Commerzbank Ag · XETR:CBK
Commerzbank — Investor Day (September 2005)
21 slides from Commerzbank's investor day presentation, Sep 14, 2005
Slide 1: Investors' Day: Commerzbank Corporates & Markets on the right track
Investors‘ Day Commerzbank corporates & markets on the right track Frankfurt, 14.09.2005 Nicholas Teller Member of the Board of Managing Directors
Slide 2: Securities - Where are we coming from?
Corporates & Markets on the right track Securities - Where are we coming from? • Imbalanced prop trading to sales revenue relationship - bottom line oversensitive to trading performance • Excessive cost base - support cost infrastructure out of balance with business scale and revenue generating capa
Slide 3: Securities - What did we aim at and what have we achieved so far
Corporates & Markets on the right track Securities - What did we aim at and what have we achieved so far Targets Status ü Significant reduction of cost base Cost reduction ahead of plan 1. (-€294m by 2007) Full effect expected in 2007 09/04 2005e Target ü Reduction of front office staff by Target al
Slide 4: Securities - Cost base is being managed down
Corporates & Markets on the right track Securities - Cost base is being managed down Costs pre bonus per quarter in € m Total costs down by 20% against pre-restructuring 185 181 183 average 2004 168 -21% 141 145 Both direct and indirect costs below 2005 target Additional cost savings of more than €1
Slide 5: Securities - Staff cuts completed
Corporates & Markets on the right track Securities - Staff cuts completed London 576 Frankfurt Japan/ 425 387 279 ComSec 31 0 30.09. Status 30.09. Status 30.09. Status 2004 quo 2004 quo 2004 quo Total 1,275 757 ~800 USA/CCMC Rest of 118 World 125 24 67 30.09. Status 30.09. Status 2004 quo 2004 quo 3
Slide 6: Securities - Significant reduction of Value at Risk
Corporates & Markets on the right track Securities - Significant reduction of Value at Risk Development of VaR since 4Q 2004 in € m 20 18 16 Main impact: 14 ü Closure of all dedicated propietary trading activities 12 10 8 6 4 2 0 01.10.04 01.01.05 01.04.05 01.07. 05 VaR overnight, 97.5% 6/19
Slide 7: Corporates & Markets: Equity reduction under way
Corporates & Markets on the right track Corporates & Markets: Equity reduction under way in € m Reduction since beginning of Further reduction planned restructuring mainly through through more efficient portfolio VaR-reduction management by leveraging Securities credit markets 2,070 expertise 1,829
Slide 8: Securities - Revenues on track and ahead of restructuring target
Corporates & Markets on the right track Securities - Revenues on track and ahead of restructuring target Q1 `05 Q2 `05 y-t-d `05 Excellent start Spec Sits closed, GM and Earnings meeting 2004 level despite 113% of budget Ford downgrade affects 35% less headcount credit trading 52% less VaR 25% less
Slide 9: Securities - Substantial productivity gains
Corporates & Markets on the right track Securities - Substantial productivity gains Average VaR* Average revenues per month Average staff numbers 2004 1-8/05 2004 1-8/05 2004 1-8/05 Revenues / VaR Revenues / FTE** increased doubled by 53% +103% +53% 2004 1-8/05 2004 1-8/05 *VaR overnight, 97,5% **Fu
Slide 10: CBCM Q3/Q4 earnings: What they will be made of
Corporates & Markets on the right track CBCM Q3/Q4 earnings: What they will be made of Balanced and stable client business Structure of earnings by client group Sales performance 2005 prior year comparison in % ü ü 140 Stable performance Healthy client mix despite staff cuts 120 Retail Corporates 36
Slide 11: CBCM Q3/Q4 earnings: Less risk and less volatility
Corporates & Markets on the right track CBCM Q3/Q4 earnings: What they will be made of Less risk and less volatility Sliding standard deviation (20 days) Days of losses within a month in € m 14 14 Markets st. dev 20 days sliding 2004 12 Markets w/o Spec Sits st dev 12 2005 20 days sliding 10 10 8 8
Slide 12: CBCM Q3/Q4 earnings: Healthy trading platforms
Corporates & Markets on the right track CBCM Q3/Q4 earnings: What they will be made of Healthy trading platforms Markets Equity Derivatives • 21% ahead of 2004 level, using approx 57% of risk limit • Ranked No 1 Euwax in June and August ü Two of three largest businesses ahead of target ü Interest Ra
Slide 13: Relationship Management: What it comprises
Corporates & Markets on the right track Relationship Management: What it comprises Exposure (utilised credit lines) Target markets in € m Multi-National Coverage: 5000 • Commerzbank‘s top 100 corporate & institutional global clients 4000 UK Coverage: • FTSE350 companies in our chosen sectors 3000 •
Slide 14: Relationship Management: Cross selling ratio continues to improve
Corporates & Markets on the right track Relationship Management: Cross selling ratio continues to improve Revenues: regional split Revenues: composition 3% 2% 3% Germany UK 13% 60% 56% 75% 53% 84% 26% 40% 44% 25% 16% Germany Eastern Europe 2004 06/2005 2004 06/2005 UK USA Western Europe w/o UK Asia
Slide 15: Relationship Management: Stronger emphasis on value management showing results
Corporates & Markets on the right track Relationship Management: Stronger emphasis on value management showing results Relationship Management - Germany only Gross revenues and economic Economic profit in € m Capital in € m 125 300 • Economic capital reduced by € 73m 100 240 (-27%) since July 2004 7
Slide 16: Corporates and Markets: The integrated business model
Corporates & Markets on the right track Corporates and Markets: The integrated business model • Physical moves of Relationship Management to Securities locations have just been completed • While the past 9 months since announcement of the restructuring focused on the Securities business, we will now
Slide 17: CBCM Q3/Q4: Where are we going
Corporates & Markets on the right track CBCM Q3/Q4: Where are we going Cut costs and reorganize Build revenue and reduce reg. capital Q1 Q2 Q3 Q4 Risk target met New Head of FX Developement of revenues in 2004 Headcount Options Continue to Closure of New Head target met last implement new of Credit
Slide 18: CBCM - Challenges
Corporates & Markets on the right track CBCM - Challenges Achieve balanced sales/trading business model that is strong enough to beat market challenges Grow in areas of expertise and where we Achieve sustainable have a franchise keeping cost base under control profitability Maximise revenue from key
Slide 19: Summary
Corporates & Markets on the right track Summary H1 2005 H2 2005 2006 2007 Grow revenue Reduce capital Excellent Q1/ ü Weathered the storm in Q2 through full Implementation of allocation €1.5-1.6 bn (down from Realise residual cost savings business plans current €1.8bn) Implement full Achieve additio
Slide 20: For more information, please contact
For more information, please contact: Sandra Büschken Commerzbank Investor Relations P: +49 69 136 23617 M: [email protected] Jürgen Ackermann Ute Heiserer-Jäckel Head of Investor Relations P: +49 69 136 41874 P: +49 69 136 22338 M: [email protected] M: juergen.acke
Slide 21: Disclaimer
Corporates & Markets on the right track Disclaimer / investor relations / This presentation has been prepared and issued by Commerzbank AG. This publication is intended for professional and institutional customers. / Any information in this presentation is based on data obtained from sources conside