Competing in a consolidating world - Commerzbank AG€¦ · Competing in a consolidating world Commerzbank – building on No. 1 Mittelstandsbank position Martin Blessing Member of

Competing in a consolidating worldCommerzbank – building on No. 1 Mittelstandsbank position

Martin BlessingMember of the Board of Managing Directors Lisbon, June 14, 2007

Martin Blessing, Member of the Board of Managing Directors2 / 21

1. 2. 3. Where are we now?

Agenda

1. Where are we now?Mittelstandsbank No. 1 in Germany

2. How did we get there?Implementation of our “Move to the top” program

3. Where will we go?Expanding our wallet share of the German market



Our mission:To be the leading bank for Germany`s private and corporate customers

Private Clients

&Asset

Management

Corporate &Investment

Banking

Commercial Real Estate &

Public Finance Treasury

• One of Germany`s leading retail banks with more than 6m customers

• No. 1 in Online Brokerage• No. 1 for Business clients• No. 2 home finance provider• Among top 3 in Private Banking

• No. 1 Mittelstandsbank in Germany• Top 10 player in CEE (BRE one of the leading

banks in Poland and No. 1 Internet bank)• No. 1 producer of structured retail products at the

world’s biggest retail exchange EUWAX

• Leading in Commercial Real Estate in Europe / World

• Leading Public Finance institution in Germany and Luxembourg

• Leading Pfandbrief issuer in the European market

Best Retail Bank in

Germany

The best nationwide

Bank for (S)ME

customers (Mittelstand)

Europe’s leading

specialist forReal Estate and Public Finance

Objectives


MITTELSTANDSBANK

Integrated Mittelstand approach opens up a range of opportunities

• Main focus on our clients in Germany• With target group-specific offers in emerging markets of Eastern Europe and Asia• Supported by Financial Institutions business with leading position as external trade-

financial institution and in European payment transactions plus worldwide correspondent banking

Germany CEE / AsiaMittelstand

• Small / Medium Enterprises

• Large Corporates

• Specialised Business*

• Participations (mainly Schiffsbank)

* Center of Competences for: Global Shipping, Renewable Energies

CEE

• BRE Bank (Poland)

• Promsvyazbank (Russia)

• CB branches/subsidiaries•Czech•Hungary •Russia

Asia Pacific

• Singapore

• China (Shanghai,Hongkong)

• Japan (Tokyo)

• Business activity with banks worldwide – more than 5,000 contacts

• Foreign trade and transaction finance

• ProCredit Banks (micro credits)

• Representative Offices

Financial Institutions




Commerzbank`s market position in CEE

• SME Banking / Retail Banking / Private Banking• Optimization of product and market strategies• Sales measurements for CEE

STRATEGIC FOCUS

Operating units Representative offices ProCredit banks

Poland: BRE Bank(72.14% participation)Russia: CB Eurasija(100% subsidiary) & Promsvyazbank 15.3%Czech: Branch PragueOffices in Brno, OstravaSlovakia: Branch BratislavaHungary CB Budapest Zrt.(100% subsidiary)

CroatiaKazakhstanRomaniaRussia (Moscow & Novosibirsk)Serbia-MontenegroUkraineUzbekistanBelarusAserbaijan (shortly)

Bosnia-HerzegovinaBulgariaSerbiaKosovoAlbaniaGeorgiaRomania

BUSINESS MODELS IN CEE


Mittelstandsbank important driver to group result in Q1 2007

16% 19% 18% 8% 9%

Operating profit Q1 2007 in € m, part of total result in %

145266

174 16477 82

Private- & Business

Clients

Mittel-stands-

bank

Corporates &

Markets

Commercial Real

Estate

Public Finance & Treasury

Others

Ave. Equity tied up in € m & Operating RoE in %22.9 31.7 15.7 26.3

29%

35.9


2,530 2,967 2,1974,183

1,171 419

Private- & Business

Clients

Mittel-stands-

bank

Corporates &

Markets

Commercial Real

Estate

Public Finance & Treasury

Others

Mittelstandsbank with highest profit contribution

Mittelstandsbank key value driver for Commerzbank



All units of Mittelstandsbank with strong q-o-q operating profitGermany in € m

BREin € m

CEE (excl. BRE) in € m

Financial Institutions in € m

150

103 92

129

186

Q1 Q2 Q3 Q4 Q12006 2007

2006 2007

2006 2007

2006 2007

11

6

3

1618

Q1 Q2 Q3 Q4 Q1

+ 45% + 81%

67

20 18

37

60

Q1 Q2 Q3 Q4 Q1

27

9

1619

29

Q1 Q2 Q3 Q4 Q1

x 3 x 3


Overview Mittelstandsbank

80 81

13-46

30

Q1 Q2 Q3 Q4 Q1

333

159 165 163 188 187

306 287 328 343

Q1 Q2 Q3 Q4 Q1

35.942.6

31.1

18.020.0

Q1 Q2 Q3 Q4 Q1

266

142 129

221

312

Q1 Q2 Q3 Q4 Q1

Operating profitin € m

Operating RoEin %

Commission vs. Interest income in € m LLP & Ave. equity tied up in € m

2006 2007

2006 2007 2006 2007

+ 87%

2006 2007

Commission incomeInterest income

+ 16 bp


2,840 2,866 2,8382,932 2,967



Others promised – we delivered…

ASU German grading system ranking based on the criteria “Mittelstand orientation“, “quality of relationship“ and “competitive terms“ (from 1 = very good to 6 = very poor)

