Commerzbank Ag · XETR:CBK
Commerzbank — Q1 2017 Earnings Presentation
50 slides from Commerzbank's earnings presentation, May 9, 2017
Slide 1: Decent start into 2017 – execution of Commerzbank 4.0 on track
Decent start into 2017 – execution of Commerzbank 4.0 on track Analyst conference – Q1 2017 results Stephan Engels | CFO | Frankfurt | 09 May 2017
Slide 2: Highlights Q1 2017
Commerzbank 4.0 simple – digital – efficient Decent start into 2017 – execution of Commerzbank 4.0 on track Highlights Q1 2017 Execution of Commerzbank 4.0 going according to plan › First milestones of Commerzbank 4.0 achieved › Already 0.3m net new customers in PSBC – ahead of plan › Growth initiat
Slide 3: Commerzbank 4.0: First milestones achieved
Commerzbank 4.0 simple – digital – efficient Commerzbank 4.0: First milestones achieved Achievements Q1 2017 › Further growth initiatives started Strategy – Roll-Out of digital consumer loan offering in branches started in April – Launch of €6bn loan initiative to extend our market share with corpor
Slide 4: Expansion of Consumer Finance business in phases
Commerzbank 4.0 simple – digital – efficient Expansion of Consumer Finance business in 3 phases – new business volume increasing up to €6bn in 2020 New business volume Consumer Finance (€bn) Branch Online Point of Sale (€bn) 1 2 3 6.0 Start H2 2017 End of 2017 6th April › Digital end-to-end › Start
Slide 5: Progress of key execution indicators in line with plan
Commerzbank 4.0 simple – digital – efficient Progress of key execution indicators in line with plan Net new customers (GER) Assets under control (GER) Market share SBC1) (Wallet) Private and (m cumulated) (€bn eop) (%) 2.0 >400 8 Small 348 >345 6 0.5 5 Business 0.3 Customers Since 2017 2020 Q1 2017
Slide 6: Key financial figures at a glance
Commerzbank 4.0 simple – digital – efficient Key financial figures at a glance Group Financial Results Group Capital Operating result B3 CET1 ratio fully phased-in (€m) (% end of period) 337 314 12.0 12.3 12.5 282 Q1 2016 Q4 2016 Q1 2017 Q1 2016 Q4 2016 Q1 2017 Net result1) Leverage ratio fully phas
Slide 7: Operating result of Commerzbank divisions
Commerzbank 4.0 simple – digital – efficient Operating result of Commerzbank divisions Private and Small Business Customers Corporate Clients (€m) (€m) 361 277 280 233 250 194 Q1 2016 Q4 2016 Q1 2017 Q1 2016 Q4 2016 Q1 2017 Others & Consolidation Asset & Capital Recovery (€m) (€m) -33 -102 -97 -119
Slide 8: Revenues – exceptional revenue items
Commerzbank 4.0 simple – digital – efficient Exceptional revenue items 2016 Revenues 2017 Revenues › Hedging & valuation adjustments1) €68m › Hedging & valuation adjustments1) €90m › Extraordinary dividend EKS (PSBC) €44m Q1 › Sale of bond positions (CC) €43m €155m €90m › Hedging & valuation adjustm
Slide 9: Solid operating performance in Q1 2017
Commerzbank 4.0 simple – digital – efficient Solid operating performance in Q1 2017 Group operating result Group P&L (€m) in € m Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Revenues 2,323 2,240 2,437 2,399 2,374 429 Revenues excl. exceptional items 2,168 2,083 2,206 2,111 2,284 LLP -148 -187 -275 -290 -
Slide 10: Expenses do not yet fully reflect planned investments for 2017
Commerzbank 4.0 simple – digital – efficient Expenses do not yet fully reflect planned investments for 2017 Transition costs Q1 2016 vs. Q1 2017 Personnel expenses (€m) Operating expenses 1,893 33 49 3 10 25 1,865 930 910 963 955 Q1 2016 Investments Regulatory & Compulsory Cost Other Q1 2017 & Growt
