Commerzbank AG · XETR:CBK
Commerzbank — Q2 2019 Earnings Presentation
41 slides from Commerzbank's earnings presentation, Aug 7, 2019
Slide 1: Continued momentum in customer business in challenging environment
Commerzbank 4.0 simple – digital – efficient Continued momentum in customer business in challenging environment Analyst conference – Q2 2019 results Stephan Engels | CFO | Frankfurt | 7 August 2019 All figures in this presentation are subject to rounding
Slide 2: Highlights Q2 2019
Commerzbank 4.0 simple – digital – efficient Continued momentum in customer business in challenging environment Highlights Q2 2019 Further growth in customers and assets › In PSBC net new customers Germany increased by 108k bringing the total to 1.3m › AuC in PSBC Germany up by €11bn in Q2 – loan vo
Slide 3: Key financial figures at a glance
Commerzbank 4.0 simple – digital – efficient Key financial figures at a glance Group Financial Results Group Capital2 Exceptional Revenue Items Operating result CET1 ratio fully loaded (€m) (%) 401 18 13.0 12.7 12.9 298 244 34 383 278 264 -34 Q2 2018 Q1 2019 Q2 2019 Q2 2018 Q1 2019 Q2 2019 Leverage
Slide 4: Exceptional revenue items
Commerzbank 4.0 simple – digital – efficient Exceptional revenue items 2018 Revenues 2019 Revenues (€m) (€m) › Hedging & valuation adjustments -24 › Hedging & valuation adjustments -15 Q1 › Polish group insurance business (PSBC) 52 1 › PPA Consumer Finance (PSBC) -19 -34 › PPA Consumer Finance (PSBC
Slide 5: Revenues and operating results of Commerzbank divisions
Commerzbank 4.0 simple – digital – efficient Revenues and operating results of Commerzbank divisions Private and Small Business Customers Corporate Clients (€m) (€m) 1,200 1,200 1,223 901 860 Exceptional Revenue Items 776 1,225 1,220 1,244 909 Revenues Revenues 869 799 -25 -20 -21 -8 -8 -23 Q2 2018
Slide 6: Operating result reflects resilient customer business – but weak fair value result
Commerzbank 4.0 simple – digital – efficient Operating result reflects resilient customer business – but weak contribution from fair value result Group operating result Group P&L (€m) in €m Q2 2018 Q1 2019 Q2 2019 H1 2018 H1 2019 Revenues 2,178 2,156 2,129 4,395 4,285 401 Exceptional items 18 -34 34
Slide 7: Cost development remains in line with FY guidance
Commerzbank 4.0 simple – digital – efficient Cost development remains in line with FY guidance H1 2018 vs. H1 2019 transition Personnel expenses (€m) Administrative expenses Compulsory contributions 3,576 35 107 3,487 1,702 10 26 19 1,754 1,572 1,395 337 302 H1 2018 Compulsory Costs of Regulatory &
Slide 8: Risk result driven by single cases
Commerzbank 4.0 simple – digital – efficient Risk result driven by single cases Risk Result Risk Result divisional split (€m) Risk Result in €m Q2 2018 Q1 2019 Q2 2019 H1 2018 H1 2019 Private and Small Business Customers -66 -52 -48 -115 -100 Corporate Clients -35 -28 -127 -60 -155 Asset & Capital R
Slide 9: Private and Small Business Customers: net new customer acquisition on target
Commerzbank 4.0 simple – digital – efficient Private and Small Business Customers: net new customer acquisition on target – Assets under Control above €400bn Net new customers (GER) Assets under Control (GER) Targets Loans (m cumulative) (€bn eop) Deposits Securities +0.7m continued growth +77bn +0.
