cheuvreux german corporate conference commerzbank: … · 2016. 11. 21. · - efficiency increase...

CheuvreuxGerman Corporate Conference

Commerzbank: Enabling future success

Dr. Eric Strutz

Chief Financial Officer

FrankfurtJanuary 17, 2005

CHART 1

Agenda

Overview Group Strategy

New Corporates & Markets Division

Financials

Where are we going?

CHART 2

2002 2003 2004

Commerzbank successfully restructured

��Restored: Corporate financial strengthRestored: Corporate financial strengthRestored: Corporate financial strengthRestored: Corporate financial strength

Loan portfolio improved Margins increasedNon-core participations soldRetail: profitability restored – play to winAM: successfully restructured – shrink to growCorporate Bank: move to the top – kicked offCosts cut further


��Regained: Improved Core BusinessesRegained: Improved Core BusinessesRegained: Improved Core BusinessesRegained: Improved Core Businesses

�

�

�

�

�

�

�

��

�

�

Management changes implementedCosts cut rigidlyLiquidity prudently managedCapital base strengthenedRisk-weighted assets reduced


�

�

�

�

�


�

CHART 3

Strong earnings improvement in core activities –we are over-delivering on our promises Operating profit, in € m

308258

-243

53

2001 2002 2003 9m 2004

Retail banking

126

90

44

13

2001 2002 2003 9m 2004

Asset management

445355

832

453

2001 2002 2003 9m 2004

Corporate customers and institutions

-98

3

256

-2962001 2002 2003 9m 2004

Securities

Statements made by Commerzbank’s CEO Klaus-Peter Müller at AGM, May 12, 2004

Operating profit will increase by 25% in 2004

Operating profit will improve by more than 40%

Operating profit will exceed €500m

(No statement made)


CHART 4

� Retail Banking: grow to win programme for excellence and continued growth: products, marketing, branding, branches

� Acquisition of new business and retail customers, e.g. SchmidtBank

� Private Banking: Top 3 programme � com one – programme for the future

Comments on results

Growth strategy – Private Customers

+6%

+4%

-2%

+64%

n/a

+64%

1,522

-132

-1,202

188

0

188

1,618

-137

-1,173

308

0

308

Revenues

Loan loss prov.

Op. expenses

Operating profit

Goodwill amort. + extraord. items

Pre-tax profit

€ m€ m 9m2003 9m2004 Changein %

Retail Banking: grow to win programme results in growth and peer class profitability

Earnings� Higher net commission income (+9%) and net interest income

(+4%); (grow to win programme)� Operating expenses reduced even though SchmidtBank has been

integrated

From shrink to grow – StatusFocused growth programmes

operative ROE 13.8% 22.6%CIR 79.0% 72.5%

Equity allocation within Commerzbank Group

18%


CHART 5

� Net commission income up 15%� Operating expenses flat � Amortization of goodwill down from €63m to €44m � Some one-time effects in 2004� CCR/Jupiter contributing strongly

Comments on results

� Open to selective acquisitions: operational synergies, complementary products, expanded distribution

• Focused business model: asset classes, countries, distribution • Best-of-production strategy• Full leverage of synergies • Upgrade of Cominvest production & distribution

� Continuing focus on core markets and product excellence

From shrink to grow – Status

Asset Management: Higher revenues following shrink to grow

� Leverage strength and synergies of CB Asset Management Group

Further rise in profitability

+18%

n/a

+1%

+73%

-38%

n.m.

311

0

-238

73

-71

2

Revenues

Loan loss prov.

Op. expenses

Operating profit

Goodwill amort. extraord. items

Pre-tax profit

€ m 9m2003 9m2004 Changein %

367

0

-241

126

-44

82

operative ROE 14.7% 31.5%CIR 76.5% 65.7%


5%


CHART 6

Corporate Banking & Institutions set to benefit from customer-segment oriented organisation

� Operating profit 72% higher � Loan loss provisions 27% lower � Interest income flat due to smaller credit volume� Commission income and operating costs virtually unchanged

Comments on results

� Further customer segmentation & value-based performancemanagement

� “Move to the top”: Immediate action plan, EVA perspective

Organisational split and focused growth programme

+1%

-27%

+1%

+72%

-77%

+93%

1,854

-680

-916

258

-31

227

Revenues

Loan loss prov.

