DGAP-News: Commerzbank: Net profit in 2010 at EUR 1.4 billion
(firmenpresse) - DGAP-News: Commerzbank AG / Key word(s): Final Results/Quarter Results
Commerzbank: Net profit in 2010 at EUR 1.4 billion
23.02.2011 / 07:06
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Commerzbank: Net profit in 2010 at EUR 1.4 billion
- Gross revenues EUR 12.7 bn, operating profit EUR 1.4 bn
- German GAAP result of the AG minus EUR 1.2 bn mainly due to EU
requirement on Eurohypo sale
- Core bank with strong operating performance, Mittelstandsbank posts
record result
- Core Tier 1 ratio at 10.0%, Tier 1 ratio 11.9% (2009: 10.5%)
- Blessing: 'We want to reduce the silent participations of SoFFin
significantly already in 2011'
As previously announced and one year earlier than forecasted, Commerzbank
returned to profitability in 2010. Thanks to the strong performance in
customer business and bolstered by the positive market development gross
revenues rose by 16% to EUR 12.7 billion (2009: EUR 10.9 billion). The
economic recovery is also reflected in loan loss provisions. These declined
by some 40% to just under EUR 2.5 billion (2009: EUR 4.2 billion). The
operating profit of the Bank amounted to EUR 1.4 billion. Even the
typically weaker fourth quarter was positive with an operating profit of
EUR 256 million. Net profit (IFRS) attributable to Commerzbank shareholders
amounted to EUR 1.4 billion in the full year 2010; in the fourth quarter of
2010 it came to EUR 257 million. Mittelstandsbank posted a record result
for 2010. The Corporates&Markets segment was profitable in all four
quarters of 2010. Central&Eastern Europe and the Private Customers
segment also concluded the year with positive results. In total, the core
bank achieved a profit of EUR 2.0 billion.
'2010 was a successful year for Commerzbank in many respects. We have
achieved key targets and the Commerzbank Group has returned to
profitability one year earlier than forecasted in the 'Roadmap 2012'. We
have also implemented the integration of Dresdner Bank more quickly than
planned in some important areas. Our employees have worked hard towards
achieving these goals. I thank them very warmly for this. Our targets for
2012 are already in sight,' said Martin Blessing, Chairman of the Board of
Managing Directors of Commerzbank. 'For 2011, we expect to close the year
with an operating profit according to IFRS that will be significantly
higher than that seen in 2010. It is also our aim to service the silent
participations of the German government for 2011. Much, however, depends on
the ongoing development of the debt crisis that arose in certain European
states and the consequences of the global financial market and economic
crisis. The Financial Market Stabilisation Fund (SoFFin) has, as is known,
made available to the Bank silent participations currently amounting to EUR
16.2 billion. Martin Blessing: 'We want to reduce the silent participations
of SoFFin significantly already in 2011.'
Servicing silent participations of SoFFin not permissible for 2010
In the unconsolidated financial statements of Commerzbank AG prepared in
accordance with German GAAP, a net loss for the year of EUR 1.2 billion was
accrued. The main reason behind this was a write-down of the Eurohypo book
value on such financial statements amounting to EUR 1.9 billion. The
servicing of silent participations is based on the rules for the payment of
dividends. Under German law these are paidfrom the profit pursuant to
German GAAP in the unconsolidated financial statement of the AG. Due to the
net loss in Commerzbank AG's financial statements pursuant to German GAAP,
servicing the silent participations of SoFFin for 2010 is not permissible.
With regard to the EU requirements, the strategic reorientation of Eurohypo
had to be stepped up further in 2010. The volume reduction is being further
accelerated, Public Finance is no longer acquiring any new business, and
Commercial Real Estate concludes new business only selectively. This is
especially due to ongoing charges in Commercial Real Estate, and the
emerging impact of the debt crisis that arose in certain European states
since the beginning of 2010. As the future revenues of Eurohypo will thus
be lower, its book value had again to be written down in the unconsolidated
financial statement of Commerzbank AG pursuant to German GAAP in 2010.
Already in 2009, the Eurohypo book value had been written down by EUR 860
million in the unconsolidated financial statement of the AG pursuant to
German GAAP. In the consolidated financial statements prepared in
accordance with IFRS, the goodwill in the Asset Based Finance segment was
written down by a total of EUR 690 million in 2009, mainly due to Eurohypo.
The Eurohypo goodwill was thus written down in full in the 2009
consolidated financial statements.
