Strategy 2024 Capital Markets Day 11 February 2021 - Commerzbank
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Strategy 2024
Capital Markets Day
11 February 2021
11 February 2021 Capital Markets Day All figures in this presentation are subject to rounding
Agenda Manfred Knof Chief Executive Officer Michael Kotzbauer Board Member for Corporate Clients Sabine Schmittroth Board Member for Private and Small Business Customers Jörg Hessenmüller Chief Operating Officer Marcus Chromik Chief Risk Officer Bettina Orlopp Chief Financial Officer Manfred Knof Chief Executive Officer 11 February 2021 Capital Markets Day 1
Strategy 2024
Manfred Knof
Chief Executive Officer
11 February 2021 Capital Markets Day 2
Initial analysis: strong franchise with high value potential
STRENGTHS CHALLENGES
Trusted client relationships Low profitability
Strong digital competencies Weak execution record
Rock solid balance sheet Lack of performance culture
11 February 2021 Capital Markets Day 3
Clear priorities to pave the way for sustainable success
Ambitious restructuring plan
Stringent & rapid execution
Transformation of organisation &
business model
11 February 2021 Capital Markets Day 4
Ambitious targets for 2024 require strict execution
€1.4bn ~10,000 ~7% up to €3bn
Cost Gross FTE Group Potential for
reductions reduction RoTE capital return1
1) See capital sensitivity study in CFO section, share buy backs are subject to receiving the prior permission of the ECB
11 February 2021 Capital Markets Day 5Strategy aims at core clients, digitisation and efficiency
Private & Small Corporate Operations &
Business Customers Clients Head Office
Focus on German clients and Increase efficiency in Operations
Digital daily banking
clients with German connectivity and Head Office
Optimise products and Improve IT efficiency and time-to-
Reduce branch network
international locations market
Advisory focus on premium clients Improve RWA efficiency Strong transformation office
11 February 2021 Capital Markets Day 6New strategy built on four cornerstones
Customer-centric Digital
Leading franchises focused on Superior scalable digital
1 the needs of our core clients in
PSBC and CC 2 banking model based on a
modern IT architecture
Sustainable Profitable
Strong focus on sustainability Significant transformation to
3 and commitment to the Paris
Climate Agreement 4 deliver attractive returns for our
shareholders
11 February 2021 Capital Markets Day 7Corporate Clients
Michael Kotzbauer
Board Member for CC
11 February 2021 Capital Markets Day 8Market leading position, but insufficient RWA efficiency
STRENGTHS CHALLENGES
Market leader in the German Shrinking revenues and a high cost
Mittelstand segment base due to significant complexity
Consistently high level of client Costly and undifferentiated
satisfaction coverage
Proven ability to achieve high RWA Overall RWA portfolio efficiency
efficiency in the SME segment below peers
Top partner in cash management Extensive product suite with
and foreign trade insufficient customer usage
11 February 2021 Capital Markets Day 9Broad range of levers to improve profitability 1 Focusing on German corporate clients and clients with connectivity to Germany 2 Establishing a needs-based coverage model with a cutting-edge digital banking proposition 3 Reducing international footprint with significant nearshoring and highly efficient lean branches 4 Focusing, improving and digitising the product offering 5 Driving profitabilisation through Customer Sales Analytics and Smart Pricing 6 Pursuing active RWA management through portfolio optimisation 11 February 2021 Capital Markets Day 10
1 German corporates are at the core of our strategy
German corporates
International clients Institutionals
In the future, we will only serve To serve our top clients with trade
international clients with products and market placement
connectivity to Germany and / or capabilities, we build on our
activity in lead sectors with network of correspondent banks
significant future potential (i.e., and selected non-bank financial
mobility, sustainability, communi- institutions, which we will further
cations, life sciences / chemicals, optimise
capital goods)
We will offer our German corporate clients a
differentiated coverage model as well as a
product portfolio tailored to their needs
