Commerzbank Ag · XETR:CBK
Commerzbank — FY2011 Earnings Presentation
49 slides from Commerzbank's earnings presentation, Feb 23, 2012
Slide 1: Commerzbank – a sustainable business model in turbulent markets
Commerzbank – a sustainable business model in turbulent markets Analyst conference – preliminary 2011 results Eric Strutz CFO Frankfurt February 23rd, 2012
Slide 2: Agenda
Agenda 1 Group summary 2 Financial highlights 3 Results by division 4 Balance sheet, capital & funding 5 Conclusion and outlook 6 Appendix Eric Strutz CFO Frankfurt February 23rd, 2012 1
Slide 3: Commerzbank with major strategic achievements in 2011
Commerzbank with major strategic achievements in 2011 Pre tax profit (€ bn) -0.8 2009 2.0 2010 4.5 2011 Pre-tax profit of Core bank of €4.5bn in FY2011 Integration project successfully completed after only 1,000 days Core Tier I ratio 10.0% 9.9% SoFFin silent participation Shareholders´ Significant
Slide 4: Strong performance in Core Bank and improved capitalization – Group
Commerzbank in 2011 with strong performance in Core Bank and improved capitalization – Group weighed down by sovereign debt crisis Fulfilment of EBA capital requirement for 30th June, 2012 fully on track Core Bank with pre tax profit of 4.5bn (including liability management 1 transactions) Overall c
Slide 5: Core Bank again shows strong result in FY2011
Core Bank again shows strong result in FY2011 Group Core Bank** Q4 Q4 12M 12M Q4 Q4 12M 12M in € m 2010 2011 2010 2011 2010 2011 2010 2011 Revenues before LLP 3,015 2,316 12,671 9,889 2,831 3,375 10,903 12,383 LLP -595 -381 -2,499 -1,390 -173 -176 -853 -478 Operating expenses 2,164 1,772 8,786 7,992
Slide 6: Agenda
Agenda 1 Group summary 2 Financial highlights 3 Results by division 4 Balance sheet, capital & funding 5 Conclusion and outlook 6 Appendix Eric Strutz CFO Frankfurt February 23rd, 2012 5
Slide 7: Core Bank revenues before LLP increased by €1.5bn (+14%) in FY2011
Core Bank revenues before LLP increased by €1.5bn* (+14%) in FY2011 Revenues before LLP in € m Group 12,671 9,889 12,383 3,015 2,316 10,903 Q4 10 Q4 11 12M 10 12M 11 Core Bank** 2,831 3,375 Q4 10 Q4 11 12M 10 12M 11 ABF 184 1,768 & PRU -1,059 -2,494 Q4 10 Q4 11 12M 10 12M 11 * including liability ma
Slide 8: Further LLP reduction of more than 40% in FY2011
Further LLP reduction of more than 40% in FY2011 Provisions for loan losses in € m LLP significantly down on previous year in each quarter Moderate LLP level in Core Bank Significant reduction in ABF by €0.7 bn in FY2011 644 639 621 595 LLP target for FY2012: ≤ €1.7bn 347 382 413 381 495 422 318 278
Slide 9: Costs down ~ €800m in FY2011
Costs down ~ €800m in FY2011 Operating expenses Overall costs down by 9% in FY2011 in € m In Q4 reduction in personnel costs by 2,209 2,228 2,185 €233m q-o-q mainly due to reversal of 2,164 2,154 119 145 146 61 70 2,030 2,036 variable compensation provisions 59 34 1,772 42 CIR in Core Bank (without
Slide 10: Operating profit and Net profit
Operating profit and Net profit Operating profit Core Bank: 4,548 Q4 operating profit of €163m in € m Additional write-downs on Greek Core Bank: 1,979 sovereign bonds of €0.7bn and further PF 76 1,566 de-risking weighed down profit in Q4 1,219 695 683 912 851 One-off effect from repurchase of hybrid
Slide 11: AG accounts (HGB) show loss compared to Group accounts (IFRS)
AG accounts (HGB) show loss compared to Group accounts (IFRS) Reconciliation of Group accounts (IFRS) with Commerzbank AG (HGB) 1 One-off-payment SoFFin in € bn › Booked against equity in group accounts (IFRS) › Booked in P&L in AG accounts (HGB) 0.7 1.0 2 Impairment on book value of subsidiaries, m
Slide 12: Agenda
Agenda 1 Group summary 2 Financial highlights 3 Results by division 4 Balance sheet, capital & funding 5 Conclusion and outlook 6 Appendix Eric Strutz CFO Frankfurt February 23rd, 2012 11
Slide 13: Core Bank segments: more balanced profit contribution
Core Bank segments*: more balanced profit contribution Operating profit in € m Private Customers recovered in difficult market environment 375 47 12M 10 12M 11 1,598 1,527 Mittelstandsbank continued to generate strong results 12M 10 12M 11 Central & Eastern Europe benefitted from BRE Bank record res
