Commerzbank Ag · XETR:CBK
Commerzbank — Q3 2011 Earnings Presentation
45 slides from Commerzbank's earnings presentation, Nov 4, 2011
Slide 1: Commerzbank – Sound performance of Core Bank weighed down by sovereign debt crisis
Commerzbank – Sound performance of Core Bank weighed down by sovereign debt crisis Analyst conference – Q3 2011 results Eric Strutz CFO Frankfurt November 4th, 2011
Slide 2: Agenda
Agenda 1 Group summary 2 Financial highlights 3 Results by division 4 Balance sheet, capital & funding 5 Conclusion and outlook 6 Appendix Eric Strutz CFO Frankfurt November 4th, 2011 1
Slide 3: Operating profit of Core Bank reached €3bn within 9 months
Operating profit of Core Bank reached €3bn within 9 months 1 MSB and CEE continued strong operating profit trend of previous quarters 2 Further impairments on Greek sovereign debt and Public Finance de-risking weighed down ABF 3 RWA almost flat q-o-q at €244bn, Core Tier 1 ratio stands at 9.4% 4 Bro
Slide 4: 9M operating profit of the Core Bank more than doubled
9M operating profit of the Core Bank more than doubled Group Core Bank** 9M Q3 Q3 9M 9M in € m Q3 2010 Q2 2011 Q3 2011 2011 2010 2011 2010 2011 Revenues before LLP 2,922 2,363 1,594 7,573 2,341 2,903 8,072 9,008 LLP -621 -278 -413 -1,009 -126 -176 -680 -302 Operating expenses 2,185 2,030 2,036 6,220
Slide 5: Agenda
Agenda 1 Group summary 2 Financial highlights 3 Results by division 4 Balance sheet, capital & funding 5 Conclusion and outlook 6 Appendix Eric Strutz CFO Frankfurt November 4th, 2011 4
Slide 6: 9M revenues before LLP in the Core Bank increased by €1bn (+12%)
9M revenues before LLP in the Core Bank increased by €1bn (+12%) Revenues before LLP in € m 9,008 8,072 9,656 Group 7,573 2,922 1,594 Q3 10 Q3 11 9M 10 9M 11 Core Bank* 581 1,584 2,903 ABF 2,341 & PRU -1,309 -1,435 Q3 10 Q3 11 9M 10 9M 11 Q3 10 Q3 11 9M 10 9M 11 * incl. Others & Consolidations Eric
Slide 7: Further reduction of LLP guidance for FY2011
Further reduction of LLP guidance for FY2011 Provisions for loan losses Moderate LLP level in Core Bank in € m LLP in ABF still on high level, but significantly down on previous year Guidance FY2011: LLP <€1.7bn 644 639 621 595 347 382 413 €798m impairment on Greek sovereign 495 422 318 278 bonds bo
Slide 8: Overall cost base flat q-o-q, but down y-o-y by 7%
Overall cost base flat q-o-q, but down y-o-y by 7% Operating expenses Personnel cost down q-o-q by €23m in € m Other expenses up q-o-q by €29m due 2,209 2,228 2,185 2,164 119 145 61 2,154 2,030 2,036 to accelerated merger of branch pairs 146 70 59 34 CIR in Core Bank at 65% (Q3) Cost target for Road
Slide 9: Operating profit and Net profit
Operating profit and Net profit Operating profit Impairment on Greek sovereign bonds in € m & PF de-risking 76 Operating profit of -€855m in Q3 2011 1,219 912 851 695 683 Tax benefit of €191m 396 205 -153 -89 -75 Minorities of €23m -427 -857 Net profit of -€687m* 9M 2011 EPS of €0,11** -1,706 NAV pe
Slide 10: Agenda
Agenda 1 Group summary 2 Financial highlights 3 Results by division 4 Balance sheet, capital & funding 5 Conclusion and outlook 6 Appendix Eric Strutz CFO Frankfurt November 4th, 2011 9
Slide 11: Core Bank with significantly improved result
Core Bank with significantly improved result Operating profit in € m 266 Private Customers benefits from lower costs 60 9M 10 9M 11 Mittelstandsbank continues to generate strong results 1,132 1,256 9M 10 9M 11 269 Central & Eastern Europe continues positive operating trend -18 9M 10 9M 11 Corporates
Slide 12: Private Customers remains stable despite challenging markets
