15.05.2018 Commerzbank Aktiengesellschaft  DE000CBK1001

DGAP-News: Commerzbank Aktiengesellschaft: Performance and strategy implementation on track in the first quarter of 2018


 
DGAP-News: Commerzbank Aktiengesellschaft / Key word(s): Quarter Results
Commerzbank Aktiengesellschaft: Performance and strategy implementation on
track in the first quarter of 2018

15.05.2018 / 07:00
The issuer is solely responsible for the content of this announcement.

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- Stable revenues of EUR2.30bn (Q1 2017: EUR2.39bn) - revenues adjusted for
exceptional items slightly higher than in Q1 2017

- Operating profit of EUR289m (Q1 2017: EUR330m)

- Net profit of EUR250m (Q1 2017: EUR229m)

- A net 712,000 new customers for Private and Small Business Customers in
Germany since October 2016 - on track for target of 1 million by end of 2018

- Common Equity Tier 1 ratio at 13.3% including dividend accrual and loan
growth in Q1 (Q1 2017: 12.5%); improvement in NPL ratio to 1.0%


In the first quarter of 2018, Commerzbank continued on its growth path and
made further progress on its strategy. The two client segments, Private and
Small Business Customers and Corporate Clients, further enlarged their
customer base and are well on track to reaching their customer growth
targets for 2018. The Bank additionally added corporate loan growth as a key
indicator of its strategy execution in its reporting. The digitalisation of
the business also progressed. In the first quarter the Corporate Clients
segment successfully rolled out its digital onboarding for corporates and a
digital working-capital lending platform. Also, the Bank aims to resume
dividend payments for financial year 2018, and made an accrual of 5 cents
per share in the first quarter.

The Bank's operating performance in the first quarter of 2018 was stable.
Revenues adjusted for exceptional items rose slightly to EUR2,301 million
(Q1 2017: EUR2,282 million). Overall, revenues stood at EUR2,302 million (Q1
2017: EUR2,390 million). The operating profit came to EUR289 million (Q1
2017: EUR330 million). The risk result under International Financial
Reporting Standard 9 (IFRS 9) stood at minus EUR77 million. It reflects the
eliminated drag from ship finance, due to the revaluation of the Ship
Finance portfolio following the introduction of IFRS 9. The Bank's
non-performing loan (NPL) ratio, which was already low compared to its
European peers, dropped to 1.0%, illustrating the Bank's healthy risk
profile.

Operating expenses, at EUR1,936 million, were higher year-on-year (Q1 2017:
EUR1,865 million). This reflects investments in strategy implementation and
digitalisation which increased in the course of the year as planned and
regulatory burdens. The operating expenses for the first quarter include
compulsory contributions of EUR244m. Thereof, EUR186m was the contribution
for the European bank levy for the year 2018, which increased by EUR15m
year-on-year and was fully booked in the first quarter. Running costs for
the fulfilment of regulatory requirements, such as those incurred in
connection with MiFIR, MiFID II and IFRS 9, increased as well. The pre-tax
profit stood at EUR289 million in the first quarter of 2018. The net profit
came to EUR250 million (Q1 2017: EUR229 million). Earnings per share came in
at EUR0.20 in the first quarter of 2018 (Q1 2017: EUR0.18).

"We are delivering on what is the core of our strategy: Growing our
businesses with private and corporate customers and digitalising our
business", said Martin Zielke, Chairman of the Board of Managing Directors
of Commerzbank. "As announced, we are aiming to resume dividend payments for
financial year 2018 and have made an accrual of 5 cents per share in the
first quarter."


Common Equity Tier 1 ratio at 13.3% - risk profile shows further improvement

Risk-weighted assets (RWA) in the first quarter rose by EUR1 billion to
EUR170 billion at the end of March 2018. With the introduction of IFRS 9,
RWA had decreased by EUR2 billion and stood at pro forma EUR 169 billion per
1 January 2018. The increase in the first quarter was mainly due to higher
lending in the client segments. The Common Equity Tier 1 ratio (CET 1) stood
at 13.3% at the end of the first quarter. Thus, after IFRS 9 Commerzbank is
still above all regulatory requirements and has leeway for further growth
and the dividend accrual in the first quarter. The leverage ratio fell to
4.6% quarter-on-quarter, after 5.1% at the end of December 2017, mainly due
to IFRS 9. Total assets came to EUR470 billion (end of 2017: EUR453
billion).

