COMMERZBANK AKTIENGESELLSCHAFT

Group Management Report
166
110 Commerzbank Annual Report 2011
Income before provisions rose by €178m to €1,157m year-on-year. At €648m, net interest
income in the segment was slightly below the previous year’s level. While interest income
from Polish subsidiary BRE Bank rose on account of the healthy growth in deposits and lending,
interest rate-dependent results in other regions fell behind those of 2010. Commission
income benefited particularly from the strong product demand in BRE’s private customer
business, improving 4.3% to €217m. Trading profit rose to €251m compared with €73m in
2010. This increase can be attributed primarily to the valuation effects of the agreed sale of
Commerzbank’s share in the Russian Promsvyazbank.
As the need to apply provisions against lending at Bank Forum and BRE Bank was much
reduced, loan loss provisions fell significantly from €361m to €89m.
Operating expenses in 2011 stood at €585m. The 3.5% rise was due mainly to higher
staff costs at BRE Bank as a result of growth.
Pre-tax earnings of the Central & Eastern Europe segment totalled €483m in 2011, a rise
of €430m compared to 2010.
The operating return on equity based on average capital employed of €1.7bn was 28%
(prior-year period: 3.3%). The cost/income ratio was 50.6% compared with 57.7% in 2010.
Main developments in 2011
The focus of our activities in 2011 was on organic growth initiatives, measures to boost efficiency
and on reducing our credit portfolio further on a value-oriented basis. Furthermore,
the strategic course was set in the segment for continuing to expand universal banking and
direct banking activities. The focus was increased on large core markets, such as Poland,
which will facilitate above-average growth and in which a top-ranked market position can be
achieved.
With the emphasis more on growth with universal bank models, it was decided to gear
corporate customer business of small CEE units more closely to the business models of Mittelstandsbank
and Corporates & Markets.
We attracted a growing number of customers with our range of product and services in
2011, the number of customers increasing by some 265,000 to almost 4.5 million. This
makes Commerzbank the leading German bank in Central and Eastern Europe. Our customers’
needs are served by close to 8,000 employees across 478 branches. The number of
cross-border customers increased through cross-border sales initiatives by 17.6% to more
than 4,600.