02.11.2015
Commerzbank AG DE000CBK1001
DGAP-News: Commerzbank: Operating profit improved after nine months of 2015 to EUR 1.5 bn - CET 1 ratio increased to 10.8%
DGAP-News: Commerzbank AG / Key word(s): Quarter Results/9-month
figures
Commerzbank: Operating profit improved after nine months of 2015 to
EUR 1.5 bn - CET 1 ratio increased to 10.8%
02.11.2015 / 07:00
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Commerzbank: Operating profit improved after nine months of 2015 to EUR 1.5
bn - CET 1 ratio increased to 10.8%
- Operating profit in Group in third quarter at EUR 429 m (Q3 2014: 343 m
Euro)
- Net profit after nine months increased significantly to EUR 853 m
(first nine months of 2014: EUR 525 m); in third quarter of 2015 at EUR
207 m (Q3 2014: EUR 225 m)
- Revenues before loan loss provisions in Core Bank increased by
approximately 7% to EUR 7.3 bn in first nine months (first nine months
of 2014: EUR 6.8 bn)
- NCA with portfolio run-down of EUR 4.0 bn in CRE and of EUR 1.1 bn in
Ship Finance in third quarter - Ship Finance portfolio lower than EUR
10 bn for the first time
- Capital ratio CET 1 increased to 10.8% as of end of September 2015 (end
of June 2015: 10.5%) - dividend accrual of 20 cents per share
- Blessing: "The successful turnaround at Commerzbank is right on track:
In the first nine months, we have increased the revenues and the
profit, as well as significantly strengthened the capital ratio. From
today's stance, the Board of Managing Directors plans to propose a
dividend of 20 cents per share for the 2015 financial year."
In the first nine months of 2015, Commerzbank significantly improved the
net profit compared to the previous year and further increased the CET 1
ratio. The operating profit in the Group in this period was improved to EUR
1,499 million (first nine months of 2014: EUR 924 million). In the third
quarter of 2015, the operating profit increased to EUR 429 million (Q3
2014: EUR 343 million). The revenues before loan loss provisions in the
Group were raised to EUR 7.5 billion (first nine months of 2014: EUR 6.9
billion). The third quarter of 2015 contributed a total of EUR 2.3 billion
to this sum (Q3 2014: EUR 2.4 billion). The loan loss provisions decreased
in the first nine months of 2015 to EUR 584 million (first nine months of
2014: EUR 836 million). In the third quarter of 2015, they were EUR 146
million (Q3 2014: EUR 341 million). The ongoing low level is based on the
high quality of the credit book and on the ongoing robust state of the
German economy. Moreover, the continued portfolio run-down in the NCA
segment has proved beneficial in this respect. In the first nine months of
2015, the operating expenses including the Bank Levy were EUR 5,426
million. Of this amount, EUR 1,734 million were accounted for by the third
quarter of 2015 (Q3 2014: EUR 1,722 million).
The pre-tax profit increased in the first nine months of 2015 to EUR 1,405
million (first nine months of 2014: EUR 924 million). In the third quarter,
the pre-tax profit improved to EUR 401 million (Q3 2014: EUR 343 million).
This includes restructuring expenses of EUR 28 million for the optimisation
of back office units in Germany and New York in the framework of the Centre
of Competence approach.
All in all, the net profit increased to EUR 853 million in the first nine
months of 2015 versus the same period of the previous year, amounting to
EUR 207 million in the third quarter of 2015 (first nine months of 2014:
EUR 525 million; Q3 2014: EUR 225 million).
Capital ratio again improved - further dividend accrual
The Common Equity Tier 1 ratio (CET 1) with full application of Basel 3
rose to 10.8% as of the end of September 2015 (end of June 2015: 10.5%).
This includes a dividend accrual for the first nine months of 2015 to the
amount of approximately EUR 250 million or 20 cents per share. From the
current stance, this is the amount that the Board of Managing Directors
will propose to the Supervisory Board for the full 2015 business year.
Despite this dividend accrual and excluding the capital increase performed
in April 2015, the Bank has already attained the CET 1 ratio target of more
than 10% set for the end of 2016.
The leverage ratio improved as of the end of the third quarter of 2015 to
4.1%, following on from 4.0% as of the end of June 2015. The risk-weighted
assets (RWA) with full application of Basel 3 remained stable in the same
period at EUR 213.5 billion as of the end of September 2015 (end of June
2015: EUR 214.4 billion). The total assets in the Group amounted to EUR 564
billion as of the end of September 2015 (end of June 2015: EUR 561
billion).
