappointing trading results Operating expenses 5% lower Restructuring expenses of 132m: pre-tax loss of 230m Operating profit/loss Restruct. exp. Pre-tax loss operative ROE 0.8% -11.1% CIR 99.1% 116.8% Equity allocation within Commerzbank Group -22% >100% 12% n/a Restructuring programme Front-office: reduction of 490 FTE - Scaling-down of non-customer-based proprietary trading - Focusing and downsizing of CCMC, New York, close-down of ComSec, Tokyo - Efficiency increase in other locations: reduction of FTEs and clearer focus Back-office: reduction of overhead and service costs (410 FTE) Restructuring expenses (personnel, rental costs, IT): 132m

9 CHART 8 Agenda Overview Group Strategy New Corporates & Markets Division Financials Where are we going?

10 New Corporates & Markets Division CHART 9 Starting point for Commerzbank s investment banking Problem areas High earnings volatility due to non-customer proprietary trading (dedicated proprietary-trading books) Stable, customer-based business: 97% of revenues in first nine months Regional positioning too broad Productivity gaps between locations

11 New Corporates & Markets Division CHART 10 Restructuring measures Trading books successfully integrated All portfolios valued fairly; checked by auditors Strategic staff cuts in line with plan Restructuring provisions evidently sufficient Reduction of FTEs: front-office, back-office, total front-office back-office total FTE structure in front office, by location FTE as of reduction (approx.) FTE 09/04 Income 09/04 FTE post restruct. Frankfurt London CCMC % 9% 8% 6% 4% 12% 45% 34% 38% ComSec Other % 51% 50% 1, Frankfurt London New York/Tokyo Other

12 New Corporates & Markets Division CHART 11 Commerzbank s new approach to investmentbanking activities We intend to expand in the following main products and services: Fixed income and other debt-related products Foreign exchange trading Equity-related derivatives Corporate finance and capital restructuring Equity research, sales and trading for German clients M&A advisory work for German corporate clients We are completely exiting or drastically reducing: Our dedicated proprietary trading operations The Tokyo office and a large part of the New York office Our pan-european equity trading operations Most of our non-german equity research Non-German M&A advisory Other, small non-core businesses

13 New Corporates & Markets Division CHART 12 Corporates & Markets strategic measures Goal: New organization: Expansion of customer-based, profitable core business of investment bank Concentration on capital-market needs of - Mittelstand - multinationals - private customers - institutions Stable, risk-reduced return Combination of capital-market products and core target corporate customers in a single division Growth areas: Derivative products for all asset classes Structured products Risk-management products

14 CHART 13 Agenda Overview Group Strategy New Corporates & Markets Division Financials Where are we going?

15 Financials CHART 14 Tier I capital ratio above target; revaluation reserve increased again in Q3 Tier I capital ratio (in %)* Revaluation reserve in m target pre-revaluation 650 1,240 1,253 1,035 1, post-revaluation -1, Mar 30 Jun 30 Sep 31 Dec 31 Mar 30 Jun 30 Sep 31 Dec 31 Mar 30 Jun Sep 03/03 06/03 09/03 12/03 03/04 06/04 09/04 12/04 equities bonds * incl. market risk position

16 Financials CHART 15 Statement of comprehensive income for Commerzbank (in m) After-tax profit, before restructuring expenses Change in revaluation reserve Change in currency translation reserve Change in cash flow hedge reserve Increase in unrealized reserves for items shown at cost Comprehensive income Restructuring expenses Comprehensive income after restructuring expenses Q m

17 CHART 16 Agenda Overview Group Strategy New Corporates & Markets Division Financials Where are we going?

18 Financials CHART 17 Quality of loan portfolio continually improving Loan-loss provisions in m 927 1,321 1, < p * downside worst case * Loan-loss cover ratio comfortable in m Loan-loss provisions Country LLP and general provision Collateral Non-performing loans In excess: 634m 7,077 7,711 In excess: 7,840 1,180m 109.0% 117.7% 5,506 6,660 5, ,857 1, Loan-loss provisions in m Q1 03 Q2 03 Q3 03 Q4 03 Q1 04 Q2 04 Q3 04

19 Where are we going? Where are we going? CHART 18 = completed Restored: Corporate financial strength Management changes implemented Costs cut rigidly Liquidity prudently managed Capital base strengthened Risk-weighted assets reduced Regained: Improved Core Businesses Loan portfolio improved Margins increased Non-core participations sold Retail: profitability restored play to win AM: successfully restructured shrink to grow Corporate Bank: move to the top kicked off Costs cut further () progressing: Stability and Focused growth Customer-segment oriented organisation Retail: product/customer initiatives grow to win Asset Management improve profitability Corp.Bk customer-focused structure, move to the top Securities reduce volatility through rightsizing Expand Eastern Europe and string-of-pearls strategy acquisitions (e.g. SchmidtBank)

20 Where are we going? CHART 19 Extra growth: String-of-pearls acquisition strategy and expansion of already strong Eastern European platform String-of-pearls acquisition strategy SchmidtBank (Participation: 100%) Plus: 360,00 retail customers, 70 branches, 2,000 corporate customers Integration proceeding successfully (to be completed by March 2005) Participation in Eastern European growth in retail & wholesale areas: organic growth/ acquisitions BRE Bank (equity participation: 72.16%) Plus: 880,00 retail customers, 60 branches, 30% market penetration for large corporates Major adjustment of participation portfolio in December Equity base strengthened in the meantime Positive results expected in retail banking 2005 Sharp upturn in BRE s overall profits likely this year

21 Where are we going? CHART 20 Commerzbank: Five pillars of our distribution platform Commerzbank PCAM CIB Private Clients Asset Management Mittelstandsbank International Corporate Banking Corporates & Markets Retail Banking Private Banking comdirect Asset Management Real Estate Fund Management Mittelstand Germany Central/Eastern Europe Leasing Europe West USA, Asia, Africa Financial Institutions multinational and large corporates Securities Dr. Achim Kassow Klaus M. Patig Martin Blessing Klaus M. Patig Nicholas Teller

22 Where are we going? Customer acquisition target already over-achieved after 9 months CHART 21 New clients in 2004 New clients: 4, ,276 3,000 Domestic corporate client base* Corporates & Markets Clients Centralised relationship management ~150 C&M customers Larger Corporates 5 Large-Corporate Centres ~650 clients 758 Mittelstand clients main branches / 159 locations Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Σ Target 2004 ~51,000 clients Our target: 9,000 more clients by end-2006 Achieved so far: 2004 increase well above plan * as of end-2003

23 Where are we going? CHART 22 We keep our promises! RoE (after-tax) targets of Commerzbank big step towards our current cost of capital > 8% > 10% (current cost of capital) (long-term cost of capital)

24 Where are we going? CHART 23 Position targeted for 2006 Commerzbank s profile as of today > 5m retail customers 40% market penetration with German Mittelstand One of top 10 players in CEE Goals for 2006 Best German bank for private customers Number 1 Mittelstands bank Leading distribution platform in the middle of Europe

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

26 Chart 18 CHART 25 /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