Commerzbank AG · XETR:CBK
Commerzbank — Q2 2008 Earnings Presentation
40 slides from Commerzbank's earnings presentation, Aug 6, 2008
Slide 1: Analyst conference – Q2 2008 results
Commerzbank Analyst conference – Q2 2008 results Dr. Eric Strutz Chief Financial Officer Frankfurt / August 6th, 2008
Slide 2: Commerzbank shows a strong operating performance
Commerzbank shows a strong operating performance Q2 2008 vs. Q2 07 vs. Q1 08 Revenues1 in € m 2,271 -10.9% +17.5% Operating profit in € m 484 -55.0% +11.3% Clean operating profit in € m 908 +19.0% +56.3% Net profit in € m 817 +6.4% +191.8% Operating RoE in % 13.3 -18.6ppts +1.3ppts 1 before LLP CBK
Slide 3: Strong underlying performance
Strong underlying perfomance Op. profit Clean Op. profit Q1‘08 Q2‘08 Q1‘08 Q2‘08 147 157 147 157 PBC Best quarter ever, client base significantly up 245 245 232 232 MSB Sustainable value driver within the Group 123 92 85 72 CEE Strong underlying profitability trend continued in Q2 132 172 Strong tra
Slide 4: Growth initiatives are paying off
Growth initiatives are paying off Almost 1 m retail clients gained in H1 08 Focus on deposits to optimize funding Number of retail clients Deposit volume in `000 in € bn +23% +34% 8,467 7,544 278 88.6 7,135 6,873 81.1 2,423 2,045 1,826 72.6 1,634 65.9 5,499 5,766 5,239 5,309 Dec `06 Jun `07 Dec `07
Slide 5: One of the best NII results ever
One of the best NII results ever All divisions generated strong NII Net interest income in € m 1,157 results 1,056 1,079 NII up 15% q-o-q and 17% y-o-y 992 997 977 Improved PFT result [+€76m q-o-q] 1,176 Higher income due to dividend season 1,045 1,003 999 973 1,022 [+€39m q-o-q] First time consolid
Slide 6: Commission income consistently strong
Commission income consistently strong Commission income increased by Commission income in € m 5% y-o-y (adjusted for IAM) 847 810 Q-o-q decline of 2% mainly due to 96 758 735 CRE due to less underwriting in 123 17 751 73 718 732 717 new business 684 688 Income from securities transactions stable des
Slide 7: Excellent trading profit in the face of market environment
Excellent trading profit in the face of market environment Trading profit in € m 381 375 Excellent trading profit in C&M 11 74 VaR slightly lower q-o-q at €8.0m 301 2 despite increased market volatilities 364 The client-driven business model has 307 -128 -62 proven to be successful 299 -57 235 Posit
Slide 8: ABS portfolio reduced by over €9bn within last 12 months
ABS portfolio reduced by over €9bn within last 12 months ABS Portfolio – Breakdown of Products Portfolio details in € bn 22.4 Trading book further reduced by €200m q-o-q -41% US RMBS impaired by roughly 50% 13.2 US Housing CDOs nearly fully impaired ABS portfolio significantly reduced and de-risked
Slide 9: LLP affected by one-off charge
LLP affected by one-off charge One-off LLP in CRE of €250m due Loan loss provisions in € m to a loan initially designated for syndication 414 Loan loss provisions in all other divisions unchanged or below Q1 - LLP increase in CEE due to Bank Forum integration LLP guidance for H2 2008: max. €350m 175
Slide 10: Disciplined cost management
