European Financials Conference: Navigating the Sea of Change Commerzbank Dr. Eric Strutz Chief Financial Officer Puerto Banus - Spain June 9, 2005
Chart 1 German banks suffering from sluggish German economy Total operating revenues of German private-sector banks in bn 53.4 2.9-6.0% 50.2-13.0% 43.7-17.3% Operating revenues before provisioning further down by 1.2% + 11.1% 40.1 36.1 1.6 1.0 0.8 0.1-0.1 2000 2001 2002 2003 2004 2005e Operating revenues GDP in %
Chart 2 Turnaround story of Commerzbank Gaining operating strength Clear, direct reporting lines New management impetus Asset Management: Shrink to Grow Retail Banking: Play to win Mittelstand: Move to the top Retail Banking: Grow to win Acquisition of SchmidtBank Rightsizing Securities New operating structure 2001 2002 2003 2004 2005 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Cost-cutting initiative I Loan-portfolio check Cost-cutting initiative II Sale of CAMI and Montgomery Revaluation of participation portfolio Capital increase Accelerated disposals of noncore assets Increasing reserves in key balance-sheet items Gaining financial strength
Chart 3 Implemented measures show results Operating strength Financial strength in m in m 5,475 2,350* 5,885 5,155 4,511 4,461 1,505 5.7 6.0 1,240 1,603 7.3 7.3 7.5 1,430 7.2 1,043 189 441 192 559-769 2000 2001 2002 2003 2004 Operating profit Operating expenses 2000 2001 2002 2003 2004 Q1 2005 Revaluation reserves Tier 1 ratio in % * Including 1,216m one-off from comdirect s IPO
Chart 4 Turnaround taking hold in 3 out of 4 core activities Operating profit in m Retail banking Asset management Corporate customers and institutions Securities 258 384 832 256 53 90 137 453 355 605 3 44-147 -243 13-296 2001 2002 2003 2004 2001 2002 2003 2004 2001 2002 2003 2004 2001 2002 2003 2004
Chart 5 Commerzbank with a clear strategic profile Commerzbank Private & Business Customers PCAM Asset Management Mittelstandsbank CIB International Corporate Banking Corporates & Markets #3 German Retail Bank 5m customers #1 in Online Banking #2 in Private Banking #5 German Asset Manager Quality leader in UK and France #2 Mittelstandsbank 16% market share in Germany s global trade > 40% (S)MEs run an account with CB Top 10 player in CEE #2 German Financial Institution Group Partner for 6,000 financial institutions Successful niche strategy in USA #3 Distributor of structured products (in Germany and France) #2 MLM in LBO Finance in Germany RoE 1 : 14.7% RoE: 27.8% RoE: 9.2% RoE: 9.9% RoE: 21.6% CIR: 78.5% CIR: 72.0% CIR: 56.1% CIR: 55.4% CIR: 68.0% 1 operating RoE Source: Q1 2005 figures
Chart 6 Commerzbank s main achievements 1. Strong capital base Well-capitalized balance sheet Strong Tier 1 ratio Significant increase in 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
Chart 7 Commerzbank s core objectives 1. Becoming the best German retail bank 2. Developing into the best bank for Germany s Mittelstand 3. Building on Top 10 position in CEE 4. Quality leader in products supplied to distribution platform 5. Tight cost/productivity management
Chart 8 Commerzbank uses selective acquisitions to sharpen its profile String-of-pearls acquisitions Strategic fit SchmidtBank 350,000 retail customers 70 branches 2,000 corporate customers growth synergies 9% more clients in relation to cost increase of 3% Expanding position in Northern Bavaria and Saxony BRE Bank 1m retail customers 52 branches and well established internet banking platform (retail) 23 branches (corporate) 20% of top 500 corporates run an account with BRE growth synergies Excellent access to region with high growth potential High-quality client base Building on Top 10 position in CEE
Chart 9 Germany still in early stage of national consolidation global 1. Stand-alone restructuring process 2. Stringof-pearls acquisition strategy 3. 3-5 National champions in each country 4. 3-5 European champions on a joint distribution platform 5. 3-5 Global players Germany Commerzbank US France UK Scandinavia time
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Chart 11 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 www.commerzbank.com/aktionaere/index.html.