Slide 11: Loan loss provisions in line with expectations
Commerzbank 4.0 simple – digital – efficient Loan loss provisions in line with expectations Provisions for loan losses, Group LLP divisional split (€m) in € m Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Private and Small Business Customers 23 42 40 14 33 275 290 Corporate Clients 56 72 87 -30 43 Asset &
Slide 12: Sound risk profile with NPL ratio of only 1.5%
Commerzbank 4.0 simple – digital – efficient Sound risk profile with NPL ratio of only 1.5% NPL in Group Cost of Risk2) in Group (€bn) 7.1 6.9 6.9 (bp) 21 16 17 YE 2015 YE 2016 3M 2017 YE 2015 YE 2016 3M 2017 PSBC 2.0 1.7 1.7 PSBC 12 9 9 CC 2.9 3.4 3.2 CC 5 9 8 O&C 0.1 0.0 0.0 O&C 7 - - ACR 2.2 1.8
Slide 13: Private and Small Business Customers: Positive development in underlying revenues
Commerzbank 4.0 simple – digital – efficient Private and Small Business Customers: Positive development in underlying revenues Operating result Segmental P&L (€m) in € m Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Revenues 1,195 1,232 1,214 1,176 1,168 277 294 272 o/w Private Customers 624 586 598 590 5
Slide 14: Private and Small Business Customers: Strong client and asset growth
Commerzbank 4.0 simple – digital – efficient Private and Small Business Customers: Strong client and asset growth Net new customers (GER) Assets under control (GER) Targets Loans (m cumulative) (€bn eop) Deposits Securities +1.7m +52bn 2.0 >400 338 348 >345 102 104 81 82 0.5 0.3 155 162 0.1 Q4 2016
Slide 15: Corporate Clients: Strategic realignment and stable performance
Commerzbank 4.0 simple – digital – efficient Corporate Clients: Strategic realignment and stable performance – strong demand for capital markets products Operating result Segmental P&L (€m) in € m Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Revenues 1,146 1,095 1,121 1,086 1,082 o/w Mittelstand 487 500
Slide 16: Corporate Clients: Main focus on improving RWA efficiency and customer growth
Commerzbank 4.0 simple – digital – efficient Corporate Clients: Main focus on improving RWA efficiency and customer growth Revenues/RWA1) Net new customers (%) (k cumulative) +40bp +8.0k 4.2 10.0 3.8 3.7 3.7 3.5 2.0 1.3 2016 Q1 2017 2017 2020 2016 Q1 2017 2017 2020 Customer growth leading to market
Slide 17: Further loan growth in Private and Small Business Customers
Commerzbank 4.0 simple – digital – efficient Further loan growth in Private and Small Business Customers – stable development in Corporate Clients PSBC Loan volume Corporate Clients Loan volume (€bn) Deposit volume (€bn) Deposit volume 118 122 97 99 96 97 96 98 Dec-16 Mar-17 Dec-16 Mar-17 Highlights
Slide 18: Asset & Capital Recovery: Revenue development in Q1 supported by non-recurring items
Commerzbank 4.0 simple – digital – efficient Asset & Capital Recovery: Revenue development in Q1 supported by non-recurring items Operating result Segmental P&L (€m) in € m Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Revenues -18 -24 72 183 115 Revenues excl. exceptional items -44 - -25 34 24 LLP -70 -7
Slide 19: RWA benefits from reduction in OpRisk RWA
Commerzbank 4.0 simple – digital – efficient RWA benefits from reduction in OpRisk RWA (B3 fully phased-in) development by RWA classification Market Rsik (€bn eop) Operational Risk -4bn Credit Risk 195 198 195 190 186 18 19 21 20 24 20 22 24 24 22 154 155 150 146 145 Q1 Q2 Q3 Q4 Q1 2016 2017 Highlig
