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April 19, 2013

Annual general meeting of Commerzbank paves the way for the repayment in full of the silent participations of the federal government and Allianz and votes on the new members of the Supervisory Board

THIS PRESS RELEASE AND THE INFORMATION CONTAINED HEREIN ARE NOT BEING ISSUED AND MAY NOT BE DISTRIBUTED IN THE UNITED STATES OF AMERICA, CANADA, JAPAN OR AUSTRALIA.

  • Klaus-Peter Müller: “Commerzbank increased its operating profit significantly in the 2012 financial year and further reduced risks”
  • Martin Blessing: “The planned complete and early repayment of the silent participations marks the beginning of the end of the federal government’s engagement in Commerzbank”

The shareholders of Commerzbank are deciding today on the planned capital increase allowing for the complete and early repayment of the silent participations of the Financial Market Stabilisation Fund (SoFFin) and Allianz. The ordinary annual general meeting is focusing on the adoption of resolutions on a combined cash capital increase/capital increase through contributions in kind of EUR 2.5 billion with subscription rights for the existing shareholders. Furthermore, the shareholders are voting on the new election of members and substitute members of the Supervisory Board, as well as on the consolidation of the existing shares pursuant to the Financial Market Stabilisation Acceleration Act. In addition, the cancellation of the authorised capital and the conditional capital is on the agenda. The shareholders’ meeting is taking place in Hall 1 of Messe Frankfurt in Frankfurt/Main. 

Klaus-Peter Müller, Chairman of the Supervisory Board of Commerzbank, said in the run-up to the annual general meeting: “Commerzbank increased its operating profit significantly in the 2012 financial year and further reduced risks. This shows the Bank is well on track. With its strategic reorientation and the growth initiatives that have been launched Commerzbank is reacting to the current challenges posed by the economy and the capital market environment.” 

The Chairman of the Board of Managing Directors of Commerzbank, Martin Blessing, said: “For us the planned complete and early redemption of the silent participations of the federal government and Allianz marks an important turning point. This is the beginning of the end of the federal government’s engagement in Commerzbank. From the very outset it was clear: The silent participations are temporary support. We have always said that we will do everything in our power to repay the funds of the federal government as soon as possible. We owe this to the taxpayer.”

“From the shareholders’ point of view there are many reasons for repaying the silent participations as quickly as possible. This means that we will no longer have to make potential coupon payments of about EUR 200 million per year. Thus, we are enhancing our future ability to pay dividends and have more flexibility for the use of future profits. In addition, it is indispensable that Commerzbank prepares for the more stringent capital requirements at an early stage. Although the Bank is very well positioned under the current standards, the equity capital ratio pursuant to Basel 3, which is expected to be fully implemented only by 2019, is now already one of the key standards for the capital markets. As a result of the planned transaction we are increasing the Common Equity Tier 1 ratio according to fully phased in Basel 3 by around 1 percentage point. Thus we expect to reach our target Common Equity Tier 1 ratio of 9 per cent already by the end of 2014. This is considerably earlier than planned to date,” added Blessing. 

The operating profit of Commerzbank improved in 2012 to EUR 1.2 billion (2011: EUR 507 million). In the Core Bank it achieved an operating profit of EUR 2.6 billion. All the segments of the Core Bank posted a profit in 2012. The net profit of EUR 6 million (2011: EUR 638 million) includes extraordinary charges, notably from the sale of Bank Forum (EUR 268 million) and depreciation on deferred tax accruals (EUR 673 million). The charges from the sale of Bank Forum and the depreciation on deferred tax accruals are essentially a result of the strategic reorientation announced in November 2012. As a result of the strategic reorientation the medium-term planning of all Group units was also amended. 

Commerzbank started solidly in the first three months of 2013 in operational terms. The first quarter of 2013 will – as already announced – be affected by one-off effects due to the planned job cuts. Restructuring expenses of almost EUR 500 million were booked, accordingly. From today’s perspective, the Bank therefore expects a net loss for the first quarter of 2013.

“We want to be a bank which orients its business model uncompromisingly to the values trust, fairness and competence. Our new claim ‘The bank at your side’ is intended to reflect precisely this conviction. This is much more than simply applying a new layer of paint. Through to 2016 we are investing more than EUR 2 billion in our core business, yet at the same time we are keeping the costs stable and further optimising our capital resources,” said Blessing.

“We have set ourselves the goal of generating a post-tax return on equity after taxes of more than 10 per cent in the Core Bank by the year 2016. In the same period we intend to reduce our cost-income ratio in the Core Bank to around 60 per cent. And we are targeting a Common Equity Tier 1 ratio of more than 9 per cent by the end of 2014, in line with our intentions to be well prepared at an early stage for the full application of Basel 3. We are convinced that we will reach these objectives,” added Blessing. 

As announced on March 13, 2013 Commerzbank plans to repay in full the existing silent participations of SoFFin and Allianz. To this end the Bank plans a combined cash capital increase/capital increase through contributions in kind of EUR 2.5 billion with subscription rights for the existing shareholders. This capital measure and the trading of subscription rights are scheduled to take place from mid-May to the beginning of June 2013.

