COMMERZBANK AKTIENGESELLSCHAFT

Group Management Report
184
128 Commerzbank Annual Report 2011
At €907m, loan loss provisions were below last year’s very high level, but they still re-
flected the ongoing problems in certain real estate markets and the uncertain trends on
shipping markets.
Operating expenses remained substantially below those of 2010 at €572m due to lower
staff costs and other operating costs.
The pre-tax loss was €-3,911m, compared with a pre-tax loss of €–1,301m in 2010.
The operating return on equity based on average capital employed of €5.4bn was
–72.5%, compared with –20.2% in the previous year.
Main developments in 2011
In the Commercial Real Estate division, we successfully pressed ahead with the implementation
of our goals of downsizing the portfolio, reducing risk and moving towards profitability.
Selective new commitments in real estate lending, which, in addition to prolongation management,
is one of the main channels for steering the downsizing process, amounted to
€2.5bn, compared with €5.7bn in 2010.
Reflecting our strategic decision to run off the Public Finance portfolio in a risk-sensitive
manner, the Public Finance division did not conduct any new public finance business during
the period under review, except for the purposes of cover pool management. We managed to
reduce the portfolio by some €18bn overall, of which around €9bn was due to actively winding
down positions, even if this meant incurring additional losses.
The Ship Finance division was dominated by the renewed downturn on the shipping markets,
principally in the second half of the year. We only took on new commitments on a very
selective basis, which helped shrink the portfolio.
Asset Management and Leasing enhanced its collaboration with the Mittelstandsbank and
Private Customers divisions, which proved particularly successful in business with institutional
clients and in the management of open-ended property funds.
Commercial Real Estate
Commercial Real Estate faced with special challenges
Finance for commercial real estate is handled within the Commerzbank Group by Eurohypo
AG. Its customers are professional real estate investors and property developers with a continuous
need for finance for stock properties, project developments and real estate portfolios.
Eurohypo AG gives them individual need-based advice and customised finance solutions. In
addition to its domestic market in Germany, this specialist bank has concentrated its core
activities on nine foreign target markets.
In view of its restructuring activities, Eurohypo has withdrawn from 17 of its total of
20 locations since 2009, in some cases earlier than planned. In 2011, it closed its offices
in Athens and Shanghai with effect from June 30 and December 31, 2011 respectively.
Further closures are planned in Bucharest and Mexico City in the first half of 2012.