annual report 2003 highlights of Commerzbank group 2003 2002 Income statement Operating profit (7 m) 559 192 Operating profit per share (7) 1.03 0.36 Pre-tax profit (7 m) –1,980 –372 Net loss (7 m) –2,320 –298 Net loss per share (7) –4.26 –0.56 Operative return on equity (%) 4.9 1.6 Cost/income ratio in operative business (%) 73.3 77.3 Pre-tax return on equity (%) –17.4 –3.1 31.12.2003 31.12.2002 Balance sheet Balance-sheet total (7 bn) 381.6 422.1 Risk-weighted assets according to BIS (7 bn) 140.8 160.2 Equity as shown in balance sheet (7 bn) 9.1 8.8 Own funds as shown in balance sheet (7 bn) 18.7 19.3 BIS capital ratios Core capital ratio, excluding market-risk position (%) 7.6 7.5 Core capital ratio, including market-risk position (%) 7.3 7.3 Own funds ratio (%) 13.0 12.3 Commerzbank share Number of shares issued (million units) 597.9 542.2 Share price (7, 1.1.–31.12.) high 17.58 21.29 low 5.33 5.04 Book value per share*) (7) 17.37 18.98 Market capitalization (7 bn) 9.3 4.0 Customers 6,840,000 6,039,000 Staff Germany 25,426 28,603 Abroad 6,951 7,963 Total 32,377 36,566 Short/long-term rating Moody’s Investors Service, New York P-1/A2 P-1/A2 Standard & Poor’s, New York A-2/A- A-2/A- Fitch Ratings, London F2/A- F2/A- *) excluding cash flow hedges structure of commerzbank group Board of Managing Directors Corporate Divisions Group Retail Banking and Corporate and Services Group companies and major holdings Management Asset Management Investment Banking Staff Banking Service ● Hypothekenbank in ● COMINVEST Asset ● BRE Bank SA ● Commerz Business Management GmbH departments departments departments Essen AG ● Commerzbank Consulting AG ● ADIG-Investment (Budapest) Rt. Luxemburg S.A. ● Erste Europäische ● Commerzbank ● pdv.com ● AFINA Bufete de Socios (Eurasija) SAO Pfandbrief- und Beratungs-GmbH Financieros, S.A. ● ● Accounting and Taxes ● Asset Management ● Corporate Banking ● Global Operations Kommunalkreditbank AG Commerzbank ● Caisse Centrale (Nederland) N.V. Investment Banking de Réescompte, S.A. ● SOLTRX Solutions for ● Commerz (East Asia) Ltd. ● Compliance and ● Credit Operations ● Financial Institutions ● EUROHYPO AG financial business GmbH ● CICM Fund Management ● P. T. Bank Finconesia Security Private Customers ● IT Development Limited ● Global Credit Operations ● Commerz International ● TC TrustCenter AG ● Corporate ● Private Banking ● IT Investment Banking ● Korea Exchange Bank Capital Management ● Commerz Grundbesitz- (Japan) Ltd. gesellschaft mbH Communications and ● Multinational Corporates ● Jupiter International ● Economic Research ● Retail Banking ● IT Production CommerzLeasing und Group plc Immobilien AG ● Real Estate ● ● Financial Controlling IT Support ● Commerzbank Europe ● ● Securities (Ireland) CBG Commerz Beteiligungsgesellschaft ● Group Treasury ● Organization ● Commerzbank Holding mbH International S.A. ● Commerzbank Capital ● ● Human Resources ● Transaction Banking Commerzbank Markets Corp. (South East Asia) Ltd. ● Commerz Futures, LLC ● Commerzbank ● Internal Auditing (Switzerland) Ltd ● Commerz Securities (Japan) Co. Ltd. ● Legal Services ● comdirect bank AG ● COMMERZ PARTNER ● Risk Control Domestic and foreign branch network Beratungsgesellschaft für Vorsorge- und Finanz- produkte mbH ● Strategy and Controlling ● Commerz Service GmbH Cooperation in bancassurance area ‡ What happens if somewhere in the world a new trend appears? ‡ your phone rings ‡ you shouldn’t chase after opportunities, but rather meet them head-on. But who lets you know where things are happening and what’s promising? We do, for example. When we find something suitable, we tell you immediately. ‡ ideas ahead ‡ ‡ What should an optimal property- financing deal look like? ‡ how you want it to ‡ Our mixture for an individual financing ‡ With whom do german companies do the plan: a calculation of your financial possibilities, plan- best deals abroad? ‡ with commerzbank ‡ ning involving state promotion funds and attractive SEDUS stoll ag, one of germany’s largest producers of office fur- interest-rate conditions, and finally A thorough technical niture, draws upon our experience. Just as other companies have check of the object of your choice. This all adds up to a for decades. That’s why we’re involved in 16% of germany’s overall package ideally suited to your needs. external trade today. When are you coming to us? ‡ ideas ahead ‡ ‡ ideas ahead ‡ ////// www.commerzbank.com / //////////////////////////////////////////////////////////// ////// www.commerzbank.com / //////////////////////////////////////////////////////////// ////// www.commerzbank.com / //////////////////////////////////////////////////////////// ‡ what do we do with funds that are better ‡ What if you have more important things to than our own? ‡ we get