Private Customers remains stable despite challenging markets Operating profit P&L at a glance in € m 116 in € m Q3 10 Q2 11 Q3 11 9M 10 9M 11 79 71 Revenues before LLP 963 959 959 2,961 2,963 LLP -64 -35 -34 -200 -110 23 24 13 Operating expenses 875 845 854 2,701 2,587 -13 Operating profit 24 79 71
Slide 13: Mittelstandsbank continues to generate strong results
Mittelstandsbank continues to generate strong results Operating profit P&L at a glance in € m 498 in € m Q3 10 Q2 11 Q3 11 9M 10 9M 11 466 430 414 388 344 Revenues before LLP 727 834 783 2,389 2,421 314 LLP 69 25 -51 -186 -34 Operating expenses 366 361 388 1,071 1,131 Operating profit 430 498 344 1,
Slide 14: Central & Eastern Europe continues positive revenue growth
Central & Eastern Europe continues positive revenue growth Operating profit P&L at a glance in € m 99 92 in € m Q3 10 Q2 11 Q3 11 9M 10 9M 11 78 71 Revenues before LLP 249 253 267 722 772 LLP -127 -6 -32 -313 -68 6 7 Operating expenses 153 148 143 427 435 -31 Operating profit -31 99 92 -18 269 Q1 Q2
Slide 15: C&M with comparably resilient business model in difficult markets
C&M with comparably resilient business model in difficult markets Operating profit P&L at a glance in € m 333 in € m Q3 10 Q2 11 Q3 11 9M 10 9M 11 282 240 Revenues before LLP 566 711 447 1,794 1,837 224 LLP -6 -31 -59 13 -90 108 121 Operating expenses 439 398 353 1,245 1,190 35 Operating profit 121
Slide 16: Corporates & Markets divisional split
Corporates & Markets divisional split Corporates - Operating Revenues incl. LLP 475 › Lower primary market activities of customers in Q3 381 332 281 245 272 › DCM and ECM reduced, but healthy pipeline remains intact 85 once market re-opens › YTD 9M 2011 benefiting from exceptional large Q1 10 Q2 10
Slide 17: Others & Consolidation
Others & Consolidation Operating profit P&L at a glance 371 in € m 309 in € m Q3 10 Q2 11 Q3 11 9M 10 9M 11 Revenues before LLP -164 73 447 206 1,015 19 LLP 2 -1 0 6 0 -65 -46 -120 Operating expenses 177 118 138 652 381 -339 Operating profit -339 -46 309 -440 634 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2010 2011 Q3 10
Slide 18: ABF & PRU
ABF & PRU Operating profit in € m -736 Asset Based Finance weighed down by impairment on -2,553 Greece and further de-risking in Public Finance 9M 10 9M 11 570 Portfolio Restructuring Unit impacted by increased CDAs -85 9M 10 9M 11 Eric Strutz CFO Frankfurt November 4th, 2011 17
Slide 19: Asset Based Finance weighed down by impairment on Greece and further de-risking in Public Finance
Asset Based Finance weighed down by impairment on Greece and further de-risking in Public Finance Operating profit P&L at a glance in € m in € m Q3 10 Q2 11 Q3 11 9M 10 9M 11 -85 -138 -248 -403 Revenues before LLP 234 -544 -1,097 879 -1,384 -532 LLP -493 -233 -254 -1,172 -728 -921 Operating expenses
Slide 20: Portfolio reduction in Asset Based Finance
Portfolio reduction in Asset Based Finance PF portfolio development (EaD in € bn)1 -40% › Overall GIIPS sovereign exposure reduced by >20% 156 within 9M 109 › Greek bond exposure halved given impairments 98 93 Dec Dec Jun Sep 2008 2010 2011 2011 GIIPS sovereign exposure (EaD1) in €bn Dec 10 Mar 11 J
Slide 21: Portfolio Restructuring Unit impacted by increased CDAs
Portfolio Restructuring Unit impacted by increased CDAs Operating profit P&L at a glance in € m 314 in € m Q3 10 Q2 11 Q3 11 9M 10 9M 11 161 105 Revenues before LLP 347 77 -212 705 -51 95 63 64 LLP -2 3 17 -52 21 Operating expenses 31 16 17 83 55 -212 Operating profit 314 64 -212 570 -85 Q1 Q2 Q3 Q4
Slide 22: Agenda
Agenda 1 Group summary 2 Financial highlights 3 Results by division 4 Balance sheet, capital & funding 5 Conclusion and Outlook 6 Appendix Eric Strutz CFO Frankfurt November 4th, 2011 21
Slide 23: M-t-m effects drives B/S increase q-o-q
