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Commerzbank – Well positioned for future growthDeutsche Bank German Corporate Conference
Klaus-Peter Müller, Chief Executive Officer
Frankfurt, June 21, 2007
1June 21th, 2007
Excellent start in 2007
1 before LLP; 3 annualized
• High profit level in the underlying business
• Operating profit without disposal gains significantly up
• Considerable rise in commission income
• Stable cost level despite significant investment programs
• Continued profit growth at Mittelstand and CRE; strong quarter for PBC and C&M
Q1`07 vs. Q1`06
-5.4%Operating profit, in € m 908
Revenues1, in € m +5.2%2,428
Net RoE, in %3
CIR, in %
-6.7ppts
+4.5ppts
19.6
56.0
+54.7%831
+24.7%2,351
+5.8ppts
-5.2ppts
17.1
57.9
Clean2 Q1`07 vs. Q1`06
2 Clean: without net result on participations
2June 21th, 2007
Agenda
1. Commerzbank’s achievements
2. Current positioning / strategy
3. Growth potential
3June 21th, 2007
Significant increase in operating profit in the last yearsOperating profit1)
in € m
Profit due to sale of participationsOperating profit adjusted for disposal of participations 1) Based on pro-forma integration of Eurohypo
2) Disposal of participations not considered
192559
906
1,784
2,134
20022) 20032) 2004 2005 2006
1,011
2,050
2,715
4June 21th, 2007
Operating revenues and expensesin € m
Strong cost discipline and management of revenue-related expenses
Total revenues after LLP Cost income ratio, in %
5,1554,511 4,493 4,662
5,204
5,340 5,5045,070
6,419
7,832
2002 2003 2004 2005 2006
Operating expenses
81.1
70.9
59.767.2
73.3
Q1 `0756.0
5June 21th, 2007
Breakdown of main income itemsQ1 2007
Net interest income• Stable lending margins• Higher deposit margins• Improved loan quality
Commission income• Continued focus on commission
generating business• Active credit portfolio management
Trading profit• Sustainable trading profit – driven by
client business• Low risk and low volatility
Stable, high quality earnings
14%
47%39%
Net interest income 1,045
Commission income 847
Trading profit 301
Q1 2007
1,060
772
320
Q1 2006
6June 21th, 2007
Comfortable capital level
Risk-weighted assets vs. Tier I capital ratio and own funds ratioin € bn
1) since Q1 2006 including Eurohypo
143 147 150
232 228 235231
141
231
7.1 6.9 6.68.0
6.4 6.4 6.5 6.7 6.9
12.3 12.1 11.4 12.510.6 10.3 11.0 11.1 11.0
31.3. 30.6. 30.9. 31.12. 31.3. 30.6. 30.9. 31.12. 31.3.
Risk-weighted assets Tier I ratio (%), incl. market risk positionOwn funds ratio (%), incl. market risk position
2005 2006 20071)
7June 21th, 2007
Focus on core competencies
Selective acquisitions3.• Strengthening retail platform via SchmidtBank• Complement of business mix via Eurohypo
Disposals1.
• Significant reduction of participation portfolio (e.g. sale of international asset management business)
• Sale of non-strategic participations, e.g. KEB, Heidelberger Druck, Banca Intesa, MAN
Additional shareholder value
Strengthening core divisions2.
