Commerzbank AG · XETR:CBK
Commerzbank — FY2006 Earnings Presentation
45 slides from Commerzbank's earnings presentation, Feb 14, 2007
Slide 1: Analyst Conference preliminary 2006 results
Commerzbank Analyst Conference preliminary 2006 results Dr. Eric Strutz, Chief Financial Officer Frankfurt, February 14th, 2007
Slide 2: Highlights 2006
Highlights 2006 • Record year for Commerzbank 1. Earnings • Targets for 2006 exceeded ü • Proposed dividend increase of 50% per share • Growth programs in core divisions 2. Strategy • Focus on fee generating products leading to ü significant commission income growth • Integration successfully comple
Slide 3: Record results in 2006
Record results in 2006 Q4 `06 vs. Q4 `05 FY 2006 vs. FY 2005 Revenues1, in € m 2,105 +12.3% 8,710 +25.5% Operating profit, in € m 631 +32.6% 2,628 +49.6% Net RoE, in % 12.4 -1.4ppts 14.1 +1.3ppts CIR, in % 1 before LLP 66.3 -6.8ppts ü 59.7 -7.5ppts ü 1. Revenues growth of 26% year-on-year, operating
Slide 4: Balanced net interest income year-on-year
Balanced net interest income year-on-year Net interest income1 • Net interest income level in € m maintained (versus 2005) 239 228 229 1,060 1,050 • Improved lending and deposit 239 267 975 volumes in corporate banking 845 832 831 • Further upward trend in 770 deposit margins 720 • Interest income w
Slide 5: Loan loss provisions without one-offs further reduced
Loan loss provisions without one-offs further reduced Loan loss provisions1 415 in € m • LLP without one-offs of 293 €637m in FY • LLPs lowered to €79m in Q4 • Reversals in Mittelstand due to strong domestic 69 67 83 economy 52 225 187 • LLP 2007 expected to be 165 159 < 2006 level, due to favorable
Slide 6: Strong growth in commission income
Strong growth in commission income Commission income • Continued focus on in € m 781 38 commission generating 718 businesses 703 34 60 659 • In Q4, highest ever 36 645 15 commission income achieved 593 599 578 • Substantial improvement in 2006 driven by • asset management business • securities trans
Slide 7: Sustained progress in trading profit
Sustained progress in trading profit Trading profit • Trading profit up by 81% on in € m 355 FY 2005 (pro-forma) 336 303 • Sustained trading profit at Corporates & Markets 250 5 217 • Strong client business, 212 183 positive results from equity derivatives, interest rate trading and FX activities •
Slide 8: Strict cost discipline maintained – higher expenses given strong Group performance
Strict cost discipline maintained – higher expenses given strong Group performance Operating expenses Personnel • Rise in operating costs Depreciation 484 in € m Others 812 (versus 2005) driven by 99 higher performance related 144 1,395 compensation 1,370 130 1,327 1,292 • Increase of 8% in personne
Slide 9: Strong operating profit growth
Strong operating profit growth Operating profit1 in € m 87 2 960 88 700 2 631 • Strong underlying 551 26 business lifted Q4 result 69 293 476 to €631m 429 110 337 • Operating profit (pro 301 forma) rose substantially by 2 including one-off gains due to sale of KEB participation 1 restated due to IAS
Slide 10: Net profit – a record year for Commerzbank
Net profit – a record year for Commerzbank Net profit1 in € m • Net profit up by 35% 743 y-o-y • Proposed dividend up 401 by 50% to €0.75 per 352 338 share 285 268 • 2006 EPS up by 23% to 217 €2.43 180 • Restructuring costs of €39m in Q4 for Retail in €m Q1 `05 Q2 `05 Q3 `05 Q4 `05 Q1 `06 Q2 `06 Q3
Slide 11: 2006 targets exceeded