M-t-m effects drives B/S increase q-o-q Total Assets RWA Core Tier 1 and Tier 1 ratio in € bn in € bn in % Increase since June mainly due to Ongoing active management in Equity T1 ratio per Sep 2011 m-t-m effects in derivatives reducing RWA at 8.6% -13% 11.9 848 11.2 11.0 754 738 9.9 9.0 -13% 280 26
Slide 24: Impact of Basel III compensated by active management – base case RWA target <€265bn
Impact of Basel III compensated by active management – base case* RWA target <€265bn RWA (in € bn) 2012 – 2015 Comments 1 2 ≤280 1 Accelerated phase-out of non-core ~16 ~260 ≤265 activities in ~ 20 ~30 ≤250 244 ~15 – ABF through reduction of prolongation rate and natural portfolio wind-down – PRU th
Slide 25: Broad range of measures to meet capital requirements of the EU summit
Broad range of measures to meet capital requirements of the EU summit Volume reduction by temporary Portfolio sales i.e. project cease of new business without finance and specialised lending connectivity to Germany and Poland Active run down of Public Finance in order to reduce Securitizations as we
Slide 26: Funding need until end 2012 in a range of €6–8 bn
Funding need until end 2012 in a range of €6–8 bn Funding plan 2012 Due to continued balance sheet reduction in € bn maturing capital markets liabilities will not have ~€30bn ~€20bn to be fully replaced in 2012 Unsecured funding needs will be covered via private placements into Commerzbank’s ~€15bn
Slide 27: Agenda
Agenda 1 Group summary 2 Financial highlights 3 Results by division 4 Balance sheet, capital & funding 5 Conclusion and outlook 6 Appendix Eric Strutz CFO Frankfurt November 4th, 2011 26
Slide 28: Conclusion and Outlook
Conclusion and Outlook Ongoing high market uncertainty following the sovereign debt crisis will provide further challenges Performance of ABF dependent on further development of the European debt crisis Active management of capital to meet new regulatory requirements Continued focus on reducing non-
Slide 29: Agenda
Agenda 1 Group summary 2 Financial highlights 3 Results by division 4 Capital & Funding 5 Conclusion and Outlook 6 Appendix Eric Strutz CFO Frankfurt November 4th, 2011 28
Slide 30: Germany will still perform better than the Eurozone
Germany will still perform better than the Eurozone Reasons for outperformance Current development 2012 expectation No bubbles in the housing market › German economy still in an › Significantly lower growth ahead upswing, but sentiment indicators › Biggest recession risk is a Low level of private se
Slide 31: PRU Structured Credit by Business Segment - September 2011
PRU Structured Credit by Business Segment - September 2011 Breakdown by asset and rating classes Details & Outlook • The economic outlook is dependent upon detailed AAA 10% resolution of European debt crisis and is key to market recovery AA 19% €12.0bn A 24% • Asset fundamentals are stable, however
Slide 32: Default Portfolio (Q3 2011)
Default Portfolio (Q3 2011) Default portfolio and coverage ratios by segment €m – excluding/including GLLP Group1 20,100 85%/92% 18,398 7,998 9,162 1,238 PC 1,584 79%/95% 1,508 536 / 718 / 254 MSB 3,056 72%/83% 2,532 1,630 583 318 CEE 2,185 99%/104% 2,279 1,082/1 ,076/ 120 C&M 2,117 37%/41% 867 705
Slide 33: Loan to Value figures in the CRE business (Q3 2011)
Loan to Value figures in the CRE business (Q3 2011) Loan to Value – UK 1 Loan to Value – Spain 1 stratified representation stratified representation EaD UK EaD Spain 2 % (3 % ) total total >100 % >100 % 1 % (1 % ) €7bn €4bn 80 % –100 % 4 % (4 % ) 80 % –100 % 2 % (4 % ) 60 % –80 % 10 % (10 % ) 60 % –
Slide 34: Appendix: Segment reporting
Appendix: Segment reporting Eric Strutz CFO Frankfurt November 4th, 2011 33
