Commerzbank Ag · XETR:CBK
Commerzbank — FY2013 Earnings Presentation
51 slides from Commerzbank's earnings presentation, Feb 13, 2014
Slide 1: CET1 fully phased-in of 9% already achieved – new targets for NCA and capital
CET1 fully phased-in of 9% already achieved – new targets for NCA and capital Analyst conference – preliminary Q4 2013 results Stephan Engels | CFO | Frankfurt | 13 February 2014
Slide 2: Full Year, Balance Sheet, Segments q-o-q
Full Year Balance Sheet Segments q-o-q Appendix: Segment reporting Stephan Engels | CFO | Frankfurt | 13 February 2014 2
Slide 3: Key Financial Facts FY 2013
Key Financial Facts FY 2013 €78m net profit under IFRS in the transition year 2013 despite €493m restructuring charges which have been fully booked in 2013 – net profit Commerzbank AG under German GAAP €166m Operating result of €725m on group-level and €1.8bn in Core Bank – operating RoE in the Core
Slide 4: Commerzbank financials at a glance
Commerzbank financials at a glance Group Q4 2012 Q3 2013 Q4 2013 FY 2012 FY 2013 Operating result (€m) -40 100 89 1,170 725 Net result (€m) 1) -726 74 64 -47 78 Core Tier 1 ratio B 2.5 (%) 12.0 12.7 13.1 12.0 13.1 Core Tier 1 ratio B 3 fully phased in (%) 7.6 8.6 9.0 7.6 9.0 Total assets (€bn) 636 5
Slide 5: Growth initiatives in the Core Bank successfully implemented
Growth initiatives in the Core Bank successfully implemented Our strategic agenda Private Customers – The new retail banking strategy › Continued high number of net new customers of ~245k in FY 2013 › New business volume in residential mortgage business of €8bn (+22% vs FY 2012) › Several new produc
Slide 6: Group net result better than previous year despite burden of restructuring charges
Group net result better than previous year despite burden of restructuring charges Full year transition, Group €m 1,170 590 725 232 87 493 232 154 78 -47 Operating Revenues LLP Costs Operating Restructuring Pre-tax profit Tax, Minorities Net result1) Net result 1) result result expenses 2013 2012 FY
Slide 7: Continued strong cost management – costs did not exceed €7.0bn
Continued strong cost management – costs did not exceed €7.0bn including investments on successful strategic realignment Costs €m 2012 2013 1,790 1,732 1,732 1,775 1,724 1,699 1,686 1,688 1,046 977 998 939 1,022 969 972 926 744 755 734 836 702 730 714 762 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 ∑ 7,029 ∑ 6,797 Pers
Slide 8: As expected moderate increase in LLP
As expected moderate increase in LLP – normalised risk provisioning trend in Core Bank, NCA benefits from lower LLP in CRE Provisions for loan losses €m 2012 2013 614 537 492 430 451 404 512 347 243 267 317 212 288 383 175 194 249 190 134 116 102 92 18 47 Q1 Q2 Q3 Q4 Q1 Q21) Q3 Q4 ∑ 1,660 ∑ 1,747 Co
Slide 9: Core Bank segments FY 2013 (1/2)
Core Bank segments FY 2013 (1/2) Revenues before LLP LLP Operating result (€m) (€m) (€m) 0% 3,342 3,350 › With new business -1% strategy stable 227 225 revenues achieved PC +14% despite ongoing 95 108 low interest rate environment FY 2012 FY 2013 FY 2012 FY 2013 FY 2012 FY 2013 -3% › After exception
Slide 10: Core Bank segments FY 2013 (2/2)
Core Bank segments FY 2013 (2/2) Revenues before LLP LLP Operating result (€m) (€m) (€m) -2% 818 802 22 › Continued strong +6% client growth, CEE 796 +13% 240 254 amongst others, 22 attracted by 105 119 new banking 218 platform FY 2012 FY 2013 FY 2012 FY 2013 FY 2012 FY 2013 Effect from sale of PSB
