Commerzbank AG — Earnings Release 2018

Feb 14, 2019

Successful first half of Commerzbank 4.0 – net result of €865m

Analyst conference – Q4 2018 / FY 2018 preliminary and unaudited results

Stephan Engels | CFO | Frankfurt | 14 February 2019

Commerzbank 4.0 simple – digital – efficient

All figures in this presentation are subject to rounding

Growth on the back of successful strategy implementation

Commerzbank 4.0 drives…

Simple

• › We will focus on businesses in two operating segments: PSBC and CC
• › We will discontinue non-core activities

Digital

• › We will transform the bank into a digital enterprise
• › We will digitalise 80% of all relevant processes until 2020

Efficient

• › We will simplify the bank, creating efficiency
• › We will generate additional competitive advantages

... business model transformation … … and growth in core segments

PSBC

• › Consumer Finance business on own balance sheet
• › Setup of market segment Small Business Customers within PSBC

› Integration of all corporate client activities in one segment

› Sale of EMC business

• Run-down legacy portfolios
• › Legacy portfolios cleaned up
• › Ship finance <€500m

based on high quality balance sheet

PSBC

• › 1m net new customers (GER)
• › +€46bn Assets under Control (GER)
• › Underlying revenue growth of €234m in 2018

CC

• › 8.9k net new corporate customers
• › Loan growth of €7bn with corporates
• › RWA efficiency of 3.9%

Balance sheet quality

• › Clean balance sheet with NPL <0.9%
• › Capital reallocated to growth in core segments

Significant progress in digitalisation – roll out of new delivery model

Sound and robust compliance framework established – Commerzbank recognised as reliable partner

Substantial investment of approx. €600m Increase of global headcount in compliance department to over 700

Full year operating profit of €1.2bn and net result of €865m

Highlights 2018

Improved underlying revenues and benign risk result

• › FY underlying revenues increased by 5% vs. 2017
• › Q4 underlying revenues remain stable vs. Q3 despite challenging markets
• › Risk Result of €-446m significantly (43%) below 2017 LLPs thanks to reduced ship finance

Costs in line with guidance

• › Expenses of €6.9bn in line with full year guidance of €7.1bn when adding back €200m from discontinued operations (EMC)
• › Cost management largely compensating effects of strong investments

Net RoTE of 3.4% in second transformation year

• › Q4 contributing €240m to FY operating result of €1.2bn
• › Ongoing loan demand reflected in FY RWA growth of 6% and CET1 ratio of 12.9%
• › Dividend of €20ct per share planned for AGM

Exceptional revenue items

2017 (€m)		Revenues	2018 (€m)	Revenues
› Q1	Hedging & valuation adjustments 108	108	› Hedging & valuation adjustments -24 › Polish group insurance business (PSBC) 52 › PPA Consumer Finance (PSBC) -27	1
› Q2	Hedging & valuation adjustments 8	8	› Hedging & valuation adjustments 42 › PPA Consumer Finance (PSBC) -25	18
› › › Q3 - ›	Hedging & valuation adjustments 28 Concardis (PSBC) 89 Consumer Finance Joint Venture 160 thereof PPA (PSBC) -16 Property sales gains (O&C) 225	502	› Hedging & valuation adjustments 41 › PPA Consumer Finance (PSBC) -23	18
› Q4 ›	Hedging & valuation adjustments -32 PPA Consumer Finance (PSBC) -29	-60	› Hedging & valuation adjustments -95 › PPA Consumer Finance (PSBC) -21	-115
FY		557		-78

Key financial figures at a glance

Revenues and operating results of Commerzbank divisions

Operating result with substantially increased revenue quality

			Group operating result					Group P&L
(€m)								in €m	Q4 2017	Q3 2018	Q4 2018	FY 2017	FY 2018
		609						Revenues	2,105	2,140	2,035	8,764	8,570
								Exceptional items	-60	18	-115	557	-78
								Revenues excl. exceptional items	2,165	2,122	2,151	8,208	8,648
								o/w Net interest income	1,169	1,243	1,254	4,370	4,828
					401			o/w Net commission income	778	771	754	3,192	3,089
						346		o/w Net fair value result	69	53	17	456	410
278				258			240	o/w Other income	149	55	126	189	321
								Risk result (2017: LLP)	-251	-133	-154	-781	-446
	141		122					Operating expenses	1,731	1,661	1,641	6,834	6,879
								Operating profit	122	346	240	1,149	1,245
								Restructuring expenses	-	-	-	808	-
								Pre-tax profit discontinued operations	16	-15	-30	118	-15
								Pre-tax profit Commerzbank Group	137	331	210	459	1,230
Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4	Taxes on income	35	89	75	237	262
								Minority interests	27	24	22	94	103
								Net result ¹	75	218	113	128	865
		2017			2018			CIR (%)	82.3	77.6	80.6	78.0	80.3
								Net RoTE (%)	1.2	3.5	1.8	0.5	3.4
								Operating RoCET (%)	2.0	6.0	4.1	4.9	5.4

• › Significantly improved revenue quality (+€441m) largely compensating for exceptional items (-€635m)
• › FY 5% increase in underlying revenues driven by NII while NCI and NFV slightly lower
• › Low risk result due to further balance sheet improvement drives increased operating result
• › Discontinued operations reflect agreement on sale of EMC

Positive trajectory of NII throughout 2018 – reflecting growth in PSBC and CC

Net Interest Income (excluding exceptional items) (€m)

Cost development in line with FY guidance

Highlights

• › Continued strategic investments in digitalisation and growth peaked in mid 2018 as planned
• › Higher costs for regulatory requirements and compulsory contributions 12M overall compulsory contribution of €420m
• › Cost Management driven by staff reduction and sourcing

For reference: 2018 costs of €6,879m correspond to guided €7.1bn when adding €246m from discontinued EMC business

Further cost savings through increased efficiency and FTE reductions

• › Targeted cost reduction to <€6.8bn in 2019 and €6.5bn in 2020
• FTE reductions based on efficiency gains including digitisation
• Efficiencies from new Campus 2.0 delivery model including benefits of internalisation
• Other ongoing cost management measures offset effects from cost inflation and growth
• › Growth, sourcing and internalisation in IT lead to revised expected FTE of >38k