Deutsche Bank Deutsche Bank (3.37)Deutsche Bank

Dresdner Bank

Sparkassen

Volksbanken

Commerzbank

HypoVereinsbank

2004

Volksbanken (2.93)

Commerzbank (2.67)

Sparkassen (2.88)

HypoVereinsbank (2.96)

Dresdner Bank (2.88)

2006

HypoVereinsbank

Sparkassen

Volksbanken

Dresdner Bank

Commerzbank

2005

We are grateful for our clients‘ trust – we take it as a challenge for the future

Source: Corporate Survey „Mittelstandsfinanzierung durch Banken“ conducted by Arbeitsgemeinschaft Selbständiger Unternehmer(ASU), December 2006


1. 2. 3. How did we get there?

Agenda





Move to the top program – implementing a new business approach

• End to end credit• Optimization of Documentary

Business • Value-based steering of

business

• Enhanced customer segmentation

• Optimized sales process• New customer acquisition• Product innovation &

development

New business model Process optimizationMove to the top

Employee development

program

Managingcapital

Cutting operating expenses

Achieving optimal

provisioning

Accompanying measures




Successful gaining of new clients

Our positive position is

represented by the development

in new clients acquisition

15.586

4.767

4.616

1.250

4.953

2004 2005 2006 Q1 2007 Ende Q12007

Development of new clients 2004 – Q1 2007

Target of 2006:9,000 new customers

already achieved in 2005

4,767

4,953

4,6161,250 15,586



Key financials of Mittelstandsbank in q-o-q comparison

~ 70% of total lending

Slightly in the average

Strong increase in lending resulting from international business activities

Mittelstandsbank (segment) Q1/2006 FY 2006 Q1/2007Total lending Mittelstandsbank (segment) (in € bn) 47.6 48.1 51.3

Margin on total corporate lending (in %) 1.41 1.42 1.35Loan-loss provision ratio (in %) 0.67 0.27 0.24Domestic corporate lending (in € bn)* 36.2 35.9 36.5Margin on domestic corporate lending(in %)** 1.43 1.41 1.34

Domestic corporate customers’ deposits(in € bn) 18.5 20.1 23.3

Margin on domestic corporate customers‘deposits (in %) 0.76 0.83 0.88

Risk-weighted assets (in € bn)*** 45.1 45.6 48.5Commission income (in € m) 159.5 674.8 186.9Net interest income (in € m) 306.1 1,264.1 333.2

Commission income / Net interest income 0.52 0.53 0.56

FTE 6,720 7,122 7,052Total income / FTE (in € ‘000) 73 284 80Operating expenses / FTE (in € ‘000) 40 153 38

Lending with higher growth in CEE

* 3 month average of domestic EP200, ** incl. loan commissions, ***MSB entities excl. BRE goodwill



BRE 2006 - best result in the bank`s history – on track for further success

BRE BANK’s POSITIONING

Corporates & MarketsRetail Banking

• High market position: Trading & Investments 1st place (33% share) in the bank bonds market

• Growing profitability: profit before tax at PLN 137.6 m in Q1 2007 up 42 % y-o-y

• Business expansion: 606 new corporate customers gained in Q1 2007 up 22% y-o-y

• Plans to open 20 further business offices

• Record-high profitability: profit before tax at PLN 69 m in Q1 2007 up by a factor of 6 y-o-y

• Successful launch of the Car Insurance Supermarket

• Over 2 million accounts: Retail accounts number up 6.9% q-o-q

• Leader in mortgage loans: Third largest provider of new mortgage loans in Q1 2007; with a market share of 9.4%



BRE Bank strategic projects focus on Retail Banking & market expansion

Maximum benefits and convenience in personal finance

Finance forindividual customers &

entrepreneurs

Offering a bene-ficial partnership in

distribution of Financial services for

retail & corporate clients

• Bank for demanding customers representing the middle class

• Modern products tailored to customers

• Multichannel service leader

• Credit card customised to individual needs

• Innovative products for entrepreneurs

• mBank as a leader in Internet banking

• Leader of innovation in personal finance

• Distribution based on cheap electronic access channels

• Transparent & straightforward range of top-quality products

• Focussing on distribution of financial services

• Cash loans

• Car loans

• Mortgage loans

• Products combined with complementary insurance products

• 10 branches & 400 representatives



CB subsidiaries – enlargement of our business models due to individual country`s specifications

Enlargement of our product range focussed on

complex solutions

• Long-term regional presence since 1983• Wide product range for our target

groups (German & Russian corporate customers and financial institutions)

• Continuation of strong trend in operating profit due to interest and commission income