Slide 11: Full Year, Balance Sheet, Segments q-o-q
Full Year Balance Sheet Segments q-o-q Appendix: Segment reporting Stephan Engels | CFO | Frankfurt | 13 February 2014 11
Slide 12: Basel 2.5 Core Tier 1 ratio improved to 13.1%
Basel 2.5 Core Tier 1 ratio improved to 13.1% – total capital ratio of 19.2% Total assets RWA Core Tier 1 Total capital ratio €bn €bn capital & ratio % €bn › Total assets below › RWA reduction driven by › Capital ratio increased › Total capital ratio at a €600bn NCA run-down thanks to lower RWA comf
Slide 13: 9.0% target on CET 1 fully phased-in ratio achieved one year earlier
9.0% target on CET 1 fully phased-in ratio achieved one year earlier Basel 2.5 CT 1 and Basel III CET 1 ratios % Pro-forma 13.1 1.5 11.6 RWA increase 2.6 9.0 Capital deductions for Shortfall & Securitisations Revaluation reserve Prudent valuation DTA deduction Minority interests Capital deductions f
Slide 14: CRD4 Leverage ratio of 4.3% under phase-in and 3.3% fully phased-in
CRD4 Leverage ratio of 4.3% under phase-in and 3.3% fully phased-in CRD4 Leverage ratio % LR under phase-in LR under fully phased-in +0.2%p 4.1 4.3 +0.1%p 3.2 3.3 30 Sep 2013 31 Dec 2013 30 Sep 2013 31 Dec 2013 Stephan Engels | CFO | Frankfurt | 13 February 2014 14
Slide 15: NCA: Higher risk cluster in CRE & Ship Finance nearly halved
NCA: Higher risk cluster in the performing book of CRE & Ship Finance1) nearly halved from €14.3bn to €7.4bn in 2013 Cluster Commercial Real Estate1) Q4/13 Q4/12 Ship Finance2) Q4/13 Q4/12 EaD in €bn EaD in €bn • Bulk Carrier (Capesize/VLOC) 0.9 • Spain 3.0 0.4 higher 4.3 10.6 • Container < 2,000 TE
Slide 16: Well diversified capital market funding – limited funding needs
Well diversified capital market funding – limited funding needs Products Currencies Entities as of 31 Dec 2013 as of 31 Dec 2013 as of 31 Dec 2013 SME SCB 0.4% EUR 86% Mortgage Senior 37.4% HF1) 48% Pfandbriefe 21.9% CB AG 48% about €116bn about €116bn about €116bn Public-sector Pfandbriefe 17.5% US
Slide 17: Full Year, Balance Sheet, Segments q-o-q
Full Year Balance Sheet Segments q-o-q Appendix: Segment reporting Stephan Engels | CFO | Frankfurt | 13 February 2014 17
Slide 18: Private Customers: Third consecutive quarter with operating profit above previous year
Private Customers: Third consecutive quarter with operating profit above previous year Quarterly overview & transition Operating result, €m 137 +43% 69 54 60 1 42 16 30 35 3 25 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Revenues LLP Costs Q4 2013 Ø equity (€ bn) 3.8 Ø equity (€ bn) 4.0
Slide 19: PC divisional split
PC divisional split Filialbank – Revenues before LLP Commerz Real – Revenues before LLP €m €m 687 701 697 ▲ Revenues at the level of the previous quarter ► Revenues slightly below the ▲ Net growth of loan volume level of the previous quarter (€0.4bn) due to lower revenues in ▲ Ongoing positive devel
Slide 20: Mittelstandsbank: Stable revenues from direct customer business
Mittelstandsbank: Stable revenues from direct customer business Quarterly overview & transition Operating result, €m 487 393 -37% 385 377 347 325 84 215 33 220 10 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Revenues LLP Costs Q4 2013 Ø equity (€ bn) 5.6 Ø equity (€ bn) 6.1 Ø equity (€ bn
Slide 21: MSB divisional split
MSB divisional split Mittelstand Germany – Revenues before LLP Großkunden & International – Revenues before LLP €m €m ▲ Stable revenues from direct ▲ Stable revenues from customer customer business 365 378 388 business 305 ► Positive one-off effect in Q3 287 ▲ Slight increase of lending 232 2013 fro
