Deutsche Bank German Corporate Conference. Commerzbank. Klaus-Peter Müller Chief Executive Officer. Frankfurt am Main June 2, 2005

Transcription

1 Deutsche Bank German Corporate Conference Commerzbank KlausPeter Müller Chief Executive Officer Frankfurt am Main June 2, 2005

2 Chart 1 Good start in 2005 Q1 04 Q * Target 2005 ( m) ,011 Net profit ( m) RoE (after tax, %)** Cost/income ratio in operating business (%) Tier 1 ratio*** Earnings per share ( ) up >750 > 8 < 69 stable substantially up * restated ** annualized *** as of period end

3 Chart 2 Good start in 2005 in m higher than Q Total income increased vs. Q Total income* ,011 1,308 1,510 6, ,777 * 1,744 1,846 Q1 Q2 Q3 Q Q1 Q1 Q2 Q3 Q Q1 Cost management as permanent task Operating expenses Loanloss provisions continue to decline Loanloss provisions 1,159 4, , , ,112 1, Q1 Q2 Q3 Q Q1 Q1 Q2 Q3 Q Q1 * Revenues excluding provisioning

4 Chart 3 Q1 results underline Commerzbank s main achievements 1. Strong capital base Wellcapitalized balance sheet Strong Tier 1 ratio Significant increase of revaluation and other reserves 2. Operating strength Successful transformation Focused strategy Considerable reduction of risk exposure 3. Leading market positions Top 2 Mittelstandsbank in Germany Top 3 Retail bank in Germany Top 10 in Central/Eastern Europe

5 Chart 4 Strong capital base Tier I capital ratio (in %)* Strengthened balance sheet ( ) Change in regulatory consolidation requirement for fund management companies (KAGs). Impact in Q1 2005: 22bp 31 Mar 30 Jun 30 Sep 31 Dec 31 Mar Jun Sep Dec Mar Great improvement in balancesheet quality Much stronger equity base due to Swing in revaluation reserves (form 769m to 1.6bn) Capital increase (of 742m) Reserves in consolidated subsidiaries and associated companies increased significantly by more than 2bn (difference between share price and book value) Balance sheet strengthened by more than 5bn * incl. market risk position, hybrid capital = 0

6 Chart 5 Commerzbank with a clear strategic profile Commerzbank PCAM CIB Private & Business Customers 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 Western Europe USA, Asia, Africa Financial Institutions Multinational and selected larger corporates Securities Mortgage Banks Others and Consolidation

7 Chart 6 Private & Business Customers: CB has one of the more successful European retail banking platforms Commerzbank s strategic Position Profitability Drivers 2005 Strategic Goal Top 3 retail bank in Germany with 5m customers (plus 1m retail customers at BRE Bank) 4.3m branch customers (+10% yoy) No. 1 in Online Banking No. 2 in Private Banking Progressive implementation of our Private & Business Customer strategy Concentration on highmargin products Comdirect s growth programme (comvalue) Efficiency gains through rollout of new branch format Becoming Germany s best retail bank

8 Chart 7 Private & Business Customers: Success story maintained m m Q * Q Change Outlook 2005 Net interest income Loan loss provision Interest after prov. Commission income Result on hedge acc. Trading profit Net result on AfS Other operating result Total income Operating expenses % +18% 7% 3% +/0% 6% 1% Operating profit in m Focus on providing sustainable growth Lending margins should remain stable Further pressure expected on customer deposit margins Provisioning should be lower than in 2004 Slight cost increase due to further investments Ø equity (in m) 1,866 1,882 operating RoE** 21.2% 14.7% CIR 75.4% 78.5% Equity allocation within Commerzbank Group % 18.6% Q1 Q2 Q3 Q4 Q almost flat compared with FY 2004 Private & Business Customers continuously creating shareholder value * restated ** annualized

9 Chart 8 Asset Management: Shifting into highermargin products Commerzbank s strategic Position Profitability Drivers 2005 Top 5 Asset Management company in Germany Assets under management at a stable level Quality leader in UK and France through our foreign units Jupiter and CCR Highly regarded awards for Jupiter and CCR Greater efficiency at our asset management units by shift to highermargin products Strategic Goal Quality leader in products supplied to distribution platform * excluding assets managed directly (deposits and portfolios)