Disciplined cost management Operating expenses up less than 4% or Operating expenses in € m €51m q-o-q P erso nnel – Final costs linked to Essenhyp Depreciatio n 552 integration according to plan [+€35m] 746 Others 75 – First-time consolidation Bank Forum [+€25m] 1,399 1,360 1,324 1,283 1,322 1,373
Slide 11: Clean operating profit at outstanding €908m
Clean operating profit at outstanding €908m Operating profit Operating profit in € m strongly influenced by one-off effects 312 149 Strong underlying -424 business boosted operating performance 1075 -146 908 -180 Adjusted for one-off 908 759 763 Clean operating profit 541 -278 581 effects, clean res
Slide 12: Net profit amplified by capitalization of tax loss carry forwards
Net profit amplified by capitalization of tax loss carry forwards Net profit almost tripled [q-o-q] Operating profit & Net profit in € m 1,075 Net RoE at 24.4% According to IAS 12 CBK had to 908 capitalize tax loss carry forwards of 817 768 €500m 609 Tax guidance unchanged at 20% to 25%, excl. tax o
Slide 13: Commerzbank is well capitalized
Commerzbank is well capitalized Tier 1 ratio Tier I target range Basel I Basel II RWA enhanced by 3% q-o-q based on growth (esp. in CEE) 7.5 7.4 Tier 1 ratio at 7.4% 6.9 6.9 Liquidity ratio according to 6.6 regulation at 1.21 (far above internal target range) Jun'07 Sep'07 Dec'07 Mar'07 Jun '08 Jun'
Slide 14: Strong underlying performance across all divisions
Strong underlying performance across all divisions Operating profit, in € m Private & Business Customers Mittelstandsbank Central & Eastern Europe 385 285 232 245 145 147 157 189 205 200 104 85 123 67 77 92 64 73 59 85 72 Q1 Q2 Q3 Q4 Q1 Q2 Q1 Q2 Q3 Q4 Q1 Q2 Q1 Q2 Q3 Q4 Q1 Q2 2007 2008 2007 2008 2007
Slide 15: Private & Business Customers – a record quarter
Private & Business Customers – a record quarter Operating profit Main P&L items in € m in € m Q2`07 Q1`08 Q2`08 H1`07 H1`08 Net interest income 318 329 343 637 672 145 147 157 Risk provisioning -66 -40 -40 -139 -80 104 85 67 Commission income 380 395 405 810 800 Trading profit 1 -1 -4 2 -5 Q1 Q2 Q3
Slide 16: Mittelstand – a sustainable value driver
Mittelstand – a sustainable value driver Operating profit Main P&L items in € m 385 in € m Q2`07 Q1`08 Q2`08 H1`07 H1`08 285 232 245 Net interest income 263 289 299 514 588 189 205 200 Risk provisioning -9 -11 -8 -28 -19 Commission income 132 145 144 276 289 Trading profit 0 5 -2 1 3 Q1 Q2 Q3 Q4 Q1
Slide 17: CEE – the growth story continued
CEE – the growth story continued Operating profit Main P&L items in € m in € m Q2`07 Q1`08 Q2`08 H1`07 H1`08 Net interest income 97 122 151 179 273 123 Risk provisioning -16 -17 -26 -27 -43 77 92 64 73 59 85 72 Commission income 43 47 56 86 103 Trading profit 30 34 35 50 69 Q1 Q2 Q3 Q4 Q1 Q2 Net inv
Slide 18: Corporates & Markets – with excellent trading profit
Corporates & Markets – with excellent trading profit Operating profit Main P&L items in € m 209 174 172 in € m Q2`07 Q1`08 Q2`08 H1`07 H1`08 110 132 Net interest income 96 113 105 197 218 7 Risk provisioning -10 -52 -42 -23 -94 -16 Commission income 61 43 35 106 78 -50 Trading profit 327 220 299 616
Slide 19: CRE – strongly influenced by follow-on effects of financial crisis
CRE – strongly influenced by follow-on effects of financial crisis Operating profit Main P&L items in € m 212 164 153 141 147 in € m Q2`07 Q1`08 Q2`08 H1`07 H1`08 106 Net interest income 211 210 215 422 425 84 46 57 Risk provisioning -39 -50 -298 -78 -348 Commission income 95 108 95 195 203 Trading