"In the first nine months, we have further increased the revenues and the
profit, while also significantly strengthening the capital ratio. We were
again able to improve the risk profile of the Bank thanks to further
run-down of the NCA portfolios. This shows that our client-centric business
model is paying off, and the successful turnaround at Commerzbank is right
on track. This is also reflected in the return on equity for the first nine
months at the Core Bank, which was considerably above the previous year's
figure," said Martin Blessing, Chairman of the Board of Managing Directors
of Commerzbank. Blessing added: "From today's stance, the Board of Managing
Directors plans to propose a dividend of 20 cents per share for the 2015
financial year."
Core Bank: operating profit increased in first nine months compared to the
previous year
The Core Bank increased the operating profit substantially in the first
nine months of 2015 compared to the previous year to EUR 1,828 million
(first nine months of 2014: EUR 1,535 million). In the third quarter, an
operating profit of EUR 416 million was attained (Q3 2014: EUR 595
million). The positive development at the Core Bank in the first nine
months is also reflected in the return on equity (RoE), as well as in the
return on tangible equity (RoTE). The operating RoE of 11.3% and an
operating RoTE of 13.2% in the first nine months were at a good level and
were higher than in the same period of the previous year - despite
considerably higher capital resources. The revenues in the Core Bank rose
in the first nine months of 2015, by 6.5% to EUR 7,275 million, over the
same period in 2014 (EUR 6,830 million). The loan loss provisions in the
Core Bank declined in the first nine months to EUR 271 million (first nine
months of 2014: EUR 387 million). The operating expenses in the same period
were EUR 5,176 million (first nine months of 2014: EUR 4,908 million). Of
this sum, EUR 137 million was accounted for by the European Bank Levy. In
addition, compared to the previous year, there were higher expenses for
strategic investments in digitisation and for regulatory issues.
Positive developments on the whole in the first nine months for the Core
Bank segments
In the Private Customers segment an improved operating result and higher
revenues underline the successful turnaround. In the first nine months of
2015, the operating profit increased significantly to EUR 562 million
(first nine months of 2014: EUR 346 million). In the third quarter alone,
an operating profit of EUR 230 million (Q3 2014: EUR 120 million) was
generated. This includes a positive one-off net effect of EUR 81 million
from a special dividend paid by EURO Kartensysteme GmbH and higher net
additional provisions for litigation and recourses. In the first nine
months of 2015, the revenues before loan loss provisions improved by 8.3%
to EUR 2,796 million despite the ongoing burdens posed by the low interest
rate environment (first nine months of 2014: EUR 2,582 million). The loan
loss provisions in the first nine months of 2015 were, at EUR 39 million,
still at a low level (first nine months of 2014: EUR 68 million). The
operating expenses in the same period amounted to EUR 2,195 million (first
nine months of 2014: EUR 2,168 million). The reason for the positive
development in the results was, above all, the ongoing growth of the
segment. The mortgage loan business developed positively with new business
volume of more than EUR 9 billion in the first nine months of 2015. The
credit volume also saw significant year-on-year growth of 8% in the third
quarter. Moreover, the Private Customers segment acquired 87,000 net new
customers in the third quarter. Thus, since the end of 2012, total growth
has amounted to 753,000 net new customers.
The operating profit at the Mittelstandsbank declined in the first nine
months of 2015 compared to the previous year to EUR 851 million (first nine
months of 2014: EUR 973 million). Of this sum, EUR 216 million was
accounted for by the third quarter of 2015 (Q3 2014: EUR 365 million). With
a virtually stable operational customer business, the downturn in the first
nine months was especially due to a write-down on a shareholding in a
technology provider. The revenues before loan loss provisions declined in
the first nine months by 6.4% to EUR 2,064 million due to valuation effects
(first nine months of 2014: EUR 2,206 million), while the loan loss
provisions decreased to EUR 119 million (first nine months of 2014: EUR 236
million). At the same time, the interest income from loans and the
commission income, particularly from currency hedging transactions, were
increased. However, these were not able to fully compensate especially for
the downturn in deposits revenues, which was driven, above all, by the low
interest rate environment. The credit volume in the first nine months of
2015 increased by 5% versus the same period of the previous year. The
operating expenses rose to EUR 1,094 million over the first nine months of
2014 (first nine months of 2014: EUR 997 million), primarily as a result of
the European Bank Levy and higher regulatory costs.
