30/03/2012
Commerzbank AG / Key word(s): Miscellaneous
30.03.2012 / 11:45
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Restructuring of Eurohypo and repositioning of the business area Commercial
Real Estate
- EU Commission changes requirement of Eurohypo disposal into required
run-down
- Organisational separation of Eurohypo into non-core activities (Public
Finance, non-core area Commercial Real Estate) and core activities (core
area Commercial Real Estate)
- Public Finance and the non-core area of the commercial real estate
business shall be consistently reduced in the new segment 'Non Core Assets'
(NCA)
- The clearly scaled-down core activities in the commercial real estate
business will be part of the new Commerzbank segment 'Real Estate and Ship
Finance' (RES)
- Balance sheet total of Commerzbank without reduction portfolio has to be
reduced to a maximum of 600 billion euro by the end of 2012 - Acquisition
ban extended until the end of Q1 2014
- Blessing: 'The changes in the conditions imposed by the EU Commission are
challenging, but acceptable. We will consistently continue with the
reduction course at Eurohypo.'
The European Commission today informed the Federal Republic of Germany that
it has changed the condition imposed on Commerzbank in 2009 to divest its
subsidiary Eurohypo into a condition to run down the company. Accordingly,
Commerzbank has to reduce in full both the state financing business (Public
Finance) as well as the bulk of the commercial real estate financing
(non-core areas Commercial Real Estate) of Eurohypo. Merely a clearly
scaled-down part of the commercial real estate financing in Germany, United
Kingdom, France, and Poland may be continued.
'The amended conditions of the EU Commission are challenging, but
acceptable. We will consistently continue with the chosen course of a
reduction in the Eurohypo portfolios. The objective is that of continuing a
small, lower-risk area of the commercial real estate business in
Commerzbank,' said Martin Blessing, Chairman of the Board of Managing
Directors of Commerzbank.
In accordance with the conditions imposed by the European Commission, the
non-core activities of Eurohypo (Public Finance and non-core areas in
Commercial Real Estate) have to be clearly separated in organisational
terms from the core activities (core areas in Commercial Real Estate). The
non-core activities will be managed in a new group-internal reduction unit
in the future. The clearly scaled-down commercial real estate business in
Germany, United Kingdom, France, and Poland will be part of the
newly-formed Core Bank segment 'Real Estate and Ship Finance' (RES) of
Commerzbank. In accordance with the conditions imposed by the European
Commission, the Eurohypo brand has to be given up. While adapting to the
changing business framework conditions, Eurohypo will be continued for the
time being. The new company name will be announced at a later point in
time.
The decision by the EU Commission also foresees other conditions: Excepting
the non-core activities, Commerzbank has to reduce its balance sheet to 600
billion euro as of the end of 2012 and it may not exceed this level until
the end of 2014. In addition, the acquisition ban has been extended to the
end of March 2014.
Portfolios of the reduction areas shall be consistently decreased
Among the business areas of Eurohypo to be reduced are the Public Finance
business and the Commercial Real Estate portfolios outside the markets in
Germany, United Kingdom, France, and Poland. Thus, the Bank is withdrawing
in the Commercial Real Estate business from 29 of the original target
markets at Eurohypo. The two areas are to be managed in a new reduction
unit with the name 'Non Core Assets' (NCA). Here, Commerzbank will continue
its strategy from past years in the future: In the period from 2008 to 2011
the Public Finance portfolio had already been reduced by some 40 %. The
portfolio volume in Commercial Real Estate was lowered by more than 20 % in
the same period. The objective of Commerzbank is to further consistently
reduce the portfolios of these non-core activities. The new reduction unit
is not part of the Core Bank of Commerzbank. On the Board of Managing
Directors of Commerzbank it will be the responsibility of Ulrich Sieber.
Reduced core activities in Commercial Real Estate will be continued in
Commerzbank
In operational terms, the reduced Commercial Real Estate business is to be
gradually transferred to Commerzbank AG in the coming years. It will be
continued in the future as part of the new Commerzbank segment 'Real Estate
and Ship Finance' (RES). In accordance with the conditions imposed by the
EU Commission, the core-activities in the area of Commercial Real Estate
may not exceed a volume of 25 billion euro including the annual maximum new
business volume of 5 billion euro through to the end of 2015. The core
activities in the area of Commercial Real Estate will continue to be
optimised in terms of its risks and profitability. 'There will always be a
need for commercial real estate financing. We are, therefore, pleased to be
able to continue to offer this product. We will, however, run this business
in the future so that it is much more focused and the risks are lower,'
said Thomas Köntgen, Chairman of the Board of Managing Directors of
Eurohypo, and responsible in the future at Commerzbank for the core area
Commercial Real Estate.
Newly-formed segment 'Real Estate and Ship Finance' (RES) will be an
integral part of the Core Bank
The newly-formed Commerzbank segment 'Real Estate and Ship Finance' (RES)
will replace the existing segment Asset Based Finance (ABF) as of July 1,
2012, and will be part of the Core Bank in the future. It comprises the
three areas Ship Finance, Asset Management & Leasing, and the Commercial
Real Estate core activities. 'All three business areas are strategically
important elements of Commerzbank. In the past years we have optimised
every single one of these areas. We have restructured the portfolios and
consistently reduced the risks,' said Jochen Klösges, the member of the
Board of Managing Directors of Commerzbank responsible for the 'Real Estate
and Ship Finance' (RES) segment in the future. 'We will continue along this
course. We intend to make a sustainable and positive contribution to the
business success of Commerzbank.'
Outlook: Details on implementation will be elaborated in the coming months
A major milestone in the implementation of the amended conditions of the EU
Commission is the transparent organisational separation of the core
activities Commercial Real Estate and the non-core activities (Public
Finance and non-core areas Commercial Real Estate). The corresponding
details on this will be elaborated in the coming months.
*****
Press contact:
Simon Steiner +49 69 136-46646
Maximilian Bicker +49 69 136-28696
Nils Happich +49 69 136-44986
*****
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
52 countries and serves more than 14 million private clients as well as 1
million business and corporate clients worldwide. In 2011, it posted gross
revenues of EUR 9.9 billion with 58,160 employees.
*****
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.
Contact:
Commerzbank AG
Group Communications
Tel.: +49 69 136 - 22830
mediarelations@commerzbank.com
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Language: English
Company: Commerzbank AG
Kaiserplatz
60261 Frankfurt am Main
Germany
Phone: +49 (069) 136 20
Fax: -
E-mail: ir@commerzbank.com
Internet: www.commerzbank.de
ISIN: DE0008032004
WKN: 803200
Indices: DAX CDAX HDAX PRIMEALL
Listed: Regulierter Markt in Berlin, Düsseldorf, Frankfurt (Prime
Standard), Hamburg, Hannover, München, Stuttgart;
Terminbörse EUREX; London, SIX
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