Continued low risk result

Risk Result (Provisions for loan losses in 2017) (€m)

Risk Result divisional split Risk Result in €m	Q4 2017	Q3 2018	Q4 2018	FY 2017	FY 2018
Private and Small Business Customers	-24	-69	-49	-154	-233
Corporate Clients	-172	-60	-71	-295	-194
Asset & Capital Recovery	-59	2	-23	-336	-8
Others & Consolidation	4	-4	-10	4	-11
Group	-251	-133	-154	-781	-446
NPL in €bn
Private and Small Business Customers	1.9	1.8	1.8	1.9	1.8
Corporate Clients	2.6	1.7	1.7	2.6	1.7
Asset & Capital Recovery	1.1	0.2	0.4	1.1	0.4
Others & Consolidation	-	-		-	-
Group	5.6	3.8	3.8	5.6	3.8
Group NPL ratio (in %) ¹	1.3	0.9	0.9	1.3	0.9
Group CoR (bps) ²	18	9	10	18	10

• › PSBC and CC reflect healthy risk profile based on prudent lending standards and stable German economy
• › Underlying credit losses stable throughout 2018 with H1 benefitting from write backs H2 run-rate baseline going forward
• › PSBC reflects transferred consumer finance portfolio on own balance sheet since Q3 2017

	1) NPL ratio = Default volume loans held at Amortised Cost and Fair Value OCI;
Stephan Engels CFO Frankfurt 14 February 2019	Exposure at Default (in 2017 LaR loans)
	2) Cost of Risk (CoR) = Risk Result / Exposure at Default (in 2017 Loan Loss Provisions)

Private and Small Business Customers: net new customer acquisition on target – lower securities volume due to weak Q4 markets

Private and Small Business Customers: underlying revenue growth in 2018

(€m)	Operating result							Segmental P&L
		380						in €m	Q4 2017	Q3 2018	Q4 2018	FY 2017	FY 2018
								Revenues	1,188	1,204	1,163	4,823	4,803
								o/w Private Customers	598	610	581	2,243	2,392
								o/w Small Business Customers	199	200	206	775	804
				203				o/w mBank	260	265	257	998	1,040
191					174	186	172	o/w comdirect	103	95	95	378	389
	140		147					o/w Commerz Real	56	56	46	219	222
								o/w exceptional revenue items	-29	-22	-23	210	-44
								Revenues excl. exceptional items	1,216	1,226	1,185	4,613	4,847
								Risk result (2017: LLP)	-24	-69	-49	-154	-233
								Operating expenses	1,016	949	941	3,811	3,835
Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4	Operating profit	147	186	172	858	735
								RWA (end of period in €bn)	38.5	40.5	41.4	38.5	41.4
								CIR (%)	85.6	78.8	81.0	79.0	79.8
	2017				2018			Operating return on equity (%)	12.5	15.5	14.1	19.0	15.5

• › FY €234m (5%) increase of underlying revenues with all subdivisions contributing
• › Q4 underlying revenues below Q3 increased NII (+€17m) more than offset by lower NCI impacted by weak markets and fair value result
• › YoY loan volume in German mortgage business up 9% to €75.6bn and consumer finance book at €3.6bn

Corporate Clients: Further customer growth and increased loan volume

1) Calculation based on RWA and operating revenues before Risk Result (LLP in 2016, 2017), XVA and OCS

– both excluding discontinued EMC business Stephan Engels | CFO | Frankfurt | 14 February 2019

2) Volumes Mittelstand and International Corporates

Corporate Clients: solid result considering ongoing margin pressure

	Operating result						Segmental P&L
(€m)								in €m	Q4 2017	Q3 2018	Q4 2018	FY 2017	FY 2018
								Revenues	893	865	808	3,613	3,451
								o/w Mittelstand	463	456	449	1,864	1,766
221		223						o/w International Corporates	215	206	232	889	877
	197				221			o/w Financial Institutions	103	116	121	458	474
						184		o/w others	115	73	54	373	377
							122	o/w exceptional revenue items	-3	15	-49	29	-43
				102				Revenues excl. exceptional items	896	850	857	3,584	3,495
								Risk result (2017: LLP)	-172	-60	-71	-295	-194
			34					Operating expenses	687	620	615	2,642	2,628
								Operating profit	34	184	122	676	629
								Pre-tax profit discontinued operations	16	-15	-30	118	-15
Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4	RWA (end of period in €bn)	88.1	97.4	97.6	88.1	97.6
								CIR (%)	76.9	71.7	76.1	73.1	76.2
		2017				2018		Operating return on equity (%)	1.3	6.6	4.3	6.0	5.8

• › Underlying revenues in Q4 slightly above Q3 in a challenging market environment driven by slightly higher NII reflecting the resilient business model
• › Loan growth based on prudent lending standards
• › Financial Institutions continues positive development
• › FY International Corporates and Mittelstand reflecting margin competition and subdued demand for capital markets products

Asset & Capital Recovery: operating result driven by valuation effects

Operating result					Segmental P&L
(€m)					60
								in €m	Q4 2017	Q3 2018	Q4 2018	FY 2017	FY 2018
				16		14		Revenues	24	28	-20	170	114
								Revenues excl. exceptional items	54	2	22	75	103
								Risk result (2017: LLP)	-59	2	-23	-336	-8
								Operating expenses	19	16	12	98	72
-33								Operating profit	-54	14	-56	-264	34
			-54				-56
								RWA (end of period in €bn)	18.0	12.6	12.1	18.0	12.1
	-82
		-94						CRE (EaD in €bn)	1.5	0.9	0.9	1.5	0.9
Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4	Ship Finance (EaD in €bn)	2.6	0.8	0.4	2.6	0.4
								Public Finance (EaD in €bn)	10.0	7.5	7.7	10.0	7.7
		2017			2018
								Group Ship Finance (EaD in €bn)	3.4	1.1	0.5	3.4	0.5

• › Operating result reflecting reduced portfolio size and valuation effects
• › Reduction of legacy positions progressing with an EaD reduction of €5bn in 2018
• › Well marked Shipping portfolio below €500m and fewer than 60 ships financed

Capital ratio of 12.9% due to growth and increased capital deductions

• › Stable Market Risk RWA in line with business model
• › Higher Credit RWA driven by increased lending in PSBC and CC
• › Capital change driven by lower discount rate and reduced valuations of pension plan assets due to weak Q4 markets
• › Capital incorporates €0.20 per share dividend accrual

Objectives and expectations for 2019

2019 – Outlook

We continue our growth strategy and expect higher underlying revenues We target a cost base below €6.8bn

We expect a Risk Result not below €550m

We plan to maintain a dividend at level comparable to 2018

We target a CET1 ratio ≥12.75% in line with anticipated SREP requirements

Commerzbank 4.0 simple – digital – efficient

We continue with the implementation of Commerzbank 4.0 – Strategic outlook towards 2020

We pursue our strategy based on a simplified business model and high quality balance sheet

We continue our growth strategy in a challenging macro environment – targeting average revenue growth of 3% p.a.