Slide 20: CET1 ratio increased to 12.5%
Commerzbank 4.0 simple – digital – efficient CET1 ratio increased to 12.5% Regulatory capital (CET1 B3 fully phased-in) transition (€bn) 12.0% 12.3% 12.5% 23.4 23.4 23.3 0.0 -0.1 0.1 -0.1 0.0 Q1 2016 Q4 2016 Net profit Actuarial Currency Revaluation Others Q1 2017 gains/losses translation reserve re
Slide 21: Objectives and expectations for 2017
Commerzbank 4.0 simple – digital – efficient Objectives and expectations for 2017 FY 2017 We will further strengthen our market position and focus on the execution of Commerzbank 4.0 We keep our CET1 ratio stable ≥12% balancing out investments, P&L incl. restructuring costs, capital and RWA We keep
Slide 22: Commerzbank 4.0 simple – digital – efficient
Commerzbank 4.0 simple – digital – efficient Stephan Engels | CFO | Frankfurt | 09 May 2017 21
Slide 23: Appendix
Commerzbank 4.0 simple – digital – efficient Appendix Commerzbank Group Funding & Rating Major pillars of PSBC 24 Funding structure 31 Major pillars of CC 25 Rating overview 32 Key figures Commerzbank share 26 P&L Tables Commerzbank financials at a glance 27 Commerzbank Group 40 Hedging & valuation
Slide 24: German economy 2017 – ongoing moderate growth ahead
Commerzbank 4.0 simple – digital – efficient German economy 2017 – ongoing moderate growth ahead › After a slowdown during the summer of 2016 growth of the German economy accelerated again in Q4. Figures available so far point to a further DAX (avg. p.a.) acceleration in Q1. 10,196 12,000 9,450 10,9
Slide 25: Major pillars of the Private and Small Business Customers segment
Commerzbank 4.0 simple – digital – efficient Major pillars of the Private and Small Business Customers segment Revenues Q1 2017 › Domestic retail banking business served via ~1,000 branches and wide-ranging €0.6bn multi-channel capabilities Private Customers › ~8m private customers including private
Slide 26: Major pillars of the Corporate Clients segment
Commerzbank 4.0 simple – digital – efficient Major pillars of the Corporate Clients segment Revenues Q1 20171) › Full range of products out of ~150 branches in Germany Mittelstand (German corporates €0.5bn › German mid-sized and large corporates with sales >15m€ (as long as not listed w/ sales > €15
Slide 27: Key figures Commerzbank share
Commerzbank 4.0 simple – digital – efficient Key figures Commerzbank share Figures per share Operating result (€) EPS 1.9 1.4 0.9 0.2 0.3 0.2 FY 2015 FY 2016 3M 2017 ytd as of 31 Dec 2015 31 Dec 2016 31 Mar 2017 Number of shares issued (in m) 1,252.4 1,252.4 1,252.4 Market capitalisation (in €bn) 12
Slide 28: Commerzbank financials at a glance
Commerzbank 4.0 simple – digital – efficient Commerzbank financials at a glance Group Q1 2016 Q4 2016 Q1 2017 Operating result (€m) 282 337 314 Net result (€m)1) 169 183 217 CET1 ratio B3 phase-in (%) 13.6 13.9 13.4 CET1 ratio B3 fully phased-in (%) 12.0 12.3 12.5 Total assets (€bn) 536 480 490 RWA
Slide 29: Leverage ratio at 4.6% fully phased-in
Commerzbank 4.0 simple – digital – efficient Leverage ratio at 4.6% fully phased-in Total assets and LR exposure Total assets Leverage ratio fully phased-in (€bn) LR exposure (% eop) 536 525 4.8 4.6 480 488 490 502 4.5 Q1 2016 Q4 2016 Q1 2017 Q1 2016 Q4 2016 Q1 2017 Stephan Engels | CFO | Frankfurt
Slide 30: Hedging & Valuation adjustments
Commerzbank 4.0 simple – digital – efficient Hedging & Valuation adjustments €m Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 PSBC OCS, FVA & Net CVA/DVA -4 - -1 3 - CC OCS, FVA & Net CVA/DVA 16 51 104 1 14 O&C OCS, FVA & Net CVA/DVA 30 7 6 3 -15 ACR OCS, FVA & Net CVA/DVA 103 4 172 31 49 Group OCS, FVA & Net CVA/D