11 February 2021 Capital Markets Day 112 Cost-efficient and differentiated coverage model
Relationship managers Specialists How we create value
Upgraded personal coverage with an efficient
Mittelstand
Revenue manufacturing approach for 19,000 clients and targeted
(SME)
wallet growth with 3,000 high-value clients
Personal
+€110m
coverage
Expansion of the dual coverage model with sector-based
Large
Revenue corporate finance specialists and local relationship
corporates
managers to 400 large German and international clients
Product
specialists
International corporates
Reduction of product specialists for low-value clients as
well as convergence towards benchmark load ratios,
Cost
reducing >30% of FTE (from >1,300 FTE in 2020 to >850
FTE in 2024)
Institutionals -€100m
Higher load ratios for 7,000 clients enabled through
Digital banking
Cost digital straight-through processing and a product
proposition
portfolio simplified by around 90%
11 February 2021 Capital Markets Day 123 Reduced international footprint
Rationale Key initiatives
25% of top clients’
revenues with Intention to reduce the international footprint by exiting 15 locations (branches /
international products subsidiaries and representative offices)
Unchanged coverage of
major trade corridors
Improvement of the low
Optimisation of European locations by converting 5 branches into lean branches with a
yielding international
FTE-efficient middle- and back-office setup
RWA portfolio
Optimisation of non-European locations by significant nearshoring of middle- and back-
office activities with transfer of >220 FTE to cost-efficient regional hubs
Selective revenue growth by (re-)allocating RWA, e.g., in lead sectors with significant
future potential
11 February 2021 Capital Markets Day 134 Improved product offering
Rationale Key initiatives
Maintaining competitive- Cooperation model for Equity Sales & Trading as well as Equity
ness and meeting client Research
needs
Reduction of the offering Discontinuation of Credit Solutions within Corporate Clients
for products with limited
demand Products
Establishment of a MidCap Corporate Finance Advisory focusing on
Top clients with 3x the Capital Structuring, Succession Planning and ECM
number of products
compared to the client Streamlining and targeted digitisation of the entire product portfolio
long-tail – potential for along client needs to reduce complexity
cross-sell
Consolidation of booking and trading applications, including horizontal
integration of booking applications towards 1-stack architecture
Product
Full digitisation of the trading setup resulting in a 50% reduction of
infra-
trading FTE
structure
Increase in efficiency through the digitisation and automation of trade
finance processing
11 February 2021 Capital Markets Day 145 Increased profitability with data analytics & rightsizing
Repricing of the portfolio using Customer Sales Analytics and Smart Pricing
Revenue
Increase in cross-sell through digital lead generation and data-powered coverage
growth
Implementation of a strict monitoring and steering cadence to ensure execution
Continuing the reduction of the correspondent banking network from >1,600 to ~1,300 banks
Optimisation
Streamlining of the staff organisation within Corporate Clients by significantly reducing FTE
11 February 2021 Capital Markets Day 156 Active RWA management
Rationale RWA efficiency Key initiatives
Optimisation of the low
RWA portfolio Continuous review of the
efficiency portfolio with RWA-E below 3%
>5% 33%
Addressing significant to generate profitabilisation
variation in RWA or exit
efficiency
Establishment of Targeted improve-
capabilities for active ment of all clients
3-5% 33%
RWA management with RWA-E below
3% Securitisation
Improvement of the
capital leeway for
revenue growthTargeted RWA release in Corporate Clients until 2024
Development of RWA in Corporate Clients 2020 vs. 2024
(€bn) Credit Risk Market Risk Operational Risk
100
1 -4
7 8 -1
90 -3
2
-7
7 84
15
-8 7 8
8
12
75 77
65
2020 Regulatory Total after Closure / sale Exit of RWA Economic Re- 2024
and model regulatory of locations products management recovery investments
effects and model
Divestments
2021-24 effects
2021-24
11 February 2021 Capital Markets Day 17Significant cost reduction until 2024
Revenues Corporate Clients Costs Corporate Clients1
(€bn) (€bn, incl. €0.3bn reduction of back-office cost allocations)
-0.1
3.1