Slide 22: Central & Eastern Europe: Strong operating profit and new brand mBank
Central & Eastern Europe: Strong operating profit and successful implementation of the new brand "mBank" Quarterly overview & transition Operating result, €m Effect from sale of PSB 87 +2% 15 75 63 5 10 64 59 6 7 52 52 42 72 52 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Revenues LLP Cos
Slide 23: Corporates & Markets: Performance better than expected within traditionally weak Q4
Corporates & Markets: Performance better than expected within traditionally weak Q4 Quarterly overview & transition Reported Result excl. OCS Operating result excl. OCS and net CVA/DVA1), €m result and net CVA/DVA1) 274 254 231 190 -12% 111 98 23 70 89 98 22 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q
Slide 24: Corporates & Markets divisional split
Corporates & Markets divisional split Corporate Finance – Revenues before LLPs EMC – Revenues before LLPs €m €m 221 ▲ Improved performance in 211 ▲ Strong quarter for most 184 Equity Flow and Structured product areas, in particular in Investment Products DCM Bonds and DCM Loans 119 103 94 ▲ Improved
Slide 25: Core Bank: Further significant decrease in NPL in 2013
Core Bank: Further significant decrease in NPL in 2013 and improved coverage ratios – NPL ratio below 2% LLP split €m +31% Addition to provisions -46% 249 31 134 15 PC ▲ Ongoing good portfolio quality (risk density) in Core Bank 106 102 MSB 16 41 139 ▲ LLP increase in MSB as expected – releases in C
Slide 26: NCA: EaD significantly below year-end target
NCA: EaD in NCA significantly below year-end target supported by strong market opportunities Quarterly overview & transition Operating result, €m -21% -86 -152 25 74 -271 9 -329 -387 -456 -448 -477 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Revenues LLP Costs Q4 2013 Ø equity (€ bn) 9.6
Slide 27: NCA: Again sizable asset reduction across all divisions
NCA: Again sizable asset reduction across all divisions - Ship Finance1) run-down target 2016 already achieved LLP €m ▲ Sizable asset reduction in all NCA divisions year-to-date: CRE: 35% (~€19bn); Ship Finance1): 24% (~€4.5bn); -38% PF: 14% (~€11bn) 512 Ship +30% ▲ Default portfolio q-o-q mainly re
Slide 28: Accelerated targets for NCA – portfolio expected to be €~75bn in 2016
Accelerated targets for NCA – portfolio expected to be €~75bn in 2016 NCA run-down €bn -60% -35% 289 NCA run-down since Q3 2012 25 (Investors’ Day): Original Guidance €93bn 104 › Planned Maturities, 160 Update <€90bn Redemptions & FX €~19bn 20 › Accelerated 116 New 59 14 Target €~75bn Redemptions €~
Slide 29: Outlook 2014
Outlook 2014 We will further grow business volumes in our Core Bank – nevertheless low interest rate environment and subdued corporate investment activity continue to weigh on earnings We will continue with our strategic initiatives whereby investments are funded by ongoing cost efficiencies – costs
Slide 30: Strategic Agenda: Our financial goals for 2016
Strategic Agenda: Our financial goals for 2016 Targets Investors’ Day 2012 Targets 2016 NCA run-down €93bn NEW €~75bn Basel III CET1 fully phased-in >9% (phase-in) NEW >10% CIR, Core Bank ~60% ~60% ROE, Core Bank (after tax1)) >10% >10% 1) Based on implicid tax rate Stephan Engels | CFO | Frankfurt
Slide 31: Appendix: Segment reporting
