Analyst Conference. Preliminary figures February 15, Dr. Eric Strutz Chief Financial Officer

Transcription

1 Analyst Conference Preliminary figures 2005 February 15, 2006 Dr. Eric Strutz Chief Financial Officer

2 Highlights of 2005 Q4 `05 vs Q4 `04 FY 2005 vs 2004 Operating profit, fold 1, % Net profit, fold 1, fold Net ROE, in % pps pps CIR, in % pps pps 1 annualized 1. Commerzbank produced one of its best-ever operating results 2. Delivered on ROE and CIR targets 3. Increased earnings quality overall 4. Mittelstand, Corporates & Markets and Mortgage Banks ahead of expectations 5. Acquisition of Eurohypo 1/40

3 Significant quarter-on-quarter increase in net interest income Net interest income Strong results of Eurohypo Higher contribution of consolidated companies in FY 2005 Interest spread up by 10 bps to 2.86% +11.5% Weak Treasury result Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Σ 3, % Σ 3, : Slight increase in net interest income expected (like-for-like) 2/40

4 Loan loss provisions at lowest level for the last six years Loan loss provisions 1,267 1,084 Net LLP 1 in bps as a proportion of total lending Development of loan loss coverage ratio in bn Non-performing loans In excess % 119.4% 119.6% LLP /40 Country LLP and general provisions Collateral

5 Strong upward trend in commission income Commission income Notable y-o-y increase in security transactions and asset management Strong in syndicated business, especially in Q % Contribution from Mittelstand grew continually throughout the year Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Σ 2, % Σ 2, : Maintaining high commission income level Friendly market environment might give additional boost 4/40

6 Trading profit: Excellent performance in favourable markets Trading profit Σ % Σ 707 Trading profit Sales & trading Net result on measurement of derivatives and fair value options (IAS 39) fold Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q C&M repositioning is paying off Strong client-related business led to more sustainable earnings stream Q4: Trading profit doubled vs Q4 `04 FY 2005: Sales & trading increased by 32% vs 2004 Treasury below last year s level Positive start in /40

7 Revaluation reserves at record level Revaluation reserve in bn 2.0 Major participations of Commerzbank as of Dec 31, % KEB < 10% Linde 1-5% Generali Mediobanca ThyssenKrupp Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Sale of Banca Intesa in Q4 equities bonds Possibility of KEB sale in /40

8 Operating costs affected by special charges in Q4 Operating expenses 1,112 1,136 1,086 1,159 1,107 1,088 1, , Operating costs (excluding special charges) grew less than 1% Other expenses decreased by 3.4% Pro-active reduction of actuarial gap CIR improved to 67.1% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Σ 4, % Σ 4,662 Personnel expenses Depreciation on fixed assets Other expenses Higher expenses due to performance-related compensation (as CBK outperformed its targets) Special charges due to revaluation of Asian real estate property of 118m Continuing focus on revenuerelated cost management 7/40

9 Development of operating expenses 2005 versus ,493 Cost reduction C&M -151 Revaluation ,662 General performance bonus Additional pension costs LTP / LTI Net effect others 8/40

10 Steady enhancement of underlying business Operating profit Operating ROE, in % Net ROE², in % CIR, in % excluding 1,216m comdirect IPO gains 2 calculated on net profit 9/40

11 Significant swing in net profit y-o-y Net profit Strong underlying business, revenue-related cost management and capital management led to high net profit EPS tripled to 1.93 Dividend of 0.50 per share recommended Pay-out ratio of 25%, higher retained earnings due to EHY acquisition -216 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Σ fold Σ 1,165 Earnings per share in Tax rate 2005: 24.3% 2006: Low tax rate due to EHY 10/40

12 Achievements We promised... and delivered Net ROE in % Net profit, 750 1,165 Operating profit, 1,250 1,717 and we are slightly ahead of targets Adj. operating profit 1, 1,458 Adj. after-tax profit 1, 906 Adj. net ROE 1, in % excl. net results on participations and impairments 11/40

13 Solid capital base and strong Tier I ratio Risk-weighted assets in bn Change in core capital 1,336 12, , First-time consolidation of KAGs Increased stake in comdirect Increased stake in CB Europe (Ir) Others Retained earnings Capital increase Mar Jun Sep Dec Mar Jun Sep Dec Tier I ratio, in % Dec Dec 2004 Av. equity ,235m % consolidation of EHY as of March 31, 2006: expected Tier I >6.3% 12/40

