COMMERZBANK AKTIENGESELLSCHAFT

To our Shareholders Interim Management Report Interim Financial Statements
231 Business and economy
232 Earnings performance, assets and financial position
237 Forecast
240 Report on post-balance sheet date events
241 Risk Report
net interest income rose strongly in the first half year-on-
year, by 79.9 % to €1,200m. With risk provisions up from
€80m in the first half of 2008 to €161m in the first six
months of 2009, the recession in Germany also had a mar-
ginally negative impact. Although net commission income
rose from €700m to €1,038m, it was severely affected by
the fall-off in securities business. Operating expenses went
up by €949m to €1,950m despite our still strict cost man-
agement programme due to first-time charges for higher
payments to the deposit protection fund and due also to
one-off charges in 2009 for payments to the German Pension
Protection Fund. With an operating profit of €98m, the
segment made a positive contribution to the Commerzbank
Group’s results.
The operating return on equity calculated on capital employed
of €2.6bn was 7.5 % (first half year 2008: 39.6 %).
The expense ratio was 88.3 % compared with 74.1 % in the
first half of 2008. Credit volume was €83.7bn on average in
the second quarter of 2009.
Mittelstandsbank made the greatest positive
contribution to the Group’s results
In difficult market conditions, the Mittelstandsbank segment
still managed to report a half-yearly profit in 2009, despite
profit momentum falling back substantially. Risk provisions
in particular rose as expected in the second quarter. The
first-time consolidation of Dresdner Bank was tangibly reflected
in individual items in the 2009 income statement.
Net interest income rose from €599m in the first half of
2008 to €1,089m, helped by a much improved lending margin.
By contrast, the deposit margin narrowed. Risk provisions
had to be increased by €285m to €309m, particularly
due to individual exposures to larger mid-sized companies.
Net commission income rose by 46.6 % to €447m thanks to
an extremely stable business performance. Despite special
effects, such as higher payments to deposit protection funds
and the German Pension Protection Fund, operating
expenses only rose by 53.9 % to €657m. This means that
costs are still under control. With operating profit up by
7.1 % to €481m, Mittelstandsbank made the biggest positive
contribution to the Commerzbank Group’s results.
The operating return on equity calculated on capital employed
of €4.8bn was 20.0 % (first half year 2008: 35.3 %).
The expense ratio was 45.4 % compared with 47.4 % in the
first half of 2008. Average credit volume in the segment was
€84.0bn in the second quarter of 2009. The corresponding
figure for Mittelstandsbank Germany was €68.4bn. We
therefore continue to finance a major section of the German
Mittelstand.
Risk provisions hit profits in Central and Eastern Europe
All units in the Central and Eastern Europe segment generated
extremely stable income before risk provisions. Nevertheless,
these provisions had to be massively increased due
to the recession in the region. In the first six months of
2009, BRE Bank and Bank Forum won nearly 300,000 new
customers, bringing the total number of customers in the
segment to almost 3.5 million. Net interest income rose by
22.0 % to €333m thanks to a much wider credit margin.
The current economic crisis was reflected in risk provisions
for all units, with the strong fluctuations in the Polish zloty
badly affecting some of BRE Bank’s corporate customers.
Total loan loss provisions rose from €43m year-on-year to
€375m. Net commission income contracted by 22.3 % in
the first half of 2009 to €80m as securities business continued
to decline. The cost programmes in Poland and the
Ukraine are taking effect, with operating expenses falling
year-on-year from €246m to €231m. The negative impact of
risk provisions led to an operating loss in the first half of
2009 of €141m compared with an operating profit in the
same period last year of €222m.
The operating return on equity calculated on capital employed
of €1.7bn was –17.0 % (first half year 2008: 29.6 %).
The cost / income ratio was 49.7 % compared to 48.1 % in
the first half of 2008.
Corporates & Markets significantly burdened
by financial crisis
The segment continued to be badly affected by the ongoing
financial market crisis in the first half of 2009, although second-quarter
results were much better than those for the first
quarter. The Portfolio Restructuring Unit (PRU) was set up
in the meantime. Its brief is to actively and transparently
work out structured credit instruments, exotic credits as
well as the credit trading book, and to scale them back over
time. In line with our strategic alignment, total assets and
risk-weighted assets were reduced and risk positions in
trading decreased. From the third quarter onwards, the
portfolio identified for scaling down will be bundled
together with structured securities from other segments
235