In the first nine months of 2015, the Central & Eastern Europe segment
attained an operating profit of EUR 273 million, which is approximately the
level seen in the previous year (first nine months of 2014: EUR 275
million). In this respect, the third quarter of 2015 contributed EUR 93
million (Q3 2014: EUR 93 million). At EUR 690 million, the revenues before
loan loss provisions in the first nine months of 2015 were slightly lower
compared to the previous year (first nine months of 2014: EUR 698 million).
In the first nine months of 2015, the revenues included the positive
special effect of approximately EUR 46 million from the sale of the
insurance business of mBank. In contrast, there was a downturn in the
interest and commission income. The growth in credit and deposit volumes
was not able to compensate in full for the negative effects of the lower
interest rate levels on the interest income in Poland or the statutory
reductions in fees in the card business. The uncertainty in Poland
regarding possible legislative initiatives on the conversion of foreign
currency loans and a bank levy will still be felt in the coming quarters.
The loan loss provisions declined versus the same period of the previous
year to EUR 75 million in the first nine months of 2015 (first nine months
of 2014: EUR 96 million). The operating expenses increased in the same
period as a consequence of higher regulatory costs and of further
investments to secure the organic growth of mBank to EUR 342 million (first
nine months of 2014: EUR 327 million).
In the Corporates & Markets segment the operating profit in the first nine
months of 2015, excluding valuation effects from own liabilities (OCS) and
counterparty risk in the derivatives business, declined to EUR 430 million
(first nine months of 2014: EUR 543 million). After a very good first half
in 2015 the third quarter suffered under challenging market conditions,
high levels of volatility, and lower client demand amid concerns over
global growth. In the third quarter of 2015 the operating profit, adjusted
for the valuation of own liabilities (OCS) and counterparty risks in the
derivatives business, amounted to EUR 32 million, following on from EUR 148
million in the same period of the previous year. The revenues before loan
loss provisions increased in the first nine months of 2015 to EUR 1,614
million (first nine months of 2014: EUR 1,529 million); in the same period
the loan loss provisions saw net reversals of EUR 25 million, following net
reversals of EUR 14 million in the same period of the previous year. The
operating expenses increased in the first nine months of 2015 to EUR 1,076
million (first nine months of 2014: EUR 987 million), in particular due to
the European Bank Levy which was booked in the first quarter of 2015.
NCA: further portfolio run-down - Ship Finance portfolio lower than EUR 10
billion for first time
In the first nine months of 2015, the operating profit in the Non-Core
Assets (NCA) segment amounted to minus EUR 329 million (first nine months
of 2014: minus EUR 611 million). In particular, the operating profit in the
third quarter of 2015 of EUR 13 million (Q3 2014: minus EUR 252 million)
contributed to the clear reduction in the loss. The revenues before loan
loss provisions in the first nine months of 2015 amounted to EUR 234
million (first nine months of 2014: EUR 77 million), which was due above
all to valuation effects. In the same period, the loan loss provisions
declined as a consequence of the ongoing portfolio reduction to EUR 313
million (first nine months of 2014: EUR 449 million). The operating
expenses amounted to EUR 250 million in the first nine months (first nine
months of 2014: EUR 239 million). The increase results from the first-ever
booking of the European Bank Levy to the amount of EUR 28 million.
The value-preserving portfolio run-down was also successfully continued by
the Bank in the third quarter: The Exposure at Default (EaD) was reduced
over the second quarter of 2015 in the areas of Commercial Real Estate
(CRE) and Ship Finance by EUR 5.1 billion. Therefore, the EaD in the two
areas at the end of September 2015 amounted to a mere EUR 22 billion
(second quarter of 2015: EUR 27 billion; Q3 2014: EUR 36 billion) and was
thus only EUR 2 billion higher than the target for the end of 2016. In the
CRE area the run-down over the previous quarter was EUR 4.0 billion, with
EUR 2.9 billion thereof accounted for by the sale of two portfolios of
commercial real estate loans, which had already been communicated in July.
The EaD in the CRE area was thus EUR 12.5 billion at the end of September
2015 (second quarter of 2015: EUR 16.5 billion). In the Ship Finance area
the portfolio was reduced by EUR 1.1 billion to EUR 9.7 billion (second
quarter of 2015: EUR 10.8 billion).
