Commerzbank Ag · XETR:CBK
Commerzbank — Q2 2011 Earnings Presentation
44 slides from Commerzbank's earnings presentation, Aug 10, 2011
Slide 1: Commerzbank – Continued operating strength of the Core Bank
Commerzbank – Continued operating strength of the Core Bank Analyst conference – Q2 2011 results Eric Strutz CFO Frankfurt August 10th, 2011
Slide 2: Agenda
Agenda 1 Group summary 2 Financial highlights 3 Results by division 4 Balance sheet, capital & funding 5 Conclusion & outlook 6 Appendix Eric Strutz CFO Frankfurt August 10th, 2011 1
Slide 3: Continued operating strength of the Core Bank with operating profit of €913m in Q2
Continued operating strength of the Core Bank with operating profit of €913m in Q2 1 Significantly improved operating profit of the Core Bank y-o-y 2 Low LLP due to restructuring efforts and strong economy 3 Continued de-risking in Public Finance – impairment on Greek sovereign bonds 4 Funding plan
Slide 4: Significantly improved operating profit of the Core Bank compared to last year
Significantly improved operating profit of the Core Bank compared to last year Group Core Bank ** in € m Q2 2010 Q1 2011 Q2 2011 H1 2011 Q2 2010 Q2 2011 H1 2010 H1 2011 Revenues before LLP 3,110 3,616 2,363 5,979 2,708 2,831 5,732 6,106 LLP -639 -318 -278 -596 -257 -48 -554 -126 Operating expenses 2
Slide 5: Sound Core Tier 1 ratio at 9.9%
Sound Core Tier 1 ratio at 9.9% Tier 1 / Core Tier 1 ratio 11.6% › SoFFin Silent Participation of 11.0% +0.3% -0.4% €3.3bn repaid out of excess capital -1.3% 9.9% › One-off payment to SoFFin of +0.3% €1.03bn booked against equity › RWA decrease by €9bn q-o-q to €239bn › Equity Tier 1 ratio at 9.1% C
Slide 6: Agenda
Agenda 1 Group summary 2 Financial highlights 3 Results by division 4 Balance sheet, capital & funding 5 Conclusion & outlook 6 Appendix Eric Strutz CFO Frankfurt August 10th, 2011 5
Slide 7: Q2 revenues before LLP in the Core Bank increased by 5% y-o-y
Q2 revenues before LLP in the Core Bank increased by 5% y-o-y Revenues before LLP in € m 6,106 6,734 Group 5,979 3,110 5,732 2,363 Q2 10 Q2 11 H1 10 H1 11 +5% Core Bank* 2,831 2,708 402 ABF 1,002 & PRU -127 -468 Q2 10 Q2 11 H1 10 H1 11 Q2 10 Q2 11 H1 10 H1 11 * incl. Others & Consolidations Eric Str
Slide 8: Ongoing low LLP in the Core Bank, reduced provisioning need in ABF y-o-y
Ongoing low LLP in the Core Bank, reduced provisioning need in ABF y-o-y Provisions for loan losses Core Bank benefits from solid in € m economic environment LLP in ABF & PRU on previous quarter level New Guidance 2011: < €1.8bn 644 639 621 595 347 382 €760m impairment on Greek sovereign 495 422 318
Slide 9: Cost base decreased by 6% q-o-q
Cost base decreased by 6% q-o-q Operating expenses Lower operating expenses post in € m Customer and Product Data Migration 2,209 2,228 2,185 2,164 119 145 146 61 2,154 70 2,030 Realisation of synergies 59 according to plan Reduction of FTE as planned CIR of Core Bank improved in Q2 to 2,090 2,083 2
Slide 10: Operating profit and Net profit
Operating profit and Net profit Operating profit Impairment on Greek sovereign bonds in € m Operating profit of €55m in Q2 2011 76 1,219 Tax charge of €2m 913 Minorities of €29m 695 684 397 Net profit of €24m* 205 -154 -89 -75 H1 2011 EPS of €0.45** -428 NAV per share at €4.08*** -858 Q1 Q2 Q3 Q4 Q1
Slide 11: Agenda
Agenda 1 Group summary 2 Financial highlights 3 Results by division 4 Balance sheet, capital & funding 5 Conclusion & outlook 6 Appendix Eric Strutz CFO Frankfurt August 10th, 2011 10
Slide 12: All segments of the Core Bank with significantly improved result
All segments of the Core Bank with significantly improved result Operating profit in € m Private Customers benefits from lower costs 195 36 H1 10 H1 11 916 Mittelstandsbank profits from stable German economy 702 H1 10 H1 11 Results for Central Eastern Europe continue to show positive trend 13 177 H1
Slide 13: Private Customers benefits from lower costs
