Commerzbank AG / Quarter Results/Interim Report
06.08.2009
Release of a UK Regulatory Announcement, transmitted by DGAP - a company of EquityStory AG. The issuer is solely responsible for the content of this announcement.
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Commerzbank: Q2 closes with an operating result of minus EUR 201m
- Gross revenues increase by 31% to EUR 3.1bn, after EUR 2.3bn in Q1
- Balance sheet total reduced by 13% from end of 2008, risk-weighted
assets fell 12%
- Loans to German companies at a record level
- Tax expenses charge of EUR 276m in the second quarter
- Core capital ratio (Tier 1) of 11.3%, compared to 10.2% (pro forma) as
at end of March
- SoFFin guarantees of EUR 5bn to be returned ahead of time
- Blessing: '2009 will remain a challenging year but we are heading in
the right direction'
Commerzbank posted an operating result of minus EUR 201 million for the
second quarter of 2009 (Q1 2009: minus EUR 591 million). The significant
improvement of EUR 390 million can particularly be attributed to lower
charges on structured credit products, the so-called ABS portfolio. At the
same time, the core segments of Private Customers and Mittelstandsbank
again achieved an operating profit (totalling EUR 206 million) in spite of
the ongoing difficult market conditions. Corporates & Markets improved its
mandate flow in the area of corporate finance, thanks to the integration of
the investment banking unit of Dresdner Bank. The segment's operating
profit improved quarter-on-quarter by EUR 913 million to stand at minus EUR
231 million.
'2009 will remain a challenging year, but we are heading in the right
direction. We are continuing to implement the 'Roadmap 2012' consistently
and we are also running perfectly to schedule with the integration of
Dresdner Bank', said Martin Blessing, Chairman of the Board of Managing
Directors of Commerzbank. 'Over the last few months, we have managed to
considerably reduce risks and balance sheet size. Nevertheless, we are
ready to meet the German Mittelstand's demand for loans. Our total lending
to Germany-based companies stands at a record level of EUR 134 billion. Due
to the general economic environment we expect the demand for loans to
decline in the second half of the year.'
Q2 saw charges of EUR 216 million due to the integration of Dresdner Bank.
Impairments on goodwill came at EUR 70 million. Including tax expenditures
totalling EUR 276 million, net profit came in at minus EUR 763 million (Q1:
minus EUR 888 million). Due to the Dresdner Bank acquisition, the figures
for 2009 cannot be compared directly with those for 2008. Last year's
figures therefore relate to pro-forma numbers of the new Commerzbank. To
allow a comparison quarter-on-quarter, the segment figures for Q1 2009 also
include the first days of January, during which Dresdner Bank did not yet
belong to Commerzbank. Group figures relate to the time after the
acquisition of Dresdner Bank.
Loan loss provisions for 2009 expected at previous year's level
Loan loss provisions in the credit business stood at EUR 993 million in Q2,
after EUR 844 million for the period from January to March 2009. For the
year as a whole, Commerzbank continues to forecast loan loss provisions at
the previous year's level. When compared with year end 2008 and as a result
of the measures put in place in the context of 'Roadmap 2012', total assets
dropped back considerably by 13% to EUR 912 billion. Successful risk
reduction is also evident in the decline in risk-weighted assets (RWA) by
EUR 41 billion to EUR 297 billion.
As at the end of June, customer deposits stood at EUR 202 billion. Already
in the first half of 2009, Commerzbank fully covered its funding plan for
2009 amounting to EUR 20 billion. Against this background, guarantees
provided by the Special Fund Financial Market Stabilization (SoFFin)
totalling EUR 5 billion will be returned ahead of time. The core capital
ratio (Tier 1) stood at 11.3% after the first half of 2009, following 10.2%
(pro forma) as of March 31, 2009. The revaluation reserve fell to minus EUR
2.5 billion as of June 30. Positive hidden reserves (fair value
adjustments) from receivables and liabilities totalled EUR 6.9 billion
before tax.
