Commerzbank Ag · XETR:CBK
Commerzbank — FY2017 Earnings Presentation
47 slides from Commerzbank's earnings presentation, Feb 8, 2018
Slide 1: Strong focus on Commerzbank 4.0 – positive result in 2017
Commerzbank 4.0 simple – digital – efficient Strong focus on Commerzbank 4.0 – positive result in 2017 Analyst conference – Q4 2017 results / FY 2017 preliminary and unaudited results Stephan Engels | CFO | Frankfurt | 08 February 2018
Slide 2: Strong focus on Commerzbank 4.0 – positive result in 2017
Commerzbank 4.0 simple – digital – efficient Strong focus on Commerzbank 4.0 – positive result in 2017 Highlights 2017 Commerzbank 4.0 strategy implementation delivers › Strong growth in customers and assets in a changing German banking market › Digital transformation on track with delivery of new a
Slide 3: Commerzbank 4.0 strategy implementation delivers
Commerzbank 4.0 simple – digital – efficient Commerzbank 4.0 strategy implementation delivers Achievements 2017 Focused Business › PSBC growth ahead of plan: net new customers (GER) Model +502k (+639k since Q4/2016), assets under control +€38bn › Realignment in CC progressing well – market leading p
Slide 4: Strong customer and asset growth support revenues
Commerzbank 4.0 simple – digital – efficient Strong customer and asset growth support revenues Strong growth in PSBC Germany… …supporting revenues Customers +0.5m +0.3m +0.3m (2017 vs. 2016) +4% 2015 2016 2017 Securities +€22bn 2017 additional revenues +€10bn (2017 +€6bn vs. 2016) +14% ~€150m 2015 2
Slide 5: Digitalisation progress in Commerzbank 4.0
Commerzbank 4.0 simple – digital – efficient Digitalisation progress in Commerzbank 4.0 Digitalisation of end-to-end processes in Digital Campus Customer Applications Master Journeys Multichannel Banking Payment Transactions/ Loans Asset App platform Trade Finance Management 2017 2018 2017 2018 2017
Slide 6: Progress of key execution indicators in line with plan
Commerzbank 4.0 simple – digital – efficient Progress of key execution indicators in line with plan Net new customers (GER) Assets under Control (GER) Market share SBC1) (Wallet) Private and (m cumulated) (€bn eop) (%) 2.0 >400 8 Small >345 6 6 0.5 >385 5 1.0 Business 0.6 376 Customers Since 2018 20
Slide 7: Exceptional revenue items
Commerzbank 4.0 simple – digital – efficient Exceptional revenue items 2016 Revenues 2017 Revenues (€m) › Hedging & valuation adjustments1) 68 › › Hedging & valuation adjustments1) 108 108 Q1 Extraordinary dividend EKS (PSBC) 44 155 › Sale of bond positions (CC) 43 › Hedging & valuation adjustments1
Slide 8: Key financial figures at a glance
Commerzbank 4.0 simple – digital – efficient Key financial figures at a glance Group Financial Results Group Capital Operating result Exceptional Revenue Items B3 CET1 ratio fully phased-in (€m) 1,399 (% end of period) 1,303 14.1 557 12.3 831 746 568 2016 2017 2016 2017 Net result1) Leverage ratio f
Slide 9: 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) 4,818 4,832 Exceptional Revenue Items 190 210 4,447 3,989 215 29 4,628 4,622 Revenues Revenues 4,232 3,959 2016 2017 2016 2017 Operati
Slide 10: Operating result of €1.3bn – net result reflecting restructuring charge
Commerzbank 4.0 simple – digital – efficient Operating result of €1.3bn – net result reflecting restructuring charge Group operating result Group P&L (€m) in €m Q4 2016 Q3 2017 Q4 2017 FY 2016 FY 2017 629 Revenues 2,399 2,510 2,193 9,399 9,163 Exceptional items 288 502 -60 831 557 Revenues excl. exc
Slide 11: Strong investment in digitalisation – costs in line with plan
Commerzbank 4.0 simple – digital – efficient Strong investment in digitalisation – costs in line with plan Cost transition 2016 vs. 2017 Personnel expenses (€m) Operating expenses 45 24 175 156 7,100 71 7,079 3,600 3,724 3,600 3,724 3,479 3,376 3,376 3,479 2016 Investments Regulatory & Compulsory Co
Slide 12: LLP below previous year in overall benign credit environment