Private Customers benefits from lower costs Operating profit P&L at a glance in € m 116 in € m Q2 10 Q1 11 Q2 11 H1 10 H1 11 79 Revenues before LLP 997 1,045 959 1,998 2,004 LLP -70 -41 -35 -136 -76 23 24 13 Operating expenses 914 888 845 1,826 1,733 -13 Operating profit 13 116 79 36 195 Q1 Q2 Q3 Q4
Slide 14: Mittelstandsbank profits from stable German economy
Mittelstandsbank profits from stable German economy Operating profit P&L at a glance in € m 501 in € m Q2 10 Q1 11 Q2 11 H1 10 H1 11 466 430 415 388 Revenues before LLP 830 804 839 1,662 1,643 314 LLP -94 -8 25 -255 17 Operating expenses 348 381 363 705 744 Operating profit 388 415 501 702 916 Q1 Q2
Slide 15: Results for Central & Eastern Europe continue to show positive trend
Results for Central & Eastern Europe continue to show positive trend Operating profit P&L at a glance in € m 99 in € m Q2 10 Q1 11 Q2 11 H1 10 H1 11 78 71 Revenues before LLP 247 252 253 473 505 LLP -92 -30 -6 -186 -36 6 7 Operating expenses 148 144 148 274 292 -31 Operating profit 7 78 99 13 177 Q1
Slide 16: Corporates & Markets – Best H1 since combining the banks
Corporates & Markets – Best H1 since combining the banks Operating profit P&L at a glance in € m 333 in € m Q2 10 Q1 11 Q2 11 H1 10 H1 11 281 240 Revenues before LLP 503 678 712 1,228 1,390 223 LLP 0 0 -31 19 -31 109 121 Operating expenses 394 438 400 805 838 Operating profit 109 240 281 442 521 Q1
Slide 17: Corporates & Markets divisional split
Corporates & Markets divisional split Corporate Finance - Operating Revenues incl. LLP › Corporate Finance with exceptional performance through a 473 381 few larger capital markets transactions 332 280 241 271 › Particularly good result in origination and financing solutions › No significant provisi
Slide 18: Others & Consolidation
Others & Consolidation Operating profit P&L at a glance 370 in € m in € m Q2 10 Q1 11 Q2 11 H1 10 H1 11 Revenues before LLP 131 496 68 371 564 19 LLP -1 1 -1 4 0 -63 -47 -120 Operating expenses 250 127 114 476 241 -339 Operating profit -120 370 -47 -101 323 Q1 Q2 Q3 Q4 Q1 Q2 2010 2011 Q2 10 Q1 11 Q2
Slide 19: ABF & PRU
ABF & PRU Operating profit in € m -334 Asset Based Finance hit by impairment on Greece -1,060 H1 10 H1 11 B/S reduction in Portfolio Restructuring Unit on track 256 127 H1 10 H1 11 Eric Strutz CFO Frankfurt August 10th, 2011 18
Slide 20: Asset Based Finance hit by impairment on Greece
Asset Based Finance hit by impairment on Greece Operating profit P&L at a glance in € m in € m Q2 10 Q1 11 Q2 11 H1 10 H1 11 -85 -138 -249 Revenues before LLP 252 257 -545 644 -288 -403 -533 LLP -354 -241 -233 -679 -474 -922 Operating expenses 147 154 144 299 298 Operating profit -249 -138 -922 -334
Slide 21: Portfolio reduction in Asset Based Finance
Portfolio reduction in Asset Based Finance PF portfolio development (EaD in € bn)1,3 Jun 2010 Jun 2011 156 -37% RWA (in € bn) 90 71 118 104 98 LLP (YtD, in € m) 679 474 – thereof CRE 549 401 – thereof Ship Finance 91 57 Dec Jun Mar Jun 0.56 0.48 2008 2010 2011 2011 LLP ratio (% of EaD*) – thereof CR
Slide 22: B/S reduction in Portfolio Restructuring Unit on track
B/S reduction in Portfolio Restructuring Unit on track Operating profit P&L at a glance in € m 314 in € m Q2 10 Q1 11 Q2 11 H1 10 H1 11 Revenues before LLP 150 84 77 358 161 161 LLP -28 1 3 -50 4 95 105 63 64 Operating expenses 27 22 16 52 38 Operating profit 95 63 64 256 127 Q1 Q2 Q3 Q4 Q1 Q2 2010
Slide 23: Agenda
Agenda 1 Group summary 2 Financial highlights 3 Results by division 4 Balance sheet, capital & funding 5 Conclusion & Outlook 6 Appendix Eric Strutz CFO Frankfurt August 10th, 2011 22
Slide 24: Further decrease in B/S - sound Core Tier 1 ratio
Further decrease in B/S - sound Core Tier 1 ratio Total Assets RWA Core Tier 1 and Tier 1 ratio in € bn in € bn in % Decrease since end of December Ongoing active management in Equity T1 ratio per June 2011 mainly due to m-t-m effects in reducing RWA at 9.1% derivatives and ABF run-down -24% 898 11.
