Dresdner Bank AG was merged with Commerzbank on May 11, 2009. This was the most of import event in the concern policy of Commerzbank in that twelvemonth. The entire purchase monetary value for Dresdner Bank was a‚¬4.7bn. Few of import stairss have been taken in the integrating procedure. For illustration, Commerzbank reached an understanding with employee representatives on incorporating the caput offices of Commerzbank, Dresdner Bank and Dresdner Kleinwort in Frankfurt. Furthermore, an understanding was reached on the rapprochement of involvements sing the integrating of Dresdner Bank ‘s employees and regional locations into the new Commerzbank. As portion of the understandings reached, the original program to do no operational redundancies before the terminal of 2011 has been extended to 2013, provided that certain marks are met.
The banking sector environment in 2009 was marked by a stage of consolidation and stabilisation following the biggest fiscal and economic crisis in post-war history in Germany, Europe and the remainder of the universe. Harmonizing to an IMF study, Bankss in the Eurozone had to absorb damage charges numbering US $ 350bn on their income statements in 2009.
At the terminal of the coverage twelvemonth the Commerzbank Group ‘s capital base remains solid and the degree of liquidness is comfy. The Group has besides made farther advancement in cut downing entire assets and pull offing down our hazard places. However, the Group besides incurred important charges in 2009.
As a consequence of the planetary economic and fiscal crisis, the income statement was affected in peculiar by a crisp addition in loan loss commissariats but besides by a trading loss. In add-on, restructuring disbursals and ongoing operating disbursals numbering a‚¬1,864m were incurred for the integrating of Dresdner Bank, and the new Asset Based Finance section experienced write-offs on good will and trade name names of a‚¬768m. The ambitious environment and the disbursals connected with the integrating of Dresdner Bank resulted in a important amalgamate loss attributable to Commerzbank stockholders of a‚¬4.54bn.
On detecting the amalgamate fiscal statements, we compare the consequences of 2009 with those for 2008, adjusted for the new section construction but without Dresdner
Bank. This comparing shows the impact of the first-time consolidation of Dresdner Bank in 2009, which resulted in some really significant alterations in certain income statement points. Through the purchase of Dresdner Bank the Group besides indirectly acquired a farther 40 % of Deutsche Schiffsbank AG, in add-on to the original 40 % interest. This means that Schiffsbank will besides be to the full consolidated. By contrast, the cominvest companies sold in the class of the acquisition of Dresdner Bank are, in peculiar, no longer included in the consolidation.
The single points in the income statement are as follows. Net involvement income rose 52 % compared with the old twelvemonth, to a‚¬7.19bn in 2009. The net allotment to commissariats for possible loan losingss went up by a‚¬2.36bn to a‚¬4.21bn in the same period. Net involvement income after the proviso for possible loan losingss increased by 3.5 % to a‚¬2.98bn. Net committee income rose by 30.8 % to a‚¬3.72bn. The trading consequence
improved by 21.1 % in 2009 to a‚¬-358m. Net investing income amounted to a‚¬417m in
2009, up from a‚¬-665m in the old twelvemonth. The “ Other consequence ” point increased by 18.5 % to a‚¬-22m.
Operating disbursals increased by 81.7 % wholly, to a‚¬9.00bn. Personnel disbursals
were up by 88.0 % to a‚¬4.70bn. At the terminal of 2009, the Commerzbank Group employed
62,671 people – about 19,500 more than at the terminal of the old twelvemonth. Other operating disbursals rose by 75.3 % to a‚¬3.77bn. The net consequence of all the aforesaid income and disbursals was an operating loss of a‚¬2.27bn, after a loss of a‚¬382m in 2008.
Restructuring disbursals of a‚¬1.62bn were incurred, chiefly owing to the integrating of
Dresdner Bank but besides, to a lesser extent, by Eurohypo AG ‘s Commercial Real Estate concern.
In 2008, reconstituting disbursals came to a‚¬25m. The pre-tax consequence was therefore a loss of
a‚¬4.66bn, after a loss of a‚¬407m in 2008. Tax income fell from a‚¬466m to a‚¬26m in the coverage twelvemonth. A loss of a‚¬96m is attributable to minority involvements. This consequences in an attributable amalgamate loss of a‚¬4.54bn – offset by the release of militias – compared with a‚¬0 in 2008. Net incomes per portion fell from a‚¬0 in 2008 to a‚¬-4.40. Since Commerzbank received aid from the German authorities ‘s fiscal markets stabilisation plan, the Bank is non permitted to pay any dividends for the 2008 and
2009 fiscal old ages, irrespective of net incomes. Return on equity – i.e. the ratio of amalgamate net income / loss to the mean sum of capital employed, as attributable to Commerzbank stockholders – fell from 0 % in 2008 to -15.6 % . The cost / income ratio – i.e. the ratio of operating disbursals to entire net incomes before tax write-off of loan loss commissariats – rose from 77.1 % in 2008 to 82.2 % in the coverage twelvemonth.