-0.1 3.0
0.1
-0.2 -0.6
0.1
2.5
-0.1
-0.1
-0.1
-0.2 1.9
2020 Locations RWA Coverage Products 2024 2020 Locations Coverage Products Back-office 2024
management & data & data efficiencies
analytics analytics & process
digitisation
1) Differences due to rounding
11 February 2021 Capital Markets Day 18RoCET of ~9% in 2024
2024
€3.0bn €1.9bn €84bn 2.5k 62% ~9%
Revenues Costs RWA FTE CIR RoCET
before tax
Difference to 2020
-€0.1bn -€0.6bn -€6bn -900 -18pp +13pp
11 February 2021 Capital Markets Day 19Clear milestones defined
2021 2022 & 2023 2024
● Complete >30% of FTE reductions ● Complete >85% of FTE reductions ● All MSB clients transferred to new
coverage model
● Roll out a sector-focused advisory for ● Fully establish a digital banking
an additional 150 clients proposition ● International footprint streamlined
● Further develop Customer Sales ● Intend to complete the exit / sale of 15 ● Full impact from profitabilisation and
Analytics and Smart Pricing locations, and finalise nearshoring and headcount reduction measures realised
lean branches (subject to regulatory
● Increase securitisation volumes approval) ● Infrastructure further consolidated –
number of applications reduced by up to
● Realise 32% of risk exposure with ● Introduce a cooperation model for Equity 40%
RWA-EPrivate and Small
Business Customers
Sabine Schmittroth
Board Member for PSBC
11 February 2021 Capital Markets Day 21Strong market position at weak cost income ratio
STRENGTHS CHALLENGES
Continuing business and customer Profitability unsatisfactory –
growth ahead of market CIR at 85% (PSBC Germany)
Strong market position with Expensive parallel development of
profitable wealthy customers digital banking model
Acknowledged expertise in direct Insufficiently utilised potential from
banking & personal advice 11m German customer base
11 February 2021 Capital Markets Day 22Levers based on radical change of business model
Cost savings – Strongly modified sales approach with substantially lower cost-to-serve – we close
1
>50% of branches and reduce costs materially by ~20%
2 Unique blend – Leverage comdirect to create scalable digital banking model combined with
superior personal advisory expertise
3
“Premium” client focus – Individually tailored customer care model with excellent
advisory solutions for most valuable premium clients
4
Churn mitigation – Range of value driven mitigation measures address impact of branch
closures and modified sales model
11 February 2021 Capital Markets Day 231 Strongly modified sales model – focus on profitability
Services for all Exclusively for
customers premium clients
Mobile / Online Advisory center Advisory points Premium branch
“Mobile First” for all 24/7 Remote advice Quick advice & self- Best-in-Class branches
requests service for premium clients
Self-service process Share of customers # of advisory points # of branches
thereof
~10% ~90% ~25% ~90% ~1,000 ~450 ~220 ~220
● All service requests ● Remote advisory by ● Easy and quick ● Multiple award-
and sales transactions highly qualified advisory & sales for winning advisory and
with outstanding experts non-complex products highly qualified
customer without appointment specialists
experience
current
2024 Cost-to-Serve Revenue
11 February 2021 Capital Markets Day 241 Closure of >50% of branches by end of 2022
Number of branches
(end of period) thereof premium branches
-55% Achievement 2020
~1,000 ● ~200 branches remain closed (closing Corona-related)
~800
Transformation & optimisation 2021-2022
~600 ● ~450 advisory points, thereof ~220 branches for
~450 premium clients
● Advisory points are key mitigant for churn
● Permanent review of number of advisory points
~220 ~220 ~220 ~220 ● ~€45m costs for renovation and optimisation of
branch network
2019 2020 2021 2022
11 February 2021 Capital Markets Day 251 €0.7bn cost savings by 2024
Costs PSBC Germany excl. mBank1
(€bn, incl. €0.2bn reduction of back-office cost allocations)
-0.7
3.2 I Net reduction of ~3,500 FTE
due to significant reduction of branches
-0.4 as well as modified sales model &
synergies from comdirect integration
-0.1
-0.3 II Closing of net ~550 branches
2.4 due to expansion in direct customer care
III Savings of administrative costs
e.g. IT-costs, marketing expenses, postal
I II III charges and other optimisation
2020 Personnel Admin. costs Other 2024
expenses branch admin.