14 Substantial increase in Mittelstand, C&M, Mortgage Banks Operating profit Private & Business Customers Asset Management Mittelstand Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 International Corporate Banking Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Σ 323 Σ 282 Σ 177 Σ 120 Σ 131 Σ 408 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Corporates & Markets Mortgage Banks Σ 311 Σ 299 Σ 75 Σ 212 Σ 139 Σ /40

15 PBC: Personnel expenses impact operating result Operating profit Abridged P&L Q4 `04 Q4 `05 FY 2004 FY % Interest income ,137 1,124 LLP Commission income ,010 1,065 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Σ 323 Σ 282 Other operating income Operating expenses ,657 1,719 Operating profit FY 2004 FY 2005 Avg. equity ( m) 1,894 1,891 Operating ROE (%) CIR (%) Equity allocation within Group 18.5% Increased commission income driven by higher sales of securities Operating expenses up by 17m q-o-q due to charges for bonuses and pension payments Improved operating result without reconciliation and personnel effects 14/40

16 still sound underlying business Development of operating profit 323 ~ -100 ~ Reconciliation 1. Treasury prepayments 2. Higher refinancing costs of participations Personnel expenses 3. Higher pension costs 4. Bonuses FY 2004 Reconciliation & personnel expenses Improved operating result FY 2005 Investments 5. Additional investments in /40

17 Asset Management achieved 9% higher commission income in 2005 Operating profit Abridged P&L Q4 `04 Q4 `05 FY 2004 FY % Commission income Trading profit Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Σ 177 Σ 120 AfS result Other operating income Operating expenses Operating profit FY 2004 FY 2005 Avg. equity ( m) Operating ROE (%) CIR (%) Equity allocation within Group 5.2% Pre-tax profit slightly up by 2m to 120m vs 2004 AuM rose from 94.2bn to 98.3bn y-o-y Asset management units generated higher commission income in Q4 as well as in FY 2005 Higher charges for share option programme (IFRS 2) increased operating expenses 16/40

18 Mittelstand: Operating profit tripled in 2005 Operating profit fold Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Σ 131 Σ Abridged P&L Q4 `04 Q4 `05 FY 2004 FY 2005 Interest income ,152 1,193 LLP Commission income Trading profit Operating expenses ,029 Operating profit FY 2004 FY 2005 Avg. equity ( m) 2,663 3,028 Operating ROE (%) CIR (%) Equity allocation within Group 29.6% Operating ROE of 13.5%, higher than forecast Marked decline in risk provisioning Commission income boosted by improved debt and equity business (derivatives) Very satisfying development of BRE Bank back on positive earnings trend 17/40

19 International Corporate Banking benefits from LLP reversals Operating profit -3.9% Abridged P&L Q4 `04 Q4 `05 FY 2004 FY 2005 Interest income LLP Commission income Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Avg. equity ( m) 1,337 1,388 Operating ROE (%) CIR (%) Equity allocation within Group Σ 311 Σ 299 FY 2004 FY % Trading profit Operating expenses Operating profit Strong operating profit driven by reversals (U.S. and Asia) Negative impact by Treasury New York Realignment programme initiated in order to enhance profitability (restructuring expenses of 11m) Concentration on competitive strength (structured lending products and trade finance) Streamlining W-Europe business by centralizing functions 18/40

20 Very satisfying progress in Corporates & Markets Operating profit Abridged P&L Q4 `04 Q4 `05 FY 2004 FY 2005 Interest income LLP Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Avg. equity ( m) 2,022 1,818 Operating ROE (%) CIR (%) Equity allocation within Group -55 Σ 75 Σ 212 FY 2004 FY % Commission income Trading profit Operating expenses Operating profit Improved efficiency: Higher revenues despite lower VaR and headcount Lower commission income due to discontinued business and related revenues Sales-driven trading profit back to strong level Costs down significantly in 2005, entire cost reduction target achieved 19/40

21 Excellent year for Mortgage Banks Operating profit Abridged P&L Q4 `04 Q4 `05 FY 2004 FY fold Interest income LLP Trading profit Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Σ 139 Σ 350 AfS result Operating expenses Operating profit FY 2004 FY 2005 Avg. equity ( m) 1,003 1,007 Operating ROE (%) CIR (%) Equity allocation within Group 9.8% Net interest income more than doubled All units with strong performance Negative trading result offset by AfS result and interest income 20/40

22 Others & Consolidation: Driven by disposals and impairment Operating profit Abridged P&L Q4 `04 Q4 `05 FY 2004 FY 2005 Interest income Trading profit Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Σ 5 Σ 46 AfS result Other operating income Operating expenses Operating profit Operating profit in FY `05 at 46m way stronger than last year s 5m Interest income influenced by net financing costs for participation and lower treasury result Banca Intesa sale lifted AfS result by roughly 160m in Q4 Revaluation of Asian real estate property ( 118m) caused surge in operating expenses 21/40