Op. expenses

Operating profit

Goodwill amort. extraord. items

Pre-tax profit

€ m 9m2003 9m2004 Changein %

1,869

-497

-927

445

-7

438

� Expansion in Central and Eastern European growth markets

� “Mittelstandsinitiative”: 4,276 new clients, productivity programme

� Split “Corporate Banking & Institutions”: “Mittelstandsbank”, “International Corporate Banking”, “Corporates and Markets”Operative ROE 6.6% 12.5%

CIR 49.4% 49.6%


46%


CHART 7

Securities: Rightsizing programme developed

� Income 19% lower – disappointing trading results� Operating expenses 5% lower � Restructuring expenses of €132m: pre-tax loss of €230m

Comments on results

Restructuring programme

-19%

n/a

-5%

-22%

>100%

n/a

703

0

-697

6

-34

-28

Revenues

Loan loss prov.

Op. expenses

Operating profit/loss

€ m 9m2003 9m2004 Changein %

572

-2

-668

-98

-132

-230

Restruct. exp.

Pre-tax loss � Front-office: reduction of 490 FTE

- Focusing and downsizing of CCMC, New York, close-down of ComSec, Tokyo

- Efficiency increase in other locations: reduction of FTEs and clearer focus

� Back-office: reduction of overhead and service costs (410 FTE)

- Scaling-down of non-customer-based proprietary trading

� Restructuring expenses (personnel, rental costs, IT): €132m

operative ROE 0.8% -11.1%CIR 99.1% 116.8%


12%


CHART 8

Agenda



Financials

Where are we going?

CHART 9

High earnings volatility due tonon-customer proprietary trading(dedicated proprietary-trading books)

Starting point for Commerzbank’s investment banking

Regional positioning too broad

Problem areas

Productivity gaps between locations

Stable, customer-basedbusiness:

97% of revenues in first nine months


CHART 10

Restructuring measures

490

410

900

front-office back-office total

FTE structure in front office, by location

1,275

Frankfurt 425 30

London 576 275

CCMC 118 90

ComSec 31 31

Other 125 65

reduction(approx.)

490

FTE as of 30.09.04

33%51% 50%

45%

34% 38%

12%6% 4%

10% 9% 8%

Frankfurt London New York/Tokyo Other

FTE 09/04 Income 09/04 FTE post restruct.

Reduction of FTEs: front-office, back-office, total� Trading books successfully integrated

� All portfolios valued fairly; checked by auditors� Strategic staff cuts in line with plan� Restructuring provisions evidently sufficient


CHART 11

Commerzbank’s new approach to investment-banking activities

We intend to expand in the following main products and services:� Fixed income and other debt-related products� Foreign exchange trading� Equity-related derivatives� Corporate finance and capital restructuring� Equity research, sales and trading for German clients� M&A advisory work for German corporate clients

We are completely exiting or drastically reducing:� Our dedicated proprietary trading operations� The Tokyo office and a large part of the New York office� Our pan-European equity trading operations� Most of our non-German equity research� Non-German M&A advisory� Other, small non-core businesses


CHART 12

Corporates & Markets – strategic measures

� Combination of capital-market products and core target corporatecustomers in a single division

Goal:

� Derivative products for all asset classes� Structured products� Risk-management products

� Expansion of customer-based, profitable core business of investment bank� Concentration on capital-market needs of

- Mittelstand- multinationals - private customers- institutions

� Stable, risk-reduced return

Neworganization:

Growthareas:


CHART 13

Agenda



Financials

Where are we going?

CHART 14

Revaluation reservein € m

pre-revaluation

post-revaluation

equities bonds

1,2131,035

1,2531,240

650

-258

-1,100

03/03 06/03 09/03 12/03 03/04 06/04 09/04 12/04

Tier I capital ratio above target; revaluation reserve increased again in Q3

7.4 7.3 7.27.07.1

7.87.7

7.3

6.7

5.9

6.0

31Mar

30Jun

30Sep

31Dec

31Mar

30Jun

30Sep

31Dec

31Mar

30Jun

30Sep

Tier I capital ratio (in %)*

target

2002 2003 2004

* incl. market risk position

Financials

CHART 15

Statement of comprehensive income for Commerzbank(in € m)

- 109

- 13223

23

- 92- 10178

- 76

Q3 2004

492Comprehensive income

78Change in cash flow hedge reserve

- 132Restructuring expenses

360Comprehensive income after restructuring expenses

- 43Increase in unrealized reserves for items shown at cost

58Change in currency translation reserve- 27Change in revaluation reserve

426After-tax profit, before restructuring expenses

9m 2004

Financials

CHART 16

Agenda



Financials

Where are we going?