reduction costs
FTE ~10,800 ~-3,500 ~7,300
1) Differences due to rounding
11 February 2021 Capital Markets Day 262 Leverage comdirect across the entire franchise
Excellent digital products and processes offered to 11 million customers
THE BEST BANK comdirect catalyst to extend digital product range significantly faster
Provide excellent
customer Highly above-average share of wealthy and highly digital affine clients
experiences with
strong direct
banking capability
Unique expertise throughout the entire securities and brokerage value chain
Earnings potential from diverting customers from deposits to securities
11 February 2021 Capital Markets Day 273 Focus on growth with premium clients
2024
Market growth of ● Active approach to develop existing
+2% clients into premium clients
wealthy households Premium
Clients
● Market penetration through modified
CAGR 2020-2024 sales model
Increase high- +10% +10% ● Increased use of analytics & big data
margin assets Loans to Securities ● Acquisition of assets from wealthy
Business Business
Clients and business clients
CAGR 2020-2024
Unique client ● Investment in marketing activities to
promote unique client proposition
proposition for private and business clients
11 February 2021 Capital Markets Day 284 Comprehensive set of measures to limit churn
Losing customer relationships and related …will be limited by data-driven customer
income… communication
● Individual support including fast lane hotline
… due to modified sales model based on proximity, ● Promotion of digital offering with active support at advisory points
branch use, advisory needs and digital skills ● Active communication of third party cash supply
● Use of early warning indicators based on data driven analysis
● More customisable and flexible product range
… due to changes in pricing model ● Communicative support via all channels
● Specific treatment for customers affected by combined effects
Estimated total transformation churn effect: ~€0.3bn revenues
11 February 2021 Capital Markets Day 29Only limited net revenue growth assumed
Revenues PSBC Germany excl. mBank
(€bn)
Net commission income
+0.1 ● Securities business benefits from
3.9 comdirect’s brokerage expertise and
3.8 0.1
-0.3 0.3 positive market outlook
-0.3 0.3 ● Payment business with modular pricing
Net interest income (loan business)
● Consumer loans expand through more
third-party sales
● Mortgage finance growth in premium
segment in particular
● Individual loans with focus on premium
2020 Deposits Churn NCI NII Others 2024
Small Business Customers
RWA 28 +7 35
11 February 2021 Capital Markets Day 30Improve CIR from 85% to 62%
2024 excl. mBank
€3.9bn €2.4bn €35bn 7.3k 62% ~31%
Revenues Costs RWA FTE CIR RoCET
before tax
Difference to 2020
+€0.1bn -€0.7bn +€7bn -3.5k -23pp +23pp
11 February 2021 Capital Markets Day 31Strict execution: progress will be visible every year
2021 2022 & 2023 2024
● Start remote advice pilot for ● Additional ~150 branches closed ● New sales model fully in place
private customers
● Final completion remote advisory ● Active digital banking users: 73%
● ~200 branches permanently closed center (+7pp vs. 2020)
● Further development of mobile / ● Mobile / online offers fully digitised ● Loan and securities volumes
online channels in direction of direct – direct banking capability achieved (GER): >€390bn (+€100bn vs. 2020)
banking capability
● Final completion comdirect ● Mobile / online channels as well as
● Start exclusive fast lane for integration self-service fully established
premium clients
11 February 2021 Capital Markets Day 32Operations & Head Office
Jörg Hessenmüller
Chief Operating Officer
11 February 2021 Capital Markets Day 33New delivery model with more potential to be lifted
STRENGTHS CHALLENGES
New organisational model introduced Structures and processes in Head
Office & Operations not yet
(Campus 2.0 / Delivery Organisation)
comprehensively optimised
Already significant efficiency gains Modernisation of IT infrastructure
realised not yet at target level
State-of-the-art platform for Still too dependent on expensive
compliance and risk management external support
11 February 2021 Capital Markets Day 34Large efficiency potential but also investment needs
1 2
Efficiency Build new bank
Efficiency gains and cost reduction Backbone for new strategy
€700m €1.7bn
cost reductions 2024 vs. 2020 total Change-the-Bank budget 2021-2024
Head Downsizing & adapting functions, e.g.