We further intensify our digitalisation efforts with Campus 2.0 – contributing to our targeted cost base of €6.5bn in 2020

Commerzbank 4.0 simple – digital – efficient

Appendix

Commerzbank Group

Commerzbank financials at a glance	24
Key figures Commerzbank share	25
Key execution indicators	26
Digitalisation progress	27
Loan and Deposit volumes	28
Scenario: NII sensitivity	29
Funding & Rating
Funding structure	30
Rating overview	31

Risk & Capital Management

IAS 19	32
Exchange rate development effects on capital	33
Group equity composition	43
Glossary – capital allocation & return calculation	44

P&L Tables

Commerzbank Group	36
Private and Small Business Customers	37
Corporate Clients	38
Asset & Capital Recovery	39
Others & Consolidation	40
mBank	41
Exceptional Revenue Items	42

Other Information

German economy	23
Residential mortgage business	34
Corporate responsibility	35

German economy 2019 – ongoing upswing

	›	In the course of 2018 the German economy significantly lost momentum, and the ongoing downward trend of the sentiment indicators signals that this soft patch is not yet over.		DAX (avg. p.a.)				12,272
Current development	›	The main reasons are probably the temporarily stronger Euro and less dynamic demand from Asia. The US trade policy and the Brexit might have been an additional burden for the economy.		10,196 10,957			12,431		11,800
	›	In contrast, the internal demand has grown further driven by the ECB's still very expansionary monetary policy.		2015		2016	2017	2018	2019e
	›	As long as risks do not materialise, e.g. no global trade war, a recession is unlikely because of the still expansionary stance of monetary policy.		Euribor (avg. p.a. in %)
Our expectation for 2019	›	In the further course of the year somewhat stronger demand in some parts of the world economy (especially in China based on the government's stimulus measures) will probably even lead to a little bit higher QoQ growth rates of the German economy. This should be signalled by an improvement of sentiment indicators starting in spring.	-0.02			-0.26	-0.32	-0.32	-0.30
	›	On average the German economy will expand by 1.2% in 2019 (after 1.5% in 2018) which would be roughly in line with the long-term growth potential.		2015		2016	2017	2018	2019e
	›	The export oriented German economy could suffer especially from rising protectionism initiated by the US government.		GDP			(change vs. previous year in %)		Germany Eurozone
Risks in the	›	In the medium term EMs – a very important market for German exports – could grow more slowly than in the past.		1.7	2.0	1.9 1.8	2.6 2.2	1.9 1.5	1.4
long-run	›	Germany's price and non-price competitiveness within the Euro area has eroded since 2009.							1.2
	›	Economic policy has been geared more towards redistribution of wealth than support for growth, and this will not change with the current government.		2015		2016	2017	2018	2019e

Commerzbank financials at a glance

Group	Q4 2017	Q3 2018	Q4 2018	FY 2017	FY 2018
Operating result (€m)	122	346	240	1,149	1,245
Net result (€m)	75	218	113	128	865
CET1 ratio Basel 3 fully phased-in (%)¹	14.1	13.2	12.9	14.1	12.9
Total assets (€bn)	452	493	462	452	462
RWA B3 fully phased-in (€bn)	171	178	180	171	180
Leverage ratio fully phased-in (%)	5.1	4.5	4.8	5.1	4.8
Cost/income ratio (%)	82.3	77.6	80.6	78.0	80.3
Net RoE (%)	1.0	3.1	1.6	0.4	3.1
Net RoTE (%)	1.2	3.5	1.8	0.5	3.4
Total capital ratio fully phased-in (%)¹	17.5	16.4	15.9	17.5	15.9
NPL ratio (in %)	1.3	0.9	0.9	1.3	0.9
CoR (bps)	18	9	10	18	10

Key figures Commerzbank share

ytd as of	31 Dec 2016	31 Dec 2017	31 Dec 2018
Number of shares issued (in m)	1,252.4	1,252.4	1,252.4
Market capitalisation (in €bn)	9.1	15.7	7.2
Net asset value per share (in €)	21.69	21.88	21.34
Low/high Xetra intraday prices YtD (in €)	5.16/9.50	6.97/12.96	5.50/13.82

Key Execution Indicators

Digitalisation progress in Commerzbank 4.0

Continuing loan and deposit growth

• › Loan growth in Private and Small Business Customers mainly driven by mortgage business in Germany and mBank's loan book
• › Corporate Clients loan volume slightly lower with growth in corporate customers more than balanced by reductions with Financial Institutions and legacy books

Significant NII potential in scenario of rising interest rates

• › Year 1 effect of €500-550m driven by short-end rates due to large stock of overnight (excess) deposits
• › Thereof ~1/3 stem from leaving the negative interest rate territory
• › Year 4 effect of €900-1,000m driven by higher reinvestment yield of modelled deposits used to refinance longer term loans

Capital markets funding activities

• › €10.5bn issued in 2018 (average term ~7 years), with focus on longer tenors, thereof:
• Pfandbriefe: €3.75bn Benchmarks with maturities between 4 years and 10 years
• Preferred Senior: Benchmark transactions with total volume of €3.1bn following inaugural dual tranche in August 2018
• Non-Preferred Senior: €0.5bn inaugural green bond backed by renewable energy loans
• Tier 2: Diversification in Asian markets (AUD 225m 10 years, SGD 400m 10 years non-call 5 years)
• mBank: €1.2bn issuances; €0.5bn Senior Unsecured Benchmark and mBank Hipoteczny with €300m 7 years covered bond
• › Total funding volume for 2019 expected to be approx. €10bn