Core Tier 1 ratio at a good level, operating expenses declining
In the 2010 financial year, Commerzbank made considerable progress in the
reduction of its total assets and risks. Compared to year-end 2009, total
assets were reduced by 10.6% to EUR 754 billion. Risk-weighted assets were
lowered from EUR 280 billion to EUR 268 billion. 'Thanks to the reduction
in non-core activities we are gaining leeway for further growth in our core
business,' said Eric Strutz, Chief Financial Officer of Commerzbank. The
core Tier 1 ratio was at 10.0% (2009: 9.2%) at the end of December 2010,
with the Tier 1 ratio coming to 11.9% (2009: 10.5%).
Operating expenses decreased slightly in a year-on-year comparison (down 2%
to EUR 8.8 billion). Adjusted for integration costs, they decreased by 4%.
In 2010, cost synergies amounting to EUR 1.1 billion were realised from the
Dresdner Bank take-over. This corresponds to some 45% of the synergy target
of EUR 2.4 billion per annum. In 2011 the realised synergies are forecasted
to amount to more than EUR 1.5 billion.
Mittelstandsbank also positive in Q4, Corporates&Markets with successes
in customer business
Against the background of the improved economic development, in 2010
Mittelstandsbank attained the best result ever. The operating profit was
EUR 1.6 billion, following EUR 602 million in the previous year. Loan loss
provisions have been reduced to EUR 279 million (2009: EUR 954 million). In
the fourth quarter 2010 the segment also developed positively with an
operating profit of EUR 469 million (after EUR 429 million in the third
quarter 2010). Next to the market recovery this also reflects positive
earnings contributions from restructured loans.
The Corporates&Markets (C&M) segment posted an operating profit of EUR
786 million for 2010 (2009: minus EUR 420 million). In addition to the
positive market development, the reasons for the increase are, above all,
strong performance in customer business, which led to a stable income,
particularly in Corporate Finance and with Fixed Income and Currencies
business for customers. The segment also profited from net releases of loan
loss provisions and, particularly in the fourth quarter 2010, from positive
earnings contributions from restructured loans. The operating profit thus
increased from EUR 122 million in the third quarter 2010 to EUR 221 million
in the fourth quarter 2010. In 2011, C&M intends to increasingly invest in
the infrastructure of its electronic trading platforms due to expected
changes in the market environment against the background of regulatory
changes.
Central&Eastern Europe initiates turnaround, BRE Bank with strong
earnings contribution
Thanks to profitable restructuring measures and in light of the economic
recovery of the Central and Eastern European markets, the Central&Eastern
Europe (CEE) segment initiated a turnaround in 2010. After minus EUR 393
million in 2009 a positive operating profit of EUR 53 million was attained
in 2010. The number of customers in the region increased in comparison to
2009 considerably by 460,000 to a total of more than 4 million. The
operating expenses rose, predominantly due to exchange rate effects, from
EUR 486 million in 2009 to EUR 565 million in 2010. The result of the
Ukrainian Bank Forum has improved recently but remained negative for the
whole year. The Polish Commerzbank subsidiary BRE Bank has again
contributed strongly to the result of the segment in 2010.
BRE Bank Group's capital adequacy ratio stood at 15.9% and core capital
(tier 1) ratio reached 10.4% at year-end 2010. In view of BRE Bank Group's
sustainable core capital and earnings strength and in accordance with
international standards, the existing letters of comfort issued to BRE Bank
and its subsidiaries BRE Bank Hipoteczny and BRE Leasing will expire by the
end of March 2011. BRE Bank is a strategic core investment of Commerzbank
Group in its second home market Central and Eastern Europe and together
with its subsidiaries part of the funding pool of Commerzbank Group.
Private Customers still facing charges from integration, ABF with successes
in risk reduction
With an operating profit of EUR 48 million, the Private Customers segment
closed 2010 on a positive note, yet is still facing charges from the impact
of integration. In the fourth quarter the operating profit was negative at
minus EUR 13 million (third quarter 2010: EUR 24 million). The operating
expenses in the segment were EUR 3.6 billion in 2010, slightly lower than
the EUR 3.8 billion seen in a year-on-year comparison. At EUR 246 million
loan loss provisions remained at the same level seen in the previous year.
The number of customers in the segment was stable at 11 million.
In the Asset Based Finance (ABF) segment there has again been progress with
risk management and the optimisation of the portfolio structure: Thus the
assets in the Public Finance sector have been reduced by nearly one third
since the end of 2008 to EUR 108 billion, in the Commercial Real Estate
area by 9% to EUR 73 billion. At EUR 1.6 billion the loan loss provisions
remained at the level seen in the previous year. From the background of
continuing comprehensive risk reduction the operating profit was minus EUR
1.3 billion (2009: minus EUR 813 million).
