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CommerzbankConference Call
Dr. Eric StrutzCFO
FrankfurtAugust 4, 2004
Chart 1Chart 1Chart 1Chart 1
Mid-2004 highlights in figures
178 160 155 150 149 141 148199205 146
6.77.3 7.4 7.7 7.8 7.3 7.1 7.05.96.0
31 Mar 30 Jun 30 Sep 31 Dec 31 Mar 30 Jun 30 Sep 31 Dec 31 Mar 30 Jun
RWA, in € bn Tier I ratio, in %
2002 2003
Target7%
2004
Q2 2004 Q1 2004 H1 2004 H1 2003Operating profit (€m) 403 435 838 366
Net profit (€m) 248 254 502 73
Earnings per share (€) 0.42 0.43 0.85 0.14
Chart 2Chart 2Chart 2Chart 2
Successful start to integration of SchmidtBank into Commerzbank
� 347,000 retail customers
� 4,000 corporate clients� Staff of roughly 550� Balance-sheet total as of
1.6.: €3.4bn� 70 branches and 29 self-
service centres
� Commerzbank has a risk umbrella for large unexpected losses
Integration process
� In both first half and 2004 as a whole, hardly relevant for results
� Both operating income and operating expenses roughly €30m in first half of 2004
� Starting 2005, pre-tax return on equity of 10% – or more – expected
Impact on results
Chart 3Chart 3Chart 3Chart 3
Net interest income strengthened profitability
705746 718
805
663662
Q1 03 Q2 03 Q3 03 Q4 03 Q1 04 Q2 04
Net interest incomein €m
Net interest income after provisioningin €m
453 443 480
591
407389
Q1 03 Q2 03 Q3 03 Q4 03 Q1 04 Q2 04
Q2 improvement in net interest income was driven by three factors:
1. Higher dividend income from ourinvestment portfolio
2. Stronger Group Treasury3. Increase in corporate business
2.762.62
2.442.34
2.392.43
31.3. 30.6. 30.9. 31.12. 31.3. 30.6.2003 2004
Average interest margin based on risk-weighted assets, in %
Chart 4Chart 4Chart 4Chart 4
Quality of loan portfolio continuously improving
927
1,321
8809501,084
2001 2002 2003 31.03. 30.6.
Loan loss provisionsin €m
Loan loss provisions in €m
252303
238214 214 214
256273
Q1 03 Q2 03 Q3 03 Q4 03 Q1 04 Q2 04 Q3 04*** Q4 04***
*
*) excluding SchmidtBank**) including SchmidtBank
**
2004
***) expected
7,077 6,844
1,857 1,857348 352
6,846
1,683385
5,6365,5065,320
Non-performing loans CollateralCountry LLP and general provision Loan-loss provisions
107.9% 109.0% 114.6%
31.12.2002 31.12.2003 30.6.2004
7,388 7,711 7,845In excess:
€542mIn excess:
€634m In excess:€1,001m
Loan loss cover ratio seasonably on a high levelin €m
Chart 5Chart 5Chart 5Chart 5
More difficult market conditions reduce income from securities
520 516
597557
591
509
Q1 03 Q2 03 Q3 03 Q4 03 Q1 04 Q2 04
Net commission incomein €m
Net result on investments and securities portfolioin €m
105
5477
181
6864
Q1 03 Q2 03 Q3 03 Q4 03 Q1 04 Q2 04
*
**
*) roughly €20m from SCH disposal **) approx. €100m from SCH disposal
231278
314
131121107
Q1 03 Q2 03 Q3 03 Q4 03 Q1 04 Q2 04
Trading profitin €m
-769-1,100
1,240 1,253 1,035650
-258
12/02 03/03 06/03 09/03 12/03 03/04 06/04
Revaluation reservein €m
pre-revaluation
post-revaluation
equities bonds
Chart 6Chart 6Chart 6Chart 6
Sustained cost control supports earnings improvementin € m
Operating expenses
1,398 1,3081,179 1,141 1,078 1,113 1,104 1,128
1,2201,229
Q1 02 Q2 02 Q3 02 Q4 02 Q1 03 Q2 03 Q3 03 Q4 03 Q1 04 Q2 04
Operating profit
18154
172 194101 92
435 403
-75 32
Q1 02 Q2 02 Q3 02 Q4 02 Q1 03 Q2 03 Q3 03 Q4 03 Q1 04 Q2 04
Net profit 72 2 -129 -243 3 70 -2,305 -88 254 248
Chart 7Chart 7Chart 7Chart 7
-307 -256 -329 -562 -555 -452
-2,040 -2,470-2,909 -2,706 -2,320 -2,232
1,693 1,696 1,834 1,734
9571,423 1,216 1,129
1,036 1,154
391
600 602417