Rating overview Commerzbank

As of 14 February 2019
Bank Ratings	S&P	Moody's	Fitch	Scope
Counterparty Rating/ Assessment1	A	A1/ A1 (cr)	A- (dcr)	-
Deposit Rating2	A- negative	A1 stable	A-	-
Issuer Credit Rating (long-term debt)	A- negative	A1 stable	BBB+ stable	A stable
Stand-alone Rating (financial strength)	bbb+	baa2	bbb+	-
Short-term debt	A-2	P-1	F2	S-1
Product Ratings (unsecured issuances)
Preferred senior unsecured debt	A- negative	A1 stable	A-	A stable
Non-preferred senior unsecured debt	BBB	Baa1	BBB+ stable	A- stable
Subordinated debt (Tier 2)	BBB-	Baa3	BBB	BBB stable

Rating events 2018

• › Q2 2018: Moody's assigned the new Counterparty Risk Rating of "A2". S&P Global assigned the new Resolution Counterparty Rating of "A"
• › Q3 2018: Moody's upgraded counterparty risk rating, deposit rating and "preferred" senior unsecured debt rating to "A1" and subordinated debt rating to "Baa3" triggered by an uplift of the stand-alone Rating by 1 Notch to "baa2" Methodical change: issuer credit rating positioned at "preferred" senior unsecured rating level and increased therefore by 3 notches to "A1"

Rating events 2019

› Fitch confirmed Commerzbank's ratings in a regular rating review in January 2019

• 1) Includes client business (i.e. counterparty for derivatives)

32

IAS 19: Development of pension obligations

Additional information

• › Pension obligations decreased YtD mainly due to regular benefits paid
• › The discount rate is derived from a AA rated corporate bond basket yield with average duration of 18 years
• › The average funding ratio (plan assets vs. pension obligations) of all Group plans is 93.2%
• › Value of plan assets decreased due to market developments, resulting in a negative YtD OCI capital effect of -€286m after tax

Strengthening of USD with net negative impact on capital ratio

Explanation

• › QoQ the EUR weakened by -1.1% against the USD resulting in +€0.3bn higher Credit Risk RWA
• › Due to USD strengthening the currency translation reserve for USD increased by +€10m impacting the CET1 ratio
• › Negative impact of USD strengthening on CET1 ratio due to higher Credit Risk RWA not compensated by increasing currency translation reserve in USD

Residential mortgage business vs. property prices

Source: Immobilienscout24, Commerzbank Research

› Prices of houses and flats, existing stock and newly constructed dwellings, averages, index: March 2007 = 100; Munich (MUC), Berlin (BER), Hamburg (HAM), Frankfurt (FRA), Cologne (COL)

• › Growing mortgage volume with a very good risk quality:
• 12/15: EaD €62.6bn RD 12bp
• 12/16: EaD €66.8bn RD 10bp
• 12/17: EaD €75.2bn RD 9bp
• 12/18: EaD €81.0bn RD 9bp
• › Rating profile with a share of 90% in investment grade ratings
• › Vintages of recent years developed more favourably so far and NPLs remain at a low level
• › Due to risk-oriented selection, RD still very low
• › As a consequence of low interest rates, repayment rates remain on a very high level
• › Average "Beleihungsauslauf" (BLA) in new business of 84% in 2018. German BLA is more conservative than the internationally used LtV definition due to the application of the strict German Pfandbrief law

Risk parameters still on very good level, loan decisions remain conservative

We are a leading German provider of Renewable Energy Project Finance funding and will become Germany's most sustainable commercial bank

Commerzbank's Sustainability Ratings¹

Stephan Engels | CFO | Frankfurt | 14 February 2019

Commerzbank Group

	Q1	Q2	Q3	Q4	FY	Q1	Q2	Q3	Q4	FY
€m	2017	2017	2017	2017	2017	2018	2018	2018	2018	2018
Total clean revenues	2,160	1,956	1,926	2,165	8,208	2,216	2,160	2,122	2,151	8,648
Exceptional items	108	8	502	-60	557	1	18	18	-115	-78
Total revenues	2,268	1,964	2,428	2,105	8,764	2,217	2,178	2,140	2,035	8,570
o/w Net interest income	1,064	1,035	1,065	1,132	4,295	1,098	1,190	1,223	1,237	4,748
o/w Net commission income	889	786	739	778	3,192	802	763	771	754	3,089
o/w Net fair value result	266	149	137	46	598	203	200	85	-121	366
o/w Other income	49	-5	486	149	679	115	25	62	166	367
o/w Dividend income	28	27	17	34	106	14	6	9	6	36
o/w Net income from hedge accounting	-33	-53	-7	8	-85	-16	36	6	22	48
o/w Other result from realisation and measurement (2017 only)	-3	-14	-29	-29	-76	-	-	-	-	-
o/w Other financial result	47	25	83	89	244	-19	3	6	35	26
o/w At equity result	7	9	5	2	23	6	3	1	2	12
o/w Other net income	3	1	417	45	466	129	-24	40	101	245
Risk result (2017: Provision for possible loan losses)	-195	-167	-168	-251	-781	-77	-82	-133	-154	-446
Operating expenses	1,795	1,656	1,652	1,731	6,834	1,882	1,694	1,661	1,641	6,879
o/w European bank levy / Polish banking tax	179	37	22	18	256	209	23	17	23	273
Operating profit	278	141	609	122	1,149	258	401	346	240	1,245
Restructuring expenses	-	807	-	-	808	-	-	-	-	-
Pre-tax profit discontinued operations	49	39	14	16	118	42	-12	-15	-30	-15
Pre-tax profit Commerzbank Group	326	-628	623	137	459	301	389	331	210	1,230
Taxes on income	81	-13	134	35	237	5	94	89	75	262
Minority Interests	20	25	21	27	94	34	23	24	22	103
Consolidated Result attributable to Commerzbank shareholders	226	-640	467	75	128	262	272	218	113	865
Total Assets	490,262	487,266	489,925	452,495	452,495	470,013	487,518	493,203	462,369	462,369
o/w Discontinued operations	-	-	-	-	-	-	-	-	12,996	12,996
Average capital employed	23,375	23,390	23,463	24,074	23,609	22,468	22,640	23,097	23,399	22,886
RWA credit risk (end of period)	144,074	140,530	138,204	136,155	136,155	136,014	141,648	142,633	145,229	145,229
RWA market risk (end of period)	19,159	16,395	14,333	12,090	12,090	10,987	10,673	11,507	10,801	10,801
RWA operational risk (end of period)	21,669	20,549	22,722	21,041	21,041	21,090	21,297	21,685	21,393	21,393
RWA (end of period) continued operations	184,903	177,474	175,259	169,285	169,285	168,091	173,618	175,825	177,423	177,423
RWA (end of period) discontinued operations	1,259	989	1,338	1,734	1,734	1,999	1,890	2,535	3,075	3,075
RWA (end of period)	186,162	178,464	176,597	171,019	171,019	170,090	175,508	178,360	180,498	180,498
Cost/income ratio (%)	79.2%	84.3%	68.0%	82.3%	78.0%	84.9%	77.8%	77.6%	80.6%	80.3%
Operating return on CET1 (%)	4.8%	2.4%	10.4%	2.0%	4.9%	4.6%	7.1%	6.0%	4.1%	5.4%
Operating return on tangible equity (%)	4.1%	2.1%	9.1%	1.8%	4.3%	4.0%	6.1%	5.3%	3.6%	4.8%
Return on equity of net result (%)	3.2%	-8.9%	6.6%	1.0%	0.4%	3.8%	3.9%	3.1%	1.6%	3.1%
Net return on tangible equity (%)	3.5%	-9.8%	7.3%	1.2%	0.5%	4.2%	4.3%	3.5%	1.8%	3.4%