Gross revenues 31% higher than in Q1
Net interest income between April and June 2009 rose 9% above the previous
quarter's figure to over EUR 1.8 billion. Against a backdrop of weaker
customer activity due to the difficult market conditions, net commission
income was lower than in the same quarter last year. But at EUR 947
million, it was 11% higher than in the first quarter of 2009 (EUR 850
million). Due to external effects, including increased charges of the
deposit insurance scheme (Einlagensicherungsfonds) and one-off charges to
the mutual pension assurance association (Pensionssicherungsverein),
operating expenses increased by 9% to just under EUR 2.3 billion. Adjusted
for Dresdner's cost base during the first days in January and integration
cost, the cost base fell by almost 6%.
In terms of trading profit, positive developments in the fixed income
business were countered by a dip in earnings from customer business in the
area of equity derivatives. The bank achieved a positive trading result of
EUR 93 million in the second quarter, up from minus EUR 523 milion in Q1.
Net investment income, which declined by around EUR 214 million from the
previous quarter to EUR 172 million, was affected by income arising from
the sale of industrial holdings (Linde, Lufthansa, ThyssenKrupp) on the one
hand, and further write-downs on structured credit products (ABS/RMBS) on
the other.
Sustained customer growth in the core segments
Despite the adverse economic conditions, customer growth in the core
segments of Private Customers, Mittelstandsbank and Central and Eastern
Europe (CEE) continued in the second quarter of 2009. The number of private
customers in Germany rose by 73,000. As planned, Mittelstandsbank was able
to secure additional customer relationships in the segment of companies
with an annual turnover of up to EUR 7.5 million. In Central and Eastern
Europe, BRE Bank gained approximately 93,000 additional private customers
and Bank Forum some 29,000. This means that Commerzbank now serves some 15
million private customers. The Private Customer and Mittelstandsbank
segments ended the quarter with positive operating results of EUR 50
million and EUR 156 million respectively. Crucial factors that influenced
these figures were continuing strict cost controls and the net interest
income, which came to EUR 605 million in the Private Customers business
(EUR 595 million in Q1) and EUR 542 million in the Mittelstandsbank segment
(EUR 547 million in Q1).
Net commission income grew by EUR 30 million in the Private Customer
segment to EUR 534 million. As a consequence of the decline in the number
of customer transactions, Mittelstandsbank saw this measure decrease by EUR
27 million to 210 million in Q2. Loan loss provisions in the Private
Customer segment rose to EUR 96 million from EUR 65 million in Q1 of 2009.
Due to market conditions this increase was greater for Mittelstandsbank,
with the figure up from EUR 90 million in Q1 to EUR 219 million in Q2. The
CEE segment faced the effects of the unfavourable situation in the Central
and Eastern European markets between April and June 2009. Altogether, the
second quarter showed operating revenues amounting to EUR 235 million as
opposed to EUR 230 million in Q1. Increased loan loss provisions (EUR 202
million after EUR 173 million in Q1) led to an operating result of minus
EUR 83 million.
Successes from Dresdner Bank takeover, CRE restructuring under way
A clear turnaround was achieved in Q2 in the Corporates & Markets
(including Public Finance). The takeover of Dresdner Bank has further
improved Commerzbank's position in several areas including Corporate
Finance. Market share was well up both here and in bonds and foreign
exchange business. Compared with Q1 2009, the operating result rose
accordingly by EUR 913 million to minus EUR 231 million. Write-downs on the
ABS portfolio fell significantly quarter-on-quarter by EUR 952 million to
173 EUR million. Loan loss provisions also fell, by EUR 176 million to EUR
151 million. This is a first indication of the success of bundling
non-strategic holdings in the Portfolio Restructuring Unit (PRU). Effective
Q3, the PRU will no longer be reported as part of Corporates & Markets.
Public Finance and CRE will then be combined in Asset Based Finance.
Net interest income in Commercial Real Estate (CRE) icreased to EUR 265
million, as compared with EUR 222 million last quarter. As a result of the
active reduction in new business, net commission income fell by 21% to EUR
78 million as compared with Q2 2008. CRE experienced further value
adjustments, particularly in the USA and Spain. In response to the
continuing difficult trading environment, loan loss provisions rose from
EUR 189 million in Q1 to EUR 318 million in Q2. Operating profit was minus
EUR 171 million after minus EUR 53 million in the previous quarter.