CHART 17

927

1,321

<800850

1,084

2001 2002 2003 2004 2005p

Quality of loan portfolio continually improving

Loan-loss provisionsin € m

6,660

1,857 1,770

348 334

7,077 5,7365,506

Loan-lossprovisions

Country LLP andgeneral provision

Collateral

Non-performingloans

109.0% 117.7%

31.12.2003 30.09.2004

7,711 7,840In excess:€1,180m

252

303

238214 199

256273

Q1 03 Q2 03 Q3 03 Q4 03 Q1 04 Q2 04 Q3 04

Loan-loss provisionsin € m

Loan-loss cover ratio comfortablein € m

* downside worst case

In excess:€634m

****

Financials

CHART 18

2002 2003 2004 2005

�= completedWhere are we going?



��Restored: Corporate financial strengthRestored: Corporate financial strengthRestored: Corporate financial strengthRestored: Corporate financial strength



��Regained: Improved Core BusinessesRegained: Improved Core BusinessesRegained: Improved Core BusinessesRegained: Improved Core Businesses

�

�

�

��

�

�

��

��

Customer-segment oriented organisationRetail: product/customer initiatives – grow to winAsset Management – improve profitabilityCorp.Bk – customer-focused structure, move to the topSecurities – reduce volatility through rightsizingExpand Eastern Europe and string-of-pearls strategy acquisitions (e.g. SchmidtBank)

((((��)))) progressing: Stability and Focused growthprogressing: Stability and Focused growthprogressing: Stability and Focused growthprogressing: Stability and Focused growth

Where are we going?

CHART 19

BRE Bank (equity participation: 72.16%)� Plus: 880,00 retail customers, 60 branches, 30% market

penetration for large corporates� Major adjustment of participation portfolio in December� Equity base strengthened in the meantime� Positive results expected in retail banking 2005� Sharp upturn in BRE’s overall profits likely this year

SchmidtBank (Participation: 100%)� Plus: 360,00 retail customers, 70 branches,

2,000 corporate customers� Integration proceeding successfully

(to be completed by March 2005)

Extra growth: String-of-pearls acquisition strategy and expansion of already strong Eastern European platform

Participation in Eastern European growth in retail & wholesale areas: organic growth/ acquisitions

String-of-pearls acquisition strategy

Where are we going?

CHART 20

Commerzbank: Five pillars of our distribution platform

Private Clients

� Retail Banking

� Private Banking

� comdirect

Asset Management

� Asset Management

� Real Estate Fund Management

Mittelstands-bank

� Mittelstand Germany

� Central/Eastern Europe

� Leasing

International CorporateBanking

� Europe West

� USA, Asia, Africa

� FinancialInstitutions

Corporates & Markets

� 150-180 multinational andlarge corporates

� Securities

PCAM CIB

Commerzbank

Dr. Achim Kassow

Klaus M. Patig

Martin Blessing

Klaus M. Patig

Nicholas Teller

Where are we going?

CHART 21

Customer acquisition target already over-achieved after 9 months

605

451

3,000

4,276

70 98 155211

758

447

557

526

398

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Σ Target2004

New clients:4,276

New clients in 2004Corporates & Markets Clients

~150 C&M customers

Larger Corporates

Centralised relationship management

5 Large-Corporate Centres

Mittelstand clients

~51,000 clients

20 main branches / 159 locations

~650 clients

Domestic corporate client base*

Our target: 9,000 more clients by end-2006Achieved so far: 2004 increase well above plan

* as of end-2003

Where are we going?

CHART 22

We keep our promises!

RoE (after-tax) targets of Commerzbank

big step towards our current cost of capital

(current cost of capital) (long-term cost of capital)

2004 2006

> 8% > 10%

2005

Where are we going?

CHART 23

Position targeted for 2006

� Best German bank for private customers

� Number 1 Mittelstands bank

� Leading distribution platform in the middle of Europe

• > 5m retail customers

• 40% market penetration with German Mittelstand

• One of top 10 players in CEE

Commerzbank’s profile as of today Goals for 2006

Where are we going?

For more information, please contact:Commerzbank Investor Relations

Tel. +49 (69) 136 22 33 8

[email protected]

CHART 25Chart 18Chart 18Chart 18Chart 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 orguarantees 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.

cheuvreux german corporate conference commerzbank: … · 2016. 11. 21. · - efficiency increase...

Documents