Slide 31: Significant NII potential in scenario of rising interest rates
Commerzbank 4.0 simple – digital – efficient Significant NII potential in scenario of rising interest rates 100bp parallel up-shift in rates yield curve Scenario impact on NII (16th January 2017, in %) (€m) 900-1,000 2.0 1.5 500-550 1.0 0.5 0.0 -0.5 0Y 2Y 4Y 6Y 8Y Year 1 Year 4 Highlights › Year 1 e
Slide 32: Capital markets funding activities
Commerzbank 4.0 simple – digital – efficient Capital markets funding activities Funding structure1) Funding activities (as of 31 March 2017) Q1 2017 – Notional €2.6bn Subordinated debt Subordinated Unsecured Covered 16% debt bonds bonds €0.9bn €1.2bn €0.5bn Promissory notes 15% about 49% Covered bon
Slide 33: Rating overview Commerzbank
Commerzbank 4.0 simple – digital – efficient Rating overview Commerzbank As of 09 May 2017 Bank Ratings Counterparty Rating1) A- negative A2 (cr) A- (dcr) - Deposit Rating2) A- negative A2 stable A- - Issuer Credit Rating (long-term debt) A- negative Baa1 stable BBB+ stable A stable Stand-alone Rati
Slide 34: Change in revaluation reserve due to changes in Italian credit spread
Commerzbank 4.0 simple – digital – efficient Change in revaluation reserve due to changes in Italian credit spread Movement of revaluation reserve1) Revaluation reserve - impact of Italy (€m) in Bp Credit spread – Italian sovereign bonds 76 128 89 166 -718 -798 -895 -1,001 2015 2016 Q1 2016 Q1 2017
Slide 35: IAS 19: Development of pension liabilities
Commerzbank 4.0 simple – digital – efficient IAS 19: Development of pension liabilities Cumulated actuarial gains and losses Pension Liabilities (gross) Discount rate in % 2) (€m) Cumulated OCI effect 1) 3.9 2.3 2.6 2.0 1.8 1.8 713 1,278 1,068 1,317 1,446 1,542 7,175 8,547 9,201 9,252 9,729 9,699 20
Slide 36: Exchange rate developments with limited net effect on capital
Commerzbank 4.0 simple – digital – efficient Exchange rate developments with limited net effect on capital YoY Change in FX capital position1) 144.5 10.3 +7 +2 Other 11.0 FX rates 12/16 03/17 +372 +91 GBP 9.2 EUR/ GBP 0.856 0.856 PLN EUR/ PLN 4.410 4.227 USD 33.0 -479 -15 EUR EUR/ USD 1.054 1.069 81
Slide 37: Charter rates for bulker and container surged recently
Commerzbank 4.0 simple – digital – efficient Charter rates for bulker and container surged recently; however, a sustainable recovery is not yet in sight Fleet index Bulker Fleet Charter rate index Bulker Charter Rate (%) Tanker Fleet (%) Tanker Charter Rate Container Fleet Container Charter Rate 210
Slide 38: ACR Ship Finance portfolio as of 31 March 2017
Commerzbank 4.0 simple – digital – efficient ACR Ship Finance portfolio as of 31 March 2017 31 March 2017 (31 Dec 2016) Performing portfolio SF by ship type | €m Total Container Tanker Bulker Exposure at Default 3,056 (3,511) 999 (1,116) 805 (875) 778 (912) Expected Loss 262 (288) 84 (85) 16 (12) 10
Slide 39: Residential mortgage business vs property prices
Commerzbank 4.0 simple – digital – efficient Residential mortgage business vs property prices German residential properties HAM Overall mortgage portfolio COL FRA › Growing mortgage volume with a very good risk quality: BER 12/15: EAD €62.6bn – RD1)12bp MUC 250 Germany 12/16: EAD €66.8bn – RD 10
Slide 40: Corporate Responsibility – partner for a sustainable economic development