2006 targets exceeded Net RoE1 CIR1 EPS1 in % +1.3ppts ü in % 67.2 -7.5ppts ü in € +23% 2.43 ü 14.1 1.97 12.8 59.7 FY 2005 FY 2006 FY 2005 FY 2006 FY 2005 FY 2006 Target 2006: >10% Target 2006: <65% Target 2006: >10% growth Clean net RoE1 Clean CIR1 Clean EPS1 ü ü ü in % in % -5.9ppts in € +1.3ppts
Slide 12: Continued strong capital levels
Continued strong capital levels Revaluation reserve Regulatory capital (Tier I)1 in € m in € m Mar 2006 Jun 2006 Sep 2006 Dec 2006 Subscribed capital 1,707 1,707 1,707 1,705 Reg. Reserves 9,627 9,655 9,741 9,983 1,995 Minority interests (BIS) 935 910 910 884 1,746 Hybrid capital 2,518 2,519 2,534 2,
Slide 13: Strong Group performance driven by Mittelstand, C&M and CRE
Strong Group performance driven by Mittelstand, C&M and CRE Operating profit in € m Private & Business Customers Asset Management Mittelstand +26% 807 +19% 641 167 137 817 231 115 670 -77 120 139 -64 -58 -19 -5 -2 -29 -10 2005 20061 2005 2006 2005 2006 1 incl. one-off provision of €293m Corporates &
Slide 14: Successful start of growth programs at Private & Business Customers
Successful start of growth programs at Private & Business Customers Main P&L items Operating profit in € m Q4`05 Q4`05 PF Q4`06 FY`05 PF FY`06 PF FY`06 in € m Net interest income 301 348 322 1,350 1,304 1,261 112 71 66 Risk provisioning -83 -110 -76 -372 -600 -585 5 54 39 Commission income 262 258 2
Slide 15: Asset Management: Strong revenues in favourable markets
Asset Management: Strong revenues in favourable markets Main P&L items Operating profit in € m Q4`05 Q4`05 PF Q4`06 FY`05 PF FY`06 PF FY`06 in € m Net interest income -6 -8 -4 -15 -22 -20 46 42 38 Commission income 170 170 216 575 735 735 37 32 Revenues 171 169 217 581 730 732 27 17 20 Operating exp
Slide 16: Mittelstand: strong performance benefiting from German economy
Mittelstand: strong performance benefiting from German economy Main P&L items Operating profit in € m Q4`05 Q4`05 PF Q4`06 FY`05 PF FY`06 PF FY`06 in € m Net interest income 317 310 339 1,167 1,245 1,255 314 Risk provisioning 29 28 46 -159 -128 -128 244 220 Commission income 169 169 188 593 676 676
Slide 17: Corporates & Markets: continuing to deliver sustainable results
Corporates & Markets: continuing to deliver sustainable results Main P&L items Operating profit in € m Q4`05 Q4`05 PF Q4`06 FY`05 PF FY`06 PF FY`06 in € m Net interest income 89 82 91 337 339 347 190 164 Risk provisioning 79 79 4 68 11 11 159158 115 127 110 Commission income 29 29 45 118 132 132 Tra
Slide 18: Commercial Real Estate: strong new business
Commercial Real Estate: strong new business Main P&L items Operating profit in € m Q4`05 Q4`05 PF Q4`06 FY`05 PF FY`06 PF FY`06 in € m Net interest income 55 217 226 806 851 696 138 147 Risk provisioning -48 -92 -48 -316 -185 -148 112 Commission income 26 66 85 253 257 214 90 85 Operating expenses 2
Slide 19: Public Finance & Treasury: rising rates and flat yield curve
Public Finance & Treasury: rising rates and flat yield curve Main P&L items Operating profit in € m Q4`05 Q4`05 PF Q4`06 FY`05 PF FY`06 PF FY`06 in € m Net interest income 120 158 28 596 446 393 124 51 Trading profit -44 -63 24 -283 -56 -42 27 39 10 AfS Result 32 39 50 207 120 102 58 74 52 53 Operat
Slide 20: Commerzbank management committed to achieving more
Commerzbank management committed to achieving more Short-term Mid-term Financial targets 2007 Financial targets by 2010 • Net ROE > 12%1 • Sustainable profitability of 15% net RoE ü • Net profit of > €1.5bn • CIR < 60% • Further improvement in • Steady increase in dividend productivity Strategic tar
Slide 21: Well positioned for future growth
