Commerzbank Ag · XETR:CBK
Commerzbank — Investor Day (September 2003)
27 slides from Commerzbank's investor day presentation, Sep 10, 2003
Slide 1: Investors' Day 2003 – Corporate Customers and Institutions
Investors’ Day 2003 Corporate Customers and Institutions Nicholas R. Teller Member of the Board of Managing Directors Glashütten/Taunus, September 10, 2003
Slide 2: Agenda
investors‘ day september 10, 2003 2 Agenda What Are We Talking About? Commerzbank‘s Corporate Banking Franchise Where Do We Come From? Corporate Banking In Challenging Domestic Markets What‘s Next? Opportunities and Challenges: The Way Ahead
Slide 3: Agenda
investors‘ day september 10, 2003 3 Agenda What Are We Talking About? Commerzbank‘s Corporate Banking Franchise Where Do We Come From? Corporate Banking In Challenging Domestic Markets What‘s Next? Opportunities and Challenges: The Way Ahead
Slide 4: Corporate Customers and Institutions by regions: global presence with European focus
investors‘ day september 10, 2003 4 Corporate Customers and Institutions by regions: Global presence with clear European focus North America Investment grade large corporates and MNCs Germany Nationwide franchise for successful (S)ME and large corps with 20 main branches, 4 financial engineering cen
Slide 5: Domestic Corporate Banking: attractive market presence and growing market share
investors‘ day september 10, 2003 5 Domestic Corporate Banking: Highly attractive market presence and growing market share Client relationships Market share of core products Multinational corporates 100 162 clients % Foreign trade volume 12% 16% 1995 Current Large Corporates Turnover of € 250 – 5.00
Slide 6: Putting the division into (group) perspective
investors‘ day september 10, 2003 6 Putting the division into (group) perspective Operating Profit 1H2003 vs. 2002/2 Return on Equity 300 40% 250 252% 101% 2002/2 1H2003 30% 2002 1H2003 200 150 20% 100 10% 50 0 0% -50 -10% -100 -150 -20% -200 -30% Mortgage Treasury Mortgage Banking Securities Manage
Slide 7: Agenda
investors‘ day september 10, 2003 7 Agenda What Are We Talking About? Commerzbank‘s Corporate Banking Franchise Where Do We Come From? Corporate Banking In Challenging Domestic Markets What‘s Next? Opportunities and Challenges: The Way Ahead
Slide 8: The German Landscape: a highly fragmented banking system
investors‘ day september 10, 2003 8 The German Landscape: A highly fragmented banking system... Market share of the three largest banks as 78.4 percentage of all banks‘ balance sheet totals 64.0 46.6 35.0 21.3 21.5 13.1 Germany Italy UK France Spain Switzerland Netherlands Source: EZB, „The Banker“
Slide 9: High market share of state guaranteed public sector banks
investors‘ day september 10, 2003 9 ... and a high market share of state guaranteed public sector banks... Co-operative banks 2 Co-operative central institutions 1,489 Credit co-operatives Public sector 14 Landesbanken 12% 510 Savings banks 14 Banks with special functions Universal banks 16% „The 4
Slide 10: The market with the lowest loan margins in Europe
investors‘ day september 10, 2003 10 ... creating the market with the lowest loan margins in Europe Net interest margin in % 3.06 3.07 (full-year 2002) 2.63 2.43 2.49 2.04 1.71 1.51 1.02 1.11 Germany France Benelux Nordic UK Austria Italy Ireland Spain / Greece Region Portugal Net interest margin de
Slide 11: Strong increase of insolvency levels in 2002 and 2003
investors‘ day september 10, 2003 11 Adding risk to the picture: Strong increase of insolvency levels in 2002 and 2003 (Germany) Corporate Losses insolvencies in € bn in thousands 60 60 50 50 40 40 30 30 20 20 10 10 0 0 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003F Source: DESTATIS (Statistisch
Slide 12: Managing in difficult markets: protecting the core business
investors‘ day september 10, 2003 12 Managing in difficult markets: Protecting the core business and building on existing strengths 1. Cost cutting initiatives ü 2. Pricing initiatives ü 3. Outstanding risk management expertise ü 4. Strengthening of capital base ü 5. Review of business strategy and
Slide 13: Are we succeeding? Head-count reductions
investors‘ day september 10, 2003 13 Are we succeeding? Head-count reductions (domestic) Commerzbank first bank in Germany to implement Head-count comprehensive cost cutting in FTE measures 4500 üKostenoffensive Streamlining of branch 4000 office processes, closing of - 14,7% domestic locations and