Commerzbank 4.0 simple – digital – efficient LLP below previous year in overall benign credit environment Provisions for loan losses (Group) LLP divisional split (€m) in €m Q4 2016 Q3 2017 Q4 2017 FY 2016 FY 2017 276 290 Private and Small Business Customers 14 55 24 119 154 251 Corporate Clients -30
Slide 13: Sound risk profile with NPL ratio of only 1.3%
Commerzbank 4.0 simple – digital – efficient Sound risk profile with NPL ratio of only 1.3% NPL in Group Cost of Risk2) in Group (€bn) (bp) 6.9 21 18 5.6 YE 2016 YE 2017 YE 2016 YE 2017 PSBC 1.7 1.9 PSBC 9 10 CC 3.4 2.6 CC 9 16 O&C 0.0 0.0 O&C - - ACR 1.8 1.1 ACR 380 239 NPL ratio1) Group 1.6% 1.3%
Slide 14: Private and Small Business Customers: strong customer and asset growth
Commerzbank 4.0 simple – digital – efficient Private and Small Business Customers: strong customer and asset growth Targets Loans Net new customers (GER) Assets under Control (GER) (m cumulative) (€bn eop) Deposits Securities +1.4m +24bn +38bn 2.0 >400 376 >385 338 111 102 +0.5m 1.0 88 81 0.6 155 17
Slide 15: Private and Small Business Customers: Overall stable revenues in 2017
Commerzbank 4.0 simple – digital – efficient Private and Small Business Customers: Overall stable revenues in 2017 Operating result Segmental P&L (€m) 382 in €m Q4 2016 Q3 2017 Q4 2017 FY 2016 FY 2017 Revenues 1,174 1,362 1,190 4,818 4,832 278 295 273 o/w Private Customers 590 531 596 2,322 2,235 o/
Slide 16: Corporate Clients: Strong net new customer growth and increase in RWA efficiency
Commerzbank 4.0 simple – digital – efficient Corporate Clients: Strong net new customer growth and increase in RWA efficiency Net new customers Revenues/RWA1) (k cumulative) (%) +4.6k +40bp 10.0 +10bp 4.2 +4.1k 7.0 3.8 3.8 3.7 5.4 1.3 2016 2017 2018 2020 2016 2017 2018 2020 1) Calculation based on R
Slide 17: Corporate Clients: Strategic realignment progressing well
Commerzbank 4.0 simple – digital – efficient Corporate Clients: Strategic realignment progressing well – revenues impacted by challenging markets Operating result Segmental P&L (€m) in €m Q4 2016 Q3 2017 Q4 2017 FY 2016 FY 2017 Revenues 1,087 971 975 4,447 3,989 o/w Mittelstand 500 437 467 1,943 1,8
Slide 18: Strong loan growth in PSBC – active deposit management in Corporate Clients
Commerzbank 4.0 simple – digital – efficient Strong loan growth in Private and Small Business Customers – active deposit management in Corporate Clients PSBC Loan volume Corporate Clients Loan volume (€bn) Deposit volume (€bn) Deposit volume 129 118 97 106 96 97 95 94 Dec-16 Dec-17 Dec-16 Dec-17 Hig
Slide 19: Asset & Capital Recovery: Ship Finance at €2.6bn – future drag minimized
Commerzbank 4.0 simple – digital – efficient Asset & Capital Recovery: Ship Finance at €2.6bn – future drag minimized Operating result Segmental P&L (€m) in €m Q4 2016 Q3 2017 Q4 2017 FY 2016 FY 2017 Revenues 183 -13 25 213 166 -33 Revenues excl. exceptional items 34 -30 54 -34 70 -54 LLP -308 -65 -
Slide 20: RWA with reduction of €6bn in Q4 2017
Commerzbank 4.0 simple – digital – efficient RWA with reduction of €6bn in Q4 2017 Market Risk RWA (B3 fully phased-in) development by RWA classification (€bn eop) Operational Risk Credit Risk -6bn 195 198 195 190 186 178 177 18 19 21 20 171 24 20 17 15 22 24 24 13 22 21 23 21 154 155 150 146 145 14
Slide 21: CET1 ratio increased to 14.1% - IFRS 9 impact ~75bp
Commerzbank 4.0 simple – digital – efficient CET1 ratio increased to 14.1% - IFRS 9 impact ~75bp Transition of CET1 ratio fully phased-in (%) 14.1 13.5 0.5 ~0.75 ~13.3 1.2 12.3 YE 2016 Q3 2017 YE 2017 IFRS 9 effects 01/01/2018 IFRS 9 pro forma Highlights › Increase of CET1 ratio to 14.1% due to lowe
Slide 22: Objectives and expectations for 2018
Commerzbank 4.0 simple – digital – efficient Objectives and expectations for 2018 FY 2018 We focus on further growth and the execution of our strategy Commerzbank 4.0 We expect higher underlying revenues in PSBC and Corporate Clients We will manage our cost base at ~€7.0bn We expect a Risk Result un