Slide 20: Commercial real estate portfolio is well-diversified and robust
Commercial real estate portfolio is well-diversified and robust Total CRE EaD by region (as of 30/06/2008) Loan to Value (as of 30/06/2008) 1) 2) 3) (layered representation) LTV Band > 100% Spain 7% UK 10% 80% - 100% USA 7% USA 60% - 80% 12% Germany 48% 40% - 60% 27% €83.0bn 20% - 40% 30% 0% - 20% 3
Slide 21: PFT – improved performance in Q2
PFT – improved performance in Q2 Operating profit Main P&L items in € m 77 61 in € m Q2`07 Q1`08 Q2`08 H1`07 H1`08 18 Net interest income 11 -57 19 79 -38 26 Risk provisioning -7 -5 0 -12 -5 -53 -74 Commission income -7 -4 -4 -13 -8 -132 -144 Trading profit 2 -83 44 -32 -39 Net investment income 43
Slide 22: Outlook
Outlook 1. Strong performance of PBC, Mittelstand and CEE franchise 2. Well positioned for further selective growth in Germany and CEE 3. Disciplined M&A approach to add value for shareholders 4. Maintaining outlook for 2008 given in May 5. Commerzbank remains on track to achieve 2010 targets Dr. Er
Slide 23: Investors' Day on September 24th, 2008
Investors‘ Day on September 24th, 2008 09.00 – 09.40 a.m. Martin Blessing: Strategy of Commerzbank Group 09.45 – 10.25 a.m. Markus Beumer: Mittelstandsbank 11.00 – 11.55 a.m. Michael Reuther: Public Finance & Treasury and C&M 12.00 – 12.40 p.m. Achim Kassow: Private & Business Customers 02.00 – 02.4
Slide 24: Appendix
Appendix 1 Dr. Eric Strutz Chief Financial Officer Frankfurt / August 6th, 2008 23
Slide 25: CRE: rating structure total
CRE: rating structure total in € bn Investment Grade Non-Investment Grade 14 12 10 8 6 4 2 1.0 1.2 1.4 1.6 1.8 2.0 2.2 2.4 2.6 2.8 3.0 3.2 3.4 3.6 3.8 4.0 4.2 4.4 4.6 4.8 5.0 5.2 5.4 5.6 5.8 30/06/2008 30/06/2007 Basis: internal rating system Dr. Eric Strutz Chief Financial Officer Frankfurt / A
Slide 26: CRE: rating structure UK
CRE: rating structure UK in € bn Investment Grade Non-Investment Grade 2.0 1.5 1.0 0.5 0.0 1.0 1.2 1.4 1.6 1.8 2.0 2.2 2.4 2.6 2.8 3.0 3.2 3.4 3.6 3.8 4.0 4.2 4.4 4.6 4.8 5.0 5.2 5.4 5.6 5.8 Basis: internal rating system 30/06/2008 30/06/2007 Dr. Eric Strutz Chief Financial Officer Frankfurt / A
Slide 27: CRE: rating structure Spain
CRE: rating structure Spain in € bn Investment Grade Non-Investment Grade 2.0 1.5 1.0 0.5 0.0 1.0 1.2 1.4 1.6 1.8 2.0 2.2 2.4 2.6 2.8 3.0 3.2 3.4 3.6 3.8 4.0 4.2 4.4 4.6 4.8 5.0 5.2 5.4 5.6 5.8 Basis: internal rating system 30/06/2008 30/06/2007 Dr. Eric Strutz Chief Financial Officer Frankfurt
Slide 28: CRE: rating structure USA
CRE: rating structure USA in € bn Investment Grade Non-Investment Grade 2.5 2.0 1.5 1.0 0.5 0.0 1.0 1.2 1.4 1.6 1.8 2.0 2.2 2.4 2.6 2.8 3.0 3.2 3.4 3.6 3.8 4.0 4.2 4.4 4.6 4.8 5.0 5.2 5.4 5.6 5.8 Basis: internal rating system 30/06/2008 30/06/2007 Dr. Eric Strutz Chief Financial Officer Frankfur
Slide 29: Appendix
Appendix 2 Dr. Eric Strutz Chief Financial Officer Frankfurt / August 6th, 2008 28
Slide 30: Commerzbank Group
Commerzbank Group Q1 2007 Q2 2007 H1 2007 Q3 2007 Q4 2007 FY 2007 Q1 2008 Q2 2008 H1 2008 in € m Net interest income 1,045 1,003 2,048 999 973 4,020 1,022 1,176 2,198 Provision f or possible loan losses -160 -151 -311 -107 -61 -479 -175 -414 -589 Net interest income af ter provisioning 885 852 1,737
