03.07.2018
Commerzbank Aktiengesellschaft DE000CBK1001
DGAP-News: Commerzbank reaches agreement to sell its Equity Markets & Commodities business (EMC) to Societe Generale
DGAP-News: Commerzbank Aktiengesellschaft / Key word(s): Miscellaneous
Commerzbank reaches agreement to sell its Equity Markets & Commodities
business (EMC) to Societe Generale
03.07.2018 / 07:00
The issuer is solely responsible for the content of this announcement.
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- Transaction would include transfer of trading books, client franchise,
staff, and IT infrastructure
- Simplification of IT infrastructure and business model would contribute to
cost and RWA reduction targets announced as part of "Commerzbank 4.0"
strategy
- CEO Martin Zielke: "With this agreement we are delivering a further
milestone in the implementation of our strategy 'Commerzbank 4.0'"
Commerzbank has reached an agreement to sell its Equity Markets &
Commodities (EMC) business to Societe Generale. The transaction is subject
to pre-clearance with competent tax authorities, approval by further
relevant authorities and the employee representative committees as well as
the finalisation of legal documentation. It marks a further milestone in the
execution of the "Commerzbank 4.0" strategy, which is deemed to reduce the
Bank's overall complexity and free up capital for investment in
Commerzbank's core franchise.
The transaction would include the transfer of EMC's trading books and client
franchise, staff, as well as parts of the IT infrastructure. EMC front
office employees and certain associated support function staff would move to
Societe Generale, subject to approval by employee representative committees.
The transfer of trading books and its associated balance sheet and revenue
implications are estimated to take place gradually and to start at the end
of 2018. Therefore, EMC revenues are expected to fade out in the profit and
loss statement of Commerzbank during 2019. The reduction of expenses
associated to Commerzbank's EMC business is estimated to reduce the Bank's
cost base by at least EUR200m by year-end 2020 and to contribute to the cost
reduction target announced as part of the "Commerzbank 4.0" strategy in
2016.
Since the announcement of the strategy, more than EUR3bn of risk-weighted
assets (RWA) has been released due to the streamlining of the Bank's Fixed
Income, Currencies & Commodities (FICC) business. Through the sale of its
EMC business, Commerzbank would additionally benefit from the release of
RWA. Further to that, the sale would contribute to avoid the RWA impact
expected to apply with the Fundamental Review of the Trading Book (FRTB)
regulation.
Commerzbank's EMC business comprises the Bank's manufacturing and market
making of flow and structured trading and investment products as well as its
established exchange-traded funds (ETF) brand, Comstage, and its associated
leading ETF market making platform. The Equity Capital Markets ("ECM"), the
Equity Brokerage ("Equity Trading" and "Equity Sales"/"Brokerage")
businesses, and the hedging business for commodity risks will not be part of
the transaction but will remain in Commerzbank's Corporate Clients segment
as part of its strategic client offering.
"With this agreement, we are delivering a further milestone in the
implementation of our 'Commerzbank 4.0' strategy," said Martin Zielke, Chief
Executive Officer (CEO) of Commerzbank. "We are simplifying our business, we
are contributing to our cost-cutting targets, and we are freeing up capital
for the benefit of our core business with private and corporate clients," he
added.
"As a market leader for corporates in Germany, we will of course continue to
offer the full range of capital markets products including commodity hedging
products and brokerage services to our clients," explained Michael Reuther,
member of the Board of Managing Directors responsible for the Corporate
Clients segment.
The current EMC business is an attractive and value-generating business. In
2017 it generated EUR381m gross revenues. It is an important ETF market
maker in Europe, amongst the major retail products market makers and amongst
the leading dealers of medium term notes.
"Over the last 29 years, the Equity Markets & Commodities business has grown
in Commerzbank to be one of the leading European manufacturers and market
makers of financial products. I am convinced that with Societe Generale and
Lyxor, leading Derivatives and ETF Houses, we have found the right new
owners for this franchise to grow, innovate and be even more successful in
the future," said Roberto Vila, Divisional Board Member Equity Markets &
Commodities. "We will ensure a smooth and transparent transition process for
investors who are holding our products," Vila added.
*****
Press contact
Margarita Thiel +49 69 136-46646
Maximilian Bicker +49 69 136-22440
*****
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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03.07.2018 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.
The DGAP Distribution Services include Regulatory Announcements,
Financial/Corporate News and Press Releases.
Archive at www.dgap.de
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Language: English
Company: Commerzbank Aktiengesellschaft
Kaiserstraße 16
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; Regulated
Unofficial Market in Tradegate Exchange; London, SIX
End of News DGAP News Service
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