10 Chart 9 Asset Management: Well on its way m m Q1 2004* Q Change Outlook 2005 Net interest income Loan loss provision Interest after prov. Commission income Result on hedge acc. Trading profit Net result on AfS Other operating result Total income Operating expenses % +/0% +/0% 11% 1% 30% in m Q1 Q2 Q3 Q4 Q Assets under management stable despite open architecture Ongoing product mix shift from lowmargin moneymarket assets to specialized equity funds No repeats expected of 2004 s high positive oneoffs on a par with last year Ø equity (in m) operating RoE** 36.8% 27.8% CIR 64.4% 72.0% Equity allocation within Commerzbank Group 5.3% * restated ** annualized

11 Chart 10 Asset Management: Focus on core areas and Groupwide knowhow leverage Cominvest Jupiter Expertise in German equities Highly successful performance of Adig funds Winner of various awards (e.g. Flagship Adig Fondak for many years winner of S&P and Lipper Fund Award) Jupiter leading UK investment house Jupiter is Britain s best fund management company Excellent performance on wide range of investment products Knowhow leverage and cooperation CCR Strong niche player with focus on money market, hedge funds and European value equity funds Best Eurozone equities funds Specialized Banks (S&P and Lipper Fund Award)

12 Chart 11 Mittelstandsbank: Positive earnings trend in Germany as well as in CEE Commerzbank s strategic Position Profitability Drivers 2005/2006 Strategic Goals Top 2 Mittelstandsbank in Germany Approx. 40% of German (S)MEs run a Commerzbank account Market share of over 16% in handling the financial side of Germany s global trade Top 10 player in CEE BRE is one of Poland's largest banks (1m retail customers) No. 1 in Polish internet banking Strong operating units in Moscow, Prague, Budapest and Bratislava Sales force steering and more precise sales targets lead to higher revenues and greater efficiency Continuing to build upon our strengths in German trade and derivatives business Developing into the best bank for Germany s Mittelstand Building on Top 10 position in CEE

13 Chart 12 Mittelstandsbank: Measures implemented in 2004 producing positive results m m Q1 2004* Q Change Outlook 2005 Net interest income Loan loss provision Interest after prov. Commission income Result on hedge acc. Trading profit Net result on AfS Other operating result Total income Operating expenses % 22% +37% +19% >100% 67% 80% +22% +2% >100% in m Q1 Q2 Q3 Q4 Q All units show promising trend this year German Mittelstand: Improved revenues and cost base BRE Bank: Results underlined the positive trend of group s strategy Eastern Europe: Profitable business maintained Lower provisioning expected in 2005 Streamlining backoffice functions Ø equity (in m) 2,646 2,945 operating RoE** 2.7% 9.2% CIR 58.0% 56.1% Equity allocation within Commerzbank Group 29.2% planned to exceed 300m due to two levers: BRE Bank German SMEs * restated ** annualized

14 Chart 13 Strategy in CEE is focused on selective growth Objectives Strong presence in CEE BRE Bank: Corporate Banking: Leading bank for highquality corporate clients Retail Banking: Maintaining market leadership in Internet banking Remaining market leader for new investment products Private Banking: Expanding branch network Investment Banking: Expanding sales, trading and advisory activities Eastern Europe: Examine interesting acquisition targets in markets with high growth potential Operating units Source: Eastern Europe Division Representative offices

15 Chart 14 International Corporate Banking: Successful niche strategy Commerzbank s strategic Position No. 2 Financial Institution Group in Germany Partner for more than 6,000 financial institutions Successful international operating units Profitability Drivers 2005/2006 Strategic Goal Concentration on valuecreating structured lending products and trade finance Weeding out lowmargin products Improving efficiency in Western Europe Focus on investmentgrade loans Continuing our successful niche strategies in the US and with Financial Institutions Sharpen profile in Western Europe

16 Chart 15 International Corporate Banking: Successful niche strategy m m Q1 2004* Q Change Outlook 2005 Net interest income Loan loss provision Interest after prov. Commission income Result on hedge acc. Trading profit Net result on AfS Other operating result Total income Operating expenses % 47% +/0% +3% 25% 50% 11% +3% in m Focus on highquality borrowers prevents widening of margins Further reduction of backoffice function C/I ratio in 2005 should be held below 50% Operating RoE in the course of the year back to normal (twodigit figure) Ø equity (in m) 1,363 1,251 31% Q1 Q2 Q3 Q4 Q operating RoE** 13.2% 9.9% CIR 42.6% 55.4% Equity allocation within Commerzbank Group 12.4% * restated ** annualized

