COMMERZBANK AKTIENGESELLSCHAFT

To our Shareholders Corporate Responsibility Management Report Risk Report Group Financial Statements Further Information 135
79
127 71 Business and overall conditions
135 79 Earnings performance, assets and financial position
147 91 Segment performance
137 193 Our employees
143 199 Report on events after the reporting period
144 200 Outlook and opportunities report
Earnings performance, assets
and financial position
After a good first quarter, the European sovereign debt crisis represented a significant drag for
the Commerzbank Group as the year progressed, even though the core bank segments continued
to perform well. The core bank consists of the entire Group excluding the Asset Based Finance
and Portfolio Restructuring Unit segments. Commerzbank reported a stable liquidity
position in the year under review and more than met the funding plan for the whole of 2011.
The Bank also made good progress in downsizing its non-strategic business volume, as it significantly
reduced total assets and risk assets. This also applied to the public finance portfolio
of the countries affected by the European sovereign debt crisis. The successful capital measures
taken during the year under review, including the repayment of a sizeable portion of the
SoFFin’s silent participation, significantly improved the capital structure. As at the end of 2011,
the Commerzbank Group had a Core Tier I ratio of 9.9% and a Core capital ratio of 11.1%.
Income statement of the Commerzbank Group
Commerzbank achieved a pre-tax operating profit of €507m in 2011 compared with €1,353m
in 2010. The 2011 results were heavily affected by the European sovereign debt crisis.
Charges due to write-downs on Greek government bonds totalled €2.2bn. Overall, the substantial
progress made in reducing operating expenses and risk provisions could not offset
the drop in income at overall Group level. The situation was different in the core bank, where
income increased to such a degree that pre-tax earnings, including the approx. €1.1bn from
the buyback of the Bank’s own hybrid capital instruments, rose to €4.5bn.
The individual items in the income statement were as follows:
Net interest income was €6,724m, which was 4.7% lower than the previous year’s figure
of €7,054m. This was primarily due to the planned reduction in the public finance and commercial
real estate portfolios in the Asset Based Finance segment. In contrast, the deposit
business of the Private Customers, Mittelstandsbank and CEE segments generated higher
contributions compared to the prior-year period thanks to an increase in margins. Moreover,
we recorded income from restructured loans.
Risk provisions in lending fell year-on-year by 44.4% to €–1,390m. This was due to lower
gross allocations and higher reversals. Apart from Corporates & Markets, which saw a net release
last year, loan loss provisions in all segments fell back significantly. In the core bank,
risk provision costs for the whole year fell to a very low level. By contrast, risk provisions in
the Asset Based Finance segment, although significantly lower compared to last year, were
still high due to the continually difficult situation on certain commercial real estate finance
markets.
› Notes to the income statement
Page 233 ff.
Group Management Report