23 Main benefits of Eurohypo transaction 1. Strong business fit Reinforce Commerzbank s position as the leading German commercial bank Broaden exposure in the recovering German real estate market (No. 1 with market share of 22%) Increasing and more stable earnings 2. Additional shareholder Substantial value value creation Significant EPS and ROE accretion starting in 2006 Growing dividends in following years Benefit from German recovery story Value-enhancing with identified synergies High tax benefits 3. Integration process Integration teams making good progress some projects almost finalized Working on cooperation in credit processing Synergy potential of up to 130m seems feasible No negative surprises 22/40

24 Milestones of Eurohypo integration Nov Dec Jan Feb Mar Apr May Jun Jul Aug Increase stake to 49% Complete stock taking Finalize preliminary concept Increase stake to 98.04% Finalize detailed concept Taking stock Kick-off project teams Launch hybrid capital Prepare integration Start integration process Integration of EHY Nov 17, `05 Announcement of acquisition Capital increase Feb 15, `06 Analyst conference: Preliminary figures 2005 Disclosure of schedule for EHY integration May 4, `06 Analyst conference: Q1 figures CBK (based on old segment reporting) Details of integration concept and synergy potential Aug 9, `06 Analyst conference: Q2 figures of combined entity New segment reporting 23/40

25 Consolidating Eurohypo CBK`s share in EHY capital 31.84% 48.91% 48.91% 48.91% 98.04% 98.04% % Jan 1 Dec 15 Dec 31 Mar 31 Apr 1 Dec 31 Balance Sheet EHY is measured according to the equity method and is shown under Investments and security portfolio (consolidation at equity) All balance sheet items of EHY are shown in Commerzbank`s consolidated financial statement (fully consolidated) as of March 31(e) 1 P&L 31.8% of EHY s net profit is reflected in CBK s net interest income 48.9% of EHY s net profit is reflected in CBK s net interest income All P&L items of EHY are shown in Commerzbank`s consolidated financial statement (fully consolidated) starting April 1(e) 1 1 timing depending on regulatory approvals 24/40

26 Capital increase was well received by investors CBK share price performance: Nov 10, 2005 Feb 8, 2006 in EPS 2 in , , /40 Nov 17, 2005 Announcement of acquisition of Eurohypo ABO by CBK with 10% capital increase Offering price ABO completed within 2 hours >3 times oversubscribed Nov 17 Dec 15 Dec 31 Feb Dividend per share 1 recommended Shares outstanding in m Average shares outstanding 2 Calculated on av. number of shares outstanding

27 Commerzbank s challenges in Market positioning Strengthening position as the leading German commercial bank Playing an active part in consolidating the German banking market Additional Eurohypo shareholder value Strengthening our divisions Completion of acquisition Successful integration Exploring synergy potential on a joint basis Keeping strong momentum in Mittelstand and Corporates & Markets Profitability enhancement in International Corporate Banking 4. Capital management Launching hybrid capital Regaining solid Tier I ratio Rising trend for dividend payout 26/40

28 Confident for 2006 Net ROE targets 2006e > 10.0% 4.0% Major step towards our current cost of capital 9.6% 1 Above our current cost of capital Above our long-term cost capital (~10%) 1 excl. participations and impairments 27/40

29 Appendix 28/40

30 Financial Calendar 2006 February 27 By March 31 Start of roadshow on hybrid capital Acquisition of 2 nd tranche of Eurohypo May 4 Q Telephone Conference May 17 Annual General Meeting August 9 Q Conference September 21 Early November Investors Day Q Telephone Conference 29/40

31 Profitability analysis FY 2005 Private & Business Customers Asset Management Mittelstand International Corporate Banking Corporates & Markets Mortgage Banks Others & Consolidation Operating profit ( m) Regulatory capital ( m) 1, ,028 1,388 1,818 1, Operating ROE (%) Economic capital ( m) 1, ,207 1,104 1,527 1,151 1,806 RoRaC (%) Avg. RWA* ( bn) 26,8 5,9 40,5 19,8 25,4 14,4 10,8 Avg. lending volume ( bn) Net LLP per lending volume (bps) ** ** Regulatory capital defined as risk-weighted assets in each segment multiplied by 7% target BIS-Tier I ratio plus differences between book value and equity of subsidiaries Economic capital defined as aggregation of credit risk, market risk, operational risk, and business risk, each calculated on appropriate value-at-risk models at 99.95% confidence levels 30/40 * RWA including market-risk position ** without Eurohypo

