COMMERZBANK AKTIENGESELLSCHAFT

To our Shareholders Interim Management Report Interim Financial Statements
2 9 Overall results
272 Consolidated balance sheet
273 Statement of changes in equity
274 Cash flow statement
275 Notes to the income statement
284 Notes to the balance sheet
290 Other notes
The Mittelstandsbank segment includes the Corporate Bank-
ing and Financial Institutions business areas. The Corporate
Banking business area serves small and mid-sized businesses,
the public sector and institutional clients. In addition,
this business area also houses the competence centre for customers
from the Renewable Energies sector. Our comprehensive
service offering includes payments, flexible financing
solutions, interest rate and currency management products,
professional investment advisory services, foreign trade
business and innovative banking solutions. The Financial
Institutions business area is responsible for our relationships
with German and foreign banks and financial institutions and
central banks. The business area offers these customers comprehensive
advice and support, with a strategic focus on the
processing of foreign trade.
Central and Eastern Europe contains the operations of our
subsidiaries and branches in the Central and Eastern Europe
region (particularly BRE Bank and Bank Forum). These are
grouped together under a management holding. The holding
acts as the interface between the local units and the central
departments in Germany and is also the strategic decisionmaker.
The local units serve private and business customers
and selected investment banking clients. They are the contact
points for local companies in Central and Eastern Europe, as
well as for cross-border business.
Corporates & Markets consists of three major businesses.
Equity Markets & Commodities trades in equities, equity
derivatives and commodities products and contains the
related sales resources. Fixed Income & Currencies comprises
trading and sales of interest rate and currency instruments
together with related derivatives as well as the central
credit portfolio management operations of the Corporate &
Markets segment. Corporate Finance is active in equity and
debt capital financing and advisory services. In addition, Corporate
& Markets houses the Group’s client relationship
management activities with a focus on the 100 biggest German
corporates and insurances. The Group’s Public Finance
operations are located in Corporates & Markets as well as the
workout portfolios that will be assigned to the Portfolio
Restructuring Unit in future.
Commercial Real Estate combines the results of the commer-
cial real estate finance business (especially in the Commerz-
bank subsidiary Eurohypo), the immovable and movable prop-
erty asset management/leasing activities of Commerz Real
and Shipping (within Commerzbank itself and our subsidiary
Deutsche Schiffsbank).
The Others and Consolidation segment contains the income
and expenses which are not attributable to the operating
business lines. These also include those expenses and
income amounts that represent the reconciliation between
the internal management reporting figures shown in the
segment reports and the Group financial statements in
accordance with IFRS. In addition, this segment covers
equity participations which are not assigned to the operating
segments as well as other international asset management
activities and Group Treasury. The costs of the service units
and Group controlling services are also shown here, which
– aside from restructuring costs – are charged in full to the
segments.
The result generated by each segment is measured in terms of
operating profit and pre-tax profit, as well as the return on equity
and cost/income ratio. In the statement of pre-tax profits, minority
interests are included in both the result and the average capital
employed. All the revenue for which a segment is responsible
is thus reflected in pre-tax profit.
The return on equity is calculated from the ratio between operating
profit before tax and the average amount of capital
employed. It shows the return on the capital employed in a given
segment. The cost/income ratio in operating business reflects
the cost efficiency of the various segments and shows the relationship
of operating expenses to income before provisions.
Income and expenses are shown by originating unit and at
market rates, with the market interest rate applied in the case of
interest rate activities. Net interest income reflects the actual
funding costs of the equity capital assigned to the respective
business segments. The Group’s return on capital employed is
allocated to the net interest income of the various segments in
proportion to the average capital employed in the segment. The
interest rate corresponds to that of a risk-free investment in the
long-term capital market. The average capital employed is calculated
in 2009 using the Basel II system, based on the computed
average risk-weighted assets and the capital charges for market
risk positions (risk-weighted asset equivalents). At Group level,
investors’ capital is shown, which is used to calculate the return
on equity. The regulatory capital requirement for risk-weighted
assets assumed for segment reporting purposes is 7 %.
Current income from investment in associates was €3m in
the first half-year (1H2008: €26m) and relates to the segments
Private Customers in an amount of €5m (1H2008: –), Mittelstandsbank
€2m (1H2008: €3m), Commercial Real Estate –€5m
(1H2008: €21m) and Others and Consolidation €1m (1H2008:
€2m). The carrying amounts of associated companies were
€360m (1H2008: €297m) and are divided over the segments
Private Customers €130m (1H2008: –), Mittelstandsbank €39m
279