Net committee income fell by 20.4 % compared with the old twelvemonth to a‚¬3,722m.
While it was hit in peculiar by the market turbulency in the first one-fourth of 2009, the figures for the undermentioned quarters were besides below those for the old twelvemonth. Customers across all sections were really cautious towards securities minutess which were a consequence of the hard market environment. Private clients concern was peculiarly affected. For corporations and markets, the surcease of certain securities firm activities led to a considerable bead in net committee income. In add-on, the significantly reduced degree of new concern in the Asset Based Finance section ‘s Commercial Real Estate country besides generated a lower degree of net committee income.
Net income from merchandising improved markedly compared with the old twelvemonth: in 2009
the loss was slashed by 92.3 % to a‚¬358m. This was chiefly due to significantly lower damage losingss on the ABS portfolio. This tendency mirrored developments in the capital markets in 2009: whereas a a‚¬527m loss was recorded between January and March, more favorable market conditions resulted in a trading net income of a‚¬71m in the 2nd one-fourth and a‚¬659m in the 3rd one-fourth. In the 4th one-fourth, there was a trading loss of a‚¬561m, driven chiefly by rating accommodations for monoline insurance companies, every bit good as the weak economic clime. In the Corporates & A ; Markets section, the trading consequence for 2009 was significantly lower than in the old twelvemonth ; this section had to postulate with de-risking steps which had a negative impact of about a‚¬0.5bn. The Portfolio Restructuring Unit section besides suffered ample damage losingss, mostly on the ABS portfolio. However, these were well less than in the old twelvemonth.
Net investing income increased from a‚¬81m in 2008 to a‚¬417m in the twelvemonth under reappraisal. Income from the transportation or sale of investings such as cominvest, Linde and ThyssenKrupp was offset by damages on the ABS book. The “ Other consequence ” point improved from a‚¬-118m in 2008 to a‚¬-22m.
Operating disbursals fell 1.3 % compared with 2008, to a‚¬9,004m. Personnel disbursals declined by 4.8 % to a‚¬4,698m as a consequence of the 9.7 % bead in head count to 62,671. The twelvemonth under reappraisal saw non-recurring higher parts to the German Pension Protection Fund. Other operating disbursals including current depreciation increased 2.9 % to a‚¬4,306m. This figure besides includes go oning execution disbursals for the integrating of Dresdner Bank amounting to a‚¬316m ( chiefly costs of IT integrating ) and higher parts to the Deposit Protection Fund.
The developments described resulted in an operating loss of a‚¬2.27bn for 2009, compared with a loss of a‚¬5.45bn in the old twelvemonth. Restructuring disbursals amounted to a‚¬1.62bn in the twelvemonth under reappraisal, of which a‚¬1.55bn related to the integrating of Dresdner Bank and a‚¬73m to the strategic realignment of Eurohypo. In add-on, damages of good will and trade name names – the latter ensuing from the full write-down of the Eurohypo and Dresdner Kleinwort brands – amounted to a‚¬768m. At a‚¬690m, good will damages in the Asset Based Finance section accounted for by far the largest portion. After tax write-off of restructuring disbursals and damages on good will and trade name names, the consequence before revenue enhancement was a‚¬-4.66bn ( old twelvemonth: a‚¬-5.51bn ) . Overall, revenue enhancement income came to a‚¬26m for the period under reappraisal. After revenue enhancement, the amalgamate loss was a‚¬4.63bn, of which a‚¬96m is attributable to minority involvements. A figure of a‚¬-4.54bn is attributable to Commerzbank stockholders. The comprehensive statement of income for 2009, which includes the amalgamate loss and other comprehensive income for the period, showed a net sum of a‚¬-4.56m. Other comprehensive income of a‚¬69m consists of the accrued alterations in the reappraisal excess ( a‚¬638m ) , the modesty for hard currency flow hedges ( a‚¬-352m ) and the currency interlingual rendition modesty ( a‚¬-217m ) . Operating net incomes per portion amounted to a‚¬-2.20 and net incomes per portion to a‚¬-4.40.