Full Year Balance Sheet Segments q-o-q Appendix: Segment reporting Stephan Engels | CFO | Frankfurt | 13 February 2014 31
Slide 32: German economy 2014 – Economy defies politics (as yet)
German economy 2014 – Economy defies politics (as yet) Current development Our expectation for 2014 Reasons for outperformance › Rising orders and improved › 2014 should turn out better than 2013 › No bubble in the housing market sentiment indicators point to an as investment will be increased and ›
Slide 33: Hedging & Valuation Adjustments
Hedging & Valuation Adjustments €m Q1 12 Q2 12 Q3 12 Q4 12 FY 12 Q1 13 Q2 13 Q3 13 Q4 13 FY 13 OCS & PC 0 -0 0 0 0 0 -0 0 -0 -0 Net CVA/DVA OCS & MSB -2 -3 -5 -1 -10 -0 -34 13 21 -1 Net CVA/DVA OCS & CEE - 7 - - 7 - -7 6 -1 -2 Net CVA/DVA OCS & C&M -159 27 -62 -140 -335 41 -20 -25 68 64 Net CVA/DVA
Slide 34: Full focus on implementation of our strategic agenda
Full focus on implementation of our strategic agenda Segment Target Target 2016 Progress towards target in Q41) Revenues per customer +10% Net new customers 1 million PC Assets under control >€300bn Net promoter score >30% Revenue growth +4% p.a. Growth in international revenues +8% p.a. MSB >50% Cr
Slide 35: Full focus on implementation of our strategic agenda
Full focus on implementation of our strategic agenda Segment Target Target 2016 Progress towards target in Q41) Revenue growth +5% p.a. CEE Loan to deposit ratio 115% Revenue growth +4% p.a. C&M Front-to-back cost efficiency €150m p.a. Maintain capital efficiency Maintain despite Basel III 1) Simpli
Slide 36: NCA: Diversified portfolio with large parts being German risk
NCA: Diversified portfolio with large parts being German risk EaD (incl. NPL) as of 31 Dec 2013, in €bn Performing 35.6 NPL Commercial 5.7 Real Estate 15.1 30.0 1.0 1.9 7.7 3.0 1.3 Sum CRE GER USA IT ES POR Rest 66.1 19.9 Public Finance 7.7 (incl. PFI1)) 9.0 5.3 23.0 1.2 Sum PF GER USA IT ES POR Res
Slide 37: NCA: Diversified portfolio of mainly long term assets
NCA: Diversified portfolio of mainly long term assets EaD (incl. NPL) per 31 Dec 2013, in €bn GER USA IT ES POR Rest Sum Commercial Performing 15.1 1.0 1.9 3.0 1.3 7.7 30.0 EaD RWA Real Estate NPL3) 2.4 0.3 0.1 1.8 0.3 0.8 5.7 35.6 22.1 Sum 17.5 1.2 2.0 4.8 1.7 8.5 35.6 GER USA IT ES POR Rest Sum FI
Slide 38: Default Portfolio (31 Dec 2013)
Default Portfolio (31 Dec 2013) Default portfolio and coverage ratios by segment €m – excluding/including GLLP Group1 15,563 88% / 94% 14,581 6,241 7,407 933 Private Customers 943 80% / 93% 877 311/445/121 Mittelstandsbank 2,655 71% / 81% 2,139 1,487 /387/265 Central & Eastern Europe 1,126 87% / 93%
Slide 39: Default portfolios CRE and Ship Finance as of 31 Dec 2013
Default portfolios CRE and Ship Finance1) as of 31 Dec 2013 31 Dec 2013 (30 Sep 2013) 31 Dec 2012 Default portfolio CRE by country | €m Total Germany Spain US Total Default volume 5,662 (6,057) 2,371 (2,496) 1,796 (1,716) 283 (365) 7,643 Loan loss provisions 1,882 (2,135) 662 (682) 718 (737) 55 (72)
Slide 40: Commerzbank Group
Commerzbank Group Q1 Q2 Q3 Q4 12M Q1 Q2 Q3 Q4 12M in € m % yoy % qoq 2012 2012 2012 2012 2012 2013 2013 2013 2013 2013 Net interest income 1,694 1,784 1,281 1,728 6,487 1,356 1,629 1,483 1,680 6,148 -2.8 13.3 Total net interest and net trading incom e 1,851 1,863 1,501 1,345 6,560 1,668 1,614 1,406
Slide 41: Core Bank
Core Bank Q1 Q2 Q3 Q4 12M Q1 Q2 Q3 Q4 12M in € m % yoy % qoq 2012 2012 2012 2012 2012 2013 2013 2013 2013 2013 Net interest income 1,474 1,597 1,155 1,520 5,746 1,186 1,447 1,424 1,569 5,626 3.2 10.2 Total net interest and net trading income 1,708 1,568 1,445 1,208 5,929 1,541 1,409 1,382 1,265 5,59