Slide 14: Margin recovery thanks to pricing initiatives and RWA cut-back
investors‘ day september 10, 2003 14 Are we succeeding (cont‘d)? Margin recovery thanks to pricing initiatives and cut-back in RWA Margins on fixed and 1.5% floating rate domestic loans increased strongly through üPricing initiatives 1.4% Re-negotiation of terms (commenced early in 2001 and ongoing)
Slide 15: Development of revenues (domestic)
investors‘ day september 10, 2003 15 Are we succeeding (cont‘d)? Development of revenues (domestic) Substantial cut-back in risk-weighted assets EONIA rate cuts and EU pricing regulation counter-balanced by pricing initiatives only partly offset by increased bond and • Risk-weighted assets cut by 11
Slide 16: Credit quality (domestic)
investors‘ day september 10, 2003 16 Are we succeeding (cont‘d)? Credit quality (domestic) üOutstanding risk management expertise 800 and credit portfolio check Quality of overall domestic 700 corporate loan book has remained remarkably stable 600 through economic downturn Commerzbank first bank in
Slide 17: Mid-term performance – the un-managed base case
investors‘ day september 10, 2003 17 Are we succeeding (cont‘d)? Mid-term performance – the „un-managed“ base case What is the mid-term sustainable performance of the core client groups 20% „Mittelstand“ and large corporates if Pre-tax RoE Commerzbank decided to stick to the status quo in Corporate
Slide 18: Agenda
investors‘ day september 10, 2003 18 Agenda What Are We Talking About? Commerzbank‘s Corporate Banking Franchise Where Do We Come From? Corporate Banking In Challenging Domestic Markets What‘s Next? Opportunities and Challenges: The Way Ahead
Slide 19: The competitive landscape in Germany is changing
investors‘ day september 10, 2003 19 The competitive landscape in Germany is changing Target positioning / vision Strategic priorities / success factors Global investment banking & Deutsche Bank Extension of production capabilities asset management platform Strengthening retail & corporate banking i
Slide 20: Commerzbank's strategic priorities in Corporate Banking
investors‘ day september 10, 2003 20 Commerzbank‘s strategic priorities in Corporate Banking Portfolio “Mittelstandsoffensive” and “Wertoffensive” structuring Products & Extend product capabilities services Priorities: FX, derivatives, structured finance Corporate Western Europe: Standardization of
Slide 21: Domestic corporate customers: strategy of a value-driven portfolio
investors‘ day september 10, 2003 21 Domestic corporate customers: Strategy of a value-driven portfolio structuring, re-alignment of organization Portfolio Shift „Mittelstandsoffensive“ „Wertoffensive“ RoE Value Creation ü Extend business with ü Review all client Mittelstands- existing clients, buil
Slide 22: Products: joint approach between Corporate and Investment Banking
investors‘ day september 10, 2003 22 Products: Joint approach between Corporate and Investment Banking is a critical success factor ü Loan syndication ü Derivatives Investment banking ü ABS ü Debt Capital Markets ü Leveraged finance ü Mergers & Acquisition ü Structured finance ü Balance sheet ü Stru
Slide 23: Services: Adding state-of-the-art internet capabilities
investors‘ day september 10, 2003 23 Services: Adding state-of-the-art internet capabilities
Slide 24: Corporate banking strategy Europe
investors‘ day september 10, 2003 24 Corporate banking strategy Europe: Focus on sales in Western Europe / build on presence in CEE Central and Eastern Europe Western Europe Subsidiaries of German Subsidiaries of German corporate clients; corporate clients, domestic international and large corporate
Slide 25: The true sale initiative: higher velocity of capital
investors‘ day september 10, 2003 25 The true sale initiative: Moving towards a higher velocity of capital The true sale initiative (TSI) will eliminate structural competitive disadvantages of the German banking system and will trigger the creation of a German market for credit risk In line with the
Slide 26: The bottom line
investors‘ day september 10, 2003 26 The bottom line We do not expect a „Big Bang“, bringing the German market to a level European playing field shortly • Nevertheless, domestic lending margins have been increasing constantly since 2001 and will improve further Commerzbank‘s corporate banking busine
Slide 27: investors‘ day september 10, 2003
investors‘ day september 10, 2003 27