Commerzbank Ag · XETR:CBK
Commerzbank — Q1 2012 Earnings Presentation
46 slides from Commerzbank's earnings presentation, May 9, 2012
Slide 1: EBA capital target fulfilled – solid start in 2012
EBA capital target fulfilled – solid start in 2012 Analyst conference – Q1 2012 results Stephan Engels CFO Frankfurt May 9th, 2012
Slide 2: Agenda
Agenda 1 Group summary 2 Financial highlights 3 Results by division 4 Balance sheet, capital & funding 5 Conclusion and outlook 6 Appendix Stephan Engels CFO Frankfurt May 9th, 2012 1
Slide 3: EBA capital target fulfilled ahead of plan – solid start in 2012
EBA capital target fulfilled ahead of plan – solid start in 2012 EBA capital target fulfilled ahead of plan Solid group operating profit of €584m and €845m in Core bank, both including negative valuation effect from own credit spread (OCS) of €158m 2 Successful de-risking and disposal of non-core as
Slide 4: Solid start with €584m Group operating profit despite challenging market environment
Solid start with €584m Group operating profit despite challenging market environment Group Core Bank** Q1 Q1 in € m Q1 2011 Q4 2011 Q1 2011 Q4 2011 2012 2012 Revenues before LLP 3,616 2,316 2,585 3,275 3,375 2,510 LLP -318 -381 -212 -78 -176 -17 Operating expenses 2,154 1,772 1,789 1,978 1,632 1,648
Slide 5: Agenda
Agenda 1 Group summary 2 Financial highlights 3 Results by division 4 Balance sheet, capital & funding 5 Conclusion and outlook 6 Appendix Stephan Engels CFO Frankfurt May 9th, 2012 4
Slide 6: Revenue development driven by non-recurring items and de-risking of balance sheet
Revenue development driven by non-recurring items and de-risking of balance sheet Revenues before LLP in € m 3,616 Group 2,316 2,585 Q1 11 Q4 11 Q1 12 3,275 3,375 Core Bank* 2,510 75 Q1 11 Q4 11 Q1 12 ABF 341 & -1,059 PRU Q1 11 Q4 11 Q1 12 * incl. Others & Consolidations Stephan Engels CFO Frank
Slide 7: Core Bank: underlying operating revenues stable and on average level of previous quarters
Core Bank*: underlying operating revenues stable and on average level of previous quarters Core Bank* revenues before LLP in € m 3,375 3,275 3,024 7 2,831 358 2,830 2,903 715 2,707 6 7 22 2,510 179 29 75 5 2,341 3,017 2,910 2,678 2,825 2,808 2,724 2,664 2,585 2,357 -16 -158 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q
Slide 8: LLP development benefitting from robust German economy and restructurings in ABF
LLP development benefitting from robust German economy and restructurings in ABF Provisions for loan losses in € m LLP in Q1 further down by €106m y-o-y 413 381 Core Bank benefits from general loan loss provision releases 318 Successful ongoing restructuring in 278 237 205 CRE partly compensated by
Slide 9: Costs significantly down by €365m y-o-y
Costs significantly down by €365m y-o-y – benefitting from cost synergies and additional cost measures Operating expenses in € m Overall costs reduced by 17% y-o-y About 50% of expense reduction from realised cost synergies and reduction in integration costs Additional reduction from further cost me
Slide 10: Attributable Net Profit influenced by higher tax charges
Attributable Net Profit* influenced by higher tax charges Attributable Net Profit* Net profit of €369m* in € m Eurohypo restructuring charges of €34m included in Q1 2012 985 Higher tax charge due to revaluation of 316 369 24 DTA following Eurohypo agreement -687 NAV per share improved to €3.97** dur
Slide 11: Agenda
Agenda 1 Group summary 2 Financial highlights 3 Results by division 4 Balance sheet, capital & funding 5 Conclusion and outlook 6 Appendix Stephan Engels CFO Frankfurt May 9th, 2012 10
Slide 12: Core Bank segments with solid operating contribution