Slide 10: Private and Small Business Customers: progress in line with strategy
Commerzbank 4.0 simple – digital – efficient Private and Small Business Customers: progress in line with strategy Operating result Segmental P&L (€m) in €m Q2 2018 Q1 2019 Q2 2019 H1 2018 H1 2019 Revenues 1,200 1,200 1,223 2,436 2,424 239 o/w Private Customers 599 589 598 1,196 1,187 203 o/w Small B
Slide 11: Corporate Clients: 2020 customer growth and loan volume targets reached
Commerzbank 4.0 simple – digital – efficient Corporate Clients: 2020 customer growth and loan volume targets reached Net new customers Loan Volume Corporates1 (k cumulative) (€bn) continued growth continued growth + 2.5k +13€bn +7.6k 11.4 88 >10.0 >85 >9.4 8.9 >83 82 78 5.4 75 1.3 2016 2017 2018 H1
Slide 12: Corporate Clients: stable customer business but lower fair value and increased risk result
Commerzbank 4.0 simple – digital – efficient Corporate Clients: stable customer business but significantly lower fair value and increased risk result Operating result Segmental P&L (€m) in €m Q2 2018 Q1 2019 Q2 2019 H1 2018 H1 2019 Revenues 901 860 776 1,765 1,636 o/w Mittelstand 429 452 437 858 889
Slide 13: Asset & Capital Recovery: segment dissolved as of July 1st
Commerzbank 4.0 simple – digital – efficient Asset & Capital Recovery: segment dissolved as of July 1st following successful portfolio run down Operating result Segmental P&L (€m) 60 38 in €m Q2 2018 Q1 2019 Q2 2019 H1 2018 H1 2019 Revenues 62 11 68 106 79 16 14 Revenues excl. exceptional items 10 1
Slide 14: Capital ratio increased to 12.9% on capital built
Commerzbank 4.0 simple – digital – efficient Capital ratio increased to 12.9% on capital built RWA development by RWA classification Transition of CET1 ratio (€bn eop) (%) 185 187 176 12 12 12 23 Market Risk 22 13.0 21 Operational Risk 12.9 Credit Risk 12.7 0.3 0.1 143 152 152 Q2 2018 Q1 2019 Q2 201
Slide 15: Objectives and expectations for 2019
Commerzbank 4.0 simple – digital – efficient Objectives and expectations for 2019 2019 – Outlook We continue our growth strategy and expect higher underlying revenues We target a cost base below €6.8bn We expect a risk result not below €550m We plan to maintain a dividend pay-out ratio comparable to
Slide 16: simple – digital – efficient
Commerzbank 4.0 simple – digital – efficient Commerzbank 4.0 simple – digital – efficient Stephan Engels | CFO | Frankfurt | 7 August 2019 15
Slide 17: Appendix
Commerzbank 4.0 simple – digital – efficient Appendix Commerzbank Group P&L Tables Commerzbank financials at a glance 18 Commerzbank Group 30 Key figures Commerzbank share 19 Private and Small Business Customers 31 Key execution indicators 20 Corporate Clients 32 Digitalisation progress 21 Asset & C
Slide 18: German economy 2019/2020 – looking for the turn-around
Commerzbank 4.0 simple – digital – efficient German economy 2019/2020 – looking for the turn-around › In H1 2019 the German economy stayed weak, and probably contracted in Q2. While manufacturing is in recession, services are still holding up. DAX (avg. p.a.) › This divergence points to weak externa
Slide 19: Commerzbank financials at a glance
Commerzbank 4.0 simple – digital – efficient Commerzbank financials at a glance Group Q2 2018 Q1 2019 Q2 2019 H1 2018 H1 2019 Operating result (€m) 401 244 298 659 542 Net result (€m) 272 120 271 533 391 CET1 ratio fully loaded (%)¹ 13.0 12.7 12.9 13.0 12.9 Total assets (€bn) 488 503 518 488 518 RWA
Slide 20: Key figures Commerzbank share
Commerzbank 4.0 simple – digital – efficient Key figures Commerzbank share Figures per share Operating result per share (€) EPS 1.0 0.9 0.7 0.4 0.3 0.1 FY 2017 FY 2018 H1 2019 ytd as of FY 2017 FY 2018 H1 2019 Number of shares issued (in m) 1,252.40 1,252.40 1,252.40 Market capitalisation (in €bn) 1
