DGAP-News: Commerzbank to invest more than EUR 2.0 billion in its core business until 2016
(firmenpresse) - DGAP-News: Commerzbank AG / Key word(s): Strategic Company
Decision/Forecast
Commerzbank to invest more than EUR 2.0 billion in its core business
until 2016
08.11.2012 / 07:30
---------------------------------------------------------------------
Commerzbank to invest more than EUR 2.0 billion in its core business until
2016
- Return on equity after taxes (RoE) in the Core Bank to be more than 10
% by 2016
- Cost-income ratio (CIR) in the Core Bank to decrease to around 60 %
- Core Tier 1 ratio to be always substantially higher than 9%, even
pursuant to Basel 3 (phase-in)
- Cost base to remain stable despite investments
- Portfolios (EaD) in Non-Core Assets (NCA) segment to be reduced by more
than 40 % until 2016
- Blessing: 'We want a new bank that unites modern technologies with
traditional values.'
In the coming years, Commerzbank will adapt its business model to the new
framework conditions in the financial sector and will concentrate on
focused growth. In the framework of its strategic agenda until 2016, the
Bank is investing more than EUR 2.0 billion in the revenues power of its
core business. At the same time and due to additional efficiency measures,
it is maintaining its costs at a constant level and is further optimising
its capital base. In 2016, the Bank intends to achieve a return on equity
after taxes (RoE) of more than 10% in its core business. The cost-income
ratio (CIR) of the Core Bank with the operating segments Private Customers,
Mittelstandsbank, Corporates&Markets, and Central&Eastern Europe is to
be lowered to around 60%. Taking into consideration the phase-in of Basel
3, the Core Tier 1 ratio of the Group shall always be comfortably above 9%
until the end of 2016. In addition, it is planned to reduce the portfolios
in the Non-Core Assets (NCA) segment by more than 40% until 2016 (as of the
end of September 2012: EUR 160 billion Exposure at default, EaD).
'There can be no return to 'business as usual' in the banking industry.
Regaining the trust of customers will be the most important task for all
banks in the coming years. For us this means: we want a new bank that
unites modern technologies and traditional values. We are rigorously
orienting our business model towards the needs of the real economy,
amending our advisory, products and services,' said Martin Blessing,
Chairman of the Board of Managing Directors of Commerzbank. 'We are
continuing with our consistent cost management and gradually reducing
non-strategic activities further. This gives us the necessary flexibility
for focused growth in our core business. In this respect, above all in the
Private Customers business we are repositioning ourselves both
strategically and operationally. In the future, our customers will receive
the products and services of Commerzbank anywhere and at any time. To this
end, we are investing approximately one billion euros alone in the
development of a modern multi-channel bank and the flexibilisation of our
branch network. We will expand our leading position as a long-term partner
for our customers and as a reliable lender in the coming years, thus
increasing our profitability on a sustainable basis.'
Commerzbank is thus reacting to the challenges posed by the financial
market and sovereign debt crisis and to the resulting 'new normality' in
the financial sector - namely tougher requirements for the capital base ofbanks, ongoing low interest rate levels and a loss of trust on the part of
customers. 'In past years, we have reduced costs, lowered risks and
successfully completed the integration of Dresdner Bank. Now we will
consistently adapt our business model and our processes to the changing
market conditions. Thus we will have a strong base, which we can utilise
for further growth,' said Stephan Engels, Chief Financial Officer of
Commerzbank.
Above all, the strategic repositioning of the Private Customers business is
intended to make a contribution to the increase in revenues. The goal is
the development of a multi-channel bank which unites modern technologies
with traditional values such as fairness, trust and competence. Until 2016,
Commerzbank will invest a total of around EUR 1.0 billion in its platforms,
its product and service offering, the advisory process, and the
qualification of employees in the Private Customers business. Thus,
revenues per customer are to be increased and the number of customers is to
be raised from 11 million at present to 12 million, with the generation of
an operating profit of approximately EUR 500 million in 2016 (operating
profit in the first nine months of 2012: EUR 215 million). The return on
equity before taxes (RoE) is then to be more than 12% (RoE in the first
nine months of 2012: 7.3%).
