Commerzbank Ag · XETR:CBK
Commerzbank — Investor Day (September 2003)
22 slides from Commerzbank's investor day presentation, Sep 10, 2003
Slide 1: Investors' Day 2003: Looking back and moving forward
Investors’ Day 2003 Looking back and moving forward Klaus-Peter Müller Chairman of the Board of Managing Directors Glashütten/Taunus, September 10, 2003
Slide 2: Commerzbank's two-step transformation: 1st Phase
investors‘ day september 10, 2003 1 Commerzbank’s two-step transformation… 1st Phase A. A new management team , B. Two demanding cost-cutting initiatives , C. A strengthened capital base , D. Review of all divisional strategies , E. Refocus on the bank’s strengths in corporate and retail banking , E
Slide 3: 2nd Phase – measures to be taken
investors‘ day september 10, 2003 2 … 2nd Phase – measures to be taken a. Focus on revenue growth b. Ongoing cost management as a core capability c. Portfolio shift on capital employed A refocused Commerzbank d. Risk-adequate growth strategy in selected areas e. Continued divestments of industrial h
Slide 4: 1st Phase of Commerzbank's transformation
investors‘ day september 10, 2003 3 1st Phase of Commerzbank’s transformation
Slide 5: A. New management team: Fresh impetus
investors‘ day september 10, 2003 4 A. New management team: Fresh impetus with highly qualified people from within and outside § 29 new members of top § Board has international man- management level and agement style and experience Board of Managing Directors § Management is familiar with since mid-
Slide 6: B. Cost-cutting programmes
investors‘ day september 10, 2003 5 B. Cost-cutting programmes Cost-cutting initiative Operating expenses • Reduction of operating expenses in € m below €5.5bn in 2002 • based on competitor-benchmarking 5,855 • focus of project: branches/service units 5,477 5,155 • FTE reduction 3,400 + 900 4476 ? C
Slide 7: C. Commerzbank's strong equity base
investors‘ day september 10, 2003 6 C. Commerzbank’s strong equity base Own funds of Germany’s commercial banks1) in € m Supervisory of which: of which: Own funds Core capital core capital hybrid capital ratio capital instruments in % ratio in % Deutsche Bank 31.73) 23.3 2.1 13.7 10.0 Commerzbank 19
Slide 8: D. All divisions have undertaken an intensive strategy review
investors‘ day september 10, 2003 7 D. All divisions have undertaken an intensive strategy review § Play-to-win Retail Banking Asset Management § Shrink-to-grow § Portfolio shift Corporate Banking § Mittelstand offensive § Value offensive Securities § Linkage with Corporate Banking § Capacity adjust
Slide 9: E. Two double pillars with a clear focus on distribution
investors‘ day september 10, 2003 8 E. Two double pillars with a clear focus on distribution The creative relationship bank • for successful corporate customers The best choice for demanding in Germany private customers in Germany • for European and US corporates of high credit quality Private Asset
Slide 10: 2nd Phase of Commerzbank's transformation
investors‘ day september 10, 2003 9 2nd Phase of Commerzbank’s transformation
Slide 11: a. Focus on revenue growth: Six major programmes
investors‘ day september 10, 2003 10 a. Focus on revenue growth: Six major revenue-generating programmes under way Retail Banking § From play-to-win to grow-to-win Asset Management § ADIG products sold by third parties § Mittelstand offensive Corporate Banking § Value offensive for major corporates
Slide 12: b. Cost management: A capability to build on
investors‘ day september 10, 2003 11 b. Cost management: A capability to build on within Commerzbank Commerzbank‘s cost management is widely recognized Cost-cutting § Aggressive without losing sense of initiative proportion Project § Strong in implementation / controlling office cost management Cost
Slide 13: c. Equity allocation within the Commerzbank Group
investors‘ day september 10, 2003 12 c. Equity allocation within the Commerzbank Group Strengthening of growth areas, 30.6.2003, in € bn medium-term target 1.708 0.668 Corporate customers 0.879 Retail Banking 0.116 Securities 1.021 Group Treasury Mortgage banks Others + consolidation 1.827 5.300 Ass
Slide 14: e. Potential for reducing non-strategic listed investments
investors‘ day september 10, 2003 13 e. Potential for reducing non-strategic listed investments1) 5.362) Even with currently low interest-rate level, 3.72 3.47 an annual rise of almost €100m in interest 3.07 income could be achieved through systematic overall reduction of non-strategic € bn 1.94 2.2
Slide 15: Performance of the Commerzbank share and pre-tax profit
investors‘ day september 10, 2003 14 Performance of the Commerzbank share and pre-tax profit DowJonesEuroStoxxBanks (indexed) Commerzbank Operating profit (in € m, right scale) 20 200 172 194 16 100 12 0 8 -100 -75 -215 4 -200 Q3 2002 Q4 2002 Q1 2003 Q2 2003 0 -300 Jul Aug Sep Oct Nov Dec Jan Feb Ma
Slide 16: Improved operating performance
investors‘ day september 10, 2003 15 Improved operating performance Phase 1 of transformation programme starting to pay off Operating profit Operative ROE Operative C/I ratio in € m annualized, in % in % 441 81.1 366 77.3 73.5 71.6 6.4 192 6.0 172 3.4 1.6 FY FY Q1 H1 FY FY Q1 H1 FY FY Q1 H1 2001 200
Slide 17: Analysts' 2004 forecasts for Commerzbank
investors‘ day september 10, 2003 16 Analysts’ 2004 forecasts for Commerzbank ROE (pre-tax) 5-6% C/I ratio <69% Costs ≤€4.5bn (present scenario) Pre-tax profit €500-600m
Slide 18: Quo vadis, Commerzbank?
investors‘ day september 10, 2003 17 Quo vadis, Commerzbank? in € bn best-case scenario revenues Why such 6.668 a large gap? worst-case scenario 5.155 operating expenses 1.321 risk provisioning 2002 2003 2004 2005
Slide 19: Sensitivity: dependence on net commission and net interest income
investors‘ day september 10, 2003 18 Sensitivity: dependence on net commission income and net interest income DAX EONIA (overnight money) 130 110 commission income 120 105 110 interest income 100 100 2000 3000 4000 5000 2.0% 2.5% 3.0% 3.5% 4.0% indexed indexed
Slide 20: Differences in the impact of economic variables
investors‘ day september 10, 2003 19 Differences in the impact of economic variables Retail Asset Corporate Multi- Securities banking management banking* nationals* EONIA DAX GDP growth External trade Impact on earnings: ● strong impact ◕ distinct impact * Corporate banking and Multinationals only i
Slide 21: Summing up
investors‘ day september 10, 2003 20 Summing up Leading distribution platform in the middle of Europe 1. Number 1 bank for the successful German Mittelstand (turnover €2.5m–250m) 2. Top relationship bank for European corporates; growing the profitable business §out of our commercial banking sophisti
Slide 22: investors‘ day september 10, 2003
investors‘ day september 10, 2003 21