Slide 21: Key Execution Indicators
Commerzbank 4.0 simple – digital – efficient Key Execution Indicators H1 Target Target 2016 2018 2019 2019 2020 2.0 Net new customers 1.3 1.5 1.0 (GER)1 (m cumulated) 0.1 413 >400 PSBC Assets under Control 381 >390 (GER) 336 (€bn eop) Growth 8.9 11.4 >9.4 >10.0 Net new customers2 (k cumulated) 1.3 C
Slide 22: Digitalisation progress in Commerzbank 4.0
Commerzbank 4.0 simple – digital – efficient Digitalisation progress in Commerzbank 4.0 Digitalisation of end-to-end processes Master Journeys Payment Transactions / Trade Finance Loans Asset Management 2019 2020 Accounts Accounts & Credit Securities Credit SME & CLM Retail CLM Corp Corporate Retail
Slide 23: Continuing loan and deposit growth
Commerzbank 4.0 simple – digital – efficient Continuing loan and deposit growth PSBC Loan volume Corporate Clients Loan volume (€bn) Deposit volume (€bn) Deposit volume 151 155 120 102 102 117 82 81 Mar-19 Jun-19 Mar-19 Jun-19 Highlights › Loan growth in Private and Small Business Customers mainly d
Slide 24: Significant NII potential in scenario of rising interest rates
Commerzbank 4.0 simple – digital – efficient Significant NII potential in scenario of rising interest rates 100 bp parallel up-shift in rates yield curve Scenario impact on NII (as of 28 June 2019, in %) (€m) ~900-950 2.0 1.5 ~500-550 1.0 0.5 0.0 -0.5 0Y 2Y 4Y 6Y 8Y 10Y Year 1 Year 4 Highlights › Ye
Slide 25: Capital markets funding activities
Commerzbank 4.0 simple – digital – efficient Capital markets funding activities Funding structure1 Group Funding activities H1 20192 (as of 30 June 2019) (nominal values) Subordinated debt Non-preferred senior 12% €0.7bn Promissory notes 11% €2.5bn Covered bonds ~€69bn 50% Covered bonds €5.9bn Prefe
Slide 26: Rating overview Commerzbank
Commerzbank 4.0 simple – digital – efficient Rating overview Commerzbank As of 7 August 2019 Bank Ratings S&P Moody’s Fitch Scope Counterparty Rating/ Assessment1 A A1/ A1 (cr) A- (dcr) - Deposit Rating2 A- negative A1 stable A- - Issuer Credit Rating (long-term debt) A- negative A1 stable BBB+ stab
Slide 27: IAS 19: Development of pension obligations
Commerzbank 4.0 simple – digital – efficient IAS 19: Development of pension obligations Pension obligations (gross) Cumulated actuarial gains and losses Discount rate in %2 (€m) Cumulated OCI effect1 3.9 2.3 2.6 1.8 1.9 1.9 1.2 -713 -1,067 -1,279 -1,446 -1,300 -1,586 -1,825 -7,175 -8,547 -9,201 -9,4
Slide 28: Weakening of both, USD and GBP, with net positive impact on capital ratio
Commerzbank 4.0 simple – digital – efficient Weakening of both, USD and GBP, with net positive impact on capital ratio QoQ Change in FX capital position 152.1 7.4 Other 11.1 GBP 12.8 -513 -27 FX rates 03/19 06/19 PLN +30 EUR/ GBP 0.858 0.897 USD 24.9 +144 EUR EUR/ PLN 4.301 4.250 -342 -19 95.8 EUR/
Slide 29: Residential mortgage business vs. property prices
Commerzbank 4.0 simple – digital – efficient Residential mortgage business vs. property prices German residential properties Overall mortgage portfolio 300 › Growing mortgage volume with a very good risk quality: HAM 250 COL – 12/15: EaD €62.6bn – RD 12bp FRA – 12/16: EaD €66.8bn – RD 10bp 200 BER –
Slide 30: Leading German provider of Renewable Energy Project Finance
Commerzbank 4.0 simple – digital – efficient We are a leading German provider of Renewable Energy Project Finance funding and will become Germany’s most sustainable commercial bank Renewable Energy Project Finance Portfolio Portfolio Breakdown (Exposure at Default, €bn end of period) 1% +24% 16% 3.8