Outlook
"We intend to continue the sustainable growth path of the Core Bank through
the rest of the year, and thus continue to aspire to an increase in
revenues and market shares. Despite the dividend accrual that we have made,
we have further increased our CET 1 equity ratio to 10.8%. We assume that
this ratio will at the very least remain stable in the fourth quarter,"
said Stephan Engels, Chief Financial Officer of Commerzbank. With a view to
the loan loss provisions, the Bank expects these to remain below EUR 0.9
billion for the 2015 financial year - with lower loan loss provisions in
both NCA and in the Core Bank. The operating expenses - without taking into
account the European Bank Levy - are expected to be slightly higher than
EUR 7 billion for the year as a whole.
*****
Excerpt from the consolidated profit and loss statement
In EUR m 9M 2015 Q3 2015 Q2 2015 9M 2014 Q3 2014 Net interest and trading 5,027 1,501 1,509 4,559 1,595 income Provisions for loan losses -584 -146 -280 -836 -341 Net commission income 2,549 810 839 2,396 799 Net investment income -106 -39 61 18 15 Current income on 46 15 17 42 19 companies accounted for at equity Other income -7 22 -8 -108 -22 Revenues before loan loss 7,509 2,309 2,418 6,907 2,406 provisions Operating expenses 5,426 1,734 1,753 5,147 1,722 Operating profit or loss 1,499 429 385 924 343 Impairments of Goodwill - - - - - Restructuring expenses 94 28 - - - Net gain or loss from sale - - - - - of disposal groups Pre-tax profit or loss 1,405 401 385 924 343 Taxes 466 165 83 320 93 Consolidated profit or 853 207 280 525 225 loss attributable to Commerzbank shareholders Cost/income ratio in 72.3 75.1 72.5 74.5 71.6 operating business (%) Earnings per share 0.71 0.17 0.23 0.46 0.20 Operating RoE (%) 6.9 5.8 5.2 4.5 5.0***** Press contact Alexander Cordes +49 69 136-42764 Karsten Swoboda +49 69 136-22339 Kathrin Wetzel +49 69 136-44011 ***** About Commerzbank Commerzbank is a leading international commercial bank with branches and offices in more than 50 countries. The core markets of Commerzbank are Germany and Poland. With the business areas Private Customers, Mittelstandsbank, Corporates & Markets, and Central & Eastern Europe, its private customers and corporate clients, as well as institutional investors, profit from a comprehensive portfolio of banking and capital market services. Commerzbank finances more than 30 per cent of Germany's foreign trade and is the unchallenged leader in financing for SMEs. With its subsidiaries comdirect and Poland's mBank it owns two of the world's most innovative online banks. With approximately 1,100 branches and approximately 90 advisory centres for business customers Commerzbank has one of the densest branch networks among German private banks. In total, Commerzbank boasts approximately 15 million private customers, as well as 1 million business and corporate clients. The Bank, which was founded in 1870, is represented at all the world's major stock exchanges. In 2014, it generated gross revenues of almost EUR 9 billion with an average of approximately 52,000 employees. ***** Disclaimer This release contains forward-looking statements. Forward-looking statements are statements that are not historical facts. In this release, these statements concern inter alia the expected future business of Commerzbank, efficiency gains and expected synergies, expected growth prospects and other opportunities for an increase in value of Commerzbank as well as expected future financial results, restructuring costs and other financial developments and information. These forward-looking statements are based on the management's current plans, 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. Such factors include the conditions in the financial markets in Germany, in Europe, in the USA and other regions from which Commerzbank derives a substantial portion of its revenues and in which Commerzbank holds a substantial portion of its assets, the development of asset prices and market volatility, especially due to the ongoing European debt crisis, potential defaults of borrowers or trading counterparties, the implementation of its strategic initiatives to improve its business model, particularly to reduce its NCA portfolio, the reliability of its risk management policies, procedures and methods, risks arising as a result of regulatory change and other risks. Forward-looking statements therefore speak only as of the date they are made. Commerzbank has no obligation to 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 [email protected] --------------------------------------------------------------------- 02.11.2015 Dissemination of a Corporate News, transmitted by DGAP - a service of EQS Group AG. The issuer is solely responsible for the content of this announcement. The DGAP 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 60311 Frankfurt am Main Germany Phone: +49 (069) 136 20 Fax: - E-mail: [email protected] Internet: www.commerzbank.de ISIN: DE000CBK1001 WKN: CBK100 Indices: DAX, CDAX, HDAX, PRIMEALL Listed: Regulated Market in Berlin, Dusseldorf, Frankfurt (Prime Standard), Hamburg, Hanover, Munich, Stuttgart; Terminbörse EUREX; London, SIX End of News DGAP News Service --------------------------------------------------------------------- 407511 02.11.2015
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