Office finance, risk, communications and HR
• Transforming the business model
Delivery
Operations
Consolidating and streamlining processes
Organisation • Modernising IT platform and services
including E2E digitisation & automation
• Providing superior customer experience
Delivery
Increasing efficiency of IT run and change
Organisation
11 February 2021 Capital Markets Day 351 ~20% cost savings from efficiency gains
Direct cost reduction FTE reduction
(€m) (net)
~ -3,200
-700
3,700 ~18,700
Occupancy 600 ~15,500
3,000
Operations
Operations 800 500 (incl. Transfers)
~9,000
~6,800
700
Head Office 700
600 Head Office ~4,200 ~3,500
Delivery
1,600 Delivery
Organisation 1,200 ~5,500
Organisation ~5,200
2020 2024 2020 2024
11 February 2021 Capital Markets Day 361 Efficiency gains of €300m in Operations & Head Office
€100m ● Downsize head office to adapt to new business model
occupancy cost reductions
● Transfer administrative processes from sales to operations
achieving more economies of scale
€200m ● Digitise E2E and automate processes
● Streamline organisational structure to reduce complexity
cost reduction 2024 vs. 2020
● Leverage sourcing-potential to realise further cost synergies
● Resize domestic and foreign branch network in line with
~2,900 office space reduction plus usage of remote working models
FTE reduction 2021-2024
11 February 2021 Capital Markets Day 371 Delivery Organisation adds €400m to cost savings
€400m ● Reduce change budget following successful trans-formation
cost reduction 2024 vs. 2020
and implementation of technological enablers
● Decrease FTE at high cost locations by ~1,000 (-20%)
~300 ● Increase FTE in nearshore locations by ~700 (+100%) and
FTE reduction 2021-2024 internalise technology and IT competencies
● Reduce external staff by ~60% (equals ~1,300 FTE) to
~1,300 lower external dependencies and costs
reduction of external staff
11 February 2021 Capital Markets Day 382 Investment of €1.7bn to build new bank
Higher change budget 2021/22 driven by necessary
transformation:
● Significant investments until 2024
● Modernisation of technological basis and strengthening of
€1.7bn capabilities, capacity and stability
● Decent share of one-off investments (e.g. comdirect
total Change-the-Bank
budget 2021-2024 integration) or permanently change of IT delivery model
● Close monitoring of implementation complexity
Investment in technological foundation until 2024 leads to
lower future development expenses (esp. API, CI/CD1, Cloud)
1) CI/CD = Continuous Integration / Continuous Deployment
11 February 2021 Capital Markets Day 392 Change of Commerzbank’s technological foundation
Digitisation & smart
Best of two business Establishing one, uniform automation of further mass Implementation of regulatory
models – scalable and European IT platform as an processes in operations, risk requirements, especially in
efficient platforms and international house bank and other, e.g. KYC risk, compliance, and
personal offerings for German Mittelstand efficiencies and smart ratings transaction banking
Building of a primarily Moving to a much more Implementation of tech Explore and
digitised business digitised CC business model enablers like cloud, monetise new
model E2E in PSBC aligned with current and future extension APIs with high technologies and
customer needs dependence to other business models
initiatives
Deep dive Deep dive
11 February 2021 Capital Markets Day 402 Implementation of tech enablers key for strategy
Architectural success components
Application Security Software Deve- Architectural Data
infrastructure architecture lopment process coupling architecture
As-Is ● On Premise-based ● On Premise and ● Manually driven ● Monolithic ● Batch-driven (end-
● Partly based on Perimeter-focused integration, tests and applications of-day processing)
non-standardised, ● Expert-driven deployments ● Tightly coupled ● Complex & highly
outdated software security (designed for few interfaces (Point-2- interdependent data
infrastructure implementation releases) Point connections) provisioning
landscape
Target ● 85% of Apps on ● Cloud- and Zero- ● Highly automated ● Modular ● Event-driven (near-
cloud technology Trust-based SW integration, tests applications time processing)
(non-mainframe) ● Increasingly and deployments ● Loosely coupled ● Simplified data
● Fully based on supported by (CI/CD1, built for interfaces (e.g. provisioning land-
standardised, automated frequent releases) APIs, Apache Kafka) scape with clear
up-to-date software mechanisms ● 95% of Apps use – objective: 300 responsibilities
infrastructure CI/CD1 pipeline APIs available
1) CI/CD = Continuous Integration / Continuous Deployment