Mittelstandsbank will further expand its successful business model and its
leading market position. In this respect, growth will focus on the
acquisition of new customers, in particular in the small- and medium-sized
corporate customers segment, as well as on the expansion of business with
existing customers in Germany. Furthermore, the Cash Management&International Business platform is to be further developed. Thus, today's
customer coverage of more than 30 % with small- and medium-sized
enterprises is to be improved further and the position as the market leader
among major companies - the customer coverage here is more than 90 % - is
to be secured on a sustainable basis. Business at the existing sites abroad
will be further developed, with investment in the expansion of the position
as the leading trade service bank in Europe. In total, and also assuming a
normalisation of the loan loss provisions, in 2016 a return on equity
before taxes (RoE) of more than 20% is still to be attained (RoE as of the
end of September 2012 due to reversals in the loan loss provisions: 29.2%).
In this respect the cost-income ratio (CIR) is, in a competitor comparison,
to remain at a low level of less than 45% (CIR as of the end of September
2012: 44.0%).
Corporates&Markets will strengthen its positioning as a large
international niche player and continue to leverage the distribution
channels of Commerzbank's private and corporate customers business while
maintaining its cautious approach to risk, already introduced in 2004. The
unit will continue to build on its traditional strengths in debt capital
markets and risk management solutions. It will consolidate its strong
European franchise in equity and commodities securitised products through
diversification of its offering into selected asset management products. In
2016, Commerzbank intends to generate a return on equity before taxes (RoE)
of more than 15 % (RoE in the first nine months of 2012: 11.1 %) in
investment banking and lower its cost-income ratio to less than 65 % (CIR
in the first nine months of 2012: 76.7 %).
In the Central&Eastern Europe segment Commerzbank will continue its
successful organic growth at Poland's BRE Bank, expanding its proven
universal bank model and further modernising the direct bank offering of
mBank. The mobile banking offering of mBank is to be enlarged and its
position as one of the leading internet banks in Europe to be developed. In
addition, through the closer interplay of corporate customer business and
investment banking BRE Bank will broaden its product offering, consistently
orienting this to the Mittelstand. The brand image of the BRE Bank Group is
to be standardised under the name mBank by 2016. Central&Eastern Europe
is to attain stable growth in its value contribution in the Group,
attaining a return on equity before taxes (RoE) of more than 15% (RoE in
the first nine months of 2012: 14.7%) and a cost-income ratio of less than
55% (CIR in the first nine months of 2012: 55.8%).
The Public Finance, Commercial Real Estate (CRE) and Deutsche Schiffsbank
business divisions bundled in Non-Core Assets (NCA) will be reduced as
planned, essentially without any sales and while preserving their value.
The goal is to reduce these portfolios, totalling some EUR 160 billion
(EaD) at present, by more than 40 % until the end of 2016. As a result of
the reduction process, net capital is to be released in the NCA segment and
to be reallocated to the Core Bank segments. The job cuts planned at NCA
will be implemented in line with the portfolio reduction.
Despite the focused growth in the core business, the loan loss provisions
in the Group are to be further reduced to some EUR 1.4 billion by 2016
(loan loss provision in 2012 probably at EUR 1.7 billion). The
risk-weighted assets (RWA) are likely to rise arithmetically to around EUR
240 billion by 2016. This is essentially due to the implementation of the
new equity capital regulations pursuant to Basel 3 (RWA as of the end of
September 2012: EUR 206 billion). With a view to the new equity capital
regulations pursuant to Basel 3 and against the background of the changing
market environment, the focus will continue to be on strengthening the
equity capital. The payment of dividends for 2012 and 2013 is unlikely from
the current stance.
In the reduction of costs Commerzbank has already achieved a great deal in
past years. As announced, the Bank will realise the cost synergies from the
integration of Dresdner Bank to the full amount of EUR 2.4 billion. Since
the end of 2009, the operating expenses have been lowered by some EUR 2.0
billion, to a probable sum of EUR 7.2 billion as of the end of 2012 (minus
20 %). Thus, the Bank has more than fulfilled its costs target for 2012
announced in 2009 (expenses less than EUR 8.0 billion). In 2016, the cost
base will be at around EUR 7.1 billion to EUR 7.3 billion despite the
investments in the core business, higher wage settlements and rising factor
prices. To this end the Bank will continue its strict cost management and
save costs in the coming years through more efficient design of processes,
the launch of the new branch structure, and the adjustment of personnel
capacities. For this, restructuring expenses will incur.
