COMMERZBANK AKTIENGESELLSCHAFT

the Group holds in large listed companies in Germany and abroad are minority holdings. As a practical
matter, this investment structure may make it more difficult for the Group to promptly obtain
information required to timely counteract possible undesirable developments. Furthermore, it cannot
be ruled out that in future the Group will have to make valuation allowances with respect to its portfolio
of equity investments or that the Group will not be successful in disposing of its equity investments via
the stock market or in off-exchange transactions at appropriate prices. Any of these risks could have a
material adverse effect on the Group’s business, results of operations and financial condition.
Risks arising from Pension Obligations
Commerzbank and its subsidiaries have various direct and indirect pension obligations towards their
current and former staff. These obligations constitute contingent liabilities for accounting purposes, as
the precise timing and duration of payout is not confirmed. These obligations therefore entail various
risks. In making a commitment to grant direct pension benefits, the Group assumes similar risks as a
life insurance company (e.g., fluctuation risk, the risk of sudden changes to the balance sheet,
longevity risk, administrative risks, inflation risk, etc.). The assets reserved in the business or in
segregated pension funds to meet subsequent pension payments are subject to the risks typically
associated with a capital investment. The volume of existing pension obligations may increase on
account of judicial rulings and legislation (for example with reference to factors such as equality of
treatment, adjustment, non-forfeitability and retirement age). Risks, however, may also arise due to
changes in tax legislation and/or in judicial rulings. Obligations similar to pensions (such as obligations
in respect of early retirement, part-time work arrangements for older employees and anniversaries)
also carry similar risks. Any of these risks could have a material adverse effect on the Group’s
business, results of operations and financial condition.
Operational Risks
As part of its normal business activities, the Group conducts a large number of complex transactions in
a wide range of jurisdictions and in this connection is exposed to a variety of operational risks. These
risks concern, in particular, the possibility of inadequate or erroneous internal and external work
processes and systems, regulatory problems, human errors and deliberate legal violations such as
fraud. Moreover, it is possible that external events such as natural disasters, terrorist attacks or other
exceptional situations could have a highly negative impact on the environment in which the Group
operates and thus, indirectly, on the Group’s internal processes. Such events may cause the Group to
suffer substantial losses and reputational harm. Furthermore, the Group may be forced to make staff
redundant, which might have a detrimental impact on the Group’s business. The Group endeavors to
hedge operational risks by implementing appropriate control processes tailored to its business and the
market and regulatory environment in which it operates. Nevertheless, it is possible that these
measures prove to be ineffective in relation to particular or all operational risks to which the Group is
exposed. Even though the Group endeavors to insure itself against the most significant operational
risks, it is not possible to obtain insurance cover for all the operational risks on commercially
acceptable terms on the market. Should one, some or all of the risks described in this paragraph arise,
the Group’s business, results of operations and financial condition could be materially adversely
affected.
IT Risks
The type of comprehensive institutional banking carried out by the Group is highly dependent on
complex IT systems. IT systems are prone to a range of problems such as computer viruses, damage,
other external threats, operational errors and software or hardware errors. The harmonization of the
wide variety of IT systems used in the Group to create a standardized IT architecture presents a
particular challenge. Furthermore, regular upgrades are required for all IT systems to meet the
demands imposed by constant changes in business and supervisory requirements. In particular,
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