In the course of the capital measure SoFFin intends to exercise its subscription rights in full and in accordance with its stake to convert silent participations of approximately EUR 625 million into shares. At the beginning of the subscription period the consortium of banks appointed for the execution of the capital measure will place Commerzbank shares with a value of approximately EUR 625 million from the holdings of SoFFin on its behalf with investors. Thus it will be ensured that the proceeds from the sale correspond to the volume of the silent participations utilised for the exercising of the subscription rights. As a result, SoFFin is participating in the capital increase without investing new capital. The remainder of its silent participations will be repaid to SoFFin from the proceeds of the cash capital increase. If, as planned, Commerzbank shares from SoFFin are placed and the subscription rights of SoFFin are exercised in full, the stake held by SoFFin after the completion of the transaction is expected to decrease to less than 20 per cent. 

All the necessary resolutions by the shareholders for the capital measure for the repayment in full of the remaining silent participations of SoFFin and Allianz are to be approved today as part of the annual general meeting.

At www.commerzbank.com/agm you can find the agenda, further documents on the annual general meeting, as well as a link for the live broadcast of the speeches by the Chairman of the Supervisory Board and the Chairman of the Board of Managing Directors. Additionally, you can find footage material on the annual general meeting at www.commerzbank.de/en/footage-agm from around 1 p.m. on.

 

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Press contact:

Simon Steiner               +49 69 136 46646

Nils Happich                 +49 69 136 44986

Karsten Swoboda          +49 69 136 22339

 

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About Commerzbank

Commerzbank is a leading bank in Germany and Poland. It is also present worldwide in all markets for its customers as a partner to the business world. With the business areas Private Customers, Mittelstandsbank, Corporates & Markets and Central & Eastern Europe, it offers its private and corporate clients as well as institutional investors the banking and capital market services they need. With some 1,200 branches Commerzbank has one of the densest branch networks among German private banks. In total, Commerzbank boasts nearly 15 million private customers, as well as 1 million business and corporate clients. In 2012, it generated revenues of just under EUR 10 billion with approximately 56,000 employees on average.

 

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Disclaimer

The information contained herein serves information purposes and does not constitute a prospectus or any offer for sale or subscription of or solicitation or invitation of any offer to buy or subscribe for any securities for the purposes of EU Directive 2003/71/EC. Securities will solely be offered on the basis of a prospectus or other offering circular to be issued by the company in connection with such offering. Subject to approval by the German Federal Financial Services Supervisory Authority, a prospectus will be available free of charge from COMMERZBANK Aktiengesellschaft (Kaiserstraße 16 (Kaiserplatz), 60311 Frankfurt am Main) and on the website of COMMERZBANK Aktiengesellschaft under www.commerzbank.com. The securities will be offered exclusively on the basis of the prospectus required to be approved by the Federal Financial Services Supervisory Authority. 

This press release does not constitute an offer to sell securities, or a solicitation of an offer to buy securities, in the United States of America. Securities may not be offered or sold in the United States of America absent registration or an exemption from registration under the U.S. Securities Act of 1933, as amended (the “Securities Act”). The securities of COMMERZBANK Aktiengesellschaft described herein have not been and will not be registered under the Securities Act, or the laws of any State, and may not be offered or sold within the United States, except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable State laws. COMMERZBANK Aktiengesellschaft does not intend to register any portion of the offering in the United States or conduct a public offering of securities in the United States. 

This press release is for information purposes only and does not constitute an offer document or an offer of transferable securities to the public in the U.K. to which section 85 of the Financial Services and Markets Act 2000 of the U.K. (“FSMA”) applies and should not be considered as a recommendation that any person should subscribe for or purchase any of the Securities. The Securities will not be offered or sold to any person in the U.K. except in circumstances which have not resulted and will not result in an offer to the public in the U.K. in contravention of section 85(1) of FSMA. 

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This press release is not being distributed by, nor has it been approved for the purposes of section 21 of FSMA by, a person authorised under FSMA. This document is being communicated only at (I) persons who are outside the United Kingdom (II) to investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the “Order”) or  (III) high net worth companies and other persons within the categories described in Article 49(2)(a) to (d) of the  Order (all such persons together being referred to as “Relevant Persons”). 

Any person who is not a Relevant Person should not act or rely on this document or any of its contents. The Securities are available only to, and any invitation, offer or agreement to purchase will be engaged in only with Relevant Persons. Persons in possession of this document are required to inform themselves of any relevant restrictions. No part of this document should be published, reproduced, distributed or otherwise made available in whole or in part to any other person without the prior written consent of COMMERZBANK Aktiengesellschaft. 

This release contains forward-looking statements. Forward-looking statements are statements that are not historical facts. In this release, these statements concern the expected future business of Commerzbank, efficiency gains and expected synergies, expected growth prospects and other opportunities for an increase in value of Commerzbank as well as expected future financial results, 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. Such factors include the conditions in the financial markets in Germany, in Poland, elsewhere in Europe and other regions from which Commerzbank derives a substantial portion of its revenues and in which Commerzbank holds a substantial portion of its assets, the development of asset prices and market volatility, potential defaults of borrowers or trading counterparties, the implementation of Commerzbank’s strategic initiatives, the reliability of Commerzbank’s risk management policies, procedures and methods, and other risks. Forward-looking statements therefore speak only as of the date they are made. 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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