Investors´ Day 2007 - Commerzbank

Investors´

Day 2007

Eric Strutz

Chief Financial OfficerFrankfurt, September 20th, 2007

Strong focus on Group’s value drivers

Net RoE

EPS

CIR

•

Strong focus on Net RoE, CIR, EPS

•

Realizing growth opportunities

•

High exposure to German economy

•

Enhancing organic growth in core divisions

•

Expanding in regions and products with competitive strengths

•

Increasing profitability

•

Ongoing efficiency enhancement in all divisions

•

Following active portfolio management

•

Ensuring efficient capital management

Commerzbank

is managed along three main Group

performance indicators

+3.9ppts

1.57

2.10

55.253.9

18.2

22.1

H1 2006 H1 2007

Following a balanced approach to profitability and growth

+33.8%

H1 2006 H1 2007

H1 2006 H1 2007

Note:

2006 figures based on stated results

-1.3ppts

2 / 22

Clean Net RoE*in %

Net RoE*in %

EPSin €

Commerzbank

is fully in line to reach its FY 2007 targets

Clean EPSin €

H1 2006 H1 2007 H1 2006 H1 2007

Clean:

excluding net result on participations, restructuring charges

CIRin %

Clean CIRin %

H1 2006 H1 2007

1.572.10

1.02

1.51

18.2

22.1

11.9

16.0

55.253.9

63.1

58.6

H1 2006 H1 2007 H1 2006 H1 2007H1 2006 H1 2007

Note:

2006 figures based on stated results

+3.9ppts +33.8%

+48.0%

-1.3ppts

+4.1ppts -4.5ppts

* Annualized

3 / 22

Net interest

income

(NII)in €

m

943

1,969129 117 113 68 11

246 79

1,874

977961937931 992

14

Steady growth in net interest income

Comments•

NII excluding PFT improved by 5%•

Strong NII contribution from Mittelstand

driven by increase in lending and deposit volume

•

Deposit margins and lending volumes rose, while lending volume in PBC decreased due to further reduction of mortgage loan portfolio

•

C&M and CRE increase in credit volumes and margins

•

Spin-off of pension trust reduces NII since H2’06

NII PFTNII excl. PFT

OutlookH2:

Within range of consensus estimates2008:

Growth of NII in Mittelstand, C&M and CRE overcompensates planned reduction in PBC; higher NII in PFT (dependent on level and steepness of yield curve)

Consensus estimates H2 2007 (€

m)HighLow Average

1,952 2,065 2,1932006 2007

Q1 Q2 Q3 Q4 Q1 Q22007

H1 H12006

1,0601,0601,050 975 1,0451,003

2,120 2,048

+5%+5%

4 / 22

Commission income in €

m

532 601

360379

244231

125136

188258

H1 2006 H1 2007

Others (syndication, guarantee, etc.)Real Estate businessPayment transactionsAsset managementSecurities transactions

1,6051,449

Significant upward trend in commission income

Comments•

Commission income growth driven by strong underlying business in all segments

•

PBC: High contribution from securities transactions and asset management

•

German AuM

up by 10% (H1-o-H1)•

Focus on fee generating products for MSB clients

•

C&M driven by higher commissions from Corporate Finance and syndications

•

CRE: High level of new business commitments at €

22.5bn (+39%) as well as increase in AuM

at CGG/CLI by 9% to €

41.1bn

Outlook (dependent on equity market development)

H2:

strong, but seasonally weaker than H12008:

further increase (excl. Jupiter impact)

+11%

1,302 1,460 1,671

HighLow Average


m)

5 / 22

OutlookH2:

Lower Sales & trading in H2 due toa) seasonally weaker business in equity

derivatives

b) difficult credit trading

Trading profit in €

m

Client driven business boosting trading profit

Net result on hedge accounting, measurement of derivatives and fair value option (IAS 39)

CommentsCorporates

& Markets (H1 2007: €

616m)•

Strong focus on client-driven business led to sustainable growth in trading profit

•

Positive development across products with particularly strong results in equity derivatives

•

Well-diversified client portfolio with increasing contribution from institutional clients

•

VaR

at historical low level

€

76m IAS 39 effect in H1 2007

Sales & Trading 358 499 610

HighLow Average

326

606

-96

4874

25 76

632

299238264306 307

1114 2

2006 2007Q1 Q2 Q3 Q4 Q1 Q2

+13%

+4%

2007H1 H1

2006

320 337

168286 301

381

657 682


m)

