Investors Day. Investment Banking

Investors Day Investment Banking Mehmet Dalman Member of the Board of Managing Directors Frankfurt, September 4, 2002

Investors Day September 4, 2002 1 Contents Background 2002: First half review Future Conclusion

Investment Banking strategy Investors Day September 4, 2002 2 Phase I 1997-1999 To establish a fully integrated, profitable Equities business, in a controlled environment Phase II 2000-2002 To establish a fully integrated Securities platform, and launch an advisory business Phase III 2002- To establish a differentiated franchise integrating Commerzbank s Corporate, Retail and Investment Banking strengths

Investors Day September 4, 2002 3 Phase I 1997-1999 To establish a fully integrated, profitable Equities business, in a controlled environment Equity Sales Research ECM Origination Cash Trading Derivatives Cbk launches new Equity Initiative Frankfurt, London, NY, Tokyo Offices 1997 1998 1999 CFP integrated ECM integrated Emerging markets integrated Regional activities integrated CFP and ECM Integrated Global Equities Launched

Investors Day September 4, 2002 4 Phase I 1997-1999 Frankfurt Management Centre Management Centre Equity Research Equity Research Quant Research Quant Research ECM ECM Equity Trading Equity Trading Derivatives Trading Derivatives Trading Equity Distribution Equity Distribution Derivative Distribution Derivative Distribution Retail Distribution Retail Distribution Research Risk Marketing London Equity Research Equity Research Quant Research Quant Research ECM ECM Equity Trading Equity Trading Derivatives Trading Derivatives Trading Equity Distribution Equity Distribution Derivative Distribution Derivative Distribution Brokerage Derivatives New York Global Equity Research Global Equity Research Quant Research Quant Research ECM ECM Equity Trading Equity Trading Derivatives Trading Derivatives Trading Equity Distribution Equity Distribution Derivative Distribution Derivative Distribution Account Management Tokyo Global Equity Research Global Equity Research Quant Research Quant Research ECM ECM Equity Trading Equity Trading Asian Derivatives Asian Derivatives Trading Trading Equity Distribution Equity Distribution Derivative Distribution Derivative Distribution

Phase II: 2000-2002 Investors Day September 4, 2002 5 To establish a fully integrated Securities platform Equities Equity Derivatives Capital Markets Fixed Income FX Cbk launches new Equity Initiative Frankfurt, London, NY, Tokyo Offices opened Equity & Fixed Income Integrated Corporate Finance Integrated 1997 1998 1999 2000 2001 2002 CFP and ECM Integrated Global Equities Launched Commerzbank Securities Launched FX Integrated Integration of businesses to provide multi-asset Securities platform research, origination, trading, distribution Integrating FX, short-end rates, local markets

Investors Day September 4, 2002 6 League Table performance IPOs on European Exchanges 2000-2001, Bookrunner and joint lead, number of deals 1 Credit Suisse First Boston 2 Deutsche Bank 3 Commerzbank Securities 4 Goldman Sachs & Co 5 Morgan Stanley 6 Salomon Smith Barney 7 DZ Bank AG 8 HypoVereinsbank 9 ABN AMRO 10 UBS Warburg Souce: Capital Data Neuer Markt IPOs 2000-2001, Bookrunner and joint lead, ranked by value 1 Commerzbank Securities 2 Dresdner Kleinwort W'stein 3 DZ Bank AG 4 Goldman Sachs & Co 5 Deutsche Bank 6 Morgan Stanley 7 HypoVereinsbank 8 Westdeutsche Landesbank 9 Salomon Smith Barney 10 UBS Warburg Souce: Capital Data All Euro-denominated German Corporate Bonds 2000-2001, Bookrunner, ranked by value 1 Deutsche Bank 2 JP Morgan 3 Merrill Lynch & Co 4 Commerzbank Securities 5 Morgan Stanley 6 Dresdner Kleinwort W'stein 7 BNP Paribas 8 Salomon Smith Barney 9 Goldman Sachs & Co 10 Societe Generale Souce: Capital Data All Jumbo Pfandbriefe 2001, Bookrunner, ranked by value 1 Commerzbank Securities 2DrKW 3 Deutsche Bank 4 HypoVereinsbank 5 CDC IXIS 6 Barclays Capital 7 Citigroup/SSSB 8 DZ Bank 9 Goldman Sachs 10 Credit Agricole Souce: IFR

