DGAP-News: Commerzbank: Net result at minus EUR 687 m in the third quarter of 2011
(firmenpresse) - DGAP-News: Commerzbank AG / Key word(s): Quarter Results/Change in
Forecast
Commerzbank: Net result at minus EUR 687 m in the third quarter of
2011
04.11.2011 / 07:01
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Commerzbank: Net result at minus EUR 687 m in the third quarter of 2011
- Operating result in the Group minus EUR 855 m, in the Core Bank plus
EUR 851 m
- EUR 798 m impairments on Greek sovereign bonds
- Core Tier 1 ratio as of September 30, 2011 at 9.4 %, Equity Tier 1
ratio 8.6 %
- Blessing: 'From January to September 2011 we have earned almost EUR 3
bn in the Core Bank'
Commerzbank closed the third quarter of 2011 with a net result attributable
to Commerzbank shareholders of minus EUR 687 million and an operating
result of minus EUR 855 million. The Core Bank, with the operating segments
Private Customers, Mittelstandsbank, Central&Eastern Europe, as well as
Corporates&Markets, saw a gratifying development with an operating profit
of EUR 851 million (third quarter of 2010: EUR 205 million) despite the
ongoing sovereign debt crisis. In the Asset Based Finance segment an
additional impairment of EUR 798 million on Greek sovereign bonds was
booked as of September 30, 2011. With a view to the ongoing uncertainty
regarding Greece's financial solvency and with regard to the EU summit on
October 26, 2011, the positions held by the Bank were in 2011 thus
depreciated by 52% of their nominal value. The accelerated reduction of
non-core activities in the framework of consistent risk reduction had an
additional negative impact of EUR 197 million. Adding to this were further
losses due to market-related valuation changes. Against this background,
the operating result in the Asset Based Finance segment in the third
quarter of 2011 was clearly negative at minus EUR 1.5 billion (third
quarter 2010: minus EUR 403 million).
In the first nine months of 2011 the Commerzbank Group attained an
operating profit of EUR 344 million (in the first nine months of 2010: EUR
1.1 billion). 'From January to September 2011 we have earned almost EUR 3
billion in the Core Bank. We continue to be committed to our original
operating profit target of EUR 4 billion for the Group, but on account of
the market environment we will be unable to reach this target next year,'
said Martin Blessing, Chairman of the Board of Managing Directors of
Commerzbank. When the figures were published for the first six months of
2011 the Bank had already stated that the profit targets for 2012 stated in
2009 remained conditional upon stable markets. For 2012 Commerzbank expects
a good operating result for the Core Bank. In the non-core areas the result
for 2012 will be dependent to a great degree on how the European sovereign
debt crisis continues to develop.
Commerzbank has already implemented fundamental strategic targets of
'Roadmap 2012' despite the turbulence in the markets. 'We have successfully
reduced the risks and our costs under control. We have reduced our
assets in the non-core areas more quickly than planned. Also in the future
we will focus on our customer-centric business model, reduce risks and
non-strategic assets, and realise the synergies from the take-over of
Dresdner Bank as planned,' said Martin Blessing. Commerzbank assumes that
loan loss provisions in 2012 will amount to less than EUR 1.8 billion. The
costs in the coming year, as foreseen in the 'Roadmap 2012', are likely to
be EUR 7.7 billion.
Net investment income with charges from impairments
Risk-weighted assets declined by 13% to EUR 244 billion in a year-on-year
comparison. Total assets were also down as compared to the third quarter of
2010 and amounted to EUR 738 billion (minus 13%). This shows the positive
impact of the continued reduction in risks and assets. The Core Tier 1
ratio as of the end of the third quarter of 2011 was 9.4 %; the Equity Tier
1 ratio was 8.6 %. In particular as a consequence of the low interest
rates, net interest income decreased slightly by 3 % over the third quarter
of 2010 to EUR 1.6 billion. With a view to the difficult market environment
and the caution of investors regarding securities transactions net
commission income has declined in a year-on-year comparison (minus 3% to
EUR 844 million), as has net trading income (minus 16% to EUR 353 million,
including income from hedge accounting). Net investment income saw charges
from the impairments on Greek sovereign bonds, and amounted to minus EUR
1.3 billion (third quarter of 2010: minus EUR 24 million). Loan loss
provisions, which at EUR 413 million declined by around one third compared
to the third quarter of 2010, reflect the impact of the German economy,
which has been relatively stable to date, and the successes of consistent
risk management. Operating expenses were reduced further in the third
quarter of 2011 to EUR 2.0 billion (down 7 % compared to the third quarter
of 2010).
All segments of the Core Bank positive and on track
Despite the caution of customers with respect to securities transactions,
the operating profit of the Private Customers segment increased in a
comparison with the third quarter of 2010 by EUR 47 million to EUR 71
million. This reflects, above all, the risk and cost discipline. In
addition, there was non-recurring income from the sale of non-core
activities. Mittelstandsbank profited from ongoing low loan loss provisions
and its strong market position, which also led to an increase in commission
income. With an operating profit of EUR 344 million it again closed the
quarter at a high level. In comparison with the very strong third quarter
of the previous year the operating profit declined by 20%, however. In the
third quarter of 2011 Central&Eastern Europe posted an operating profit
of EUR 92 million, versus EUR 31 million in the third quarter of
2010. The decisive factor in this respect was the clear downturn in loan
loss provisions. In addition, further restructuring successes at
Bank Forum and the consistent cost management need to be mentioned. The
number of customers in the region increased in the months July to September
2011 to 4.4 million. In the typically weaker third quarter 2011 the
development in the Corporates&Markets segment was impacted by the
difficult market situation. The sharp decline on the global stock markets,
the caution of investors and issuers with capital market placements and
Initial Public Offerings, as well as the volatility on the interest rate
and foreign exchange markets, led to an operating profit of EUR 35 million,
versus EUR 121 million in the third quarter of 2010. Further progress was
made in the reduction of costs.