Well positioned for future growth • Significant investment programs to enhance organic growth in our divisions 1. Growth • Expanding in regions and products with competitive strengths • Focused external growth via selective acquisitions • Ongoing efficiency enhancement in all divisions 2. Profitabil
Slide 22: Financial Calendar 2007
Financial Calendar 2007 February 14th, 2007 21 / 42
Slide 23: Financial Calendar 2007
Financial Calendar 2007 May 9 Q1 2007 Telephone Conference May 16 Annual General Meeting August 9 Q2 2007 Telephone Conference September 20 Investors‘ Day Early November Q3 2007 Telephone Conference February 14th, 2007 22 / 42
Slide 24: Quarterly results in new Group structure restated due to IAS 8
Quarterly results in new Group structure restated due to IAS 8 February 14th, 2007 23 / 42
Slide 25: Commerzbank Group Quarterly results in new Group structure
Commerzbank Group Quarterly results in new Group structure Q I - Q IV Q I - Q IV €m Q I 2005 Q II 2005 Q III 2005 Q IV 2005 Q I 2006 Q II 2006 Q III 2006 Q IV 2006 2005 2006 Net interest income 720 845 770 832 3,167 831 1,060 1,050 975 3,916 Provision for possible loan losses -187 -165 -140 -29 -521
Slide 26: Private and Business Customers Quarterly results
Private and Business Customers Quarterly results in new Group structure Q I - Q IV Q I - Q IV €m Q I 2005 Q II 2005 Q III 2005 Q IV 2005 Q I 2006 Q II 2006 Q III 2006 Q IV 2006 2005 2006 Net interest income 276 271 289 301 1,137 285 323 331 322 1,261 Provision for possible loan losses -62 -61 -62 -8
Slide 27: Asset Management Quarterly results
Asset Management Quarterly results in new Group structure Q I - Q IV Q I - Q IV €m Q I 2005 Q II 2005 Q III 2005 Q IV 2005 Q I 2006 Q II 2006 Q III 2006 Q IV 2006 2005 2006 Net interest income 4 -1 -7 -6 -10 -4 -6 -6 -4 -20 Provision for possible loan losses 0 0 0 0 0 0 0 0 0 0 Net interest income a
Slide 28: Mittelstand Quarterly results
Mittelstand Quarterly results in new Group structure Q I - Q IV Q I - Q IV €m Q I 2005 Q II 2005 Q III 2005 Q IV 2005 Q I 2006 Q II 2006 Q III 2006 Q IV 2006 2005 2006 Net interest income 274 305 299 317 1,195 311 282 323 339 1,255 Provision for possible loan losses -87 -74 -26 29 -158 -80 -81 -13 4
Slide 29: Corporates & Markets Quarterly results
Corporates & Markets Quarterly results in new Group structure Q I - Q IV Q I - Q IV €m Q I 2005 Q II 2005 Q III 2005 Q IV 2005 Q I 2006 Q II 2006 Q III 2006 Q IV 2006 2005 2006 Net interest income 89 91 94 89 363 93 68 95 91 347 Provision for possible loan losses -13 -5 7 79 68 -11 -9 27 4 11 Net in
Slide 30: Commercial Real Estate Quarterly results
Commercial Real Estate Quarterly results in new Group structure Q I - Q IV Q I - Q IV €m Q I 2005 Q II 2005 Q III 2005 Q IV 2005 Q I 2006 Q II 2006 Q III 2006 Q IV 2006 2005 2006 Net interest income 38 42 38 55 173 51 216 203 226 696 Provision for possible loan losses -17 -18 -47 -48 -130 -4 -55 -41
Slide 31: Public Finance & Treasury Quarterly results
Public Finance & Treasury Quarterly results in new Group structure Q I - Q IV Q I - Q IV €m Q I 2005 Q II 2005 Q III 2005 Q IV 2005 Q I 2006 Q II 2006 Q III 2006 Q IV 2006 2005 2006 Net interest income 79 112 88 120 399 94 144 127 28 393 Provision for possible loan losses -8 -7 -12 -6 -33 -8 -8 -7 -
Slide 32: Others and Consolidation Quarterly results
Others and Consolidation Quarterly results in new Group structure Q I - Q IV Q I - Q IV €m Q I 2005 Q II 2005 Q III 2005 Q IV 2005 Q I 2006 Q II 2006 Q III 2006 Q IV 2006 2005 2006 Net interest income -40 25 -31 -44 -90 1 33 -23 -27 -16 Provision for possible loan losses 0 0 0 0 0 0 0 0 0 0 Net inte
Slide 33: Pro forma full integration of Eurohypo restated due to IAS 8
Pro forma full integration of Eurohypo restated due to IAS 8 February 14th, 2007 32 / 42