32 Commerzbank Group Q1 `04 Q2 `04 Q3 `04 Q4 `04 FY 2004 Q1 `05 Q2 `05 Q3 `05 Q4 `05 FY 2005 Interest income , ,172 LLP Commission income , ,415 Hedge result Trading profit AfS result Other operating income Total revenues 1,539 1,531 1,109 1,325 5,504 1,648 1,379 1,516 1,836 6,379 Operating expenses 1,112 1,136 1,086 1,159 4,493 1,107 1,088 1,097 1,370 4,662 Operating profit , ,717 Restructuring expenses Goodwill Pre tax profit ,680 Average equity 10,207 10,219 10,276 10,330 10,258 10,097 10,073 9,755 11,015 10,235 Operating ROE (in %) CIR (in %) /40

33 Private & Business Customers Q1 `04 Q2 `04 Q3 `04 Q4 `04 FY 2004 Q1 `05 Q2 `05 Q3 `05 Q4 `05 FY 2005 Interest income , ,124 LLP Commission income , ,065 Hedge result Trading profit AfS result Other operating income Total revenues , ,001 Operating expenses , ,719 Operating profit Restructuring expenses Goodwill Pre tax profit Average equity 1,866 1,888 1,910 1,912 1,894 1,882 1,880 1,887 1,915 1,891 Operating ROE (in %) CIR (in %) /40

34 Asset Management Q1 `04 Q2 `04 Q3 `04 Q4 `04 FY 2004 Q1 `05 Q2 `05 Q3 `05 Q4 `05 FY 2005 Interest income LLP Commission income Hedge result Trading profit AfS result Other operating income Total revenues Operating expenses Operating profit Restructuring expenses Goodwill Pre tax profit Average equity Operating ROE (in %) CIR (in %) /40

35 Mittelstand Q1 `04 Q2 `04 Q3 `04 Q4 `04 FY 2004 Q1 `05 Q2 `05 Q3 `05 Q4 `05 FY 2005 Interest income , ,193 LLP Commission income Hedge result Trading profit AfS result Other operating income Total revenues , ,437 Operating expenses ,029 Operating profit Restructuring expenses Goodwill Pre tax profit Average equity 2,646 2,692 2,660 2,654 2,663 2,945 2,973 3,058 3,136 3,028 Operating ROE (in %) CIR (in %) /40

36 International Corporate Banking Q1 `04 Q2 `04 Q3 `04 Q4 `04 FY 2004 Q1 `05 Q2 `05 Q3 `05 Q4 `05 FY 2005 Interest income LLP Commission income Hedge result Trading profit AfS result Other operating income Total revenues Operating expenses Operating profit Restructuring expenses Goodwill Pre tax profit Average equity 1,363 1,399 1,318 1,268 1,337 1,251 1,339 1,436 1,526 1,388 Operating ROE (in %) CIR (in %) /40

37 Corporates & Markets Q1 `04 Q2 `04 Q3 `04 Q4 `04 FY 2004 Q1 `05 Q2 `05 Q3 `05 Q4 `05 FY 2005 Interest income LLP Commission income Hedge result Trading profit AfS result Other operating income Total revenues Operating expenses Operating profit Restructuring expenses Goodwill Pre tax profit Average equity 1,957 2,093 2,067 1,971 2,022 1,832 1,848 1,783 1,809 1,818 Operating ROE (in %) CIR (in %) /40

38 Mortgage Banks Q1 `04 Q2 `04 Q3 `04 Q4 `04 FY 2004 Q1 `05 Q2 `05 Q3 `05 Q4 `05 FY 2005 Interest income LLP Commission income Hedge result Trading profit AfS result Other operating income Total revenues Operating expenses Operating profit Restructuring expenses Goodwill Pre tax profit Average equity 1,039 1, , ,006 1,040 1,007 Operating ROE (in %) CIR (in %) /40

39 Others & Consolidation Q1 `04 Q2 `04 Q3 `04 Q4 `04 FY 2004 Q1 `05 Q2 `05 Q3 `05 Q4 `05 FY 2005 Interest income LLP Commission income Hedge result Trading profit AfS result Other operating income Total revenues Operating expenses Operating profit Restructuring expenses Goodwill Pre tax profit Average equity , Operating ROE (in %) CIR (in %) /40

40 For more information, please contact: Commerzbank Investor Relations Jürgen Ackermann Head of Investor Relations P: M: Sandra Büschken P: M: Ute Heiserer-Jäckel P: M: Simone Nuxoll P: M:

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