6 / 22

Cost discipline remains strong management focus, several growth projects underway

Comments•

Expenses excluding Jupiter increased by 3% H1-o-H1

•

Increase in personnel expenses driven by strong group performance

•

Investment in Eurohypo

foreign expansion•

Marketing investments to support growth initiatives

•

Clean CIR as of H1 2007: 58.6%

Outlook•

Continued cost control •

Ongoing efficiency programs•

Investments in growth initiatives

2,526 2,609 2,736

HighLow Average

Operating

expensesin €

m

Jupiter expenses

2006 2007Q1 Q2 Q3 Q4 Q1 Q2

+4%

+3%

2007H1 H1

2006

1,3201,3271,2921,395 1,3601,324

2,647 2,684

CIR in %54.8 53.951.2 58.9 63.2 66.3 56.0 51.9


m)

7 / 22

Disposal of• Germanischer

Lloyd

€

38m• Deutsche Börse

AG

€

48m• BRE’s

AM-unit SAMH

€

23m

Disposal of Jupiter• Proceeds from sale of Jupiter

€

243m• Release of Jupiter sundry provisions

€

94m• External advisory fees

€

-10m

Impairment of US subprime

exposure

€

-46m

in Corporates

& Markets

Write-downs at Commerzbank

Asset

€

-23m

Management Asia (CAMA)

Exceptionals

2007

Positive:• Disposal of CICM Japan• Sale of real estate object in Berlin•

Gains in Mittelstand

due to judgement of

supreme tax court concerning reserve

management

Negative:• H2 impairment of US subprime

exposure

H1 2007 effects Expected H2 2007 effects

8 / 22

H2 2007: One-off effect in Mittelstand

segment due to supreme tax court judgement

* GfR

= Gesellschaft für Rücklagenmanagement

Structure Legal situation

Expected positive one-off effect in H2 2007: > €

100m

•

2000: Foundation of 8 companies for reserve management (GfR) for Commerzbank's

corporate customers to avoid disadvantages of corporate tax reform in 2001

•

Loans by Commerzbank

to GfR

•

Initially: no acceptance of structure by tax authorities

No intermediation fees paid to

Commerzbank

•

2006/07: Positive decision by German supreme tax court regarding the main issue and subsequent application by one lower tax court

9 / 22

in €

m

Net pre-tax profit according to IAS/IFRS

1,983Group income tax rate (initial position)

39.6%Calculated income tax 785

Effects of:•

differences between tax rate of top entity

and effective tax rate of local entity

-73•

non-deductible operating expenses

45•

tax exempt income

-259•

others

52

Taxes on income

550Tax Rate 27.7%

New guidance for tax rate 2007: 25-27%

Outlook2007:

expected FY tax rate of 25-27%2008:

expected tax rate of approx. 25%,

positively affected by reduced tax rates in Germany (≈31%) and capitalization of tax loss carry forwards

Composition of taxes H1 2007 Expected tax effects H2 2007

Tax reformOne-time tax effect due to tax rate reduction of deferred taxes in Germany

-149 €

m

Eurohypo

One-time effect due to capitalization of deferred taxes on tax loss carry-

forwards as a result of the Profit Loss Tax Agreement

≈150 €

m

Expected additional capi-

talization

of deferred taxes on tax loss carry-forwards due to assumed improved forecast of taxable income for the next years

>

100 €

mTax loss carry-

forwards

10 / 22

Revenuesincl. LLP´s

Costs

Net profit1)

Average

equity

Clean net2)

RoE

Value drivers (€ m)

16.0%

Outlook CB group: Further increase in growth and profitability

>12%

4,667

2,684

1,377

13,493

11.2%

8,049

5,334

1,597

12,203

Value drivers: current figures and outlook

2006 H1 20072007p (vs. 2006)

2008-2010p Outlook

• Ongoing internal and external growth

•

Continued cost discipline •

Investment in growth programs

• Positive profit dynamics over time

•

As of 01/01/2008 Basel II conversion

-

projected

capital

release

of ~10%•

Proactive capital management: investment in growth, return of potential surplus capital

•

Continuous improvement in RoE

above 15% to achieve standards compared to international peers

2)

Clean: excluding net result on participations and restructuring

charges1)

2006 figure based on stated result

11 / 22

•

PBC: Profitability improvement based on organic growth•

MSB: Further expansion of our leading position in Germany and selective growth areas

•

C&M: Customer focused strategy driver for high sustainable profits•

CRE: Developing an integrated value chain in Real Estate •

PFT: Building an integrated

public finance platform,

prudent Treasury Management in stressed markets

Key take-aways

from today’s Investors’

Day

Financials

•

Record profitability level in H1 2007•

2007 targets to be overachieved•

In 2008-2010: continuous

improvement in RoE

above 15% to achieve standards compared to international peers

Segments

Strategy•

Further strengthening Commerzbank's

position as the leading German commercial bank

•

Expansion of core competencies in products and geographic areas

Commerzbank

with shareholder-minded strategy and capital management

1.