"Our business grew further in the first quarter. Growth is our answer to
what remains a highly competitive German banking market", said Stephan
Engels, Chief Financial Officer of Commerzbank. He added: "Strict cost
management remains a priority to compensate for large investments in
digitalisation, increasing compulsory levies and the implementation of
regulatory projects."


Development of the segments

The Private and Small Business Customers (PSBC) segment continued its growth
in the first quarter of 2018. Revenues climbed to EUR1,237 million (Q1 2017:
EUR1,168 million). Excluding non-recurring items they improved by EUR44
million due to the good loan growth, more than offsetting the impact of
negative interest rates. Operating profit rose year-on-year to EUR202
million (Q1 2017: EUR194 million).

The Bank gained approximately 73,000 net new private and small business
customers in Germany in the first quarter, meaning customer growth was
higher than in the previous two quarters. The PSBC segment has gained a net
712,000 new customers in Germany since October 2016, so it is well on track
to reach its target of one million net new customers by the end of 2018.
Assets under Control showed large gains in loans (EUR3 billion), deposits
(EUR3 billion) and net new inflows in securities accounts (EUR3 billion).
Thanks to this growth, Assets under Control amounting to EUR376 billion
remained stable relative to the previous quarter, despite falling equity
markets.

mBank, Comdirect and Commerz Real saw further business growth in the first
quarter of 2018, and were able to increase their revenues compared to the
first quarter of 2017. While Comdirect profited from customer growth and
increased client trading activity due to higher market volatility, mBank
benefited from margin expansion as well as volume growth in loans and
deposits.

The risk result for the segment came to minus EUR52 million. This includes
the risk costs for the instalment loan business, which Commerzbank has been
operating on its books after it terminated a joint venture. Due to the high
quality of the loan book, the risk result is still at a low level. Operating
expenses climbed year-on-year to EUR984 million (Q1 2017: EUR941 million).
This includes the charges for both the European bank levy and the Polish
banking tax, which went up by EUR7 million year-on-year, as well as costs
for the implementation of MiFID II and investments in growth and
digitalisation. Costs were down quarter-on-quarter, though (Q4 2017:
EUR1,016 million).


The Corporate Clients (CC) segment registered further growth as well. The
Bank gained around 1,000 net new corporate clients in the first quarter and
increased the volume of lending to German Mittelstand companies and large
corporates year-on-year. Business was marked by pricing competition on the
German market and muted client demand for capital market products in the
first quarter of 2018. The operating profit was down in the first quarter,
at EUR145 million (Q1 2017: EUR267 million). Revenues excluding valuation
effects decreased year-on-year to EUR967 million (Q1 2017: EUR1,068
million). The Mittelstand and International Corporates divisions reflected
the challenging market environment. Revenues in Financial Institutions
increased quarter-on-quarter, after the Bank tightened its risk and
compliance framework in 2017.

The segment's risk result stood at minus EUR23 million in the first quarter
of 2018. Operating expenses remained close to stable year-on-year, at EUR799
million (Q1 2017: EUR790 million). Personnel reductions undertaken as part
of the segment's strategic realignment compensated for higher investments.


In the Asset & Capital Recovery (ACR) segment, the revaluation of the Ship
Finance portfolio following the introduction of IFRS 9 had a positive
impact. The segment's operating result improved in the first quarter of 2018
to EUR18 million (Q1 2017: minus EUR33 million). Revenues came to EUR45
million (Q1 2017: EUR115 million). The ACR segment did not generate any
charges for the risk result in the first quarter (loan loss provisions Q1
2017: EUR119 million). Operating expenses remained stable at EUR27 million
in the first quarter of 2018 (Q1 2017: EUR29 million).


Outlook

The outlook remains unchanged: In 2018 the Bank will focus on further growth
and the implementation of its Commerzbank 4.0 strategy. Higher adjusted
revenues are expected for both the Private and Small Business Customers and
the Corporate Clients segments. Despite ongoing investments in
digitalisation and IT, the Bank will manage its costs at around EUR7.0
billion. The risk result under IFRS 9 is expected to be below EUR600
million. The Bank aims to resume dividend payments for financial year 2018.