• Restored profitability in retail business• Major turnaround in corporate bank• De-risked and profitable Investment Banking
Efficiency4.• Optimized credit & back office processes• Streamlined cost structure across the group
Achievments
8June 21th, 2007
Agenda
1. Commerzbank’s achievements
2. Current positioning / strategy
3. Growth potential
9June 21th, 2007
Well diversified business mix
Private & Business Customers Mittelstand Corporates &
Markets Commercial Real Estate
Public Finance & Treasury
Equity allocation within Group as of 03/20071)
19% 40%
38%
1) Remaining 3% equity allocation in segment Others & Consolidation
Three strong pillars with balanced equity allocation and high profit contribution
Commerzbank Group
Best Retail Bank in Germany
The best nationwide Bank for SME Customers
(Mittelstand)
Europe´s leadingspecialist for Real Estate and Public
Finance
10June 21th, 2007
Positioning
CREPT
CIB
PBC
• No 3 German Retail bank with more than 6 m customers:High market share among affluent clients
• No 1 in Online Brokerage• No 2 home finance provider• Among top 3 in Private Banking
Core segments: Well positioned in defined segments
• Approx. 40% of German “(S)ME“-clients and 80% of large customers with CB account. No 1 Mittelstandsbank in Germany
• Top 10 player in CEE (BRE one of the leading banks in Poland andNo 1 Internet bank)
• C&M: sustainable earnings stream thanks to customer-related business
• No 1 producer of structured retail products at the world’s biggest retail exchange EUWAX
• Leading in Commercial Real Estate in Europe• Leading Public Finance institution in Germany and Luxembourg• Leading Pfandbrief issuer in the European market
11June 21th, 2007
Integrated business model with mutual synergy effects
Integrated platform across divisions and subsidiaries
• Joint customer approach of PBC and Mittelstand
• C&M provides structured products and services to our Retail and SME customers
• Integrated value chain with real estate financing and real estate asset management products
• Refinancing advantage through joint capital market approach (CBK able to use EHY AAA-rated Pfandbrief platform)
• Joint Group treasury operations, risk management and financial controlling
• EHY benefits from customer access domestically and internationally
PFT
Mittel-stand
C&M
PBC
CRE
12June 21th, 2007
Core region: strong foothold in Germany and focused international business
30
Focus Germany
Focused international business• Accompanying German corporates in their international business• Strong presence in main international real estate markets• Seizing growth opportunities in selected regions, i.e. CEE
70
Claims on customersin %
Germany
Abroad
Year end 2006 Commerzbank Group
30
76
Employeesin % 24
32
68
Revenues after provisioningin %
13June 21th, 2007
Agenda
1. Commerzbank’s achievements
2. Current positioning / strategy
3. Growth potential
14June 21th, 2007
Anorganic growth
Ongoing organicgrowth and profitabilityincrease
Current
Balanced approach of profitability and growth
Lever 1
Lever 2
Growth
Profi-tability
• Ongoing efficiency enhancement in all divisions - strict cost management
• Optimizing capital structure via active capital management
• Following active portfolio management
• Significant investment programs to enhance organic growth in our core divisions
• Expanding in regions and products with competitive strengths
• High exposure to strong German economy leads to …
… increased growth momentum … upside potential given conservative
risk management approach
15June 21th, 2007
German GDPReal, seasonally adjusted, q-o-q change in %
Strong momentum in German economy
• German economy achieved 2.8% growth in 2006 (best result since 2000), economy remains stable in Q1 2007 with growth of 0.5% – no significant negative effects of VAT increase
• German companies with noticeably increased competitiveness
• Exports rose by 12.6% in 2006 and 9.3% in 1Q 2007 q-o-q
• Unemployment decreased significantly• Domestic demand has been picking up
Outlook: • Corporate tax reform to cut rate below 30%• Optimistic outlook in real estate after phase
of consolidation
German ifo1) indexseasonally adjusted monthly figures
-0.6%
-0.4%
-0.2%
0.0%
0.2%
0.4%
0.6%
0.8%
1.0%
1.2%
2003 2004 2005 2006