Core Bank segments* with solid operating contribution Operating profit in € m Private Customers: lower revenues nearly compensated by cost measures and low LLP 116 112 Q1 11 Q1 12 Mittelstandsbank: continues to generate strong results 487 thanks to excellent franchise with German corporates 433 Q1 1
Slide 13: Private Customers: lower revenues nearly compensated by cost measures and low LLP
Private Customers: lower revenues nearly compensated by cost measures and low LLP Operating profit P&L at a glance in € m 116 112 in € m Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 109 Revenues before LLP 1,045 959 959 857 845 79 71 LLP -41 -35 -34 53 -6 Operating expenses 888 845 854 801 727 Operating profit 116
Slide 14: Mittelstandsbank: continues to generate strong results
Mittelstandsbank: continues to generate strong results thanks to excellent franchise with German corporates Operating profit P&L at a glance in € m 514 487 in € m Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 433 347 Revenues before LLP 837 863 806 781 790 289 LLP -11 28 -58 -149 35 Operating expenses 393 377 401 3
Slide 15: Central & Eastern Europe with strong BRE-Bank result
Central & Eastern Europe with strong BRE-Bank result Operating profit P&L at a glance in € m 194 in € m Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 Revenues before LLP 218 225 246 355 220 83 90 87 LLP -27 -9 -26 -24 -18 60 Operating expenses 131 133 130 137 115 Operating profit 60 83 90 194 87 Q1 Q2 Q3 Q4 Q1 2011
Slide 16: Corporates & Markets: recovery in client activity offset by own credit spread effect
Corporates & Markets: recovery in client activity compared to H2 2011 offset by own credit spread effect Operating profit P&L at a glance in € m in € m Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 281 Revenues before LLP 679 710 448 397 397 240 LLP 0 -31 -59 -56 -27 Operating expenses 439 398 354 314 340 35 27 30
Slide 17: Corporates & Markets divisional split
Corporates & Markets divisional split Corporates - Operating Revenues incl. LLP in € m › DCM Bonds with strong result from 402 300 underwriting business 236 181 105 › Low new deal flow in other Corporate Finance areas and reduction of loan book resulting in Q1 Q2 Q3 Q4 Q1 lower revenues 2011 2012 Eq
Slide 18: Others & Consolidation with strong treasury result
Others & Consolidation with strong treasury result Operating profit P&L at a glance in € m 948 in € m Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 Revenues before LLP 496 73 444 985 258 715 370 LLP 1 -1 1 0 -1 308 358 129 Operating expenses 127 117 137 37 128 308 233 5 125 12 -45 Operating profit 370 -45 308 948 1
Slide 19: ABF & PRU
ABF & PRU Operating profit in € m De-leveraging in ABF continued – Greek PSI bonds -138 sold in Q1 -425 Q1 11 Q1 12 Portfolio Restructuring Unit with strong result, using market opportunities for active downsizing 63 164 Q1 11 Q1 12 Stephan Engels CFO Frankfurt May 9th, 2012 18
Slide 20: De-leveraging in ABF continued – Greek PSI bonds sold in Q1
De-leveraging in ABF continued – Greek PSI bonds sold in Q1 Operating profit P&L at a glance in € m in € m Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 -138 Revenues before LLP 257 -544 -1,097 -1,048 -117 -425 LLP -241 -233 -254 -179 -179 -921 Operating expenses 154 144 143 132 129 -1,359 -1,494 Operating profit -
Slide 21: Portfolio reduction in Asset Based Finance
Portfolio reduction in Asset Based Finance PF portfolio development (EaD) in € bn › Public Finance EaD reduced by €7bn during first -43% quarter driven by asset sales and maturities 144 125 › Sold assets include Greek PSI bonds 104 89 82 › Position of Italian exposure reflects temporary market makin
Slide 22: Portfolio Restructuring Unit with strong result, using market opportunities