Slide 23: simple – digital – efficient
Commerzbank 4.0 simple – digital – efficient Commerzbank 4.0 simple – digital – efficient Stephan Engels | CFO | Frankfurt | 08 February 2018
Slide 24: Appendix
Commerzbank 4.0 simple – digital – efficient Appendix Commerzbank Group P&L Tables Major pillars of PSBC 25 Commerzbank Group 36 Major pillars of CC 26 Private and Small Business Customers 37 Key figures Commerzbank share 27 Corporate Clients 38 Commerzbank financials at a glance 28 Asset & Capital
Slide 25: German economy 2018 – ongoing upswing
Commerzbank 4.0 simple – digital – efficient German economy 2018 – ongoing upswing › German economy has grown significantly in recent quarters. Very positive DAX sentiment indicators indicate, that this will not change soon. (avg. p.a.) 13,600 › The main drivers of growth are still private consumpti
Slide 26: Major pillars of the Private and Small Business Customers segment
Commerzbank 4.0 simple – digital – efficient Major pillars of the Private and Small Business Customers segment (€bn) Revenues 20171) › Domestic retail banking business served via ~1,000 branches and wide-ranging multi-channel capabilities Private Customers 2.2 › ~8m private customers including priva
Slide 27: Major pillars of the Corporate Clients segment
Commerzbank 4.0 simple – digital – efficient Major pillars of the Corporate Clients segment (€bn) Revenues 20171) › Full range of products out of ~150 branches in Germany Mittelstand (German corporates 1.8 › German mid-sized and large corporates with sales >€15m (as long as not listed w/ sales > €15
Slide 28: Key figures Commerzbank share
Commerzbank 4.0 simple – digital – efficient Key figures Commerzbank share Figures per share Operating result per share (€) EPS 1.1 1.0 0.2 0.1 FY 2016 FY 2017 ytd as of 31 Dec 2016 31 Dec 2017 Number of shares issued (in m) 1,252.4 1,252.4 Market capitalisation (in €bn) 9.1 15.7 Net asset value per
Slide 29: Commerzbank financials at a glance
Commerzbank 4.0 simple – digital – efficient Commerzbank financials at a glance Group Q4 2016 Q3 2017 Q4 2017 FY 2016 FY 2017 Operating result (€m) 337 629 159 1,399 1,303 Net result (€m) 182 472 90 279 156 CET1 ratio B3 phase-in (%) 13.9 14.4 14.9 13.9 14.9 CET1 ratio B3 fully phased-in (%) 12.3 13
Slide 30: Capital markets funding 2018 expected at similar level as 2017
Commerzbank 4.0 simple – digital – efficient Capital markets funding 2018 expected at similar level as 2017 Funding structure1) Group Funding activities2) (as of 31 December 2017) 2017 – Notional €5.7bn Subordinated debt 15% Subordinated Unsecured Covered debt bonds bonds €0.9bn €2.8bn €2.0bn Promis
Slide 31: 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 bps parallel up-shift in rates yield curve Scenario impact on NII (as of 31 December 2017, in %) (€m) 900-1,000 2.0 1.5 500-550 1.0 0.5 0.0 -0.5 0Y 2Y 4Y 6Y 8Y 10Y 0Y 2Y 4Y 6Y 8Y 10Y Year
Slide 32: Rating overview Commerzbank
Commerzbank 4.0 simple – digital – efficient Rating overview Commerzbank As of 08 February 2018 Bank Ratings S&P Moody’s Fitch Scope Counterparty Rating1) A- negative A2 (cr) A- (dcr) - Deposit Rating2) A- negative A2 positive A- - Issuer Credit Rating (long-term debt) A- negative Baa1 stable BBB+ s
Slide 33: 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 effect 1) 3.9 2.3 2.6 1.8 1.9 -713 -1,067 -1,279 -1,446 -1,300 -7,175 -8,547 -9,201 -9,421 -9,729 2013 201
Slide 34: Weakening of USD with net positive impact on capital ratio
Commerzbank 4.0 simple – digital – efficient Weakening of USD with net positive impact on capital ratio Y-o-Y Change 137.1 7.6 -321 Other 10.2 +478 GBP 10.1 FX rates 12/16 12/17 PLN -13 EUR/ GBP 0.856 0.887 USD 26.1 +120 -4.132 EUR/ PLN 4.410 4.177 EUR -129 EUR/ USD 1.054 1.199 83.1 Currency Credit
Slide 35: Residential mortgage business vs. property prices