11 February 2021 Capital Markets Day 412 Targeted innovations as important building block
Open Banking Distributed Ledger Data
Creation of technological Systematic expansion of DLT- Use of data and artificial
foundations for participation in based products & services, intelligence to continuously
Ecosystems and connectivity to esp. in wholesale banking optimise customer offering and
external distribution channels risk management
Digital Payments Digital Identity Fintechs
Further participation in German Research on the DLT-based Innovation through strategic
#dk and European Payment topic “self-sovereign digital cooperation & investments in
Initiative for further development identities” with BMWi funding technology-driven start-ups
of payment transaction (Federal Ministry of Economics)
11 February 2021 Capital Markets Day 42Ambitious roadmap to achieve objectives by 2024
2021 2022 & 2023 2024
● Enforce efficiency measures ● Realise additional sourcing and ● Full impact from E2E digitisation /
(paperless bank…) & FTE reduction nearshoring projects process & functional optimisation
realised – net 3,200 FTE reduced
● Start execution of organisational ● Implement large share of cost
target structure and scaling savings in Head Office as well as ● Internal IT nearshoring capacity
nearshoring occupancy cost reductions increased to 26%, external staff
reduced by ~1,300
● Create basis for occupancy cost ● Transform IT architecture
reduction ● Maximised space compression
● Realise major part of efficiency (savings of ~€100m achieved)
gains / FTE-Savings
● IT Transformation goals achieved
(300 APIs, 85% Apps on cloud…)
11 February 2021 Capital Markets Day 43Group Risk Management
Marcus Chromik
Chief Risk Officer
11 February 2021 Capital Markets Day 44Strong risk profile
German economy strongest in EU Commerzbank with resilient loan book
● AAA rated by rating agencies ● Operating mainly in attractive German economy
● Unemployment rate of 4.7% vs. 7.5% EU average ● Focus on stable client segments with low risks,
resulting in fortress balance sheet
● Low national debt ratio of 70.0% vs 93.9% EU
average ● NPE ratio of 1.0% – significant better than
average of European banks
● German residential properties with strong
development since financial crisis ● Internal ratings show ~85% of exposure to
investment grade clients
● GDP shows Germany’s stronger resilience to
Corona pandemic ● ~75% of loan book allocated in core Europe
11 February 2021 Capital Markets Day 45Well prepared for 2021 due to TLA booking in 2020
Risk result
(€m)
-1,748 ● Overall TLA increased to -€505m to cover
expected impacts considering forward looking
Corona
-505 information
TLA
● TLA is based on in-depth portfolio analysis
Corona
effects
-456 considering ECB’s December scenario which
assumes a 3% increase in German GDP in 2021
● Expected increase in insolvencies due to 2nd
Base -788
lockdown and discontinuation of the obligation
to file for insolvency
2020
11 February 2021 Capital Markets Day 46Limited exposure to affected sectors – covered by TLA
Top Level Adjustment ● Tour operators and hotels severely affected by
(€m) Corona crisis
Travel ● Due to shutdown of airlines / airports suppliers
0.9% of EaD
will also be severely affected
505 ● Cruise ship financings mostly ECA covered
373
3
● Overall stable sector with profiteers and losers
225 Mittelstand ● Food retailing and mail ordering benefit from
Retail the crises
1.6% of EaD ● Stationary sales (especially textile industry and
furniture specialists) are facing losses
136 International
129 Clients
PC 11 12 Institutionals ● Automotive: affected by general drop in
demand, recovery to pre-crisis level not before
SBC
118 2023 expected
Automotive /
Mechanical ● Automotive supplier: smaller suppliers more
PSBC CC O&C Total affected due to lower capitalisation / substance
Engineering
4.4% of EaD ● Mechanical Engineering: outlook for top clients
predominantly positive, larger challenges
expected for smaller clients
11 February 2021 Capital Markets Day 47Limited stage migration throughout 2020
Exposure Risk provisions
(€m, excl. mBank) (€m, excl. mBank)
Stage 1 Stage 2 Stage 3 TLA
• TLA will cover Corona
2,762 related stage migrations
505 which are anticipated today
397 391 and will materialise in 2021
372 18
3
19
4 371
1,707
• Increased risk provisions
358 3 4 1,611 in stage 3 driven by a large
3 17 20 1,109
18 single case and a few
338 352 376 369 348 Corona-related defaults
375
324
274 271
• From 2022 onwards we
Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 FY19 FY20 expect a normalisation
11 February 2021 Capital Markets Day 48No significant impact of deferrals
Loan deferrals since start of crisis until 31 Dec.