Portfolio reduction in Asset Based Finance consistently continued
In the third quarter of 2011 Commerzbank consistently continued the
reduction of risks and assets in the non-core areas. In total the exposure
at default in the Public Finance sector in the Asset Based Finance segment
was reduced by EUR 16 billion to EUR 93 billion since the beginning of the
year. Taking the impairment into account the Bank has reduced its
commitments to public debt in the GIIPS states by more than 20 % to EUR
13.0 billion in the same period. The reduction in European government bonds
is to be continued in the coming months. As a result of the charges from
the continuing risk reduction, as well as the impairments on Greek
sovereign bonds, the segment's operating result was further reduced in the
third quarter of 2011 tominus EUR 1.5 billion (versus minus EUR 403
million in the third quarter of 2010). In the development of the Portfolio
Restructuring Unit above all the impact of the uncertainty on the financial
markets may be seen. As a consequence of market-related valuation losses,
the operating result of the segment declined in the third quarter of 2011
to minus EUR 212 million (versus plus EUR 314 million in the third quarter
of 2010).
Outlook 2011
'In the third quarter of 2011 we have continued to successfully focus on
the activities of the Core Bank and the result shows that our
customer-focussed business-model bears fruit also in a challenging
environment. Mittelstandsbank and Central&Eastern Europe have continued
their positive operating development. The Private Customer business is also
on track,' said Eric Strutz, Chief Financial Officer of Commerzbank. 'For
the current year we assume that the Core Bank will profit from its
customer-centric positioning also in the fourth quarter of 2011. The
economic environment is increasingly likely to see a downturn, however. On
the securities markets the development in October 2011 continued to be
shaped by uncertainties.' Loan loss provisions in 2011 will probably be
less than EUR 1.7 billion. To date the Bank had assumed that loan loss
provisions would be less than EUR 1.8 billion. As early as the end of June
2011 Commerzbank had already met its refinancing requirements for the
entire year. In the third quarter of 2011 it was thus possible to
successfully initialise the refinancing for 2012.
As already announced on 27 October, 2011 Commerzbank is currently examining
all options so as to meet the additional capital requirements of the
European Banking Authority (EBA). Against this background, the Board of
Managing Directors of the bank has decided upon immediate measures to
accelerate the reduction of risk-weighted assets. Amongst these are:
- the temporary suspension of new business at Eurohypo
- the temporary suspension of new loan business without connectivity to
Germany or Poland
- the accelerated reduction or the sale of non-strategic assets such as
special and project financing portfolios, as well as
- a review of the possibility of selling financial investments; this does
not include comdirect and BRE Bank, which are part of the core
business.
With these measures, to be adopted with immediate effect, the Bank can
reduce its risk-weighted assets by as much as EUR 30 billion. Retained
earnings and an accelerated cost management will provide additional options
to attain the required capital ratio. This includes, for example, a
revision of all external consulting services and purchased services.
'Since 2009 we have already been consistently reducing risks in our
business. We are now further accelerating this process', said Eric Strutz.
'This will not happen at the expense of the German economy. We will
continue to stand by our customers and particularly continue to support the
Mittelstand, and we do not intend to make use of public funds.'
Excerpt from the consolidated profit and loss statement
in EUR m Q3 2011 Q3 2010 9M 2011 9M 2010 Q2 2011
Net interest income 1,589 1,633 5,106 5,372 1,790
Provision for loan losses -413 -621 -1,009 -1,904 -278
Net commission income 844 870 2,792 2,772 928
Net trading income 353 422 1,448 1,574 576
Net investment income -1,267 -24 -2,209 -83 -954
Current income on companies
accounted for at equity 16 -5 29 3 13
Other income 59 26 407 18 10
Operating expenses 2,036 2,185 6,220 6,622 2,030
Operating profit -855 116 344 1,130 55
Impairments of goodwill - - - - -
Restructuring expenses - - - 33 -
Taxes-191 -19 -54 -115 2
Consolidated profit attributable
to Commerzbank shareholders -664 135 398 1,212 53
Cost/income ratio in operating
business (%) 127.7 74.8 82.1 68.6 85.9
*****
From 7:00 a.m. on November 4, 2011 you will be able to access
broadcast-quality video and audio material, including statements from Eric
Strutz, at www.tvservicebox.de or www.getaudio.de.
The video with statements from Eric Strutz can be accessed via smart
phones.
iPhone user:
http://cbvideo.commerzbank.de/Q32011/Coba_Statements_Strutz_en_Q3_2011_250
k.mp4
Blackberry user:
http://cbvideo.commerzbank.de/Q32011/Coba_Statements_Strutz_en_Q3_2011_3GP
P_MP4_AAC_128K.3gp
*****
About Commerzbank
Commerzbank is a leading bank for private and corporate customers in
Germany. With the segments Private Customers, 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 around 60 sites in
more than 50 countries and serves more than 14 million private clients as
well as 1 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 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
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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
Listed: Regulierter Markt in Berlin, Düsseldorf, Frankfurt (Prime
Standard), Hamburg, Hannover, München, SIX, Stuttgart;
Terminbörse EUREX; London
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