Strutz: 'We are progressing on target and are working through 'Roadmap
2012' step by step'
'We are progressing on target. We are concentrating on our sustainably
profitable core business areas and are working through 'Roadmap 2012' step
by step. This means: the balance sheet total is being reduced; non core
activities will be disposed of; risks are being decreased', said Eric
Strutz, Chief Financial Officer of Commerzbank. 'In the second half of the
year the average rating of borrowers will be downgraded due to the economic
downturn. As a result, risk-weighted assets may increase. However, we will
reap benefits in the medium term as the economic recovery that is expected
will help to realise write-up potential.'
Costs associated with the integration of Dresdner Bank are expected to
amount to around EUR 2 billion in 2009, of which EUR 1.7 billion is
restructuring expenses and EUR 300 million in operating expenses. Due to
the ongoing diffiult markets a forecast for all of 2009 is still not
possible. If normal market conditions prevail, repayment of SoFFin silent
participations could begin in 2012; if market trends are more positive it
may even start in 2011. Commerzbank continues to expect to achieve its
medium-term goal of a 12% post-tax return on equity in 2012.
'We have already successfully implemented the first measures defined in
'Roadmap 2012'. This also includes the sale of subsidiaries that took place
in July. The number of full-time equivalents in the Commerzbank Group has
already been reduced by more than 1,800 as part of the integration process.
We have achieved this more quickly than we had initially planned', said
Strutz. The aim is to reduce a total of 9,000 full-time equivalents, 6,500
of them in Germany. The bank has ruled out any operational redundancies
(betriebsbedingte Beendigungskündigungen) in Germany until at least the
end of 2011, and in case of the attainment of the declared goals until
2013.
Excerpt from the consolidated profit and loss statement
Q2 Q1 Q2
in EUR m 2009 2009 Change 20081)
Net interest income 1,838 1,692 9% 1,762
Loan loss provisions - 993 - 844 18% - 488
Net commission income 947 850 11% 1,205
Trading profit 93 - 523 - - 246
Net investment income 172 386 55% 1
Other result 5 - 71 - 52
Operating expenses 2,263 2,081 9% 2,417
Operating profit - 201 - 591 66% - 131
Impairments of goodwill 70 - - -
Restructuring expenses 216 289 25% -
Taxes 276 8 - - 388
Consolidated profit attributable to
Commerzbank shareholders - 746 - 861 13% 200
Profit per share in EUR - 0.76 - 1.02 34% 0.31
Operating expense ratio in % 74.1 89.2 - 87.1
1) on a pro-forma basis
*****
We will be holding a teleconference for journalists at 10:30 a.m. (CEST) on
August 6, 2009. At the teleconference, Eric Strutz will explain the results
for Q2 2009 in detail.
If you would like to take part, please register at:
https://portal.meetyoo.de/auto_attendant/fwd/coba_presse.php. You will then
be sent the dial-in number and the access PIN. If you are unable to
register via the internet, please call the following number on the day of
the conference: +49 (0)69 247 501 892 approximately 10 minutes prior to the
start of call. You wil then be connected to the teleconference. A
presentation will be available from around 7:30 a.m. Please see:
https://www.commerzbank.de/de/hauptnavigation/presse/archiv_/praesentation
en_1/praesentationen_2.html
Contact:
Commerzbank AG
Group Communications
Tel.: +49 69 136 - 22830
mediarelations@commerzbank.com
DGAP 06.08.2009
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Language: English
Issuer: Commerzbank AG
Kaiserplatz
60261 Frankfurt am Main
Deutschland
Phone: +49 (069) 136 20
Fax: -
E-mail: ir@commerzbank.com
Internet: www.commerzbank.de
ISIN: DE0008032004
Indices: DAX, CDAX, HDAX, PRIMEALL
Listed: Regulierter Markt in Berlin, Frankfurt (Prime
Standard), München, Hannover, Düsseldorf, Hamburg,
Stuttgart; Terminbörse EUREX; Foreign Exchange(s)
London, SWX
Category Code: IR
LSE Ticker: CZB
Sequence Number: 228
Time of Receipt: Aug 06, 2009 07:00:13
End of News DGAP News-Service
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DGAP-UK-Regulatory: Commerzbank: Q2 closes with an operating result of minus EUR 201m
| Source: EQS Group AG