Slide 25: Funding plan 2011 already fulfilled in H1
Funding plan 2011 already fulfilled in H1 Funding plan 2011 Funding breakdown H1 2011 in € bn in € bn ~€36bn ~€24bn Lettres de Gage Senior Schiffspfandbriefe 0.1 4.2 Unsecured ~€14bn 0.2 Funding €10.8bn ~€10-12bn Mortgage 4.0 ~€22bn €10.8bn Pfandbriefe ~50% Lower 1.9 6.1 Tier II ~50% 0.5 4.7 Maturin
Slide 26: Agenda
Agenda 1 Group summary 2 Financial highlights 3 Results by division 4 Balance sheet, capital & funding 5 Conclusion & outlook 6 Appendix Eric Strutz CFO Frankfurt August 10th, 2011 25
Slide 27: Outlook
Outlook High market uncertainty following the sovereign debt crisis will provide further challenges Performance of ABF dependent on further development of the European debt crisis Momentum of Core Bank intact given robust German economy and well balanced business mix Strong focus on realizing cost s
Slide 28: Agenda
Agenda 1 Group summary 2 Financial highlights 3 Results by division 4 Capital & Funding 5 Conclusion & Outlook 6 Appendix Eric Strutz CFO Frankfurt August 10th, 2011 27
Slide 29: Germany is the economic engine of the Eurozone
Germany is the economic engine of the Eurozone Reasons for outperformance Current development 2011 – 2012 expectation No bubbles in the housing market › Upswing of German economy is › Upswing will go on at a lower pace, going on, based primarily on Germany still ‘outperformer’ within EMU Low level o
Slide 30: PRU Structured Credit by Business Segment - June 2011
PRU Structured Credit by Business Segment - June 2011 Breakdown by asset and rating classes Details & Outlook Resolution of current US debt ceiling and European peripheral country concerns is key to further market AAA 12% recovery AA 20% Asset specific fundamentals supporting market recovery on trac
Slide 31: Default Portfolio (Q2 2011)
Default Portfolio (Q2 2011) Default portfolio and coverage ratios by segment €m – excluding/including GLLP Group1 20,721 85%/90% 18,717 8,140 9,419 1,158 PC 1,647 80%/96% 1,579 566/758/255 MSB 3,265 75%/84% 2,731 1,737 710 284 CEE 2,192 98%/104% 2,274 1,093/1,058/ 123 C&M 2,232 31%/35% 780 612/76/92
Slide 32: Loan to Value figures in the CRE business (Q2 2011)
Loan to Value figures in the CRE business (Q2 2011) Loan to Value – UK 1 Loan to Value – Spain 1 stratified representation stratified representation EaD UK EaD Spain total total >100 % 2 % (3 %) >100 % 1 % (1 %) €7bn €4bn 80 %–100 % 4 % (4 %) 80 %–100 % 2 % (4 %) 60 %–80 % 10 % (10 %) 60 %–80 % 13 %
Slide 33: Appendix: Segment reporting
Appendix: Segment reporting Eric Strutz CFO Frankfurt August 10th, 2011 32
Slide 34: Commerzbank Group
Commerzbank Group Q1 Q2 6M Q3 Q4 Q1 Q2 6M in € m 2010 2010 2010 2010 2010 2011 2011 2011 Net interest income 1,886 1,853 3,739 1,633 1,682 1,727 1,790 3,517 Provisions for loan losses -644 -639 -1,283 -621 -595 -318 -278 -596 Net interest income after provisions 1,242 1,214 2,456 1,012 1,087 1,409 1
Slide 35: Private Customers