Entire assets of the Commerzbank Group rose by 35.0 % compared with December 31,
2008, to a‚¬844.1bn. On the assets side, claims on Bankss increased by 69.4 % to a‚¬106.7bn,
and claims on clients by 23.7 % to a‚¬352.2bn. Assetss held for trading soared by 84.5 %
to a‚¬218.7bn, while fiscal assets grew by a modest 3.0 % to a‚¬131.3bn. On the liabilities
side, there was an above-average addition of 55.5 % to a‚¬264.6bn in liabilities to clients and of 100.4 % to a‚¬193.0bn for trading liabilities, whereas liabilities to Bankss and securitized liabilities rose by a comparatively moderate 9.4 % and 3.3 % severally. The growing in both subordinated and intercrossed capital of 33.9 % and 29.2 % severally was attributable in peculiar to the initial consolidation of Dresdner Bank.
The hard currency modesty fell by a‚¬11.7bn to a‚¬10.3bn compared with December 31, 2008, particularly in balances held with cardinal Bankss. Financial assets decreased by 12.9 % over
the twelvemonth, to a‚¬131.3bn. Bonds, notes and other fixed-income securities were down a‚¬18.6bn to a‚¬128.0bn, while equities and other variable-yield securities declined by a‚¬0.9bn.
On the liabilities side, the decrease in volumes was peculiarly marked in the instance of clients and bank sedimentations, securitized liabilities and liabilities from trading activities.
Liabilitiess to Bankss fell by a‚¬54.1bn to a‚¬140.6bn, peculiarly for short-run adulthoods.
This related to Bankss both in Germany and abroad. Liabilitiess to clients went down by a‚¬55.4bn to a‚¬264.6bn ; short-run sedimentations accounted for approximately 85 % of this. Securitized liabilities besides declined ; at a‚¬171.4bn they were 10.8 % lower than in the old twelvemonth. While bonds and notes decreased by a‚¬21.9bn to a‚¬148.7bn, money market instruments rose bya‚¬1.2bn to a‚¬22.6bn. Liabilitiess from trading activities were down a‚¬63.5bn overall, to a‚¬193.0bn. As in the instance of assets held for trading, this was chiefly because of the diminution in negative just values attributable to derivative fiscal instruments.
In maintaining with their Roadmap 2012 strategic plan, Commerzbank steadily reduced the degree of entire assets over each one-fourth following the first-time consolidation of Dresdner Bank: the decrease came to a‚¬202bn in all. The demand imposed by the EU Commission to cut amalgamate entire assets to about a‚¬900bn by 2012 has hence been met good in progress. Reducing entire assets was a cardinal constituent of their hazard decrease steps and some countries were peculiarly affected: the Corporates & A ; Markets section because of decreased trading activities, the Public Finance division in the Asset Based Finance section, and the Portfolio Restructuring Unit section, through the pull offing down of the portfolio.
Reported equity at December 31, 2009 was up 33.9 % or a‚¬6.7bn to a‚¬26.6bn compared with the old twelvemonth. This contrasted with the amalgamate shortage for the current fiscal twelvemonth. Owing to the release of militias to countervail the net loss for the twelvemonth, capital militias and maintained net incomes declined by a‚¬3.2bn overall compared with the terminal of the old twelvemonth, despite the capital additions. Risk assets amounted to a‚¬280.1bn as at year-end 2009. This rise of a‚¬58.3bn compared with the figure reported at year-end 2008 was chiefly consolidation related. The Group has made important advancement towards their aim of cut downing hazard assets. Their regulative nucleus capital increased over the twelvemonth by 31.2 % to a‚¬29.5bn – chiefly due to the steps to beef up equity described above and the remotion of ordinances necessitating inclusion of the reappraisal reserve – while the nucleus capital ratio rose from 10.1 % to 10.5 % . The entire capital ratio was 14.8 % on the coverage day of the month.
Commerzbank AG: Annual Report 2009
Income statement ( a‚¬ m )
Net involvement income
Provision for possible loan losingss
Net committee income
Net investing income
Operating net income
Damages of good will and trade name names
Taxs on income
Net income / loss attributable to minority involvements
Amalgamate consequence 2
Net incomes per portion ( a‚¬ )
Dividend sum ( a‚¬ m )
Dividend per portion ( a‚¬ )
Operating return on equity ( % )
Tax return on equity of amalgamate consequence 2, 3 ( % )
Operating cost / income ratio ( % )
Balance sheet ( a‚¬ bn )
Capital ratios ( % )
Core capital ratio
Own financess ratio
Long / short-run evaluation
Moody ‘s Investors Service, New York
Standard & A ; Poor ‘s, New York
A- / A-2
A- / A-2
Fitch Ratings, London
A+ / F1+
A- / F2
1 After counterparty default accommodations, see note 2.
2 Insofar as attributable to Commerzbank stockholders.
3 The capital base comprises the mean Group capital attributable to Commerzbank stockholders without the mean reappraisal modesty and the hard currency flow hedge modesty and less the current amalgamate consequence.
Beginning: Annual Report 2009 Commerzbank AG