1) ifo Business Climate Index is a widely observed early indicator for economic development in Germany
80.0
85.0
90.0
95.0
100.0
105.0
110.0
2003 2004 2005 2006
2007
2007
16June 21th, 2007
Main growth initiatives within GroupPB
C
• Investments in marketing campaign and new products for retail banking customer growth of 250,000 by 2009
• Development of strategies for continuous growth of AuM and customers in private banking• Enhanced sales of banking products and expansion in advisory for comdirect customer growth
of 550,000 by 2009• Continue growth initiative “alpha” to achieve doubling of AuM at cominvest to €100bn by 2011
MSB
C
&M
C
RE
PFT
• Large customers: closer cooperation of corporate and investment bank• Improving portfolio and customer management at Mittelstandsbank• Expansion of mBank to Slovakia and Czech Republic
• Maintain market leadership in Germany in equity derivatives• Further development link with corporate banking in interest rates• Increase cross-selling of IB products in business segment multinational clients
• Completion of RE value chain by integrating RE asset management activities (CGG, CLI)• Continue international growth (USA and selectively in Asia) and introduction of new products • Growth initiative CGG with focus on new products and improved institutional sales
• Integrated public finance business model to achieve leading position in Europe for further growth
• Treasury operation merged – further optimisation of funding structures
17June 21th, 2007
Commerzbank - building on strong position in CEE
• Top 10 player in CEE• BRE Bank one of the leading banks in Poland (mBank No 1 Internet bank)
Position in CEE
• Russia: CB Eurasija(100% subsidiary) & Promsvyazbank 15.3%
• Czech: Branch PragueOffices in Brno, Ostrava
• Slovakia: Branch Bratislava• Hungary CB Budapest Zrt.
(100% subsidiary)
Leader in mortgage loans: Third largest provider of new mortgage loans in Q1 2007 with a market share of 9.4%mBank & MultiBank: 1.6m clients by year end 2006 – year end 2007 target: 2m clientsBusiness expansion: 606 new corporate customers gained in Q1 2007 up 22% y-o-yPlans to open 20 further business offices
• Implementing successful mBank business model in Czech and Slovakia• Enhancing our position as Germanys leading trade finance bank• Accompanying the CEE expansion of our Mittelstand clients
Strategic initiatives
• Poland: BRE Bank (72.14% participation)
Main operating
units
BRE Bank’s positioning
18June 21th, 2007
2006
11.2%
1) RoE after tax and minorities, adjusted for one-off positions
RoE1) targets on track
2005
9.6%RoE:
2007
?
Well positioned to continue profitable growth
Note: 2005 CB stand alone, 2006 pro forma integration of Eurohypo
19June 21th, 2007
AppendixGroup equity definitions
20June 21th, 2007
Group equity definitions
Reconciliation of equity definitions
Basis for RoE on net profit
Equity basis for RoE
Basis for operating RoE and pre-tax RoE
* excluding:• Revaluation reserve• Cash flow hedges• Consolidated profit
Equity definitions in € m Mar-2007
Subscribed capital 1,708
Capital reserve 5,707
Retained earnings 5,165
Reserve from currency translation -143
Investors‘ capital without minorities 12,437
Minority interests (IFRS)* 1,105
Investors‘ Capital 13,542
Change in consolidated companies; goodwill; consolidated net profit minus portion of dividend; others
-443
BIS core capital without hybrid capital 13,099
Hybrid capital 3,018
BIS Tier I capital 16,117
21June 21th, 2007
Notes
Jürgen Ackermann (Head of IR)P: +49 69 136 22338M: juergen.ackermann@commerzbank.com
Sandra Büschken (Deputy Head of IR)P: +49 69 136 23617M: sandra.bueschken@commerzbank.com
Wennemar von BodelschwinghP: +49 69 136 43611M: wennemar.vonbodelschwingh@commerzbank.com
Ute Heiserer-JäckelP: +49 69 136 41874M: ute.heiserer-jaeckel@commerzbank.com
Simone NuxollP: +49 69 136 45660M: simone.nuxoll@commerzbank.com
Stefan PhilippiP: +49 69 136 45231M: stefan.philippi@commerzbank.com
Andrea Flügel (Assistant)P: +49 69 136 22255M: andrea.fluegel@commerzbank.com
www.commerzbank.com/ir
For more information, please contact:
June 21th, 2007
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 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
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