Slide 14: Private Customers recovered in difficult market environment
Private Customers recovered in difficult market environment Operating profit P&L at a glance in € m 116 109 in € m Q4 10 Q3 11 Q4 11 12M 10 12M 11 79 71 Revenues before LLP 884 959 857 3,845 3,820 LLP -46 -34 53 -246 -57 23 24 13 Operating expenses 851 854 801 3,552 3,388 -13 Operating profit -13 71
Slide 15: Mittelstandsbank continued to generate strong result
Mittelstandsbank continued to generate strong result Operating profit P&L at a glance in € m 497 in € m Q4 10 Q3 11 Q4 11 12M 10 12M 11 466 430 415 388 345 Revenues before LLP 930 782 755 3,319 3,176 314 270 LLP -93 -51 -154 -279 -188 Operating expenses 371 386 331 1,442 1,461 Operating profit 466 3
Slide 16: Central & Eastern Europe benefitted from BRE Bank record result
Central & Eastern Europe benefitted from BRE Bank record result Operating profit P&L at a glance in € m 214 in € m Q4 10 Q3 11 Q4 11 12M 10 12M 11 Revenues before LLP 257 267 385 979 1,157 99 92 71 78 LLP -48 -32 -21 -361 -89 6 7 Operating expenses 138 143 150 565 585 Operating profit 71 92 214 53 4
Slide 17: C&M affected by lower client activities
C&M affected by lower client activities Operating profit P&L at a glance in € m 333 in € m Q4 10 Q3 11 Q4 11 12M 10 12M 11 281 240 Revenues before LLP 598 448 397 2,392 2,234 224 LLP 14 -59 -56 27 -146 108 121 Operating expenses 388 354 314 1,633 1,505 35 27 Operating profit 224 35 27 786 583 Q1 Q2
Slide 18: Corporates & Markets divisional split
Corporates & Markets divisional split Corporates - Operating Revenues incl. LLP 495 402 › Stable performance in Corporates 359 308 300 272 236 › Strong year-end performance in Q4 11 mainly driven by 105 Structured Finance › Effect of restructured loans in Q4 10 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2010 2011 Equi
Slide 19: Others & Consolidation
Others & Consolidation Operating profit 946 P&L at a glance in € m in € m Q4 10 Q3 11 Q4 11 12M 10 12M 11 370 Revenues before LLP 162 447 981 368 1,996 308 LLP 0 0 2 6 2 19 Operating expenses 227 139 37 879 418 -65 -44 -120 Operating profit -65 308 946 -505 1,580 -339 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2010 20
Slide 20: ABF & PRU
ABF & PRU Operating profit in € m -1,268 Asset Based Finance weighed down by impairment on -3,911 Greek bonds and further de-risking in Public Finance 12M 10 12M 11 Portfolio Restructuring Unit with shift in strategy to capital optimization 675 -130 12M 10 12M 11 Eric Strutz CFO Frankfurt Febr
Slide 21: Asset Based Finance weighed down by impairment on Greek bonds
Asset Based Finance weighed down by impairment on Greek bonds and further de-risking in Public Finance Operating profit P&L at a glance in € m in € m Q4 10 Q3 11 Q4 11 12M 10 12M 11 -85 -138 -248 Revenues before LLP 46 -1,097 -1,048 925 -2,432 -403 -532 LLP -412 -254 -179 -1,584 -907 -921 Operating
Slide 22: Portfolio reduction in Asset Based Finance
Portfolio reduction in Asset Based Finance PF portfolio development (EaD in € bn)* -43% › Downsizing PF and CRE portfolio ahead of 156 schedule 129 › Overall GIIPS sovereign exposure reduced by 109 89 38% since December 2009 Q4 2008 Q4 2009 Q4 2010 Q4 2011 GIIPS GIIPSsovereign sovereignexposure expo
Slide 23: Portfolio Restructuring Unit with shift in strategy to capital optimization
Portfolio Restructuring Unit with shift in strategy to capital optimization Operating profit P&L at a glance in € m 314 in € m Q4 10 Q3 11 Q4 11 12M 10 12M 11 161 Revenues before LLP 138 -212 -11 843 -62 95 105 63 64 LLP -10 17 -26 -62 -5 -45 Operating expenses 23 17 8 106 63 Operating profit 105 -2
Slide 24: Agenda
Agenda 1 Group summary 2 Financial highlights 3 Results by division 4 Balance sheet, capital & funding 5 Conclusion and Outlook 6 Appendix Eric Strutz CFO Frankfurt February 23rd, 2012 23
Slide 25: B/S decrease and RWA reduction of 12% in FY2011 despite Basel 2.5
