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December 08, 2011

Statement by Commerzbank on the publication issued by the European Banking Authority (EBA) on December 8, 2011

Statement by Commerzbank on the publication issued by the European Banking Authority (EBA) on December 8, 2011

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As required by the European Council, 71 internationally operating European banks are required to comply with a Core Tier 1 ratio of 9% by June 30, 2012, after accounting for the effects of a simulated partial default on European sovereign bonds; this substantially exceeds the current regulatory requirements. At present Commerzbank's Core Tier 1 ratio is 9.4% (as of September 30, 2011).

With a view to the resolutions adopted by the EU, the EBA has now finally determined the capital deductions provisionally stated by EBA on October 26, 2011. The final deduction specified for Commerzbank in EBA's scenarios amounts to EUR 5.305 billion (provisional deduction: EUR 2.938 billion). This final deduction, too, is accounted for virtually entirely by EBA's default assumptions for European sovereign bonds in the portfolios of Eurohypo. In contrast, the core business of Commerzbank is practically unaffected.

The amount of the additional charge that exceeds the provisional deduction from October 2011 results almost entirely from the further escalation of the European state debt crisis. Thus, for example, the total deduction originally set by the EBA for Italy, Greece and Spain has been increased by some EUR 2 billion compared to the provisional EBA figure. In addition, there were further impacts from the adjustment of the regulatory capital under Basel 2.5 as per the end of the year which had not been taken into consideration by the EBA to date, and a smaller exchange rate-related increase in the risk-weighted assets in the third quarter of 2011.

The implementation of the immediate measures already announced at the presentation of the third quarter results at the beginning of November 2011 is progressing well. With these measures the Bank should be able to reduce its risk-weighted assets by as much as up to EUR 30 billion by June 30, 2012. This would consequently lower the need for additional capital by as much as up to EUR 2.7 billion.

On December 5, 2011 Commerzbank made an offer to investors in selected hybrid equity instruments (Trust Preferred Securities) to repurchase these instruments against cash consideration. The objective of the measure, for which a sum of as much as EUR 600 million is available, is - among other things - a further increase in the Core Tier 1 ratio on the consolidated accounts of the Bank.

Furthermore, Commerzbank has the possibility of strengthening its equity capital by the sale of non-strategic assets, retained earnings and accelerated cost management, for example. In line with the requirements of the EBA, the issue of equity capital instruments is also an option.

"As of today and resulting from the new, tighter requirements of the EBA we have to increase our Core Tier 1 ratio to considerably more than 10% by June 30, 2012. Thus the EBA is going far beyond the tougher minimum ratios of Basel III which are not applicable for another six years, i.e. from 2018 onwards only," said Eric Strutz, CFO of Commerzbank. "Two things are important for us in this respect. Firstly: We are aware of our responsibility for the supply of credit to the German economy and we will continue to stand by our customers and particularly will continue to support the Mittelstand. Secondly: We stand by our intention not to make use of additional public funds."

Please find further information on the publication of the EBA from December 8, 2011 at https://www.commerzbank.de/en/hauptnavigation/aktionaere/service

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About Commerzbank

Commerzbank is a leading bank for private and corporate customers in Germany. With the segments Private Customers, Mittelstandsbank, Corporates & Markets, Central & Eastern Europe as well as Asset Based Finance, the Bank offers its customers an attractive product portfolio, and is a strong partner for the export-oriented SME sector in Germany and worldwide. With a future total of some 1,200 branches, Commerzbank has one of the densest networks of branches among German private banks. It has around 60 sites in more than 50 countries and serves more than 14 million private clients as well as 1 million business and corporate clients worldwide. In 2010, it posted gross revenues of EUR 12.7 billion with some 59,000 employees.

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Disclaimer

This release contains statements concerning the expected future business of Commerzbank, efficiency gains and expected synergies, expected growth prospects and other opportunities for an increase in value of the company as well as expected future net income per share, restructuring costs and other financial developments and information. These forward-looking statements are based on the management's current expectations, estimates and projections. They are subject to a number of assumptions and involve known and unknown risks, uncertainties and other factors that may cause actual results and developments to differ materially from any future results and developments expressed or implied by such forward-looking statements. Commerzbank has no obligation to periodically update or release any revisions to the forward-looking statements contained in this release to reflect events or circumstances after the date of this release.

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