Commerzbank investors day growth strategy in retail banking

Transcription

1 Commerzbank investors day 2004 growth strategy in retail banking Martin Blessing Member of the Board of Managing Directors Frankfurt September 22

2 Chart 1 Commerzbank on growth course thanks to significant increase in profitability over the past two years Profitability Profitability Profitability Profitability Profitability as as as as The The The The Basis Basis Basis Basis Net profit ( m) RoE (%) CIR (%) growth growth growth growth FOR FOR FOR FOR SUSTAINED SUSTAINED SUSTAINED SUSTAINED GROWTH GROWTH GROWTH GROWTH Integration of SchmidtBank branches 2006 Optimization of business model Tapping of further opportunities for growth

3 Chart 2 In 2003, we promised a RoE of more than 11% in 2004 and a target return of 17.3% in RoE* Retail Banking segment in % Already achieved/extrapolation Medium-term planning INVESTORS DAY SEP 2003 Targeted return 17.3% > 7% > 11% ~1/3 of planned improvement in results -14.9% 3.2% e 2004e 2005e ~ 600m ~2/3 of improvement achieved after two years * before taxes

4 Chart 3... in 2004, after 500m improvement in results in two years, Retail Banking has kept - and gone beyond - its promise Operating profit*, RoE, Retail Banking segment, in m 258 ( )** ~ 2 / 3 of fullyear plan ~ 500m / % 3.2% 14.3% 24.5%*** * before tax ** full-year plan *** annualized

5 Chart 4 Stable profit improvement reflected in quarterly results as well Quarterly operating profit, in m Half-year average Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q

6 Chart 5 Earnings raised and costs further reduced in 1st half 2004 Half-year comparison, in m Earnings (incl. risk) Costs +7.2% -15.0% , /2002 6/2003 6/2004 6/2002 6/2003 6/2004

7 Chart 6 Reduction of branches by 10% and branch personnel by 19% in roughly two years... Number of branches 798 9,448 Branch personnel % 7,781 7,651* -19% 12/ / / /2003 6/2004 Branch network optimized on basis of customer potential analysis Geographic market coverage secured Staff reductions in sales force, services and credit department Organizational focus on distribution * without SchmidtBank

8 Chart 7... has increased sales productivity by about 32% in 000 Revenues/employee % / /2003 6/2004* New distribution management Qualification programme for branch staff until end of 2004 Optimization of 150 distribution processes Quick-win price initiative und development of pricing strategy * annualized

9 Chart 8 In first half of 2004, profitability boosted considerably and effectiveness further clearly improved in % Cost of capital Return on equity* Cost/income ratio +23.0% points % points /2002 6/2003 6/2004 6/2002 6/2003 6/2004 * annualized

10 * Year-end levels ** On reporting date Source: Reuters, Internal reporting Chart 9 Steady volume of deposits, but margins narrower Individual items 12/00 12/01 12/02 12/03 6/04 Volume deposits (average, m) - Sight -Time -Savings - Savings certificates Margin on deposits - Sight (Eonia) 21,607 22,049 22,377 22,128 21,697 6,380 4,508 9,555 1,164 6,505 5,010 9, ,937 4,574 10, ,911 3,648 11, ,044 3,260 11, (4.88) 3.34(3.43) 2.53(3.03) 1.84(2.33) 1.60(2.13) Change 12/00-6/04: >10% >2% <2% <-2% <-10% -Time Savings (ECB deposit facility) 1.42 (3.75) 1.28 (2.25) 1.26 (1.75) 1.26 (1.00) 1.31(1.00) Portfolio volume** 50,397 44,887 36,790 41,246 40,663 -Equities (DAX*,.000) 18,886(6.4) 13,891(5.2) 7,921(2.9) 10,380(4.0) 10,303(4.1) - Bonds 10,324 9,291 8,991 8,449 7,618 - Investment funds (incl. COBAS) 20,112 20,528 18,767 20,531 20,327 -Other (incl. structured products) 1,075 1,177 1,111 1,886 2,415

11 Chart 10 Despite rating downgrade and difficult market conditions, Commerzbank s lending maintained with positive outlook in m Individual items 12/00 12/01 12/02 12/03 6/04 Total lending (average, m) 36,222 37,386 37,591 36,837 - Home loans (fixed and floating) 23,605 24,185 24,114 23,443 - Loans (floating interest rate) 2,946 2,897 2,544 1,969 - Loans (fixed interest rate) 8,075 8,655 9,408 10,038 - Consumer loans 1,032 1, Other DZV* (Eurohypo, Essenhyp, etc.) 1,066 1,311 1,583 Individual items 12/00 12/01 12/02 12/03 Margin on loans 34,219 22,840 1,737 8, /04 Change 12/00-6/04: >10% >2% <2% <-2% <-10% - Home loans (floating) Home loans (fixed) ** 0.92** - Loans (floating interest) Loans (fixed interest) Consumer loans * Direct loan approval for mortgage banks ** Portfolio effect, new business margin without KfW Global > 1.3% Source: Reuters, Internal reporting

