COMMERZBANK AKTIENGESELLSCHAFT

To our Shareholders Corporate Responsibility Management Report Risk Report Group Financial Statements Further Information 119 175
127 71 Business and overall conditions
135 79 Earnings performance, assets and financial position
147 91 Segment performance
119 175 Corporates & Markets
137 193 Our employees
143 199 Report on events after the reporting period
144 200 Outlook and opportunities report
Corporates & Markets
The Corporates & Markets segment includes Commerzbank’s customer-oriented investment
banking activities and management of customers who require capital market products. The
range of products and services Commerzbank offers enables it to meet the rising customer
requirements of a universal bank. Corporates & Markets segment is a core segment of the
whole bank and is closely connected with other segments. The Group divisions working
closely together – Fixed Income & Currencies, Equity Markets & Commodities, Corporate
Finance and Client Relationship Management – are described in more detail below.
The 2011 financial year was dominated by an extremely difficult market environment, declining
economic momentum, the ongoing European sovereign debt crisis with accompanying
high market volatility as well as customers’ increasing risk aversion. This had a negative
impact on the segment’s earnings, particularly in the second half of the year.
Performance
Corporates & Markets
2011 2010 Change in
€m
%/%-points
Income before provisions 2,234 2,392 – 6.6
Loan loss provisions – 146 27 .
Operating expenses 1,505 1,633 – 7.8
Operating profit/loss 583 786 – 25.8
Capital employed 3,026 3,854 – 21.5
Operating return on equity (%) 19.3 20.4 – 1.1
Cost/income ratio in operating business (%) 67.4 68.3 – 0.9
Table 6
In the difficult market environment, the Corporates & Markets segment posted an operating
profit of €583m for 2011, after €786m a year earlier. It posted an operating profit in all four
quarters of 2011 by systematically focusing on its customer-oriented business model.
In the Corporate Finance division, income was below 2010 levels after strong performance
in the first six months, followed by weaker performance in the second half. This was
also due to high income levels from restructured loans in 2010. Earnings growth in the
Equity Markets & Commodities division also differed in the two halves of the year: after
excellent results in the first half, the market turbulence in the second half of the year, particularly
in the fourth quarter, resulted in less customer activity and negative valuation
adjustments. The Fixed Income & Currencies division was sorely affected by the European
sovereign debt crisis in 2011, resulting in lower income levels than in 2010. The results of
this division include a gain of around €290m from the remeasurement of own liabilities.
› Note 44 – Segment reporting
Page 242 ff.
Group Management Report