(€bn, Germany) 30 Jun. 2020 31 Dec. 2020
1.9 ● RepresentsRisk result expected at normalised levels from 2022
Risk result 2019-2024
(€bn, CoRL in bps)
1.7
Pre-crisis
0.8-1.2 standard
~0.7
0.6
2019 2020 2021 2022-2024
Low level, first signs of Corona effects: Still Corona Normalised
economic slowdown -€940m in 2020 effects levels
CoRL: 24bps 68bps 30-45bps ~25bps
11 February 2021 Capital Markets Day 50Financials
Bettina Orlopp
Chief Financial Officer
11 February 2021 Capital Markets Day 51Targets 2024 based on prudent assumptions
Economic scenario
COVID-19 accelerated adoption
Economic recovery in 2021 of digital banking
Unchanged Euro interest rate
environment in planning period Post pandemic normalisation of
economic and regulatory environment Persistent competitive pressure
in German banking market
€1.4bn ~10,000 ~7% up to €3bn
Cost Gross FTE Group Potential for
reductions reduction RoTE capital return1
1) See capital sensitivity study in CFO section, share buy backs are subject to receiving the prior permission of the ECB
11 February 2021 Capital Markets Day 52€1.4bn net cost savings identified and validated
Cost reduction by segment1
(€bn) Personnel costs Admin costs Compulsory contributions
6.7
0.5 -0.7
-0.6 5.3
-0.2 0.2 0.3
2.7
2.1
€1.6bn gross cost savings
3.5
2.9
2020 PSBC Germany CC O&C mBank 2024
1) Differences due to rounding
11 February 2021 Capital Markets Day 53Every year lower cost – more than ⅓ of savings by 2022
Costs incl. compulsory contributions
(€bn) Change-the-Bank IT cash spent
-1.4
6.7 6.5
6.2
5.8
5.3
2020 2021 2022 2023 2024
0.4 0.6 0.6 0.3 0.2
Increased IT investments in 2021/2022 for transformation
11 February 2021 Capital Markets Day 54Gross FTE reduction of ~30% outside mBank
Internal FTE transition
Commerzbank Group excl. mBank mBank
~ -7,500
~39,500
~6,600 ~32,000
~ -10,000 ~6,800
~2,300
~32,900
~25,200
2020 Reduction Nearshoring & replacement 2024
of external staff
External
~2,200 ~ -1,300 / ~ -60% ~900
staff
(excl. subsidiaries)
11 February 2021 Capital Markets Day 55€1.8bn restructuring charges booked until 2021
Restructuring charges
(€m) Personnel reduction Occupancy related
~900
814 ~150
43 ● Booking of all restructuring charges will be
completed by end of 2021
● €1.6bn restructuring charges for gross reduction
of ~10,000 FTE vs. 2020
771 ~750
● €0.2bn real estate related restructuring
charges for reduction of branch network, foreign
101
locations and reduced central functions
2019 2020 2021
11 February 2021 Capital Markets Day 56Moderate revenue growth
Revenues 2020 vs. 2024 incl. mBank
(€bn) NII NCI Others Drivers NII
− Drag from rates and customer
●
+0.5 churn
8.7 ●
+ Loan growth PSBC
8.2 0.6
0.1 -0.1 -0.1 ●
+ Margin management
5.4
5.0
Drivers NCI
●
+ Additional business with core
clients in PSBC & CC
3.3 3.8
●
+ Growth of securities business
-0.1 -0.5 in PSBC
2020 PSBC CC O&C mBank 2024 ●
+ Targeted pricing measures
Germany
11 February 2021 Capital Markets Day 57Recovery of risk result until 2022
Risk result 2020-2024
(€bn, CoRL in bps)
-1.0 / -60%
1.7
0.8-1.2
68bps ~0.7
30-45bps
~25bps
2020 2021 2022-2024
11 February 2021 Capital Markets Day 58Clear turnaround visible in targets
Transition of operating result
(€bn)
+2.9
2.7
1.0
0.5
1.4
-0.2
2020 Cost reduction Revenue growth Normalisation 2024
of risk result
CIR
(%, incl. compulsory 82 61
contributions)
Net RoTE
(%, w/o capital mgmt.) -11.7 ~7
11 February 2021 Capital Markets Day 59RWA reallocation to increase profitability
Development of RWA 2020 vs. 2024
(€bn) Credit Risk CC Credit Risk PSBC Credit Risk O&C Regulatory changes Operational Risk Market Risk
179 183
-4 3 8 1
12 2 -12 7 16
18 18
33 28
40 57
75 65
2020 Market Risk Operational Regulation Optimisation Growth Growth O&C 2024
Risk net1 CC PSBC mBank
Germany
Differences due to rounding 1) Regulation net: ~ €8bn Market Risk, ~ -€2bn Operational Risk, ~ €2bn Credit Risk CC, ~ €1bn Credit Risk PSBC, ~ -€6bn Credit Risk O&C
11 February 2021 Capital Markets Day 60Resulting CET1 ratio far above MDA
Development of CET1 ratio 2020 vs. 2024
(%)
14.6
0.4
13.2
-0.5 1.0 -1.1 1.9
-0.3
Targeted corridor 200-250 bps above MDA
9.5
MDA 2020 2020 Restructuring RWA reg. RWA mgmt. RWA growth Retained Other 2024
expense effects CC PSBC earnings
(incl. mBank)
11 February 2021 Capital Markets Day 61Significant potential for capital return
~5bn 8.4%
~3bn 7.8%
Potential capital
return to share-
~2bn 7.3%
holders until 20241
No capital return/
dividend
7.0%
14.6% 13.5% 12.5% 11.5%
RoTE
2024 CET1 ratio