Slide 42: Private Customers
Private Customers Q1 Q2 Q3 Q4 12M Q1 Q2 Q3 Q4 12M in € m % yoy % qoq 2012 2012 2012 2012 2012 2013 2013 2013 2013 2013 Net interest income 471 449 446 460 1,826 430 444 451 446 1,771 -3.0 -1.1 Total net interest and net trading income 472 449 447 461 1,829 431 444 452 446 1,773 -3.3 -1.3 Provisions
Slide 43: Mittelstandsbank
Mittelstandsbank Q1 Q2 Q3 Q4 12M Q1 Q2 Q3 Q4 12M in € m % yoy % qoq 2012 2012 2012 2012 2012 2013 2013 2013 2013 2013 Net interest income 541 486 467 455 1,949 456 432 424 418 1,730 -8.1 -1.4 Total net interest and net trading income 529 487 454 458 1,928 457 405 457 440 1,759 -3.9 -3.7 Provisions f
Slide 44: Central & Eastern Europe
Central & Eastern Europe Q1 Q2 Q3 Q4 12M Q1 Q2 Q3 Q4 12M in € m % yoy % qoq 2012 2012 2012 2012 2012 2013 2013 2013 2013 2013 Net interest income 124 126 129 129 508 103 98 111 117 429 -9.3 5.4 Total net interest and net trading income 158 149 144 134 585 126 126 144 142 538 6.0 -1.4 Provisions for
Slide 45: Corporates & Markets
Corporates & Markets Q1 Q2 Q3 Q4 12M Q1 Q2 Q3 Q4 12M in € m % yoy % qoq 2012 2012 2012 2012 2012 2013 2013 2013 2013 2013 Net interest income 296 537 -23 441 1,251 197 554 382 685 1,818 55.3 79.3 Total net interest and net trading income 294 311 290 132 1,027 504 415 299 346 1,564 >100 15.7 Provisio
Slide 46: Non-Core Assets
Non-Core Assets Q1 Q2 Q3 Q4 12M Q1 Q2 Q3 Q4 12M in € m % yoy % qoq 2012 2012 2012 2012 2012 2013 2013 2013 2013 2013 Net interest income 184 157 126 208 675 170 182 59 111 522 -46.6 88.1 Total net interest and net trading income -31 281 56 137 443 127 205 24 113 469 -17.5 >100 Provisions for loan lo
Slide 47: Portfolio Restructuring Unit
Portfolio Restructuring Unit Q1 Q2 Q3 Q4 12M Q1 Q2 Q3 Q4 12M in € m % yoy % qoq 2012 2012 2012 2012 2012 2013 2013 2013 2013 2013 Net interest income 36 30 - - 66 - - - - - - - Total net interest and net trading income 174 14 - - 188 - - - - - - - Provisions for loan losses -16 13 - - -3 - - - - - -
Slide 48: Others & Consolidation
Others & Consolidation Q1 Q2 Q3 Q4 12M Q1 Q2 Q3 Q4 12M in € m % yoy % qoq 2012 2012 2012 2012 2012 2013 2013 2013 2013 2013 Net interest income 42 -1 136 35 212 - -81 56 -97 -122 >-100 >-100 Total net interest and net trading income 255 172 110 23 560 23 19 30 -109 -37 >-100 >-100 Provisions for loa
Slide 49: Group equity definitions
Group equity definitions Reconciliation of equity definitions Equity basis for RoE Reconciliation of equity definitions Q4 2013 12M 2013 Equity definitions in €m End of Period Average Subscribed capital 1,139 2,539 Capital reserve 15,928 13,569 Retained earnings 10,580 10,697 Silent participations S
Slide 50: For more information, please contact Commerzbank's IR team
For more information, please contact Commerzbank´ ´s IR team: Tanja Birkholz (Head of Investor Relations / Executive Management Board Member) P: +49 69 136 23854 M: tanja.birkholz@commerzbank.com Jürgen Ackermann (Europe / US) Ute Heiserer-Jäckel (Retail Investors) P: +49 69 136 22338 P: +49 69 136
Slide 51: Disclaimer
Disclaimer Investor Relations This presentation contains forward-looking statements. Forward-looking statements are statements that are not historical facts; they include, inter alia, statements about Commerzbank’s beliefs and expectations and the assumptions underlying them. These statements are ba