COMMERZBANK AKTIENGESELLSCHAFT

Group Financial Statements
300
244 Commerzbank Annual Report 2011
• The Portfolio Restructuring Unit (PRU) is responsible for
managing down assets related to proprietary trading and
investment activities which no longer fit into Commerzbank’s
client-centric strategy and were discontinued in 2009. The
segment’s goal is to reduce the portfolio in a way that
optimises the bank’s capital position. The positions managed
by this segment initially included asset-backed securities
(ABSs) which do not have a state guarantee, other structured
credit products, proprietary trading positions in corporate or
financial bonds and exotic credit derivatives. These positions
were primarily transferred from the Corporates & Markets and
former Commercial Real Estate segments to the Portfolio
Restructuring Unit.
• The Others and Consolidation segment contains the income
and expenses which are not attributable to the operational
business segments. The Others category within this segment
includes equity holdings which are not assigned to the
operating segments as well as Group Treasury. The costs of
the service units which – except for integration and
restructuring costs – are charged in full to the segments are
also shown here. Consolidation includes expense and income
items that represent the reconciliation of internal
management reporting figures shown in segment reporting
with the consolidated financial statements in accordance with
IFRS. The costs of the Group management units which are
charged in full to the segments, except for integration and
restructuring costs, are also reported under this heading.
The performance of each segment is measured in terms of
operating profit or loss and pre-tax profit or loss, as well as
return on equity and the cost/income ratio. Operating profit or
loss is defined as the sum of net interest income after loan loss
provisions, net commission income, net trading income and net
income from hedge accounting, net investment income, current
net income from companies accounted for using the equity
method and other net income less operating expenses. As we
report pre-tax profits, non-controlling interests are included in
the figures for both profit or loss and average capital employed.
All the revenue for which a segment is responsible is thus
reflected in the pre-tax profit.
The return on equity is calculated as the ratio of profit (both
operating and pre-tax) to average capital employed. It shows the
return on the capital employed in a given segment. The
operating cost/income ratio reflects the cost efficiency of the
various segments and shows the relationship of operating
expenses to income before provisions.
Income and expenses are reported in the segments by
originating unit and at market prices, with the market interest
rate method being used for interest rate operations. The actual
funding costs for the segment-specific equity holdings allocated
to each segment are shown in net interest income. The Group’s
return on capital employed is allocated to the net interest
income of the various segments in proportion to the average
capital employed in the segment. The interest rate used is the
long-term risk-free rate on the capital market. The average
capital employed was calculated using the Basel II methodology,
based on the computed average risk-weighted assets and the
capital charges for market risk positions (risk-weighted asset
equivalents). At Group level, investors’ capital is shown, which is
used to calculate the return on equity. The regulatory capital
requirement for risk-weighted assets assumed for segment
reporting purposes is 7%.
The segment reporting of the Commerzbank Group shows
the segments’ pre-tax profit or loss. To adjust for the impact on
earnings of specific tax-related transactions in the
Corporates & Markets segment, the net interest income of
Corporates & Markets includes a pre-tax equivalent of the aftertax
income from these transactions. When segment reporting is
reconciled with the figures from external accounting this pre-tax
equivalent is eliminated in Others and Consolidation.
The carrying amounts of companies accounted for using the
equity method were €694m (previous year: €737m) and are
divided over the segments as follows: Private Customers €278m
(previous year: €224m), Mittelstandsbank €96m (previous year:
€95m), Corporates & Markets €85m (previous year: €33m),
Asset Based Finance €154m (previous year: €320m) and Others
and Consolidation €81m (previous year: €65m).
The operating expenses reported under operating profit or
loss contain personnel expenses, other operating expenses as
well as depreciation and write-downs on fixed assets and other
intangible assets. Restructuring expenses are reported below the
operating profit line in pre-tax profit or loss. Operating expenses
are attributed to the individual segments on the basis of cost
causation. The indirect expenses arising in connection with
internal services are charged to the user of the service and
credited to the segment performing the service. The provision of
intra-group services is charged at market prices or at full cost.