Slide 35: Commerzbank Group
Commerzbank Group Q1 Q2 Q3 9M Q4 Q1 Q2 Q3 9M in € m 2010 2010 2010 2010 2010 2011 2011 2011 2011 Net interest income 1,886 1,853 1,633 5,372 1,682 1,727 1,790 1,589 5,106 Provisions for loan losses -644 -639 -621 -1,904 -595 -318 -278 -413 -1,009 Net interest income after provisions 1,242 1,214 1,01
Slide 36: Private Customers
Private Customers Q1 Q2 Q3 9M Q4 Q1 Q2 Q3 9M in € m 2010 2010 2010 2010 2010 2011 2011 2011 2011 Net interest income 489 486 500 1,475 507 492 514 497 1,503 Provisions for loan losses -66 -70 -64 -200 -46 -41 -35 -34 -110 Net interest income after provisions 423 416 436 1,275 461 451 479 463 1,393 N
Slide 37: Mittelstandsbank
Mittelstandsbank Q1 Q2 Q3 9M Q4 Q1 Q2 Q3 9M in € m 2010 2010 2010 2010 2010 2011 2011 2011 2011 Net interest income 523 553 482 1,558 523 514 585 527 1,626 Provisions for loan losses -161 -94 69 -186 -93 -8 25 -51 -34 Net interest income after provisions 362 459 551 1,372 430 506 610 476 1,592 Net c
Slide 38: Central & Eastern Europe
Central & Eastern Europe Q1 Q2 Q3 9M Q4 Q1 Q2 Q3 9M in € m 2010 2010 2010 2010 2010 2011 2011 2011 2011 Net interest income 159 161 164 484 190 157 166 171 494 Provisions for loan losses -94 -92 -127 -313 -48 -30 -6 -32 -68 Net interest income after provisions 65 69 37 171 142 127 160 139 426 Net co
Slide 39: Corporates & Markets
Corporates & Markets Q1 Q2 Q3 9M Q4 Q1 Q2 Q3 9M in € m 2010 2010 2010 2010 2010 2011 2011 2011 2011 Net interest income 208 198 141 547 220 160 226 141 527 Provisions for loan losses 19 0 -6 13 14 0 -31 -59 -90 Net interest income after provisions 227 198 135 560 234 160 195 82 437 Net commission in
Slide 40: Asset Based Finance
Asset Based Finance Q1 Q2 Q3 9M Q4 Q1 Q2 Q3 9M in € m 2010 2010 2010 2010 2010 2011 2011 2011 2011 Net interest income 298 320 283 901 261 296 256 240 792 Provisions for loan losses -325 -354 -493 -1,172 -412 -241 -233 -254 -728 Net interest income after provisions -27 -34 -210 -271 -151 55 23 -14 6
Slide 41: Portfolio Restructuring Unit
Portfolio Restructuring Unit Q1 Q2 Q3 9M Q4 Q1 Q2 Q3 9M in € m 2010 2010 2010 2010 2010 2011 2011 2011 2011 Net interest income 23 10 29 62 20 5 13 7 25 Provisions for loan losses -22 -28 -2 -52 -10 1 3 17 21 Net interest income after provisions 1 -18 27 10 10 6 16 24 46 Net commission income -3 7 2
Slide 42: Others & Consolidation
Others & Consolidation Q1 Q2 Q3 9M Q4 Q1 Q2 Q3 9M in € m 2010 2010 2010 2010 2010 2011 2011 2011 2011 Net interest income 186 125 34 345 -39 103 30 6 139 Provisions for loan losses 5 -1 2 6 -0 1 -1 -0 -0 Net interest income after provisions 191 124 36 351 -39 104 29 6 139 Net commission income -29 -
Slide 43: Group equity definitions
Group equity definitions Reconciliation of equity definitions Equity basis for RoE Reconciliation of equity definitions 9M 2011 End of Equity definitions in € m Average Period Subscribed capital 5,113 4,005 Capital reserve 10,923 6,000 Retained earnings 8,412 9,022 Silent participations SoFFin / All
Slide 44: For more information, please contact Commerzbank's IR team
For more information, please contact Commerzbank´s IR team: Tanja Birkholz (Executive Management Board Member Investor Relations) ir@commerzbank.com P: +49 69 136 23854 www.ir.commerzbank.com M: tanja.birkholz@commerzbank.com Jürgen Ackermann (Head of Investor Relations) P: +49 69 136 22338 M: juerg
Slide 45: Disclaimer
Disclaimer Investor Relations This presentation contains forward-looking statements. Forward-looking statements are statements that are not historical facts; they include statements about Commerzbank’s beliefs and expectations and the assumptions underlying them. These statements are based on plans,