Portfolio Restructuring Unit with strong result, using market opportunities for active downsizing Operating profit P&L at a glance in € m 164 in € m Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 63 64 Revenues before LLP 84 77 -212 -11 192 LLP 1 3 17 -26 -16 -45 Operating expenses 22 16 17 8 12 Operating profit 63
Slide 23: Agenda
Agenda 1 Group summary 2 Financial highlights 3 Results by division 4 Balance sheet, capital & funding 5 Conclusion and Outlook 6 Appendix Stephan Engels CFO Frankfurt May 9th, 2012 22
Slide 24: Strong capital position with 11.3% Core Tier I ratio
Strong capital position with 11.3% Core Tier I ratio – further improvement amid €14bn RWA reduction during Q1 to €223bn Total Assets RWA Core Tier 1 and Tier 1 ratio in € bn in € bn in % › Further reduction in non-core assets › RWA development in Q1 mainly › Strengthening of capital ratios due compe
Slide 25: EBA capital target of originally €5.3bn fulfilled
EBA capital target of originally €5.3bn fulfilled – Liability Management in Q1 improved capital structure further Development of capital target in Q1 2012 in € bn 1.1 0.7 0.4 0.6 1.2 0.4 -1.8 EBA capital target Retained RWA Capital Excess capital Liability Excess capital per 31/12/2011 earnings mana
Slide 26: Pro forma Basel 3 capital ratio 10% per 01/01/2013
Pro forma Basel 3 capital ratio 10% per 01/01/2013* Planned development of RWA and Basel 3 effect Pro forma Core Tier 1 in € bn Basel 2.5 Basel 3 9.9% 11.3% 10%* ~245-250 237 ~22-27 14 223 RWA per RWA RWA per Expected RWA RWA per 31/12/2011 management 31/03/2012 development 01/01/2013 Q1 2012 rest o
Slide 27: Strong long-term funding profile, no further issuance needed in 2012
Strong long-term funding profile, no further issuance into capital markets needed in 2012* Funding plan 2012 › Continued asset reduction in ABF in € bn and PRU, accelerated by EBA 1.3 measures › Due to asset reduction and deposit 1.0 ~2.5 growth no need for capital markets ~15 funding to maintain st
Slide 28: Agenda
Agenda 1 Group summary 2 Financial highlights 3 Results by division 4 Balance sheet, capital & funding 5 Conclusion and outlook 6 Appendix Stephan Engels CFO Frankfurt May 9th, 2012 27
Slide 29: Conclusion and Outlook
Conclusion and Outlook Fulfillment of EBA capital target earlier than promised and on track to further increase our capital buffer Core Bank is well positioned in difficult markets and on course for a solid operating result in 2012 given a stable economic environment On the way to overachieve cost g
Slide 30: Agenda
Agenda 1 Group summary 2 Financial highlights 3 Results by division 4 Capital & Funding 5 Conclusion and Outlook 6 Appendix Stephan Engels CFO Frankfurt May 9th, 2012 29
Slide 31: We expect Germany to continue to outperform the Eurozone
We expect Germany to continue to outperform the Eurozone Current development Our expectation for 2012 Reasons for outperformance › German economy has slowed down › Sovereign debt crisis will weigh on No bubbles in the housing market significantly in the course of 2011, growth during the whole year L
Slide 32: PRU Structured Credit by Business Segment
PRU Structured Credit by Business Segment Breakdown by asset and rating classes Details & Outlook › The economic outlook is dependent upon sustainable AAA 6% resolution of European debt crisis and is key to further market recovery AA 23% €8.7bn A 24% › Asset fundamentals are stable and Q1 saw a pick
Slide 33: Default Portfolio (Q1 2012)
Default Portfolio (Q1 2012) Default portfolio and coverage ratios by segment €m – excluding / including GLLP Group * 19,494 84 % / 89 % 17,272 7,586 8,856 830 Private Customers 1,348 81 % / 91 % 1,225 452 / 637 / 137 Mittelstandsbank 3,254 73 % / 80 % 2,595 1,719 / 641 / 234 Central & Eastern Europe
Slide 34: Loan to Value figures in the CRE business (Q1 2012)