3.

2.

12 / 22

Appendix

13 / 22

142 129221

312266 271

535

269180 169 163

113174

349 383

209118

7136

145189

249

104

Good performance especially in Private & Business Customers, Mittelstand

and Commercial Real Estate

Operating profitMittelstandin €

mPrivate & Business Customersin €

m

2006 2007Q1 Q2 Q3 Q4 Q1 Q2

+46%+32%

2007H1 H1

2006

Corporates

& Marketsin €

m

-231

2006 2007Q1 Q2 Q3 Q4 Q1 Q2

+109% +97%

2007H1 H1

2006 2006 2007Q1 Q2 Q3 Q4 Q1 Q2

+24%+10%

2007H1 H1

2006

91 11244 47 77

203

9518

377

96

-6 -29

82

473404

322

139 123 146 152 164

262317

153

2006 2007Q1 Q2 Q3 Q4 Q1 Q2

+24%+21%

2007H1 H1

2006 2006 2007Q1 Q2 Q3 Q4 Q1 Q2

-84% -53%

2007H1 H1

2006 2006 2007Q1 Q2 Q3 Q4 Q1 Q2

2007H1 H1

2006

Public Finance & Treasuryin €

mCommercial Real Estatein €

mOthers & Consolidationin €

m

14 / 22

Details of profitability by segment H1 2007Public

Finance

& Treasury

Mittel-stand

Commercial Real Estate

Corporates

& Markets

21.1 75.7 188.5**52.659.1Avg. lending

volume

(€

bn)

1,064 1,960 8081,694Economic capital (€

m)

34.6 15.0 16.235.4Operating

RoE

(%)*

36.9 74.0 19.849.440.3Avg. RWA (€

bn)

22 21 1.32147Net LLP per lending

volume

(bps)*

72.1 32.3 23.663.135.3RoRaC

(%)*

2,215 4,232 1,1733,025Average equity (€

m)

383 317 95535249Operating profit (€

m)

Private & Business

Customers

defined as risk-weighted assets (BIZ)

times 6% plus debit differences

comprises credit risk, market risk, operational

risk and business risk at 99.95% level confidence

Average

equity Economic capital

* Annualized** incl. public finance bonds

2,514

19.8

1,412

15 / 22

Private & Business Customers: Deposits volume and margins increasing, ratio of commission income to net interest income increased

Value driver analysisChange in operating profit from H1 2006 to H1 2007

in €

m

H1 '06 H1 '07 Change

Customers (in m) 5.1 5.3 +4%

Total lending (in €

bn) 62.6 59.1 -6%

Margin on total lending (in %) 1.20 1.19 -1bps

Volume of customer deposits (in €

bn) 29.3 32.6 +11%

Margin on customer deposits (in %) 1.35 1.62 +27bps

Risk-weighted assets (in €

bn) 42.4 40.3 -5%

Commission income / net interest income 114% 127% +13ppt.

FTE 9,284 9,438 +2%

Gross revenue/FTE (in €

‘000) 149 154 +3%

Operating expenses/FTE (in €

‘000) 113 113 +0%

68+4

-12

60

∆ revenueswithout LLP

∆ LLP ∆ costs ∆ operatingprofit

16 / 22

Value driver analysisChange in operating profit from H1 2006 to H1 2007in €

m

Mittelstand: Lending volumes and deposit income increased, improvement of credit quality

* Annualized

+26%23.918.9Domestic customers’

deposits (in €

bn)

+3%36.935.8Domestic lending (in €

bn)

+5%7,0866, 764FTE

1.351.43Margin on domestic lending (in %)*

+12%52.647.1Total lending (in €

bn)*

-47bps0.210.68Loan-loss provision ratio (in %)*

+9%49.445.3Risk-weighted assets (in €

bn)

+13%160142Gross revenue/FTE (in €

‘000)

-1%

Change

7778Operating expenses/FTE (in €

‘000)

0.890.78Margin on domestic customers’

deposits (in %)*

H1 '07H1 '06

-8bps

+11bps

Commission income / net interest income 55% 52% -3ppt.

