Commerzbank Aktiengesellschaft - CMVM

34 MANAGEMENT REPORT
Securities department
2003
Equity tied-up (7 m) 995
Operative return
on equity 0.3%
Cost/income ratio in
operating business 99.7%
in Slovakia. In the current year, a further representative office will follow in the
Serbian capital, Belgrade. Our network in the Central and Eastern European
region, where we are one of the largest foreign banks, is complemented by
minority stakes in several procredit banks, the former microfinance banks.
By far our most important involvement in the region is our interest in BRE
Bank in Poland, which having achieved a turnaround last year is now back on an
expansion course. With its market share of a good 6.5%, it is one of the country’s
leading banks. After receiving the approval of the authorities to raise our existing
50% interest in BRE Bank to a maximum of 75%, we acquired further shares
through two public tender bids. In the meantime, our stake amounts to more
than 72%. This puts us in a position to play a major role in a consolidation of the
Polish banking market.
US branches successful
Last year, the Commerzbank branches and subsidiaries operating in Western
Europe had to contend with a persistently unfavourable market environment. We
mainly concentrated on improving the networking of our units and on strengthening
our sales teams through specialists for complex financing solutions.
Larger corporates and multinationals in particular benefited as a result.
In North America, we maintain four branches; last year, they remained on a
successful course, once again turning in exceptionally good results. Their pretax
return on equity reached 24%. Above all, asset/liability management and secondary-market
activities registered above-average performance again. The cost
base was further reduced, by a tenth. Due to the strong economic upswing, we
see good opportunities for our Northern American outlets this year as well.
Securities department
The strongest improvement in the results of our operative business lines last
year was registered by the Securities department, which has included foreignexchange
business since mid-2002. Thanks to substantial reductions in costs,
accompanied by a recovery in trading revenues, and with a gradually more positive
outlook in the markets, Securities returned to profitability.
Central to business strategy in 2003 was an expansion in services for corporate
clients in Germany, but also throughout Europe as a whole and the United
States. For the first time, the range extended from capital raising and products
for hedging and asset enhancement to advising companies facing the need to
reorganize their balance sheets.
Synergies from integration of bond and FX businesses
The fixed-income area benefited last year not only from the persistent buoyancy
of new issues and trading activity in many markets, but also from the integration
of foreign-exchange and interest-rate business. Both of these will now be provided
from a single platform and can draw upon the synergies to their mutual
benefit, given the ever greater influence that exchange rates have on interest
rates.