them into the team ‡ do than to go to your bank? ‡ then we simply how does a successful team come about? You look for the best. And come to you ‡ you can settle a lot of things by phone or that’s precisely how we select our funds for you. For this purpose, we online, but not everything. We prefer to discuss with you personally perform a completely neutral analysis of thousands of offers. And if what is crucial for you. anywhere you wish. the funds of other companies are interesting, we recommend them. ‡ ideas ahead ‡ ‡ ideas ahead ‡ ‡ it’s quite normal to be available for cus- tomers at all hours ‡ we think so, at any rate ‡ you can always reach us. By using our self-service zones and our extensive online services, Giving retail and corporate customers all they need in the way of banking. ‡ ideas ahead ‡ ////// www.commerzbank.com / //////////////////////////////////////////////////////////// ////// www.commerzbank.com / //////////////////////////////////////////////////////////// ////// www.commerzbank.com / //////////////////////////////////////////////////////////// ‡ ideas ahead ‡ or: how do we get our message across? In banking, the advertising “battle” for cus- The translation of the slogan tomers primarily takes place at the emotional into advertising takes account level: how can we position our Bank such that of the various target groups, our customers both have more trust in us and but addresses them in the think we are capable of more than our rivals? same tonality: for Commerz- / bank, much is matter-of-course / which for others is quite the Based on a broad survey of various target exception. Commerzbank has groups in Germany, France and Italy, we surprisingly straightforward have identified two key points distinguishing solutions for apparently complex us from our competitors: our customers are problems. Our advertising identi- relatively well satisfied with Commerzbank. fies the problem and presents a Non-customers imagine that, as a “small” convincing, target-group-oriented major bank, we are more flexible, creative solution. and act more quickly than our competi- / tors. / / The motifs used as images in our / advertising – and which appear as The right positioning for Commerzbank illustrative material throughout this is, therefore: “Commerzbank is a cre- report – repeatedly show people in ative major bank. In an interactive situations that tell entire stories in relationship with customers and its combination with the headline. Ex- business associates, it offers the best citing, unusual, surprising and striking, financial services.” That is the starting but always in close touch with the point for all our advertising messages topic. We are the flexible bank which is and presentations. The core concept full of ideas in responding to customers’ “creativity” distinguishes us, for one wishes. The deliberate use of colour, thing, from our competitors and, for contrast and sharpness depicts reality another, it entails a promise. as more attractive and impressive than / it actually is. Small is made larger and the / normal more unusual. The campaign is Our slogan “ideas ahead” sums intended to make an impression; it should this up. It serves as a “heightened also polarize and arouse curiosity about translation” of the expectations Commerzbank. For we have ideas, and they placed in us and at the same get our customers ahead. time embodies what we offer customers by way of creative cooperation. It enhances the Bank’s attractiveness, makes it more sympathetic and arouses curiosity for its services. It has a motivating impact on staff, but also calls upon them to generate new ideas. contents Management report Survey of the Commerzbank Group 6 Corporate governance at Commerzbank 14 Retail banking and asset management 20 Corporate and investment banking 30 Staff and welfare report 40 Our share, strategy and outlook 46 Risk report 52 Financial statements of the Commerzbank Group 2003 Overview 80 Income statement 83 Balance sheet 85 Statement of changes in equity 86 Cash flow statement 88 Notes 90 Group auditors’ report 172 Report of the Supervisory Board 173 Boards, seats on other boards, Group managers, managers of branches and Group companies Supervisory Board 177 Central Advisory Board 179 Board of Managing Directors 180 Regional Board Members and CIO 182 Group managers 183 Managers of domestic main branches 184 Managers of larger corporates centres 184 Managers of foreign branches 185 Board of Trustees of Commerzbank Foundation 185 Managers of domestic Group companies 186 Managers of foreign Group companies 187 Regional Advisory Committees 188 Seats on other boards 201 Tables and charts Glossary 206 Index 211 Business progress 1968-2003 212 Front inside cover: Structure of the Commerzbank Group Back inside