509 445400
1,5231,451
245
20693
118223
H1 1999 H1 2000 H1 2001 H1 2002 H1 2003 H1 2004
H1 2004: best half since 2000
838Operating profit 3662356201,086812 € m
Total lending (€ m) 219,611 240,172 251,695 231,805 165,641 163,807DAX 5,379 6,898 6,058 4,383 3,221 4,053Rating Moody’s AA3 AA3 AA3 A1 A2 A2
S&P AA- AA- A+ A A- A-Fitch AA- AA- A+ A A- A-
Operating expenses
Loan-loss provisions
Net interest income
Net commission income
Other incomeTrading profit
*
*) adjusted by €856m generated by comdirect IPO
Chart 8Chart 8Chart 8Chart 8
1021
798
223
940
823
117
Retail Banking: H1 2004 positive shareholder value achieved
Interest income stabilized in Q2
Provisioning increased slightly
Commissions down 10% in Q2, due to lower sales of securities and funds; but H1 level still 14% above previous year
Operating expenses declined somewhat, despite integration of SchmidtBank
Operating profit in H1 exceeded previous year by more than 90%
Pre-tax RoE at mid-year almost 25%
We are well on track to increase our operating profit as promised by at least 25% in 2004 as a whole
H1 04 H1 03
Total income
Operating expenses
Operating profit
€m
Share of equity tied up in Group
18%
€ m Q1 Q2 Change279 276 -1%-39 -46 +18%240 230 -4%280 253 -10%
0 0 -1 1 0%2 2 0%3 9 +200%
526 495 -6%404 394 -2%122 101 -17%
27.6% 22.6% -71.5% 72.8% -
Operative return on equityCost/income ratio in operating business
Total incomeOperating expensesOperating profit
Net result on hedge accountingTrading profitNet result on investments and securities portfolioOther operating result
Net interest income after provisioning
Net interest incomeProvision for possible loan losses
Net commission income
Chart 9Chart 9Chart 9Chart 9
249
157
92
204
173
31
Asset Management: operating profit virtually tripled year-on-year
Concentration on core markets bearing fruit
Stronger customer demand for certificates led to slight fall in commissions and assets under management (€104.7bn)
Another small reduction in operating expenses in Q2
Operating profit, at €40m, down quarter-on-quarter, but high earnings base reconfirmed
Operating profit of €92m in H1 virtually three times higher than in previous year
Operative RoE at 34%
Our forecast of 40% higher operating profit in 2004 remains, but should be considered extremely conservative.
H1 04 H1 03
Total income
Operating expenses
Operating profit
Mio Euro
Share of equity tied up in Group
5%
€ m Q1 Q2 Change-2 -3 +50%0 0 -
-2 -3 +50%121 107 -12%
1 0 -2 2 0%1 6 -8 6 -25%
131 118 -10%79 78 -1%52 40 -23%
37.4% 30.4% -60.3% 66.1% -
Operative return on equityCost/income ratio in operating business
Total incomeOperating expensesOperating profit
Net result on hedge accountingTrading profitNet result on investments and securities portfolioOther operating result
Net interest income after provisioning
Net interest incomeProvision for possible loan losses
Net commission income
€m
Chart 10Chart 10Chart 10Chart 10
906
623
283
866
605
261
Corporate Customers & Institutions: significant improvement in Q2
Interest income before provisioning up 3% in Q2
Thanks to better credit quality, sharp reduction in provisioning
Interest income after provisioning in Q2 23% above previous quarter
Operating expenses under control
Operating profit 40% higher than previous quarter
Operative RoE raised to 11.8% for first six months
Cost/income ratio remains under 50%
Operating profit of €283m in H1 sees us well under way to achieving our communicated target of €500m in year as a whole.