12 Chart 11 Commerzbank on a growth course thanks to significant increase in profitability over the past two years Profitability growth growth growth growth Profitability Profitability Profitability Profitability as as as as BASIS BASIS BASIS BASIS Net profit ( m) RoE (%) CIR (%) for for for for SUSTAINED SUSTAINED SUSTAINED SUSTAINED GROWTH GROWTH GROWTH GROWTH Integration of SchmidtBank branches 2006 Optimization of business model Tapping of further opportunities for growth

13 Chart 12 Growth initiatives launched in all three business lines Private Client Business Retail Banking Private Banking grow to win programme for excellence and growth Building upon existing position com one programme for the future SchmidtBank and selected market opportunities to grow externally Optimized business model in distribution and back office Growth especially in product lines (bancassurance, consumer loans and securities) Acquisition of new business and retail customers Focus on expansion Targeted support for existing customers Enhanced product range Active positioning of Commerzbank Private Banking brand Growth in three fields of competence Operating-cost discipline Improvement of results to at least 50m in 2004

14 Chart 13 Growth programme in retail banking must answer four core questions on excellence of business model 2006 potential results from grow to win programme Core questions Answers Rollout Excellence Are all distribution backoffice procedures optimally coordinated? Do we have a stringent and promising strategy in all product fields? How can we ensure our distribution network is successful over the long term? Do we already have the best staff for the best retail bank? Credit strategy Branch of the future Process Excellence SPECIALIST & Sales QUALIFICATIONS /sell to win/ 2005/

15 Chart 14 Growth programme in retail banking must answer four core questions on growth potential 2006 potential results from grow to win programme Core questions In which product fields can the greatest growth potential be realized? Answers bancassurance Consumer credit securities Rollout 2004/2005 Growth In which customer groups can the greatest growth potential be realized? Are branch activities already sufficiently geared to acquiring new business? Acquisition management Do further growth options exist in the market? 2004ff

16 Chart 15 ~10% growth realized in a single transaction through takeover of SchmidtBank Sales regions 70 branches and 29 self-service centres Total of which: retail Central Franconia Saxony Upper Franconia Oberpfalz Customers ~350,000 Branch personnel Asset volume Liabilities volume retail: 310,000 affluent: 12,000 business:25, ~ bn 2.58bn 0.8bn 2.32bn Earnings per customer 260 p.a. (CB ~ 403)* * Commerzbank in Nuremberg and Dresden

17 Chart 16 Private Banking growth strategy already launched Starting position Commerzbank is one of TOP 3 banks for wealthy customers in Germany Concentrated product expertise at head office in all relevant investment classes (several awards market leader in asset management services and for closed-end funds) Regional teams currently active in 27 locations in Germany and 4 abroad (Zurich, Geneva, Luxembourg and Singapore) Close cooperation with branch network Staff of 550 Main points of emphasis Clear focus on wealthy customers with liquid assets of 1,250,000 Acquisition of new customers in market, using relation-networks of bank as a whole, including relations with Mittelstand Active positioning of private-banking services in market: full customer coverage in investment and financing issues Further additions to product range through exclusive products, e.g. in the area of alternative investments Extension of local presence to 8 further locations in Germany Selective expansion of personnel in special product areas

18 Chart 17 comdirect: Three fields of competence aligned to customers needs TODAY Yesterday Discount brokerage Online Investment Direct Banking Financial Advisory Basic banking services

19 Chart 18 Summary Strong basis built... Turnaround measures successfully implemented Commerzbank s Retail Banking again ahead of plan in first half % return on equity 72% cost/income ratio SchmidtBank acquisition executed Successful implementation of comdirect private finance Extension of Private Banking Development of successful and superior business model... for sustainable growth Excellence and selective optimization of business model investment in staff qualifications Growth grow to win programme with Private Banking a leading player in Germany comdirect s three fields of competence Continuing strict cost management

20 Chart 19 We intend to become Germany s best retail customer bank For more information, please contact: Commerzbank Investor Relations Tel. +49 (69) ir@commerzbank.com

21 Chart 20 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