Commerzbank 4.0 simple – digital – efficient Corporate Responsibility – partner for a sustainable economic development Selected ratings and indices Sustainable › Enhanced culture of integrity › Oekom Research: Prime-Status (C) corporate › Review of transaction on ESG since 2017 in the highest qualit
Slide 41: Commerzbank Group
Commerzbank 4.0 simple – digital – efficient Commerzbank Group Q1 Q2 Q3 Q4 FY Q1 % Q1 % Q1 €m 2016 2016 2016 2016 2016 2017 vs Q1 vs Q4 Total Revenues 2,323 2,240 2,437 2,399 9,399 2,374 2.2 -1.0 o/w Total net interest and net trading income 1,343 1,272 1,505 1,277 5,397 1,446 7.7 13.2 o/w Net commi
Slide 42: Private and Small Business Customers
Commerzbank 4.0 simple – digital – efficient Private and Small Business Customers Q1 Q2 Q3 Q4 FY Q1 % Q1 % Q1 €m 2016 2016 2016 2016 2016 2017 vs Q1 vs Q4 Total Revenues 1,195 1,232 1,214 1,176 4,817 1,168 -2.3 -0.7 o/w Net interest income 646 599 612 621 2,478 589 -8.8 -5.2 o/w Net trading income 1
Slide 43: Corporate Clients
Commerzbank 4.0 simple – digital – efficient Corporate Clients Q1 Q2 Q3 Q4 FY Q1 % Q1 % Q1 €m 2016 2016 2016 2016 2016 2017 vs Q1 vs Q4 Total Revenues 1,146 1,095 1,121 1,086 4,448 1,082 -5.6 -0.4 o/w Total net interest and net trading income 752 766 798 720 3,036 736 -2.1 2.2 o/w Net commission inc
Slide 44: Asset & Capital Recovery
Commerzbank 4.0 simple – digital – efficient Asset & Capital Recovery Q1 Q2 Q3 Q4 FY Q1 % Q1 % Q1 €m 2016 2016 2016 2016 2016 2017 vs Q1 vs Q4 Total Revenues -18 -24 72 183 213 115 >100 -37.2 o/w Net interest income 3 -49 60 273 287 80 >100 -70.7 o/w Net trading income -30 24 37 -233 -202 23 >100 >1
Slide 45: Others & Consolidation
Commerzbank 4.0 simple – digital – efficient Others & Consolidation Q1 Q2 Q3 Q4 FY Q1 % Q1 % Q1 €m 2016 2016 2016 2016 2016 2017 vs Q1 vs Q4 Total Revenues - -63 30 -46 -79 9 >100 >100 o/w Total net interest and net trading income -42 -81 -18 -111 -252 -3 92.9 97.3 o/w Net commission income -7 -9 -6
Slide 46: mBank
Commerzbank 4.0 simple – digital – efficient mBank Part of Segment Private and Small Business Customers Q1 Q2 Q3 Q4 FY Q1 % Q1 % Q1 €m 2016 2016 2016 2016 2016 2017 vs Q1 vs Q4 Total Revenues 220 273 228 231 952 241 9.4 4.1 o/w Net interest income 150 147 156 163 615 159 6.0 -2.7 o/w Net trading inc
Slide 47: Group equity composition
Commerzbank 4.0 simple – digital – efficient Group equity composition Capital Capital Capital Ratios Ratios Q4 2016 Q1 2017 Q1 2017 Q1 2017 Q1 2017 End of period End of period Average €bn €bn €bn % % Common equity tier 1 B3 capital (phase in) 26.5 25.0 CET1 ratio phase-in: 13.4% Transition adjustm
Slide 48: Glossary – Capital Allocation / RoE, RoTE & RoCET1 Calculation
Commerzbank 4.0 simple – digital – efficient Glossary – Capital Allocation / RoE, RoTE & RoCET1 Calculation › Amount of average capital allocated to business segments is calculated by multiplying the segments current YTD average Basel 3 RWA (fully phased-in) (PSBC €36.1bn, CC €102.0bn, O&C €28.3bn,
Slide 49: For more information, please contact Commerzbank's IR team
Commerzbank 4.0 simple – digital – efficient For more information, please contact Commerzbank’s IR team Christoph Wortig (Head of Investor Relations) P: +49 69 136 52668 M: christoph.wortig@commerzbank.com Institutional Investors and Financial Analysts Retail Investors Michael H. Klein Simone Nuxoll
Slide 50: Disclaimer
Disclaimer 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 based on plans, estim