B/S decrease and RWA reduction of 12% in FY2011 despite Basel 2.5, stable Core Tier 1 ratio Total Assets RWA Core Tier 1 and Tier 1 ratio in € bn in € bn in % Reduction in non-core assets Ongoing active management in Further improvement of capital reducing RWA ratios q-o-q Despite effects of Basel 2
Slide 26: Measures to fulfil EBA capital requirement by June 2012 well underway
Measures to fulfil EBA capital requirement by June 2012 well underway › Volume reduction outside core markets / plans to grow in primary franchise markets remain unchanged › Risk transfer – securitizations / portfolio sales RWA management › Management of market and counterparty risk › RWA efficiency
Slide 27: Capital requirement to fulfil EBA targets already reduced by two-thirds
Capital requirement to fulfil EBA targets already reduced by two-thirds per year end 2011 Development of capital requirement in € bn 5.3 EBA buffer for Greece** 1.8 4.36 0.4 0.35 1.8 EBA capital requirement RWA Capital Retained earnings EBA capital requirement per 30/09/2011 management management Q4
Slide 28: Further measures of more than €2.9bn planned to close the gap in H1 2012
Further measures of more than €2.9bn planned to close the gap in H1 2012 – excess capital potential identified Planned development of capital requirement in € bn ≥1.1 ≥1.0 1.2 0.4 1.3 1.8 EBA capital RWA Capital management/ Targeted Excess capital Improvement of requirement per management payment of
Slide 29: Successful RWA management anticipating Basel 2.5/3 effects
Successful RWA management anticipating Basel 2.5/3 effects Planned development of RWA until 30/06/2012 Pro forma Core Tier 1 in € bn 9.0% 9.9% >11% 12 244 19 237 › Expected net effect of Basel 3 on RWA 256 ~€20bn 15 › Pro forma Core Tier 1 222 as of Q1 2013 ≥10% RWA per Basel 2.5 Pro forma RWA RWA p
Slide 30: Strong long-term funding profile, no further issuance needed in 2012
Strong long-term funding profile, no further issuance into capital markets needed in 2012* Funding plan 2012 € bn › Continued asset reduction in ABF and PRU, accelerated by EBA measures ~30 ~20 › Due to asset reduction and deposit ~10 growth no need for capital markets ~15 funding to maintain strong
Slide 31: Agenda
Agenda 1 Group summary 2 Financial highlights 3 Results by division 4 Balance sheet, capital & funding 5 Conclusion and outlook 6 Appendix Eric Strutz CFO Frankfurt February 23rd, 2012 30
Slide 32: Conclusion and Outlook: Target FY2012 for LLP ≤€1.7bn and costs ≤ €7.6bn
Conclusion and Outlook Fulfilment of EBA capital requirement faster and to a higher extent than originally anticipated Core Bank is on course to reach a further sound operating profit level in 2012 if markets do not deteriorate Target FY2012 for LLP ≤€1.7bn and costs ≤ €7.6bn Ongoing high market unc
Slide 33: Agenda
Agenda 1 Group summary 2 Financial highlights 3 Results by division 4 Capital & Funding 5 Conclusion and Outlook 6 Appendix Eric Strutz CFO Frankfurt February 23rd, 2012 32
Slide 34: We expect Germany to continue to outperform the Eurozone
We expect Germany to continue to outperform the Eurozone Current development Our expectation for 2012 Reasons for outperformance › German economy has slowed down › Sovereign debt crisis will weigh on No bubbles in the housing market significantly in the course of 2011, growth during the whole year L
Slide 35: PRU Structured Credit by Business Segment - Details 2011
PRU Structured Credit by Business Segment - Details 2011 Breakdown by asset and rating classes Details & Outlook › The economic outlook is dependent upon sustainable AAA 9% resolution of European debt crisis and is key to market recovery AA 22% €13.7bn A 23% › Asset fundamentals are stable, however
Slide 36: Default Portfolio (Q4 2011)
Default Portfolio (Q4 2011) Default portfolio and coverage ratios by segment €m – excluding / including GLLP Group1 19 703 86 % / 91 % 17 884 7 657 9 278 948 Private Customers 1 444 80 % / 92 % 1 326 493/669/164 Mittelstandsbank 2 935 76 % / 86 % 2 512 1 638/590/285 Central & Eastern Europe 2 019 10
Slide 37: Loan to Value figures in the CRE business (Q4 2011)