• Our business model is focused on corporate customers

• CB represented with 10 branches

• Strong growth and expansion of operating business drives the results

• Operating profit high above Q1 2006 • Units: Corporate & Investment Banking as

well as Private Banking

Hungary

Increase dynamics of Russia –

portfolio by using capital market instruments

Implementation of InnoBanking

Czech

Russia



Financial Institutions contributes an important part to Mittelstand

A global footprint of Commerzbank Financial Institutions providing a broad range of products and services for banks worldwide

Our mission

Our set-up Our success

Client-driven organization delivers product excellence globally

Cash Services

Trade Services

Banking products

Market products

Our clients

Rel

atio

nshi

p M

anag

er

Central and Eastern Europe1

1. Deutsche Bank2. Bank of New York3.3. Amex

2003

1. Deutsche Bank2. ..3. Dresdner Bank

2006

Our approach shows results in our customer recognition

1 Ranking of the Euro Institutional Satisfaction IndexSource: FImetrix Studies 2003 – 2005


1. 2.1. 3.2. 3. Where will we go?

Agenda





Further strategic projects support the growth path in Germany…

Impact

• Intensified relationship-approach and strategic dialogue with large corporates

• Intensified cooperation with IB units• Focussing on capital markets and structured

products

• Increase of revenues in mid- & long-term credit segment

• Value-driven growth• Basis: risk-adjusted pricing

InitiativesProducts

Derivatives

Credit

Large Corporates

• Doubling of revenues from derivatives until 2010

• Build-up of additional sales-specialists com-bined with a qualification program

• Enlarged product-range

• Ambitious growth in revenues• Standardized access to products and services• Extension of cross-selling

TFTS goes global

Increase wallet share

One service around the world

Positioning as strategic partner of

our customers

Credit is Core business

for Commerzbank

1. 2. 3.1. 2. 3. Where will we go?


1. 2.1. 3.2. 3. Where will we go?

In CEE we focus our client-driven approaches on high-potential markets

CEE as second main pillar in the Mittelstandsbank

Being the best bank for Germany`s Mittelstand in

CEE

• Expansion via anorganic growth

• Increase of portfolio dynamics

• Enlargement of business model by further introducing InnoBanking

• Further expansion of product range focussed on complex product solutions

• Intensification of cross-border cooperation

• Use of best practice solutions

• Supporting SME in transition countries & strengthening our position

• Enhancing our position as Germany’s leading trade finance bank

Russia Hungary Czech BRE Bank ProCreditBanks & Rep.

Offices


1. 2.1. 3.2. 3. Where will we go?

Outlook on Mittelstandsbank`s profitability

Financials

Value Drivers of Mittelstand

Units & Financials

• Increase revenues and profitability with large corporates

• Product initiatives

RoE

Germany

CEE

Financial Institutions

Costs

LLP

Maintain on a sufficient level

Ongoing cost discipline

Stable outlook

Key Initiatives

• Further expansion into selected markets

• Intensified cross-boarder cooperation

• Demand-driven approach to further increase our customer recognition

• Client- & product-orientated placement guarantees for global excellence


Notes


Disclaimer

/ investor relations /

This presentation has been prepared and issued by Commerzbank AG. This publication is intended for professional and institutional investors./Any information in this presentation is based on data obtained from sources considered to be reliable, but no representations or guarantees are made by Commerzbank Group with regard to the accuracy of the data. The opinions and estimates contained herein constitute our best judgement at this date and time, and are subject to change without notice. This presentation is for information purposes; it is not intended to be and should not be construed as an offer or solicitation to acquire, or dispose of any of the securities or issues mentioned in this presentation./Commerzbank AG and/or its subsidiaries and/or affiliates (herein described as Commerzbank Group) may use the information in this presentation prior to its publication to its customers. Commerzbank Group or its employees may also own or build positions or trade in any such securities, issues, and derivatives thereon and may also sell them whenever considered appropriate. Commerzbank Group may also provide banking or other advisory services to interested parties./Commerzbank Group accepts no responsibility or liability whatsoever for any expense, loss or damages arising out of, or in any way connected with, the use of all or any part of this presentation./Copies of this document are available upon request or can be downloaded from www.commerzbank.com/aktionaere/index.html


For more information, please contact Commerzbank´s IR-team:

Ute Heiserer-JäckelP: +49 69 136 41874M: [email protected]

Simone NuxollP: +49 69 136 45660M: [email protected]

Stefan PhilippiP: +49 69 136 45231M: [email protected]

Andrea Flügel (Assistant)P: +49 69 136 22255M: [email protected]

Jürgen Ackermann (Head of IR)P: +49 69 136 22338M: [email protected]

Sandra Büschken (Deputy Head of IR)P: +49 69 136 23617M: [email protected]

Wennemar von BodelschwinghP: +49 69 136 43611M: [email protected]

www.commerzbank.com/ir

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Competing in a consolidating world - Commerzbank AG€¦ · Competing in a consolidating world Commerzbank – building on No. 1 Mittelstandsbank position Martin Blessing Member of