175

+106

-17

264



17 / 22

Value driver analysisChange in operating profit from H1 2006 to H1 2007 in €

m

Corporates

& Markets: Improvement driven by NII and trading profit, revenues per FTE significantly up with moderate cost increase

H1'06 H1'07 Change


bn) 20.6 21.1 +2%

Margin on total lending (in %) 1.10 1.25 +15bps

Loan-loss provision ratio (in %)* 0.19 0.22 +3bps


bn) 36.1 36.9 +2%

FTE 1,635 1,665 +2%


‘000) 530 560 +6%

thereof Markets: Trading profit/FTE (in €

‘000) 669 643 -4%


‘000) 304 316 +4%

* Annualized

66

-3

-29

34



18 / 22


m

Commercial Real Estate: Increase of lending volume and margins, high new business commitments

* Annualized

H1`06 H1`07 Change


bn) 73.5 75.7 +3%

Margin on total lending (in %) 1.36 1.46 +10bps

New business commitments (in €

bn) 16.2 22.5 +39%

Loan-loss provision ratio (in %)* 0.26 0.21 -5bps


bn) 71,6 74.0 +3%

FTE 1,571 1,522 -3%


‘000) 394 442 +12%


‘000) 166 183 +10%

54

18

-17

55



19 / 22


m

* Volume of lending and bonds; excl. Treasury**

Annualized

Public Finance & Treasury: Increased margin on a lower lending volume basis, results suffer from interest rate development

H1`06 H1`07 Change


bn)* 193.5 188.5 -3%

Margin on total lending (in %) 0.107 0.115 +0.8bps

Loan-loss

provision

ratio

(in %)** 0.017 0.013 -0.4bps

Risk-weighted

assets

(in €

bn) 18.3 19.8 +8%

Av. EONIA (in %) 2.52 3.73 +121bps

Av. 10-year bund yield (in %) 3.80 4.23 +43bps

FTE 337 351 +4%

Gross

revenue/FTE (in €

‘000) 781 456 -42%


‘000) 128 151 +18%

-102 -108

4

-10



20 / 22


m

Δ

Revenues Δ

Costs Δ

Operatingprofit

Others & Consolidation: Operating profit driven by KEB sale in 2006 and disposal of Jupiter in 2007

Others & Consolidation includes:

•

International Asset Management Units

•

Funding costs and proceeds from group holdings

•

Facility management, e.g. under-utilised office space

•

Group cost, e.g. for Board of Managing Directors, Supervisory Board, annual general meeting

•

Consolidation

-69

+48

-117

21 / 22

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 Jun-2007

Subscribed

capital 1,708

Capital reserve 5,705

Retained

earnings 5,122

Reserve from

currency

translation -51

Investors‘

capital

excluding

minorities 12,484

Minority

interests

(IFRS)* 1,063

Investors‘

Capital 13,547

Change in consolidated

companies; goodwill; consolidated

net

profit

minus portion

of dividend; others

-7

BIS core

capital

excluding

hybrid capital 13,540

Hybrid capital 3,096

BIS Tier I capital 16,636

Jan-Jun

2007

1,707

5,702

5,158

-133

12,434

1,059

13,493

22 / 22

DisclaimerAll presentations shown at Investors’ Day based on new group reporting as published per H1

2007.

This presentation has been prepared and issued by Commerzbank

AG. This publication is intended for professional and institutional investors only

.

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

AG and/or its subsidiaries and/or affiliates (herein described as Commerzbank

Group)

with regard to the accuracy of the data. This

presentation

also contains forward-looking statements that reflect our current views and expectations about future events. The words “anticipate,” “assume,” “believe,” “estimate,” “expect,” “intend,” “may,” “plan,” “project,” “should” and similar expressions are used to identify forward-looking statements. These statements are based on plans, estimates and projections as they are currently available to the management of

Commerzbank

AG. Forward-looking statements therefore speak only as of the date they are made, and we undertake no obligation to update publicly any of them in light of new information or future events.

By their very nature, forward-

looking statements involve risks and uncertainties. A number of important factors could therefore cause actual results to differ materially from those contained in any forward-looking statement. 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

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.ir.commerzbank.com

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]

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]

For more information, please contact Commerzbank´s

IR-team:

Karsten

SwobodaP: +49 69 136 22339M: [email protected]

Andrea Flügel

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

www.ir.commerzbank.com

Investors´ Day 2007 - Commerzbank

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