Investors Day September 4, 2002 7 Contents Background 2002: First half review Future Conclusion

The market environment in H1 Investors Day September 4, 2002 8 Eurostoxx 50 10y Bund 4000 3800 3600 3400 3200 3000 2800 Jan-02 Feb-02 Mar-02 Apr-02 May-02 Jun-02 109.00 108.00 107.00 106.00 105.00 104.00 Jan-02 Feb-02 Mar-02 Apr-02 May-02 Jun-02 Moody's W European Upgrades & Downgrades (number) Credit Spreads (bp) 30 20 10 0-10 -20-30 -40-50 -60-70 Q2 00 Q3 00 Q4 00 Q1 01 Q2 01 Q3 01 Q4 01 Q1 02 Q2 02 Dow ngrade Upgrade 250 200 150 100 50 0 Jan-02 Feb-02 Mar-02 Apr-02 May-02 Jun-02 BBB A AA AAA Source: Commerzbank Securities Research

Investors Day September 4, 2002 9 Financials: 2002 H1 Income 37% below 2001 H1 Direct costs 25% below 2001 H1 Allocated costs 95% above 2001 H1 Allocated costs make up 39% of total costs for 2002 H1 (EUR M) 2001 H1 2002 H1 change Income (excl co-man.) 534 339-37% Direct Costs 371 280-25% Alloc Costs 91 177 +95% Post-Tax Profit 65 (54) (inc co-managed) Capital 1,277 1,068-16%

Divisional analysis - Equities Investors Day September 4, 2002 10 Market has not recovered Business has been refocused Pan European Equities model adapted to meet market challenges Research aligned around global core sectors Eurostoxx 50 4000 3800 3600 3400 3200 3000 2800 Jan-02 Feb-02 Mar-02 Apr-02 May-02 Jun-02 Japanese business re-sized; positioned to benefit from any recovery Cost growth curtailed & costs reduced 1200 1150 1100 1050 1000 S&P 500 Pan European commissions and net performance improved 950 Jan-02 Feb-02 Mar-02 Apr-02 May-02 Jun-02

Investors Day September 4, 2002 11 Research & Extel Survey Differentiated Research Product Integrated Credit and Equity Research Quantitative expertise and Risk Management analytics 1 3 5 7 9 11 13 15 17 19 Extel 1999-2002 11th 9th 17th & "Rising Star Broker" 1999 2000 2001 2002 7th Recognition for our Research, Sales and Trading across Equities, Fixed Income and Derivatives Extel Survey 2002: Overall Pan-European Brokerage Firm 1 UBS Warburg 2 Schroder Salomon Smith Barney 3 Deutsche Bank 4 CSFB 5 Merrill Lynch International 6 Morgan Stanley 7 Commerzbank Securities 8 Goldman Sachs International 9 Dresdner Kleinwort Wasserstein 10 ABN AMRO 11 JP Morgan 12 Lehman Brothers 13 HSBC Securities 14 Cazenove 15 Credit Agricole Indosuez Chevreaux 16 ING 17 SG Securities 18 Exane 19 WestLB Panmure 20 Enskilda Securities *based upon aggregation of votes in all categories

Investors Day September 4, 2002 12 Divisional analysis - Capital Markets Capital Markets restructured for the new environment Moody's W European Upgrades & Downgrades (number) 30 20 10 New structure Equity Product Debt Product Financial Sponsors 0-10 -20-30 -40-50 -60-70 Q2 00 Q3 00 Q4 00 Q1 01 Q2 01 Q3 01 Q4 01 Q1 02 Q2 02 Dow ngrade Upgrade Sector and Country Teams Capital Structuring Re-designed to capture anticipated opportunities in corporate restructuring