Financial figures at a glance

in EURm Q1 Q1 Q4 2017 Q1/18 vs Q1/18 vs
2018 2017 2017 Q1/17 in Q4/17 in
% %
Net interest income 1,045 1,049 1,101 4,192 -0.4 -5.1
Provisions for loan -77 -195 -251 -781 60.6 69.4
losses (2017: Loan
loss provisions)
Net commission income 797 887 774 3,178 -10.1 3.0
Net fair value result 345 402 169 1,092 -14.2 -
Other income 115 51 146 692 - -21.5
Revenues before loan 2,302 2,390 2,191 9,154 -3.7 5.1
loss provisions
Revenues excl. 2,301 2,282 2,251 8,598 0.8 2.2
exceptional items
Operating expenses 1,936 1,865 1,782 7,079 3.8 8.6
Operating profit or 289 330 157 1,294 -12.3 84.2
loss
Impairments of - - - -
Goodwill
Restructuring expenses - - - 808
Pre-tax profit or loss 289 330 157 487 -12.3 84.6
Taxes 5 81 41 243 - -88.5
Consolidated profit or 250 229 89 150 9.2 -
loss attributable to
Commerzbank
shareholders
Earnings per share 0.20 0.18 0.07 0.12
(EUR)
Cost/income ratio in 84.1 78.0 81.4 77.3
operating business (%)
Operating RoTE (%) 4.5 4.9 2.3 4.8
Net RoTE (%) 4.0 3.5 1.4 0.6
Net RoE (%) 3.6 3.2 1.2 0.5
CET 1 ratio, Basel 3 13.3 12.5 14.1 14.1
fully phased-in (%)
Leverage Ratio, Basel 4.6 4.6 5.1 5.1
3 fully phased-in (%)
Total assets (EURbn) 470 490 453 453
*****


From approximately 7 am onwards you can find broadcast-ready video material
with statements by Stephan Engels at http://mediathek.commerzbank.de/.

*****

Press contact
Nils Happich +49 69 136-80529
Karsten Swoboda +49 69 136-22339
Maurice Farrouh +49 69 136-21947
Erik Nebel +49 69 136-44986

*****

About Commerzbank
Commerzbank is a leading international commercial bank with branches and
offices in almost 50 countries. In the two business segments Private and
Small Business Customers and Corporate Clients, the Bank offers a
comprehensive portfolio of financial services which is precisely aligned to
its clients' needs. Commerzbank finances approximately 30% of Germany's
foreign trade and is the leading finance provider for corporate clients in
Germany. Due to its in-depth sector know-how in the German economy, the Bank
is a leading provider of capital market products. Its subsidiaries Comdirect
in Germany and mBank in Poland are two of the world's most innovative online
banks. With approximately 1,000 branches, Commerzbank has one of the densest
branch networks among German private banks. In total, Commerzbank serves
more than 18 million private and small business customers, as well as more
than 60,000 corporate clients, multinationals, financial service providers,
and institutional clients. The Bank, which was founded in 1870, is
represented at all the world's major stock exchanges. In 2017, it generated
gross revenues of EUR9.2 billion with approximately 49,300 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, 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.


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15.05.2018 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.

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Language: English
Company: Commerzbank Aktiengesellschaft
Kaiserstraße 16
60311 Frankfurt am Main
Germany
Phone: +49 (069) 136 20
Fax: -
E-mail: pressestelle@commerzbank.com
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; Regulated
Unofficial Market in Tradegate Exchange; London, SIX



End of News DGAP News Service
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685545 15.05.2018



INVESTOR-INFORMATIONEN
©boersengefluester.de
Commerzbank
WKN Kurs in € Einschätzung Börsenwert in Mio. €
CBK100 10,126 Halten 12.681,37
KGV 2019e KGV 10Y-Ø KBV KCV
12,66 19,32 0,44 0,62
Dividende '17e in € Dividende '18e in € Div.-Rendite '17
in %
Hauptversammlung
0,00 0,15 0,00 08.05.2018
Q1-Zahlen Q2-Zahlen Q3-Zahlen Bilanz-PK
15.05.2018 07.08.2018 08.11.2018 26.03.2018
Abstand 60Tage-Linie Abstand 200Tage-Linie Performance YtD Performance 52 Wochen
-10,25% -13,72% -19,02% 6,06%
       

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