Stephan Engels | CFO | Frankfurt | 14 February 2019 36

Private and Small Business Customers

€m	Q1 2017	Q2 2017	Q3 2017	Q4 2017	FY 2017	Q1 2018	Q2 2018	Q3 2018	Q4 2018	FY 2018
Total clean revenues	1,165	1,108	1,123	1,216	4,613	1,211	1,225	1,226	1,185	4,847
Exceptional items	-	1	237	-29	210	25	-25	-22	-23	-44
Total revenues	1,165	1,110	1,360	1,188	4,823	1,236	1,200	1,204	1,163	4,803
o/w Net interest income	567	574	583	627	2,351	616	644	649	667	2,576
o/w Net commission income	543	476	464	488	1,971	508	471	483	465	1,927
o/w Net fair value result	39	36	37	36	148	32	54	48	26	160
o/w Other income	16	24	277	36	354	80	32	24	4	140
o/w Dividend income	4	7	4	9	24	2	2	7	-1	10
o/w Net income from hedge accounting	-	-1	-1	-1	-2	-	-1	-1	1	-1
o/w Other result from realisation and measurement (2017 only)	-	-3	-1	-8	-12	-	-	-	-	-
o/w Other financial result	6	6	93	16	119	11	20	9	8	48
o/w At equity result	-	2	-	-	2	-	1	-1	-	-
o/w Other net income	7	14	182	21	224	67	10	10	-5
Risk result (2017: Provision for possible loan losses)	-33	-43	-55	-24	-154	-49	-66	-69	-49	-233
Operating expenses	941	927	926	1,016	3,811	984	961	949	941	3,835
o/w European bank levy / Polish banking tax	63	27	22	23	136	71	23	24	24	141
Operating profit	191	140	380	147	858	203	174	186	172	735
Restructuring expenses	-	-	-	-	-	-	-	-	-	-
Pre-tax profit	191	140	380	147	858	203	174	186	172	735
Total Assets	120,494	123,068	125,528	128,280	128,280	130,561	131,846	136,646	138,409	138,409
Liabilities	143,656	147,131	149,196	152,028	152,028	155,262	160,259	164,992	169,933	169,933
Average capital employed	4,327	4,389	4,619	4,704	4,509	4,633	4,676	4,787	4,902	4,751
RWA credit risk (end of period)	28,604	30,927	32,351	32,591	32,591	32,897	33,529	34,643	35,523	35,523
RWA market risk (end of period)	845	786	831	851	851	876	782	802	780	780
RWA operational risk (end of period)	6,424	6,010	6,023	5,092	5,092	5,024	5,012	5,033 5,111		5,111
RWA (end of period)	35,873	37,722	39,205	38,534	38,534	38,797	39,323	40,478	41,414	41,414
Cost/income ratio (%)	80.8%	83.6%	68.0%	85.6%	79.0%	79.6%	80.0%	78.8%	81.0%	79.8%
Operating return on CET1 (%)	17.7%	12.8%	32.9%	12.5%	19.0%	17.5%	14.8%	15.5%	14.1%	15.5%
Operating return on tangible equity (%)	16.9%	12.3%	31.8%	12.2%	18.4%	17.2%	14.6%	15.1%	13.8%	15.1%