Loan to Value figures in the CRE business (Q4 2011) Loan to Value – UK1 EaD UK total €6bn Loan to Value – Spain1 EaD Spain total €4bn stratified representation stratified representation > 100 % 2 % (3 %) > 100 % 1 % (1 %) 80 % – 100 % 3 % (4 %) 80 % – 100 % 1 % (4 %) 60 % – 80 % 10 % (10 %) 60 % – 8
Slide 38: Appendix: Segment reporting
Appendix: Segment reporting Eric Strutz CFO Frankfurt February 23rd, 2012 37
Slide 39: Commerzbank Group
Commerzbank Group Q1 Q2 Q3 Q4 12M Q1 Q2 Q3 Q4 12M in € m 2010 2010 2010 2010 2010 2011 2011 2011 2011 2011 Net interest income 1,886 1,853 1,633 1,682 7,054 1,727 1,790 1,589 1,618 6,724 Provisions for loan losses -644 -639 -621 -595 -2,499 -318 -278 -413 -381 -1,390 Net interest income after provis
Slide 40: Private Customers
Private Customers Q1 Q2 Q3 Q4 12M Q1 Q2 Q3 Q4 12M in € m 2010 2010 2010 2010 2010 2011 2011 2011 2011 2011 Net interest income 489 486 500 507 1,982 492 514 497 524 2,027 Provisions for loan losses -66 -70 -64 -46 -246 -41 -35 -34 53 -57 Net interest income after provisions 423 416 436 461 1,736 451
Slide 41: Mittelstandsbank
Mittelstandsbank Q1 Q2 Q3 Q4 12M Q1 Q2 Q3 Q4 12M in € m 2010 2010 2010 2010 2010 2011 2011 2011 2011 2011 Net interest income 523 553 482 523 2,081 514 585 528 547 2,174 Provisions for loan losses -161 -94 69 -93 -279 -8 25 -51 -154 -188 Net interest income after provisions 362 459 551 430 1,802 506
Slide 42: Central & Eastern Europe
Central & Eastern Europe Q1 Q2 Q3 Q4 12M Q1 Q2 Q3 Q4 12M in € m 2010 2010 2010 2010 2010 2011 2011 2011 2011 2011 Net interest income 159 161 164 190 674 157 166 171 154 648 Provisions for loan losses -94 -92 -127 -48 -361 -30 -6 -32 -21 -89 Net interest income after provisions 65 69 37 142 313 127
Slide 43: Corporates & Markets
Corporates & Markets Q1 Q2 Q3 Q4 12M Q1 Q2 Q3 Q4 12M in € m 2010 2010 2010 2010 2010 2011 2011 2011 2011 2011 Net interest income 208 198 141 220 767 160 225 141 306 832 Provisions for loan losses 19 0 -6 14 27 0 -31 -59 -56 -146 Net interest income after provisions 227 198 135 234 794 160 194 82 25
Slide 44: Asset Based Finance
Asset Based Finance Q1 Q2 Q3 Q4 12M Q1 Q2 Q3 Q4 12M in € m 2010 2010 2010 2010 2010 2011 2011 2011 2011 2011 Net interest income 298 320 283 261 1,162 296 256 240 229 1,021 Provisions for loan losses -325 -354 -493 -412 -1,584 -241 -233 -254 -179 -907 Net interest income after provisions -27 -34 -21
Slide 45: Portfolio Restructuring Unit
Portfolio Restructuring Unit Q1 Q2 Q3 Q4 12M Q1 Q2 Q3 Q4 12M in € m 2010 2010 2010 2010 2010 2011 2011 2011 2011 2011 Net interest income 23 10 29 20 82 5 13 7 24 49 Provisions for loan losses -22 -28 -2 -10 -62 1 3 17 -26 -5 Net interest income after provisions 1 -18 27 10 20 6 16 24 -2 44 Net comm
Slide 46: Others & Consolidation
Others & Consolidation Q1 Q2 Q3 Q4 12M Q1 Q2 Q3 Q4 12M in € m 2010 2010 2010 2010 2010 2011 2011 2011 2011 2011 Net interest income 186 125 34 -39 306 103 31 5 -166 -27 Provisions for loan losses 5 -1 2 -0 6 1 -1 -0 2 2 Net interest income after provisions 191 124 36 -39 312 104 30 5 -164 -25 Net co
Slide 47: Group equity definitions
Group equity definitions Reconciliation of equity definitions Equity basis for RoE Reconciliation of equity definitions 2011 End of Equity definitions in € m Average Period Subscribed capital 5,113 4,261 Capital reserve 11,158 7,153 Retained earnings 8,184 8,865 Silent participations SoFFin / Allian
Slide 48: For more information, please contact Commerzbank's IR team
For more information, please contact Commerzbank´s IR team: Tanja Birkholz (Executive Management Board Member Investor Relations) ir@commerzbank.com P: +49 69 136 23854 www.ir.commerzbank.com M: tanja.birkholz@commerzbank.com Region UK / Asia Strategic IR IR Roadshows/ Events Michael H. Klein (Head)
Slide 49: Disclaimer
Disclaimer Investor Relations This presentation contains forward-looking statements. Forward-looking statements are statements that are not historical facts; they include statements about Commerzbank’s beliefs and expectations and the assumptions underlying them. These statements are based on plans,