Selected Transactions in H1 2002 Investors Day September 4, 2002 13 Equity Markets Joint Lead Manager of EUR111m IPO of Astaldi - A successful issue completed in difficult market conditions M&A Advised RWE on the EUR4.1bn acquisition of Transgas in the Czech Republic Debt Markets Joint Bookrunner of EUR250m 10 yr bond issue for Republic of Iceland Joint Bookrunner for Iran s debut EUR625m Eurobond issue Arranger and Lead Manager of an EUR1bn synthetic RMBS issue for Rheinhyp Joint Lead Manager of a EUR500m 10 yr Landesschatzanweisung for Free State of Bavaria Joint Bookrunner of a GBP200m 10 yr issue for GKN plc Syndicated Loans Completed first round syndication of the EUR830m Vaillant syndicated loan facility Sole Arranger EUR300m revolving credit facility for Epcos

Investors Day September 4, 2002 14 Divisional analysis - Equity Derivatives Equity Derivatives market very difficult, with flow product volumes down 85% from 2000 levels our market share is very strong, but overall levels very weak CBOE S&P100 Volatility Index 35 30 25 20 15 Jan-02 Feb-02 Mar-02 Apr-02 May-02 Jun-02 Failing investor confidence in equity markets Risk platform fully integrated 80% 70% 60% 50% 40% 30% 20% 10% Amsterdam warrant market share, July 2002 0% Commerzbank Societe Generale ING Fortis ABN

Divisional analysis - Fixed Income Investors Day September 4, 2002 15 Interest rate markets volatile, responding to equity market 109.00 108.00 10y Bund Difficult credit markets accounting revelations producing many problem corporates 107.00 106.00 105.00 104.00 Jan-02 Feb-02 Mar-02 Apr-02 May-02 Jun-02 Strong overall performance in H1 250 Credit Spreads (bp) 200 150 BBB 100 50 0 Jan-02 Feb-02 Mar-02 Apr-02 May-02 Jun-02 A AA AAA

Investors Day September 4, 2002 16 New businesses integrated from June 2002 Short-term interest rates integrated with existing rates business Local Market activities integrated into Credit business Commerz Futures Chicago integrated into global Derivatives business Foreign Exchange integrated into ComSec Credit and Equity Research integrated Fully integrated, multi-product sales force established Fully integrated risk platform

Investors Day September 4, 2002 17 Contents Background 2002: First half review Future Conclusion

Investment Banking Strategy Investors Day September 4, 2002 18 To be a leading provider of high quality risk intermediation for our clients Sovereigns Supranationals Corporates Major Investing Institutions Hedge Funds Retail leveraging corporate relationships innovation in product, research and use of technology attracting, developing and retaining the best staff in the industry Corporate Risk and Capital Structure

Corporate and Investment Banking Investors Day September 4, 2002 19 Corporate clients need both Corporate Banking and Investment Banking services Our strategy is to enhance value through a deep understanding of corporate risk and capital structure Increasing use of securitisation, derivatives Blurring of lines between lending and credit trading Managing relationships with both corporates and investors Focusing capital and credit resources to support this strategy

Corporate and Investment Banking Investors Day September 4, 2002 20 Investment Banking Corporate Banking Sector Sector Sector Sector Sector Sector Credit Management Know-how in Corporates Cross-Selling Lending and High Margin Business Risk Management Quality Credit Portfolio Sector

Investors Day September 4, 2002 21 Challenges Developments in the financial environment German financial environment Broader market backdrop equity recovery? bond markets? asset-backed markets? corporate restructuring? Internal Issues Human resources Alignment between divisions Cost-efficiency

Investors Day September 4, 2002 22 Conclusion Corporate and Investment Banking coming together We have a unique business platform A leading provider of risk intermediation Corporate structuring and restructuring Integration across asset classes Strong Retail distribution Stable management team Able to compete and win