Corporate Clients

	Q1	Q2	Q3	Q4	FY	Q1	Q2	Q3	Q4	FY
€m	2017	2017	2017	2017	2017	2018	2018	2018	2018	2018
Total clean revenues	953	853	882	896	3,584	872	916	850	857	3,495
Exceptional items	32	-8	9	-3	29	-1	-8	15	-49	-43
Total revenues	985	845	891	893	3,613	871	908	865	808	3,451
o/w Net interest income	498	437	444	458	1,837	426	444	464	484	1,818
o/w Net commission income	351	321	281	305	1,258	300	298	295	299	1,191
o/w Net fair value result	125	64	161	126	475	108	193	101	21	422
o/w Other income	11	23	4	4	42	38	-28	5	5	21
o/w Dividend income	18	3	2	2	25	10	-3	5	3	14
o/w Net income from hedge accounting	-1	-2	-	2	-	-1	2	-1	3	3
o/w Other result from realisation and measurement (2017 only)	-7	-4	-9	-18	-38	-	-	-	-	-
o/w Other financial result	-1	5	-1	10	12	1	-2	-5	-16	-22
o/w At equity result	7	7	5	2	21	6	2	2	2	12
o/w Other net income	-5	14	7	5	21	22	-27	5	13	14
Risk result (2017: Provision for possible loan losses)	-43	-33	-47	-172	-295	-25	-37	-60	-71	-194
Operating expenses	720	614	620	687	2,642	744	650	620 615		2,628
o/w European bank levy	83	4	-	-5	82	91	-	-7	-	84
Operating profit	221	197	223	34	676	102	221	184	122	629
Restructuring expenses	-	-	-	-	-	-	-	-	-	-
Pre-tax profit discontinued operations	49	39	14	16	118	42	-12	-15	-30	-15
Pre-tax profit (total)	270	236	237	50	794	144	209	169	92	614
Total Assets	208,694	198,179	189,753	173,011	173,011	176,752	187,193	189,891	179,330	179,330
o/w Discontinued operations	-	-	-	-	-	-	-	-	12,996	12,996
Liabilities	235,082	231,222	215,009	196,709	196,709	195,180	196,613	193,378	178,988	178,988
o/w Discontinued operations	-	-	-	-	-	-	-	-	12,375	12,375
Average capital employed	12,099	11,256	10,938	10,664	11,254	10,414	10,648	11,127	11,346	10,870
RWA credit risk (end of period)	78,444	75,213	74,690	72,332	72,332	72,449	76,507	78,247	78,493	78,493
RWA market risk (end of period)	8,442	7,217	5,862	4,614	4,614	4,635	4,702	5,007	4,566	4,566
RWA operational risk (end of period)	9,765	9,552	10,230	9,469	9,469	10,092	10,338 11,562		11,449	11,449
RWA (end of period) continued operations	96,651	91,982	90,782	86,415	86,415	87,176	91,547	94,817	94,507	94,507
RWA (end of period) discontinued operations	1,259	989	1,338	1,734	1,734	1,999	1,890	2,535	3,075	3,075
Cost/income ratio (%)	73.1% 72.7% 69.6% 76.9% 73.1% 85.4% 71.6% 71.7% 76.1%		76.2%
Operating return on CET1 (%)	7.3%	7.0%	8.2%	1.3%	6.0%	3.9%	8.3%	6.6%	4.3%	5.8%
Operating return on tangible equity (%)	6.7%	6.4%	7.5%	1.2% 5.5% 3.6% 7.7% 6.2%				4.1%	5.4%

Asset & Capital Recovery

€m	Q1 2017	Q2 2017	Q3 2017	Q4 2017	FY 2017	Q1 2018	Q2 2018	Q3 2018	Q4 2018	FY 2018
Total clean revenues	24	22	-25	54	75	68	10	2	22	103
Exceptional items	91	16	18	-29	96	-23	52	26	-43	12
Total revenues	115	39	-7	24	170	45	62	28	-20	114
o/w Net interest income	34	47	27	75	183	14	16	18	12	61
o/w Net commission income	-	-	-	1	2	-	-	1	-	1
o/w Net fair value result	72	8	-11	-41	28	67	51	-6	-78	35
o/w Other income	8	-16	-24	-10	-42	-37	-6	16	45	17
o/w Dividend income	-	-	-	-	-	-	-	1	-1	-
o/w Net income from hedge accounting	-4	-17	-7	-6	-34	-5	3	2	1	1
o/w Other result from realisation and measurement (2017 only)	-1	-5	-22	-5	-32	-	-	-	-	-
o/w Other financial result	-	-	-	4	4	-40	-14	6	40	-7
o/w At equity result	-	-	-	-	-	-	- -		-	-
o/w Other net income	13	5	5	-3	21	7 5		6	5	23
Risk result (2017: Provision for possible loan losses)	-119	-92	-65	-59	-336	-2	16	2	-23	-8
Operating expenses	29	28	22	19	98	27	17	16	12	72
o/w European bank levy	5	3	-	-	7	10	-	-	-	10
Operating profit	-33	-82	-94	-54	-264	16	60	14	-56	34
Restructuring expenses	-	-	-	-	-	-	-	-	-	-
Pre-tax profit	-33	-82	-94	-54	-264	16	60	14	-56	34
Total Assets	25,905	24,876	23,583	24,374	24,374	21,374	19,446	18,365	18,904	18,904
o/w Assets excl repos, collaterals and trading assets	11,143	9,670	8,804	9,222	9,222	9,632	8,841	8,215	7,985	7,985
Liabilities	19,599	19,368	19,264	19,903	19,903	18,735	17,040	16,316	17,034	17,034
Exposure at default	16,107	15,253	14,278	14,039	14,039	10,794	9,827	9,226	8,916	8,916
Average capital employed	3,165	3,182	2,916	2,751	2,982	2,483	2,254	2,054	1,883	2,174
RWA credit risk (end of period)	15,384	13,710	12,809	12,538	12,538	10,717	9,778	9,319	8,806
RWA market risk (end of period)	5,598	4,649	4,288	3,302	3,302	2,802	2,203	2,060	1,965	1,965
RWA operational risk (end of period)	1,786	1,720	1,968	2,127	2,127	2,334	2,386	1,263	1,305	1,305
RWA (end of period)	22,768	20,079	19,064	17,967	17,967	15,853	14,367	12,643	12,075	12,075

Others & Consolidation

€m	Q1 2017	Q2 2017	Q3 2017	Q4 2017	FY 2017	Q1 2018	Q2 2018	Q3 2018	Q4 2018	FY 2018
Total clean revenues	18	-28	-54	-1	-65	65	9	43	86	204
Exceptional items	-15	-1	238	1	222	-	-	-1	-1	-2
Total revenues	3	-29	184	-	158	66	8	43	85	202
o/w Net interest income	-35	-22	10	-28	-75	42	85	93	73	293
o/w Net commission income	-5	-12	-6	-15	-38	-7	-6	-8	-10	-30
o/w Net fair value result	30	41	-49	-75	-53	-4	-98	-58	-90	-251
o/w Other income	14	-36	229	118	325	34	27	16	112	189
o/w Dividend income	6	17	12	22	57	3	8	-4	5	12
o/w Net income from hedge accounting	-28	-34	1	13	-49	-11	33	6	17	46
o/w Other result from realisation and measurement (2017 only)	5	-3	2	2	6	-	-	-	-	-
o/w Other financial result	43	14	-9	60	109	9	-	-4	3	7
o/w At equity result	-	-	-	-	-	-	-	-	-	-
o/w Other net income	-12	-31	223	22	201	33	-13 18		87	125
Risk result (2017: Provision for possible loan losses)	-	-	-	4	4	-1	5	-4	-10	-11
Operating expenses	105	86	84	9	284	127	67	76	73	344
o/w European bank levy	28	2	-	1	31	37	-	-	-	37
Operating profit	-102	-115	100	-5	-122	-62	-54	-38	2	-153
Restructuring expenses	-	807	-	-	808	-	-	-	-	-
Pre-tax profit	-102	-922	100	-6	-929	-62	-54	-38	2	-153
Total Assets	135,169	141,143	151,060	126,831	126,831	141,326	149,033	148,301	125,727	125,727
Liabilities	91,924	89,545	106,456	83,856	83,856	100,836	113,606	118,517	96,415	96,415
Average capital employed	3,783	4,563	4,989	5,956	4,864	4,941	5,061	5,129	5,268	5,091
RWA credit risk (end of period)	21,643	20,680	18,354	18,694	18,694	19,950	21,834	20,423	22,408	22,408
RWA market risk (end of period)	4,274	3,743	3,352	3,323	3,323	2,674	2,986	3,638	3,490	3,490
RWA operational risk (end of period)	3,695	3,267	4,502	4,352	4,352	3,640	3,561	3,827	3,529	3,529
RWA (end of period)	29,612	27,690	26,207	26,369	26,369	26,264	28,381	27,887	29,427	29,427