Private Customers Q1 Q2 6M Q3 Q4 Q1 Q2 6M in € m 2010 2010 2010 2010 2010 2011 2011 2011 Net interest income 489 486 975 500 507 492 514 1,006 Provisions for loan losses -66 -70 -136 -64 -46 -41 -35 -76 Net interest income after provisions 423 416 839 436 461 451 479 930 Net commission income 547 49
Slide 36: Mittelstandsbank
Mittelstandsbank Q1 Q2 6M Q3 Q4 Q1 Q2 6M in € m 2010 2010 2010 2010 2010 2011 2011 2011 Net interest income 523 554 1,077 482 522 515 589 1,104 Provisions for loan losses -161 -94 -255 69 -93 -8 25 17 Net interest income after provisions 362 460 822 551 429 507 614 1,121 Net commission income 272 22
Slide 37: Central & Eastern Europe
Central & Eastern Europe Q1 Q2 6M Q3 Q4 Q1 Q2 6M in € m 2010 2010 2010 2010 2010 2011 2011 2011 Net interest income 159 161 320 164 190 157 166 323 Provisions for loan losses -94 -92 -186 -127 -48 -30 -6 -36 Net interest income after provisions 65 69 134 37 142 127 160 287 Net commission income 47 5
Slide 38: Corporates & Markets
Corporates & Markets Q1 Q2 6M Q3 Q4 Q1 Q2 6M in € m 2010 2010 2010 2010 2010 2011 2011 2011 Net interest income 208 198 406 141 220 160 226 386 Provisions for loan losses 19 0 19 -6 14 0 -31 -31 Net interest income after provisions 227 198 425 135 234 160 195 355 Net commission income 75 64 139 55 6
Slide 39: Asset Based Finance
Asset Based Finance Q1 Q2 6M Q3 Q4 Q1 Q2 6M in € m 2010 2010 2010 2010 2010 2011 2011 2011 Net interest income 298 319 617 283 260 296 255 551 Provisions for loan losses -325 -354 -679 -493 -412 -241 -233 -474 Net interest income after provisions -27 -35 -62 -210 -152 55 22 77 Net commission income
Slide 40: Portfolio Restructuring Unit
Portfolio Restructuring Unit Q1 Q2 6M Q3 Q4 Q1 Q2 6M in € m 2010 2010 2010 2010 2010 2011 2011 2011 Net interest income 23 10 33 29 20 5 13 18 Provisions for loan losses -22 -28 -50 -2 -10 1 3 4 Net interest income after provisions 1 -18 -17 27 10 6 16 22 Net commission income -3 7 4 2 -6 0 0 0 Net
Slide 41: Others & Consolidation
Others & Consolidation Q1 Q2 6M Q3 Q4 Q1 Q2 6M in € m 2010 2010 2010 2010 2010 2011 2011 2011 Net interest income 186 125 311 34 -37 102 27 129 Provisions for loan losses 5 -1 4 2 -0 1 -1 0 Net interest income after provisions 191 124 315 36 -37 103 26 129 Net commission income -29 -17 -46 -21 1 -18
Slide 42: Group equity definitions
Group equity definitions Reconciliation of equity definitions Equity basis for RoE Reconciliation of equity definitions H1 2011 End of Equity definitions in € m Average Period Subscribed capital 5,113 3,530 Capital reserve 10,889 3,897 Retained earnings 8,504 9,256 Silent participations SoFFin / All
Slide 43: For more information, please contact Commerzbank´s IR team
For more information, please contact Commerzbank´s IR team: Jürgen Ackermann (Head of Investor Relations) ir@commerzbank.com P: +49 69 136 22338 www.ir.commerzbank.com M: juergen.ackermann@commerzbank.com Equity / Fixed Income IR Financial Reporting / Rating Strategic Research Michael H. Klein (Head
Slide 44: 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,