Slide 31: Private and Business Customers
Private and Business Customers Q1 2007 Q2 2007 H1 2007 Q3 2007 Q4 2007 FY 2007 Q1 2008 Q2 2008 H1 2008 in € m Net interest income 319 318 637 319 340 1,296 329 343 672 Provision f or possible loan losses -73 -66 -139 -58 -43 -240 -40 -40 -80 Net interest income af ter provisioning 246 252 498 261 29
Slide 32: Mittelstand
Mittelstand Q1 2007 Q2 2007 H1 2007 Q3 2007 Q4 2007 FY 2007 Q1 2008 Q2 2008 H1 2008 in € m Net interest income 250 263 514 278 290 1,082 289 299 588 Provision f or possible loan losses -19 -9 -28 48 48 68 -11 -8 -19 Net interest income af ter provisioning 231 254 486 326 338 1,150 278 291 569 Net co
Slide 33: Central and Eastern Europe
Central and Eastern Europe Q1 2007 Q2 2007 H1 2007 Q3 2007 Q4 2007 FY 2007 Q1 2008 Q2 2008 H1 2008 in € m Net interest income 83 97 179 103 113 395 122 151 273 Provision f or possible loan losses -11 -16 -27 -10 -19 -56 -17 -26 -43 Net interest income af ter provisioning 72 81 152 93 94 339 105 125
Slide 34: Corporates & Markets
Corporates & Markets Q1 2007 Q2 2007 H1 2007 Q3 2007 Q4 2007 FY 2007 Q1 2008 Q2 2008 H1 2008 in € m Net interest income 101 96 197 78 98 373 113 105 218 Provision f or possible loan losses -13 -10 -23 -57 -55 -135 -52 -42 -94 Net interest income af ter provisioning 88 86 174 21 43 238 61 63 124 Net
Slide 35: Commercial Real Estate
Commercial Real Estate Q1 2007 Q2 2007 H1 2007 Q3 2007 Q4 2007 FY 2007 Q1 2008 Q2 2008 H1 2008 in € m Net interest income 211 211 422 220 216 858 210 215 425 Provision f or possible loan losses -39 -39 -78 -26 -11 -115 -50 -298 -348 Net interest income af ter provisioning 172 172 344 194 205 743 160
Slide 36: Public Finance & Treasury
Public Finance & Treasury Q1 2007 Q2 2007 H1 2007 Q3 2007 Q4 2007 FY 2007 Q1 2008 Q2 2008 H1 2008 in € m Net interest income 68 11 79 2 -83 -2 -57 19 -38 Provision f or possible loan losses -5 -7 -12 -4 20 4 -5 0 -5 Net interest income af ter provisioning 63 4 67 -2 -63 2 -62 19 -43 Net commission i
Slide 37: Others and Consolidation
Others and Consolidation Q1 2007 Q2 2007 H1 2007 Q3 2007 Q4 2007 FY 2007 Q1 2008 Q2 2008 H1 2008 in € m Net interest income 13 7 20 -1 -1 18 16 44 60 Provision f or possible loan losses 0 -4 -4 0 -1 -5 0 0 0 Net interest income af ter provisioning 13 3 16 -1 -2 13 16 44 60 Net commission income 91 5
Slide 38: Group equity definitions
Group equity definitions Reconciliation of equity definitions Equity basis for RoE Equity definitions in € m Jun 2008 Jan-Jun 2008 Subscribed capital 1,708 1,708 Capital reserve 5,712 5,709 Retained earnings 5,930 5,991 Reserve from currency translation 60 -9 Investors‘ Capital w ithout minorities 1
Slide 39: For more information, please contact Commerzbank's IR team
For more information, please contact Commerzbank´s IR team: Jürgen Ackermann (Head of IR) Wennemar von Bodelschwingh Stefan Philippi P: +49 69 136 22338 P: +49 69 136 43611 P: +49 69 136 45231 M: juergen.ackermann@commerzbank.com M: wennemar.vonbodelschwingh@commerzbank.com M: stefan.philippi@commer
Slide 40: Disclaimer
Disclaimer 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 or