mBank

Part of Segment Private and Small Business Customers

€m	Q1 2017	Q2 2017	Q3 2017	Q4 2017	FY 2017	Q1 2018	Q2 2018	Q3 2018	Q4 2018	FY 2018
Total clean revenues	241	243	254	260	998	253	265	265	257	1,040
Exceptional items	-	-	-	-	-	52	-	-	-1	52
Total revenues	241	243	254	261	998	305	265	266	257	1,092
o/w Net interest income	143	151	160	166	619	158	167	172	176	673
o/w Net commission income	59	61	62	58	239	65	59	56	52	233
o/w Net fair value result	36	32	33	34	135	31	40	38	22	131
o/w Other income	3	-1	-1	4	5	51	-	-1	6	55
o/w Dividend income	-	1	-	-	1	-	1	-	-	1
o/w Net income from hedge accounting	-	-1	-1	-1	-2	-	-1	-1	1	-1
o/w Other result from realisation and measurement (2017 only)	-	-3	-	-	-3	-	-	-	-	-
o/w Other financial result	-	-1	-2	4	1	1	-	-	2	4
o/w At equity result	-	-	-	-	-	-	-	-	-	-
o/w Other net income	2	4	2	-	9	49	1	- 2		52
Risk result (2017: Provision for possible loan losses)	-19	-28	-38	-33	-119	-18	-48	-35	-20
Operating expenses	155	146	142	152	595	173	149	154	149	625
o/w European bank levy / Polish banking tax	44	26	22	23	116	47	23	24	24	117
Operating profit	66	69	74	75	285	113	68	77	88	346
Restructuring expenses	-	-	-	-	-	-	-	-	-	-
Pre-tax profit	66	69	74	75	285	113	68	77	88	346
Total Assets	30,708	30,564	30,745	31,381	31,381	31,505	31,734	34,408	33,802	33,802
Liabilities	27,674	27,401	27,636	29,001	29,001	29,621	29,881	32,075	32,048	32,048
Average capital employed	1,807	1,842	1,897	1,945	1,874	1,956	2,028	2,094	2,129	2,049
RWA credit risk (end of period)	13,255	13,579	14,108	14,246	14,246	14,553	14,880	15,681	15,694	15,694
RWA market risk (end of period)	401	369	389	404	404	453	419	367	411
RWA operational risk (end of period)	1,477	1,491	1,598	1,449	1,449	1,702	1,707	1,777 1,524		1,524
RWA (end of period)	15,133 15,439 16,095 16,100 16,100		16,707	17,005	17,825	17,629	17,629
Cost/income ratio (%)	64.6%	59.9%	55.8%	58.4%	59.6%	56.8%	56.4%	58.1%	57.9%	57.3%
Operating return on CET1 (%)	14.6%	15.0%	15.6%	15.5%	15.2%	23.2%	13.4%	14.6%	16.6%	16.9%
Operating return on tangible equity (%)	14.0%	14.6%	15.4%	15.4%	14.9%	23.0%	13.3%	14.2%	16.3%	16.6%

Commerzbank Group

Exceptional Revenue Items

	Q1	Q2	Q3	Q4	FY	Q1	Q2	Q3	Q4	FY
€m	2017	2017	2017	2017	2017	2018	2018	2018	2018	2018
Exceptional Revenue Items	108	8	502	-60	557	1	18	18	-115	-78
o/w Net interest income	-9	-5	-24	-37	-75	-26	-17	-20	-17	-80
o/w Net fair value result	117	13	36	-23	142	14	50	31	-139	-44
o/w Other income	-	-	490	-	490	14	-14	7	40	46
o/w FVA, CVA / DVA, OCS, Other ACR valuations (NII, NFVR)	108	8	28	-32	111	-24	43	41	-95	-36
PSBC	-	1	237	-29	210	25	-25	-22	-23	-44
o/w Net interest income	-	-	-28	-29	-57	-27	-25	-23	-21	-95
o/w Net fair value result	-	1	1	-	2	-	-	1	-2	-2
o/w Other income	-	-	265	-	265	52	-	-	-	52
o/w FVA, CVA / DVA (NII, NFVR)	-	1	1	-	2	-	-	1	-2	-2
CC	32	-8	9	-3	29	-1	-8	15	-49	-43
o/w Net interest income	3	-5	-	-8	-10	1	-	-2	-2	-3
o/w Net fair value result	29	-3	9	5	39	-1	-8	16	-47	-40
o/w Other income	-	-	-	-	-	-	-	-	-	-
o/w FVA, CVA / DVA, OCS (NII, NFVR)	32	-8	9	-3	29	-1	-8	15	-49	-43
ACR	91	16	18	-29	96	-23	52	26	-43	12
o/w Net interest income	-	-	-1	-	-1	-	7	5	6	17
o/w Net fair value result	91	16	18	-29	96	15	59	15	-89	-
o/w Other income	-	-	-	-	-	-38	-14	7	40	-6
o/w FVA, CVA / DVA, Other ACR valuations (NII, NFVR)	91	16	18	-29	96	-23	52	26	-43	12
O&C	-15	-1	238	1	222	-	-	-1	-1	-2
o/w Net interest income	-12	-	5	-	-7	-	-	-	-	-
o/w Net fair value result	-3	-1	8	1	5	-	-	-1	-1	-2
o/w Other income	-	-	225	-	225	-	-	-	-	-
o/w FVA, CVA / DVA (NII, NFVR)	-15	-1	1	1	-15	-	-	-1	-1	-2