Slide 31: Commerzbank Group
Commerzbank 4.0 simple – digital – efficient Commerzbank Group Q1 Q2 H1 Q3 Q4 FY Q1 Q2 H1 €m 2018 2018 2018 2018 2018 2018 2019 2019 2019 Total clean revenues 2,216 2,160 4,376 2,122 2,151 8,649 2,190 2,095 4,285 Exceptional items 1 18 19 18 -115 -78 -34 34 - Total revenues 2,217 2,178 4,395 2,140 2
Slide 32: Private and Small Business Customers
Commerzbank 4.0 simple – digital – efficient Private and Small Business Customers Q1 Q2 H1 Q3 Q4 FY Q1 Q2 H1 €m 2018 2018 2018 2018 2018 2018 2019 2019 2019 Total clean revenues 1,211 1,225 2,436 1,226 1,184 4,846 1,220 1,244 2,464 Exceptional items 25 -25 - -22 -23 -44 -20 -21 -41 Total revenues 1,
Slide 33: Corporate Clients
Commerzbank 4.0 simple – digital – efficient Corporate Clients Q1 Q2 H1 Q3 Q4 FY Q1 Q2 H1 €m 2018 2018 2018 2018 2018 2018 2019 2019 2019 Total clean revenues 865 909 1,775 840 846 3,461 869 799 1,668 Exceptional items -1 -8 -9 15 -49 -43 -8 -23 -32 Total revenues 864 901 1,765 855 797 3,418 860 776
Slide 34: Asset & Capital Recovery
Commerzbank 4.0 simple – digital – efficient Asset & Capital Recovery Q1 Q2 H1 Q3 Q4 FY Q1 Q2 H1 €m 2018 2018 2018 2018 2018 2018 2019 2019 2019 Total clean revenues 68 10 78 2 22 103 14 -11 3 Exceptional items -23 51 28 26 -43 11 -3 78 75 Total revenues 45 62 106 28 -20 114 11 68 79 o/w Net interes
Slide 35: Others & Consolidation
Commerzbank 4.0 simple – digital – efficient Others & Consolidation Q1 Q2 H1 Q3 Q4 FY Q1 Q2 H1 €m 2018 2018 2018 2018 2018 2018 2019 2019 2019 Total clean revenues 72 15 87 53 98 238 87 63 149 Exceptional items - - - -1 -1 -2 -2 - -3 Total revenues 72 15 87 53 96 236 84 62 147 o/w Net interest incom
Slide 36: mBank
Commerzbank 4.0 simple – digital – efficient mBank Part of Segment Private and Small Business Customers Q1 Q2 H1 Q3 Q4 FY Q1 Q2 H1 €m 2018 2018 2018 2018 2018 2018 2019 2019 2019 Total clean revenues 253 265 518 265 257 1,040 274 294 568 Exceptional items 52 - 52 - -1 52 - -3 -3 Total revenues 305 2
Slide 37: Exceptional Revenue Items
Commerzbank 4.0 simple – digital – efficient Commerzbank Group Exceptional Revenue Items Q1 Q2 H1 Q3 Q4 FY Q1 Q2 H1 €m 2018 2018 2018 2018 2018 2018 2019 2019 2019 Exceptional Revenue Item s 1 18 19 18 -115 -78 -34 34 - o/w Net interest income -26 -17 -43 -20 -17 -80 -22 -16 -39 o/w Net fair value r
Slide 38: Group equity composition
Commerzbank 4.0 simple – digital – efficient Group equity composition Capital Capital Capital Ratios Ratios Ratio Q1 2019 Q2 2019 Q2 2019 Q2 2019 H1 2019 Q2 2019 End of period End of period Average €bn €bn €bn % % % Common equity tier 1 capital fully loaded 23.6 24.0 23.8 1 Op. RoCET 5.0% 4.6% CET
Slide 39: Glossary – Key Ratios
Commerzbank 4.0 simple –– digital simple digital –– efficient efficient Glossary – Key Ratios Key Ratio Abbreviation Calculated for Numerator Denominator Private and Small Business Group Asset & Capital Recovery Others & Consolidation Customers and Corporate Clients CIR (excl. Cost/income ratio (exc
Slide 40: For more information, please contact Commerzbank's IR team
Commerzbank 4.0 simple – digital – efficient For more information, please contact Commerzbank’s IR team Christoph Wortig (Head of Investor Relations) P: +49 69 136 52668 Mail: ir@commerzbank.com M: christoph.wortig@commerzbank.com www.ir.commerzbank.com Ansgar Herkert (Head of IR Communications) P:
Slide 41: Disclaimer
Commerzbank 4.0 simple – digital – efficient Disclaimer This presentation contains forward-looking statements. Forward-looking statements are statements that are not historical facts; they include, inter alia, statements about Commerzbank’s beliefs and expectations and the assumptions underlying the