Loan to Value figures in the CRE business (Q1 2012) Loan to Value – UK* EaD UK total € 6bn Loan to Value – Spain* EaD Spain total € 4bn stratified representation stratified representation > 100 % 2 % (2 %) > 100 % 1 % (1 %) 80 % – 100 % 3 % (3 %) 80 % – 100 % 2% (1 %) 60 % – 80 % 10 % (10 %) 60 % –
Slide 35: Appendix: Segment reporting
Appendix: Segment reporting Stephan Engels CFO Frankfurt May 9th, 2012 34
Slide 36: Commerzbank Group
Commerzbank Group Q1 Q2 Q3 Q4 Q1 in € m 2011 2011 2011 2011 2012 Net interest income 1,727 1,790 1,589 1,618 1,429 Provisions for loan losses -318 -278 -413 -381 -212 Net interest income after provisions 1,409 1,512 1,176 1,237 1,217 Net commission income 1,020 928 844 703 843 Net trading income and
Slide 37: Private Customers
Private Customers Q1 Q2 Q3 Q4 Q1 in € m 2011 2011 2011 2011 2012 Net interest income 492 514 497 524 453 Provisions for loan losses -41 -35 -34 53 -6 Net interest income after provisions 451 479 463 577 447 Net commission income 569 455 406 324 383 Net trading income and net income on hedge accounti
Slide 38: Mittelstandsbank
Mittelstandsbank Q1 Q2 Q3 Q4 Q1 in € m 2011 2011 2011 2011 2012 Net interest income 534 604 549 562 542 Provisions for loan losses -11 28 -58 -149 35 Net interest income after provisions 523 632 491 413 577 Net commission income 292 279 271 274 270 Net trading income and net income on hedge accounti
Slide 39: Central & Eastern Europe
Central & Eastern Europe Q1 Q2 Q3 Q4 Q1 in € m 2011 2011 2011 2011 2012 Net interest income 137 147 150 139 120 Provisions for loan losses -27 -9 -26 -24 -18 Net interest income after provisions 110 138 124 115 102 Net commission income 48 50 48 41 50 Net trading income and net income on hedge accou
Slide 40: Corporates & Markets
Corporates & Markets Q1 Q2 Q3 Q4 Q1 in € m 2011 2011 2011 2011 2012 Net interest income 160 225 141 306 119 Provisions for loan losses 0 -31 -59 -56 -27 Net interest income after provisions 160 194 82 250 92 Net commission income 48 92 78 82 83 Net trading income and net income on hedge accounting 4
Slide 41: Asset Based Finance
Asset Based Finance Q1 Q2 Q3 Q4 Q1 in € m 2011 2011 2011 2011 2012 Net interest income 296 256 240 229 206 Provisions for loan losses -241 -233 -254 -179 -179 Net interest income after provisions 55 23 -14 50 27 Net commission income 81 87 69 23 63 Net trading income and net income on hedge accounti
Slide 42: Portfolio Restructuring Unit
Portfolio Restructuring Unit Q1 Q2 Q3 Q4 Q1 in € m 2011 2011 2011 2011 2012 Net interest income 5 13 7 24 5 Provisions for loan losses 1 3 17 -26 -16 Net interest income after provisions 6 16 24 -2 -11 Net commission income 0 0 -0 0 0 Net trading income and net income on hedge accounting 61 72 -219
Slide 43: Others & Consolidation
Others & Consolidation Q1 Q2 Q3 Q4 Q1 in € m 2011 2011 2011 2011 2012 Net interest income 103 31 5 -166 -16 Provisions for loan losses 1 -1 1 0 -1 Net interest income after provisions 104 30 6 -166 -17 Net commission income -18 -35 -28 -41 -6 Net trading income and net income on hedge accounting 47
Slide 44: Group equity definitions
Group equity definitions Reconciliation of equity definitions Equity basis for RoE Reconciliation of equity definitions 2012 End of Equity definitions in € m Average Period Subscribed capital 5,593 5,233 Capital reserve 11,604 11,270 Retained earnings 8,885 8,841 Silent participations SoFFin / Allia
Slide 45: For more information, please contact Commerzbank's IR team
For more information, please contact Commerzbank´´s IR team: Tanja Birkholz (Head of Investor Relations / Executive Management Board Member) P: +49 69 136 23854 M: [email protected] Jürgen Ackermann (Europe / US) Ute Heiserer-Jäckel (Retail Investors) P: +49 69 136 22338 P: +49 69 136 4
Slide 46: 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,