Description of Exceptional Revenue Items

2017	€m	2018	€m	2018	€m
Q3 Concardis (PSBC)	89	Q1 PPA Consumer Finance (PSBC)	-27	Q3 PPA Consumer Finance (PSBC)	-23
Q3 Consumer Finance Joint Venture incl PPA (PSBC, O&C) 160		Q1 Polish group insurance business (PSBC)	52	Q4 PPA Consumer Finance (PSBC)	-21
Q3 Property sales gains (O&C)	225	Q2 PPA Consumer Finance (PSBC)	-25
Q4 PPA Consumer Finance (PSBC)	-29

Group equity composition

	Capital Q3 2018 End of period €bn	Capital Q4 2018 End of period €bn	Capital Q4 2018 Average €bn			Ratios Q4 2018 %	Ratios FY 2018 %		Ratio FY 2018 %
Common equity tier 1 B3 capital	23.5	23.2	23.4 1		Op. RoCET	4.1%	5.4%	CET1 ratio	12.9%
DTA	1.2	1.2
Deductions on securitizations	0.2	0.2
Deductions related to non-controlling interests	0.4	0.4
IRB shortfall	0.2	0.2
Other regulatory adjustments	1.0	1.0
Tangible equity	26.5	26.3	26.4 1		Op. RoTE	3.6%	4.8%
Goodwill and other intangible assets	2.8	2.8	2.8		Pre-tax RoE	3.3%	4.3%
IFRS capital	29.4	29.2	29.3 1		Op. RoE	3.3%	4.3%
Subscribed capital	1.3	1.3
Capital reserve	17.2	17.2
Retained earnings 2	9.2	8.9
Currency translation reserve	-0.2	-0.3
Revaluation reserve	0.1	-0.0
Cash flow hedges	-0.0	-0.0
Consolidated P&L	0.8	0.9
IFRS capital without non-controlling interests	28.2	28.0	28.1 1		RoE on net result	1.6%	3.1%
Non-controlling interests (IFRS)	1.2	1.2	1.2		RoTE on net result	1.8%	3.4%

• 1) Includes consolidated P&L reduced by dividend accrual

Glossary – Capital Allocation / RoE, RoTE & RoCET1 Calculation

Capital Allocation	› › › ›	Amount of average capital allocated to business segments is calculated by multiplying the segments current YtD average RWA (PSBC €39.6bn, CC €92.8bn, O&C €27.2bn, ACR €14.5bn) by a ratio of 12% (and 15% for ACR respectively) - reflecting current regulatory and market standard Excess capital reconciling to Group CET1 Basel 3 fully phased-in is allocated to Others & Consolidation CET1 capital allocation is disclosed in the business segment reporting of Commerzbank Group For the purposes of calculating the segmental RoTE, average regulatory capital deductions (excluding Goodwill and other intangibles) are allocated to the business segments additionally (PSBC €0.1bn, CC €0.8bn, O&C €2.0bn, ACR €0.4bn)
RoE, RoTE, RoCET1 Calculation	› › › ›	RoE is calculated on an average level of IFRS capital on Group level and on an average level of 12% (and 15% for ACR respectively) of the RWAs on segmental level RoTE is calculated on an average level of IFRS capital after deduction of goodwill and other intangible assets on Group level and on an average level of 12% (and 15% for ACR respectively) of the RWAs after addition of capital deductions (excluding goodwill and other intangible assets) on segmental level RoTE calculation represents the current market standard RoCET1 is calculated on average CET1 capital

For more information, please contact Commerzbank's IR team

Christoph Wortig (Head of Investor Relations) P: +49 69 136 52668 M: christoph.wortig@commerzbank.com

Mail: ir@commerzbank.com www.ir.commerzbank.com

Ansgar Herkert (Head of IR Communications) P: +49 69 136 44083 M: ansgar.herkert@commerzbank.com

Investors and Financial Analysts

Michael H. Klein

P: +49 69 136 24522 M: michael.klein@commerzbank.com

Jutta Madjlessi

P: +49 69 136 28696 M: jutta.madjlessi@commerzbank.com

Dirk Bartsch (Head of Strategic IR / Rating Agency Relations / ESG)

P: +49 69 136 22799

M: dirk.bartsch@commerzbank.com

Disclaimer

This presentation contains forward-looking statements. Forward-looking statements are statements that are not historical facts; they include, inter alia, statements about Commerzbank's beliefs and expectations and the assumptions underlying them. These statements are based on plans, estimates, projections and targets as they are currently available to the management of Commerzbank. Forward-looking statements therefore speak only as of the date they are made, and Commerzbank undertakes no obligation to update any of them in light of new information or future events. By their very nature, forward-looking statements involve risks and uncertainties. A number of important factors could therefore cause actual results to differ materially from those contained in any forward-looking statement. Such factors include, among others, the conditions in the financial markets in Germany, in Europe, in the United States and elsewhere from which Commerzbank derives a substantial portion of its revenues and in which it hold a substantial portion of its assets, the development of asset prices and market volatility, potential defaults of borrowers or trading counterparties, the implementation of its strategic initiatives and the reliability of its risk management policies.

In addition, this presentation contains financial and other information which has been derived from publicly available information disclosed by persons other than Commerzbank ("external data"). In particular, external data has been derived from industry and customer-related data and other calculations taken or derived from industry reports published by third parties, market research reports and commercial publications. Commercial publications generally state that the information they contain has originated from sources assumed to be reliable, but that the accuracy and completeness of such information is not guaranteed and that the calculations contained therein are based on a series of assumptions. The external data has not been independently verified by Commerzbank. Therefore, Commerzbank cannot assume any responsibility for the accuracy of the external data taken or derived from public sources.

Copies of this document are available upon request or can be downloaded from https://www.commerzbank.de/en/hauptnavigation/aktionaere/investor_relations.html