17 Chart 16 Corporates & Markets: Repositioning in securities business showing effect Commerzbank s strategic Position No. 2 Mandated Lead Manager for LBOs in Germany No. 3 Distributor of structured products in Germany as well as in France Profitability Drivers 2005 Strategic Goals Turnaround in Markets section Focusing on regions and products with competitive strengths sustainable value proposition for our customers Increasing capital efficiency Building strong client relationship and service model (around Commerzbank s core customers) Leverage established product platforms (i. e. Equity Derivatives) by addressing new client groups

18 Chart 17 Corporates & Markets: Return to profit in Q m m Q1 2004* Q Change Outlook 2005 Net interest income Loan loss provision % +/0% in m Maintaining strong performance in C&M Interest after prov. Commission income Result on hedge acc. Trading profit Net result on AfS Other operating result Total income % 39% 17% 21% Former lossmaking areas such as global dedicated prop trading and convertible bonds have been terminated More predictable earnings contribution from Markets Operating expenses Ø equity (in m) 1,957 1,832 operating RoE** 30.5% 21.6% 14% 34% 147 Q1 Q2 Q3 Q4 Q Equity allocation to lowmargin business to be reduced further Further cost decreases will show impact in 2006 CIR 62.6% 68.0% Equity allocation within Commerzbank Group 18.1% * restated ** annualized

19 Chart 18 Commerzbank: Risks well under control VaR* in Investment Banking substantially reduced over the past year 30 Commerzbank Group VaR** In m % Q Q Actual VaR * m, VaR overnight, 97.5% ** Group level according to KWG; 99% confidence level, 10day holding period

20 Chart 19 Mortgage Banking with positive value contribution Commerzbank s strategic Position Significant participations in three mortgage banks Eurohypo: Leading European bank for mortgage and publicsector finance Essenhyp: Most profitable German publicsector finance bank EEPK: Successful niche player in Luxembourg Profitability Drivers 2005 Continuously improving profit quality of Essenhyp and EEPK Strategic Goals Flotation of Eurohypo likely in the medium term (in the course of 2005 or 2006)

21 Chart 20 Mortgage Banking: Positive contribution from Eurohypo m m Q1 2004* Q Change Outlook 2005 Net interest income Loan loss provision Interest after prov. Commission income Result on hedge acc. Trading profit Net result on AfS Other operating result Total income % +60% +63% +/0% 72% in m Marked improvement in results expected, thanks to stable, aftertax profit contributions in all four quarters from Eurohypo Continued strong performance of Essenhyp Improved risk/return profiles Operating expenses % Q1 Q2 Q3 Q4 Q % Ø equity (in m) 1, operating RoE* 14.6% 27.9% CIR 15.7% 11.5% Equity allocation within Commerzbank Group 9.8% * restated ** annualized

22 Chart 21 Mortgage banks: On the way to increased profitability Equity CBK s share of capital held Eurohypo Management prepares for stock market (SPO) Target of 10% RoE (after tax) in 2007 Rollout and strengthening of international business, esp. Asia and USA 5,100m 31.8% Essenhyp Maintaining successful organic growth strategy Diversification of revenue streams due to new Pfandbriefgesetz 745m 51.0% EEPK Further expansion of business after strengthening capital base ( 20m for Tier 2) Diversification in terms of customers (Landesbanken) and products (e.g. securitization) 72.4m 75.0%

23 Chart 22 Others & Consolidation: Strong AfS result in Q1 m m Q1 2004* Q Change Outlook 2005 Net interest income Loan loss provision Interest after prov. Commission income Result on hedge acc. Trading profit Net result on AfS Other operating result Total income Operating expenses in m Q1 Q2 Q3 Q4 Q1 Increasing overall transparency through new structure of segment reporting Allocation of remaining volatile portion of treasury results Cost base should decrease further and costs will be allocated to operating units Ø equity (in m) operating RoE** CIR Equity allocation within Commerzbank Group 6.6% * restated ** annualized

24 Chart 23 Three main challenges for 2005 Focus Value drivers 1. Enhancement of profitability in Mittelstandsbank Germany: revenues, cross selling, costs and LLPs BRE Bank: turnaround and growth opportunities 2. Positioning of Corporates & Markets Improving profit in Markets section Focusing on regions and products with competitive strengths sustainable value proposition for our customers Increasing capital efficiency 3. Tight cost management Revenuerelated expense strategy

25 Chart 24 Commerzbank aims to achieve European RoE standards Return on equity (aftertax) targets 2004* 4.3% % (current cost of capital) 2006 > 10% (longterm cost of capital) Major step towards our current cost of capital * restated

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

27 Chart 26 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