H1 04 H1 03
Total income
Operating expenses
Operating profit
€m
Share of equity tied up in Group
47%
€m Q1 Q2 Change400 414 +3%
-194 -161 -17%206 253 +23%170 174 +2%
0 0 -13 0 -18 9 -50%22 41 +86%
429 477 +11%311 312 +0%118 165 +40%
10.0% 13.7% -49.9% 48.9% -
Operative return on equityCost/income ratio in operating business
Total incomeOperating expensesOperating profit
Net result on hedge accoutingTrading profitNet result on investments and securities portfolioOther operating result
Net interest income after provisioning
Net interest incomeProvision for possible loan losses
Net commission income
Chart 11Chart 11Chart 11Chart 11
535
462
73
541
479
62
Securities: difficult market conditions led to weaker revenues
H1 04 H1 03
Total income
Operating expenses
Operating profit
€m
Share of equity tied up in Group
12%
€ m Q1 Q2 Change4 4 -0 -2 -4 2 -50%
36 25 -31%0 0 -
312 154 -51%2 0 -0 0 -
354 181 -49%234 228 -3%120 -47 -
41.6% -14.8% -66.1% 124.6% -
Operative return on equityCost/income ratio in operating business
Total incomeOperating expensesOperating profit
Net result on hedge accountingTrading profitNet result on investments and securities portfolioOther operating result
Net interest income after provisionig
Net interest incomeProvision for possible loan losses
Net commission income
After an excellent start, earnings perspectives became much gloomier
€73m operating profit achieved in H1 2004, almost 18% more than in previous year
Operative ROE at mid-year 12.1%; again in double figures
Cost/income ratio at 86% in the first 6 months of 2004
The various sections performed very unevenly: Equity Derivatives, Equity Sales and Trading, Capital Markets and Securities Finance continued to register good performance. However, Credit Trading and FX Trading were weak.
Chart 12Chart 12Chart 12Chart 12
Commerzbank’s three additional segmentsoperating profit in € m
117
68
6
38
73
29
2003Q1 Q2 Q3 Q4 Q1 Q2
Treasury
2004
56 55 51 5444
80
2003
Mortgage banking
2004
-246
-76
-146
-69
27
-141
2003
Others and consolidation
2004
Operative ROE boosted to above 200% in Q2 2004
Treasury with stable profitcontributions in all quarters.
Eurohypo‘s H1 results have notbeen taken into account. Atmid-year, we chose not to recognize €52m (in Q2: €32m).
Hypothekenbank in Essen and Erste Europäische Hypothekenbankproduce stable profit contributions.
In addition to the approx. €100m profit from the sale of SCH, thissegment benefitted in Q2 from the lower funding costs ofnon-strategic investments and seasonally higher dividend payments. Operating expenses were higher.
Q1 Q2 Q3 Q4 Q1 Q2
Q1 Q2 Q3 Q4 Q1 Q2
Chart 13Chart 13Chart 13Chart 13
Our achievements and our goals
� Q2 figures in line with good Q1 results. We have made further progress in our two largest core business lines (Retail Banking and Corporate Banking)
� We believe our core activities possess further growth potential –through both internal and external expansion
� Additional scope for reducing loan-loss provisions � Cost discipline will be maintained� Our non-strategic participations are being reduced further
� We intend to close the gap between our present book value (€18.00) and our present share price (€13.98)
Chart 14Chart 14Chart 14Chart 14
Commerzbank: the next IR events
Investors’ Day
September 22, 2004
at Commerzbank's head office
planned with all Commerzbank board members participating
Analysts’ conference call
to present the Q3 figures
November 3, 2004
held by Eric Strutz and Commerzbank team
For more information, please contact:Commerzbank Investor Relations
Tel. +49 (69) 136 22 33 8
ir@commerzbank.com
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