Commerzbank to invest more in its core business
In the coming years, Commerzbank will adapt its business model to the new framework conditions in the financial sector and will concentrate on focused growth.
In the framework of its strategic agenda until 2016, the Bank is investing more than EUR 2.0 billion in the revenues power of its core business. At the same time and due to additional efficiency measures, it is maintaining its costs at a constant level and is further optimising its capital base. In 2016, the Bank intends to achieve a return on equity after taxes (RoE) of more than 10% in its core business. The costincome ratio (CIR) of the Core Bank with the operating segments Private Customers, Mittelstandsbank, Corporates & Markets, and Central & Eastern Europe is to be lowered to around 60%. Taking into consideration the phase-in of Basel 3, the Core Tier 1 ratio of the Group shall always be comfortably above 9% until the end of 2016. In addition, it is planned to reduce the portfolios in the Non-Core Assets (NCA) segment by more than 40% until 2016 (as of the end of September 2012: EUR 160 billion Exposure at default, EaD).
There can be no return to ‘business as usual’ in the banking industry. Regaining the trust of customers will be the most important task for all banks in the coming years.
Commerzbank is thus reacting to the challenges posed by the financial market and sovereign debt crisis and to the resulting “new normality” in the financial sector - namely tougher requirements for the capital base of banks, ongoing low interest rate levels and a loss of trust on the part of customers. In past years, we have reduced costs, lowered risks and successfully completed the integration of Dresdner Bank. Now we will consistently adapt our business model and our processes to the changing market conditions. Thus we will have a strong base, which we can utilise for further growth, said Stephan Engels, Chief Financial Officer of Commerzbank.