Portfolio Restructuring Unit concludes 2010 with a clearly positive result
The Portfolio Restructuring Unit (PRU) closed 2010 with an operating profit
of EUR 675 million (2009: minus EUR 1.5 billion), thus providing strong
support for the effectiveness of value-maximising portfolio reduction. In
2010 the loan loss provisions in the segment were reduced, in a
year-on-year comparison, from EUR 327 million to EUR 62 million. In the
fourth quarter 2010, the operating profit of the PRU declined vis-à-vis the
third quarter by EUR 209 million, to EUR 105 million. For 2011 a positive
operating result is expected in the segment. The PRU assets were further
lowered from EUR 19.7 billion in 2009 to EUR 14.1 billion as of the end of
December 2010.
Outlook: Loan loss provisions expected to be at a maximum of EUR 2.3
billion in 2011
'Our operating profit within the Group has improved by EUR 3.7 billion in
just one year. This shows that our business model is bearing fruit, and it
is testimony to the successful implementation of the 'Roadmap 2012',' said
CFO Eric Strutz. 'In the current year, we intend to further reduce costs
and again improve our operating performance. We expect further growth at
Mittelstandsbank, in the Corporates&Markets segment, as well as in
Central&Eastern Europe. In the Private Customers segment we expect to
profit increasingly from the integration in the second half of 2011.'
Strutz: 'We had a good start in January. February has so far also developed
positively. For the current year, we expect to see a further decline of at
least EUR 200 million in loan loss provisions compared to 2010 to a maximum
of EUR 2.3 billion. This pleasing development gives us additional leeway
for the repayment of the silent participations.' In order to optimise the
capital structure, at the beginning of the year, the Bank entered into a
transaction whereby equity instruments that bear profit-related coupons
were swapped for shares. 'We expect to attain a pre-tax profit according to
IFRS of roughly EUR 300 million with this transaction in the first quarter
of 2011,' said Strutz.
The integration of Dresdner Bank is also progressing as planned: 'We are
approaching the finishing line and will probably conclude the integration
of the IT systems at Easter,' said Strutz. The charges from the integration
- as already announced - amount to EUR 2.5 billion. The annual cost
synergies from the integration are as announced expected to be around EUR
2.4 billion after its complete implementation.
CEO Martin Blessing: 'We will not content ourselves with achieving the
goals of the 'Roadmap 2012'. On the contrary: We intend to bring about a
clear increase in profit subsequently. Additionally, we will do our utmost
to ensure that the German government concludes its support measures on a
positive note.'
Excerpt from the consolidated profit and loss statement
in EUR m 2010 2009 Q4 2010 Q3 2010 Q4 2009
Net interest income 7,054 7,174 1,682 1,633 1,882
Provision for loan losses -2,499 -4,214 -595 -621 -1,324
Net commission income 3,647 3,773 875 870 985
Net trading income 1,958 -409 384 422 -574
Net investment income 108 417 191 -24 -87
Current income on companies
accounted for at equity 35 15 32 -5 8
Other income -131 -22 -149 26 -68
Operating expenses 8,786 9,004 2,164 2,185 2,396
Operating profit/loss 1,386 -2,270 256 116 -1,574
Impairments of goodwill - 768 - - 52
Restructuring Expenses 33 1.621 - - 212
Taxes -136 -26 -21 -19 73
Consolidated profit/loss
(attributable to Commerzbank
shareholders) 1.430 -4.537 257 113 -1.857
Cost/income ratio in operating
business (%) 69.3 82.2 71.8 74.8 111.6
*****
About Commerzbank
Commerzbank is a leading bank for private and corporate customers in
Germany. With the segments Private Clients, Mittelstandsbank, Corporates&Markets, Central&Eastern Europe as well as Asset Based Finance, the Bank
offers its customers an attractive product portfolio, and is a strong
partner for the export-oriented SME sector in Germany and worldwide. With a
future total of some 1,200 branches, Commerzbank has one of the densest
networks of branches among German private banks. It has above 60 sites in
more than 50 countries and serves approximately 14 million private clients
as well as one million business and corporate clients worldwide. In 2010 it
posted gross revenues of EUR 12.7 billion with some 59,000 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 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
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Language: English
Company: Commerzbank AG
Kaiserplatz
60261 Frankfurt am Main
Deutschland
Phone: +49 (069) 136 20
Fax: -
E-mail: ir(at)commerzbank.com
Internet: www.commerzbank.de
ISIN: DE0008032004
WKN: 803200
Listed: Regulierter Markt in Berlin, Düsseldorf, Frankfurt (Prime
Standard), Hamburg, Hannover, München, SIX, Stuttgart;
Terminbörse EUREX; London
End of News DGAP News-Service
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113103 23.02.2011
Datum: 23.02.2011 - 07:06 Uhr
Sprache: Deutsch
News-ID 33271
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