In accordance with its clear strategic orientation along the needs of its
customers in its core markets Germany and Poland, Commerzbank is also
redesigning its international branding. The current brand promise
'Achieving more together' is to be replaced by 'Commerzbank. The Bank at
your side'. 'Thus, we are underlining the positioning of Commerzbank as a
fair and competent bank strictly oriented to the needs of its customers,'
said the Chairman of the Board of Managing Directors, Martin Blessing.
****
Press contact:
Armin Guhl +49 69 136 42764
Simon Steiner +49 69 136 46646
Simone Fuchs +49 69 136 44910
*****
Under www.tvservicebox.de and www.getaudio.de you will find broadcast-ready
video and audio material with statements by Martin Blessing, Stephan
Engels, and Martin Zielke from 14:00 onwards on November 8, 2012.
The videos can be viewed directly using mobile end devices.
Statements Martin Blessing http://cbvideo.commerzbank.de/2012/Blessing_en/
Statements Stephan Engels http://cbvideo.commerzbank.de/2012/Engels_en/
Statements Martin Zielke http://cbvideo.commerzbank.de/2012/Zielke_en/
*****
About Commerzbank
Commerzbank is a leading bank in Germany and Poland. It is also present
worldwide in all markets for its customers as a partner to the business
world. With the business areas Private Customers, Mittel-standsbank,
Corporates&Markets and Central&Eastern Europe, it offers its private
and corporate clients as well as institutional investors the banking and
capital market services they need. With some 1,200 branches Commerzbank has
one of the densest branch networks among German private banks. In total,
Commerzbank boasts nearly 15 million private customers, as well as 1
million business and corporate clients. In 2011, it generated revenues of
just under EUR 10 billion with some 58,000 employees.
*****
Disclaimer
This release contains statements concerning the expected future business of
Commerzbank, efficiency gains and expected synergies, expected growth
prospects and other opportunities for an increase in value of the company
as well as expected future net income per share, restructuring costs and
other financial developments and information. These forward-looking
statements are based on the management's current expectations, estimates
and projections. They are subject to a number of assumptions and involve
known and unknown risks, uncertainties and other factors that may cause
actual results and developments to differ materially from any future
results and developments expressed or implied by such forward-looking
statements. Commerzbank has no obligation to periodically update or release
any revisions to the forward-looking statements contained in this release
to reflect events or circumstances after the date of this release.
Contact:
Commerzbank AG
Group Communications
Tel.: +49 69 136 - 22830
mediarelations(at)commerzbank.com
End of Corporate News
---------------------------------------------------------------------
08.11.2012 Dissemination of a Corporate News, transmitted by DGAP - a
company of EquityStory AG.
The issuer is solely responsible for the content of this announcement.
DGAP's Distribution Services include Regulatory Announcements,
Financial/Corporate News and Press Releases.
Media archive at www.dgap-medientreff.de and www.dgap.de
---------------------------------------------------------------------
Language: English
Company: Commerzbank AG
Kaiserplatz
60261 Frankfurt am Main
Germany
Phone: +49 (069) 136 20
Fax: -
E-mail: ir(at)commerzbank.com
Internet: www.commerzbank.de
ISIN: DE0008032004
WKN: 803200
Indices: DAX, CDAX, HDAX, PRIMEALL
Listed: Regulierter Markt in Berlin, Düsseldorf, Frankfurt (Prime
Standard), Hamburg, Hannover, München, Stuttgart;
Terminbörse EUREX; London, SIX
End of News DGAP News-Service
---------------------------------------------------------------------
192130 08.11.2012
Themen in dieser Pressemitteilung:
Unternehmensinformation / Kurzprofil:
Datum: 08.11.2012 - 07:30 Uhr
Sprache: Deutsch
News-ID 200856
Anzahl Zeichen: 14190
contact information:
Kategorie:
Business News
Diese Pressemitteilung wurde bisher 260 mal aufgerufen.
Die Pressemitteilung mit dem Titel:
"DGAP-News: Commerzbank to invest more than EUR 2.0 billion in its core business until 2016"
steht unter der journalistisch-redaktionellen Verantwortung von
Commerzbank AG (Nachricht senden)
Beachten Sie bitte die weiteren Informationen zum Haftungsauschluß (gemäß TMG - TeleMedianGesetz) und dem Datenschutz (gemäß der DSGVO).
