COMMERZBANK AKTIENGESELLSCHAFT

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Group Risk Report 224 168 Commerzbank Annual Report 2011 › Financial Institutions portfolio Page 172 f. Credit lines and value-creating limit utilisations remained largely stable throughout the year. Risk management, which was optimised in 2011 in particular with the implementation of systematic management measures in lower rating classes, and the expansion of early risk identification, led to a slight reduction in risk density from 37 to 34 basis points. Mittelstandsbank This segment comprises all the Group’s activities with mid-size corporate customers (where they are not assigned to Central & Eastern Europe or Corporates & Markets), the public sector and institutional customers. The segment is also responsible for the Group’s relationships with domestic and foreign banks, financial institutions and central banks. 2011 was dominated by the euro and sovereign debt crisis and its initial effects on the real economy. Added to this there were events such as the natural disaster in Japan. The initial effects of the crisis on Germany’s core industries became noticeable during 2011. At the moment, only a slight slowdown has been detected in the major sectors such as mechanical engineering and the automotive industry (the level of incoming orders is still good), although the order backlog will gradually shrink. In general, the current economic situation is reflected in the Corporates Domestic subportfolio in the form of a sideways movement within the portfolio. The positive rating migration for individual customers which was ongoing until mid-year has now come to a standstill. Risk density in this area was 28 basis points at December 31, 2011, which is low for the mid-sized company financing area. EaD in Corporates International changed to €14bn and EL to €40m. Risk density remained at 28 basis points as at December 31, 2011. Overall EaD in the Mittelstandsbank increased by €4bn to €115bn at year-end 2011. For details of developments in the Financial Institutions portfolio see page 172 f. Central & Eastern Europe This segment includes the activities of the Group’s operating units and investments in Central and Eastern Europe and has a total exposure of €26bn. The economic situation of the Central and Eastern European economies is characterised by continued uncertainty as a result of the sovereign debt crisis. However, thanks to rigorous risk management, risk density in this segment declined from 84 to 73 basis points in 2011. In 2011 Poland continued to achieve noticeable economic growth, although this slowed down in the second half. The BRE Group forms the largest part of the portfolio within the CEE segment with an exposure of around €23bn. Intensive efforts to further optimise operational management of risk and the positive economic environment of 2011 contributed to further improving the segment’s good risk quality.
To our Shareholders Corporate Responsibility Management Report Risk Report Group Financial Statements Further Information 225 169 157 213 Key developments in 2011 159 215 Risk-oriented overall bank management 163 219 Default risk 178 234 Intensive care 182 238 Market risk 187 243 Liquidity risk 190 246 Operational risk 192 248 Other risks 195 251 Outlook The risk management measures adopted by Bank Forum led to a significant improvement in the risk profile in 2011. In 2011, our focus in this challenging market remained on limiting risk and restructuring the Bank. Commerzbank Eurasija, our branches in the Czech Republic and Slovakia as well as Commerzbank Zrt. were transferred to the responsibility of the Mittelstandsbank segment as at January 1, 2012. The portfolio quality in these units improved further due to a rigorous focus on strict risk management, therefore risk density could be reduced by 9 to 71 basis points in 2011. Corporates & Markets This segment covers client-driven capital market activities and commercial business with multinationals and selected large corporate customers of Commerzbank Group. The regional focus of the segment is on Germany and Western Europe, which continue to account for more than two-thirds of exposure. North America accounted for around €11bn as at December 31, 2011. The Leveraged Acquisition Finance (LAF) portfolio was reduced from €3.4bn to €3.2bn in 2011. Repayments of existing loans, in particular as a result of reselling the business or refinancing with high yield bond issues, were partially offset by new lending on a selective basis. The good economic performance in the first half of 2011 in our core operating markets brought a further improvement in portfolio quality. The economic slowdown as a result of the deterioration in the sovereign debt crisis during the second half of 2011 has not yet adversely impacted the portfolio. Europe remains the geographic focus of the LAF portfolio (94%) with a strong concentration in Germany (45%). On the whole, the portfolio companies are not particularly dependent on developments in weaker countries in the eurozone. The portfolio is widely diversified by sector and region. We will continue to place emphasis on maintaining this diversified portfolio structure and the granularity of the loan book. Asset Based Finance Asset Based Finance (ABF) comprises the sub-portfolios Commercial Real Estate (CRE) including Asset Management, Eurohypo Retail, Ship Finance and Public Finance, which are described in detail below. Commercial Real Estate The strategic reduction of existing business, mainly at Eurohypo AG, is ongoing. Total exposure (EaD) decreased by €13bn to €57bn during the year. The portfolio composition by type of use remains unchanged; the main components of exposure are the sub-portfolios office (€21bn), commerce (€18bn) and residential real estate (€6bn). The CRE exposure also contains the asset management (Commerz Real) portfolios, which are composed of warehouse assets for funds as well as the typical leasing receivables of the movable property sector. Group Risk Report
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Fourth Supplement dated April 13, 2
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Financial Statements and Management
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Corporate Responsibility One bank.
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Environment As a financial services
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In a joint initiative by the overal
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Performance-related remuneration Th
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The members of the Board of Managin
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The monthly amount of the retiremen
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tion for the remainder of his term
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Loans to members of the Board of Ma
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Other details D&O liability insuran
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Details pursuant to Art. 289 of the
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up to five years effective from the
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The Supervisory Board oversees fina
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• Statements on presentation in t
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Since summer 2011, the environment
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At the beginning of December, Comme
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The changes in the individual earni
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As with the change in other assets
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Report on events after the reportin
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We assume that Germany will fare be
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the resulting impact on financial i
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The Asset Based Finance segment was
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Risk report Risk reporting takes pl
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Risk strategy and risk management T
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Macroeconomic stress tests are also
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Overview of management instruments
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The “reduction” area comprises
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Corporates & Markets This segment c
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Public Finance Commerzbank’s Asse
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Portfolio by region as at 31.12.201
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and Europe (CLOs). The exposure in
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In 2011, provisions in Central & Ea
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of the overdraft starts on the firs
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The year 2011 was mainly affected b
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The adjoining diagram documents the
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Available net liquidity in the comb
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OpRisk events by segment | €m 201
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Reputational risk Reputational risk
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Provisions for pensions are calcula
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Notes to the income statement (5) B
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(12) Securities At December 31, 201
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(16) Fiduciary transactions Financi
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(23) Other liabilities Financial St
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(27) Equity Financial Statements an
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c) Retained earnings € Financial
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(30) Non-distributable amounts Fina
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Other notes (33) Off-balance-sheet
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(34) Forward transactions Financial
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(36) Remuneration and loans to boar
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€1,000 LTP Number of participatin
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Name Registered office Share of cap
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) Associated companies Name Registe
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Foreign-exchange rates for €1 as
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Members of the Supervisory Board of
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(41) Boards of Commerzbank Aktienge
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Independent Auditor’s Report 1 To
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Significant subsidiaries and associ
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Annual Report 2011 of the Commerzba
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To our Shareholders Corporate Respo
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Recent developments Optimisation of
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COMMERZBANK AKTIENGESELLSCHAFT Fran
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Jahresabschluss und Lagebericht 201
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