Commerzbank 4.0 simple – digital – efficient Residential mortgage business vs. property prices German residential properties HAM Overall mortgage portfolio COL FRA › Growing mortgage volume with a very good risk quality: BER – 12/15: EaD €62.6bn – RD1)12bp MUC Germany – 12/16: EaD €66.8bn – RD 10bp
Slide 36: Leading German provider of Renewable Energy Finance
Commerzbank 4.0 simple – digital – efficient We are the leading German provider of Renewable Energy Finance funding and will become Germanys most sustainable commercial bank Renewable Energy Finance Portfolio Our evidences of success (Exposure at Default, €bn end of period) › In the view of various
Slide 37: Commerzbank Group
Commerzbank 4.0 simple – digital – efficient Commerzbank Group Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY % Q4 % Q4 €m 2016 2016 2016 2016 2016 2017 2017 2017 2017 2017 vs Q4 vs Q3 Total clean revenues 2,168 2,083 2,206 2,111 8,568 2,284 2,060 2,008 2,253 8,607 6.8 12.2 Exceptional items 155 157 231 288 831 108
Slide 38: Private and Small Business Customers
Commerzbank 4.0 simple – digital – efficient Private and Small Business Customers Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY % Q4 % Q4 €m 2016 2016 2016 2016 2016 2017 2017 2017 2017 2017 vs Q4 vs Q3 Total clean revenues 1,156 1,109 1,192 1,171 4,628 1,168 1,110 1,125 1,218 4,622 4.0 8.3 Exceptional items 40 123
Slide 39: Corporate Clients
Commerzbank 4.0 simple – digital – efficient Corporate Clients Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY % Q4 % Q4 €m 2016 2016 2016 2016 2016 2017 2017 2017 2017 2017 vs Q4 vs Q3 Total clean revenues 1,086 1,042 1,017 1,086 4,232 1,068 951 962 979 3,959 -9.9 1.7 Exceptional items 59 51 104 1 215 32 -8 9 -3 29
Slide 40: Asset & Capital Recovery
Commerzbank 4.0 simple – digital – efficient Asset & Capital Recovery Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY % Q4 % Q4 €m 2016 2016 2016 2016 2016 2017 2017 2017 2017 2017 vs Q4 vs Q3 Total clean revenues -44 1 -25 34 -34 24 22 -30 54 70 56.4 >100 Exceptional items 26 -25 97 149 247 91 16 18 -29 96 >-100 >-1
Slide 41: Others & Consolidation
Commerzbank 4.0 simple – digital – efficient Others & Consolidation Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY % Q4 % Q4 €m 2016 2016 2016 2016 2016 2017 2017 2017 2017 2017 vs Q4 vs Q3 Total clean revenues -30 -69 22 -181 -258 24 -23 -48 2 -45 >100 >100 Exceptional items 30 7 6 136 179 -15 -1 238 1 222 -99.4 -9
Slide 42: mBank
Commerzbank 4.0 simple – digital – efficient mBank Part of Segment Private and Small Business Customers Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY % Q4 % Q4 €m 2016 2016 2016 2016 2016 2017 2017 2017 2017 2017 vs Q4 vs Q3 Total clean revenues 222 208 229 230 889 241 243 254 260 998 13.1 2.7 Exceptional items -2
Slide 43: Exceptional Revenue Items
Commerzbank 4.0 simple – digital – efficient Commerzbank Group Exceptional Revenue Items Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY in €m 2016 2016 2016 2016 2016 2017 2017 2017 2017 2017 Exceptional Item s 155 157 231 288 831 108 8 502 -60 557 o/w Net interest income - - - -3 -3 -9 -5 -16 -37 -67 o/w Net fair v
Slide 44: Group equity composition
Commerzbank 4.0 simple – digital – efficient Group equity composition Capital Capital Capital Ratios Ratios Ratios Q3 2017 Q4 2017 Q4 2017 Q4 2017 FY 2017 FY 2017 End of period End of period Average €bn €bn €bn % % % Common equity tier 1 B3 capital (phase in) 25.4 25.6 CET1 ratio phase-in: 14.9% 1
Slide 45: Glossary – Capital Allocation / RoE, RoTE & RoCET1 Calculation
Commerzbank 4.0 simple – digital – efficient Glossary – Capital Allocation / RoE, RoTE & RoCET1 Calculation › Amount of average capital allocated to business segments is calculated by multiplying the segments current YTD average Basel 3 RWA (fully phased-in) (PSBC €37.6bn, CC €95.1bn, O&C €27.0bn, A
Slide 46: 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 M: [email protected] Ansgar Herkert (Head of IR Communications) P: +49 69 136 44083 M: [email protected]
Slide 47: 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