1) Share buy backs are subject to receiving the prior permission of the ECB
11 February 2021 Capital Markets Day 62Transformation
Management
Manfred Knof
Chief Executive Officer
11 February 2021 Capital Markets Day 63Clear governance for strict execution
CEO
Create a new
PSBC CFO performance
Group Strategy,
CC Transformation
& Sustainability
CRO
culture
COO HR
Rigorous strategy steering through: Transformation
● Bi-weekly Strategy SteerCo with full board participation
management led
● Dedicated cost reduction tracking committee led by CFO by CEO
● Performance dialogue on revenues and RWA efficiency
11 February 2021 Capital Markets Day 64Fast implementation of FTE reduction program
Timeline Guidelines
April / May 2021
Negotiation of framework agreement until AGM ● Fair treatment of affected staff
YE 2021 ● Voluntary leave programs as basis for
Closing of agreement with workers’ council
socially responsible reduction program
YE 2023
Execution of >80% of FTE reductions ● Setup of qualification company and
validation of compulsory redundancies
YE 2024 as ultima ratio planned
✓ Full execution of FTE reductions and full
realisation of cost effects
11 February 2021 Capital Markets Day 65Operational KPIs 2024 underline transformation progress
Private & Small Corporate Operations &
Business Customers Clients Head Office
~450 domestic
15 intl. locations exited2 26% of IT capacity in
(~-350) locations (+12pp) nearshoring locations
~73% active digital
100%
digital banking 85% decentralised applications
(+7pp) banking users users activated (+53pp) on cloud technology
>€390bn loan and securities 22% of risk exposure with
~1,300 external staff reduced
3
(+100bn) volumes (Germany) (-12pp) RWA efficiencySignificant delivery already visible in 2021
Private & Small Corporate Operations &
Business Customers Clients Head Office
~600 domestic
3 intl. locations exited2 20% of IT capacity in
(~-200) locations (+6pp) nearshoring locations
~67% active digital
10%
digital banking 50% decentralised applications
(+1pp) banking users users activated (+18pp) on cloud technology
>€310bn loan and securities 32% of risk exposure with Reduction of external staff to start
3
(+20bn) volumes (Germany) (-2pp) RWA efficiencyThree major key takeaways of our new strategy
1 Clear and ambitious plan with full
commitment to related targets
2 Complete focus on customers, digitalisation,
sustainability and profitability
3 Disciplined execution and delivery in
every single year
11 February 2021 Capital Markets Day 68For more information, please contact our IR team
Investors and
Financial Analysts
Christoph Wortig Ansgar Herkert Michael H. Klein Dirk Bartsch
Head of Investor Relations Head of IR Communications P: +49 69 136 24522 Head of Strategic IR / Rating
P: +49 69 136 52668 P: +49 69 136 44083 M: michael.klein@ Agency Relations / ESG
M: christoph.wortig@ M: ansgar.herkert@ commerzbank.com P: +49 69 136 22799
commerzbank.com commerzbank.com M: dirk.bartsch@
Jutta Madjlessi commerzbank.com
P: +49 69 136 28696
M: jutta.madjlessi@
commerzbank.com
Mail: ir@commerzbank.com / www.ir.commerzbank.com
5 May 12 May 4 August 4 November
Financial calendar 2021
Annual General Meeting Q1 2021 results Q2 2021 results Q3 2021 resultsDisclaimer
This presentation contains forward-looking statements. Forward- In addition, this presentation contains financial and other information
looking statements are statements that are not historical facts; they which has been derived from publicly available information disclosed
include, inter alia, statements about Commerzbank’s beliefs and by persons other than Commerzbank (“external data”). In particular,
expectations and the assumptions underlying them. These external data has been derived from industry and customer-related
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risks and uncertainties. A number of important factors could based on a series of assumptions. The external data has not been
therefore cause actual results to differ materially from those independently verified by Commerzbank. Therefore, Commerzbank
contained in any forward-looking statement. Such factors include, cannot assume any responsibility for the accuracy of the external data
among others, the conditions in the financial markets in Germany, in taken or derived from public sources.
Europe, in the United States and elsewhere from which
Commerzbank derives a substantial portion of its revenues and in
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