Slide 34: Commerzbank Group Pro forma full integration of Eurohypo
Commerzbank Group Pro forma full integration of Eurohypo Q I - Q IV Q I - Q IV €m Q I 2005 Q II 2005 Q III 2005 Q IV 2005 Q I 2006 Q II 2006 Q III 2006 Q IV 2006 2005 2006 Net interest income 987 1,084 1,009 1,060 4,140 1,060 1,060 1,050 975 4,145 Provision for possible loan losses -256 -232 -223 -1
Slide 35: Private and Business Customers Pro forma
Private and Business Customers Pro forma full integration of Eurohypo Q I - Q IV Q I - Q IV €m Q I 2005 Q II 2005 Q III 2005 Q IV 2005 Q I 2006 Q II 2006 Q III 2006 Q IV 2006 2005 2006 Net interest income 333 326 343 348 1,350 328 323 331 322 1,304 Provision for possible loan losses -84 -87 -91 -110
Slide 36: Asset Management Pro forma
Asset Management Pro forma full integration of Eurohypo Q I - Q IV Q I - Q IV €m Q I 2005 Q II 2005 Q III 2005 Q IV 2005 Q I 2006 Q II 2006 Q III 2006 Q IV 2006 2005 2006 Net interest income 3 -2 -8 -8 -15 -6 -6 -6 -4 -22 Provision for possible loan losses 0 0 0 0 0 0 0 0 0 0 Net interest income aft
Slide 37: Mittelstand Pro forma
Mittelstand Pro forma full integration of Eurohypo Q I - Q IV Q I - Q IV €m Q I 2005 Q II 2005 Q III 2005 Q IV 2005 Q I 2006 Q II 2006 Q III 2006 Q IV 2006 2005 2006 Net interest income 268 298 291 310 1,167 301 282 323 339 1,245 Provision for possible loan losses -87 -74 -26 28 -159 -80 -81 -13 46
Slide 38: Corporates & Markets Pro forma
Corporates & Markets Pro forma full integration of Eurohypo Q I - Q IV Q I - Q IV €m Q I 2005 Q II 2005 Q III 2005 Q IV 2005 Q I 2006 Q II 2006 Q III 2006 Q IV 2006 2005 2006 Net interest income 83 84 88 82 337 85 68 95 91 339 Provision for possible loan losses -13 -5 7 79 68 -11 -9 27 4 11 Net inte
Slide 39: Commercial Real Estate Pro forma
Commercial Real Estate Pro forma full integration of Eurohypo Q I - Q IV Q I - Q IV €m Q I 2005 Q II 2005 Q III 2005 Q IV 2005 Q I 2006 Q II 2006 Q III 2006 Q IV 2006 2005 2006 Net interest income 194 192 203 217 806 206 216 203 226 851 Provision for possible loan losses -64 -59 -101 -92 -316 -41 -5
Slide 40: Public Finance & Treasury Pro forma
Public Finance & Treasury Pro forma full integration of Eurohypo Q I - Q IV Q I - Q IV €m Q I 2005 Q II 2005 Q III 2005 Q IV 2005 Q I 2006 Q II 2006 Q III 2006 Q IV 2006 2005 2006 Net interest income 150 162 126 158 596 147 144 127 28 446 Provision for possible loan losses -8 -7 -12 -6 -33 -8 -8 -7
Slide 41: Others and Consolidation Pro forma
Others and Consolidation Pro forma full integration of Eurohypo Q I - Q IV Q I - Q IV €m Q I 2005 Q II 2005 Q III 2005 Q IV 2005 Q I 2006 Q II 2006 Q III 2006 Q IV 2006 2005 2006 Net interest income -44 24 -34 -47 -101 -1 33 -23 -27 -18 Provision for possible loan losses 0 0 0 0 0 0 0 0 0 0 Net inte
Slide 42: Group equity definitions
Group equity definitions February 14th, 2007 41 / 42
Slide 43: Group equity definitions
Group equity definitions Reconciliation of equity definitions Equity basis for RoE Equity definitions in € m Dec-2006 Subscribed capital 1,705 Capital reserve 5,676 Retained earnings 4,062 Reserve from currency translation -143 Investors‘ capital without minorities 11,300 Basis for RoE on net profit
Slide 44: For more information, please contact:
For more information, please contact: Ute Heiserer-Jäckel P: +49 69 136 41874 Jürgen Ackermann (Head of IR) M: ute.heiserer-jaeckel@commerzbank.com P: +49 69 136 22338 M: juergen.ackermann@commerzbank.com Simone Nuxoll P: +49 69 136 45660 Sandra Büschken (Deputy Head of IR) M: simone.nuxoll@commerzb
Slide 45: 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 representatio