Commerzbank AG — Interim / Quarterly Report 2013

Mar 31, 2013

Q1/2013

Interim Report as at 31 March 2013

Key figures

Income statement	1.1.– 31.3.2013	1.1.– 31.3.20121
Operating profit (€m)	469	576
Operating profit per share (€)	0.08	0.10
Pre-tax profit or loss (€m)	– 24	542
Consolidated profit or loss2 (€m)	– 94	355
Earnings per share (€)	– 0.02	0.06
Operating return on equity3 (%)	6.5	8.2
Cost/income ratio in operating business (%)	70.1	69.4
Return on equity of consolidated profit or loss2,3,4 (%)	– 1.4	5.2
Balance sheet	31.3.2013	31.12.2012
Total assets (€bn)1	647.3	636.0
Risk-weighted assets (€bn)	209.8	208.1
Equity as shown in balance sheet (€bn)1	26.4	26.3
Total capital as shown in balance sheet (€bn)1	39.9	40.2
Capital ratios
Tier I capital ratio (%)	12.6	13.1
Core Tier I capital ratio5 (%)	11.5	12.0
Equity Tier I ratio6 (%)	10.7	11.2
Total capital ratio (%)	17.2	17.8
Staff	31.3.2013	31.3.2012
Germany	42,101	43,654
Abroad	11,967	13,479
Total	54,068	57,133
Long/short-term rating
Moody's Investors Service, New York	Baa1/P-27	A2/P-1
Standard & Poor's, New York	A/A-18	A/A-1
Fitch Ratings, New York/London	A+/F1+	A+/F1+

Operating profit1 (€m) Return on equity of consolidated profit or loss1,2,3,4 (%)

¹ Restatement of prior-year figures due to the first-time application of the amended IAS 19. ² Insofar as attributable to Commerzbank shareholders. ³ Annualized. ⁴ The capital base comprises the average Group capital attributable to Commerzbank shareholders without the average revaluation reserve and the cash flow hedge reserve (investors' capital). ⁵ The core Tier I capital ratio is the ratio of core Tier I capital (ordinary shares, retained earnings and silent participations) to risk-weighted assets. ⁶ The equity Tier I ratio is the ratio of Tier I capital (core Tier I capital excluding silent participations) to risk-weighted assets. ⁷ Already includes the downgrading of the long-term rating on 23 April 2013. ⁸ "Credit Watch Negative" rating since February 2013.

Contents

4 To our Shareholders

• 4 Letter from the Chairman of the Board of Managing Directors
• 6 Our share

8 Interim Management Report

• 9 Business and overall conditions
• 11 Earnings performance, assets and financial position
• 17 Segment reporting
• 24 Outlook and opportunities report
• 29 Report on events after the reporting period

30 Interim Risk Report

• 31 Risk-oriented overall bank management
• 33 Default risk
• 47 Market risk
• 50 Liquidity risk
• 52 Operational risk
• 53 Other risks

54 Interim Financial Statements

• 55 Statement of comprehensive income
• 58 Balance sheet
• 60 Statement of changes in equity
• 63 Cash flow statement (condensed version)
• 64 Selected notes
• 107 Boards of Commerzbank Aktiengesellschaft
• 108 Review report

109 Significant subsidiaries and associates

Letter from the Chairman of the Board of Managing Directors

Martin Blessing Chairman of the Board of Managing Directors

This year Commerzbank will focus on implementing our strategic agenda. We shall be working our way down our task list in a very disciplined way during the year. Although our strategic growth initiatives have not yet resulted in decisive successes – which is only to be expected since they were launched just a few months ago – some preliminary initiatives are already bearing fruit, especially in private customer business. In homebuild financing, for example, the volume of new business rose markedly in the first few months of this year compared with the same period of last year.

Operating earnings for the first three months are so far in line with our expectations for 2013 as a whole. Although at the start of the year our customers felt somewhat less uncertain generally, as did capital market participants, and net commission income almost reached the same level as the previous year, it is still too soon to speak of an underlying trend reversal. Persistently low interest rates continued to have a negative impact on the earnings of the Core Bank. In the first quarter of 2013 we achieved an operating result of €469m, compared with €576m in the same period of the previous year. We made pleasing progress in the Non-Core Assets segment, where risks and non-strategic assets were further reduced in line with strategy. It was possible to make use of the favourable conditions by reducing the portfolio of long-term financing in a value-maximising manner. We are still on track with our aim of setting free capital from the non-core business areas over the medium term so that it can be used to increase profitability in the Core Bank with an improved risk/return ratio.

In our strategic agenda we stated clearly that we are adjusting our current personnel capacities to the changing market environment and the present weak level of customer demand. The necessary job cuts will apply to all areas of the Bank. In January the Bank informed the central staff council of the plans to implement the strategic agenda up to 2016; the official negotiations regarding Commerzbank AG Germany commenced in early April. As previously announced in the report on the fourth quarter of 2012, we booked restructuring expenses of about €500m in the first quarter in connection with the job cuts in the Group. This had a corresponding impact on pre-tax profit.

At the same time we shall also be investing €2bn by 2016 and actually increasing the number of staff in some areas of the Bank which show definite growth potential.

In addition, at our Annual General Meeting on 19 April 2013 we prepared the way for entering the exit stage of the Federal Government's engagement in Commerzbank – and my colleagues on the Board of Managing Directors join me in acknowledging that in so doing we are placing considerable demands on you.

We shall use the capital measure to reduce all the constituent parts of the Federal Government's engagement that we can actively repay. As a result yearly coupon payments will no longer become due, which will have a direct impact on the Bank's ability to pay future dividends, and the implementation of the capital measure will also lead to a further improvement in our capital base. However, our shareholder structure will also normalise in consequence.

I should like to assure you, our valued shareholders, that even though there is long way to go before our strategic growth objectives have been completely attained, the first steps have already been taken and we are firmly convinced that the measures we have introduced will place your Bank on the right path and bring success. We shall keep you regularly informed about the milestones achieved.

Martin Blessing, Chairman of the Board of Managing Directors

Development of Commerzbank shares

The mood on the market was positive from the second half of last year – helped by the upturn in the US economy – and this continued at the start of 2013. In January 2013 stock market performance was supported by good economic figures from China and cautiously optimistic forecasts from the European Central Bank on the economy in the eurozone. Against this backdrop, the Commerzbank share hit a quarterly high of €1.73 in mid-January. However, in February political concerns in the eurozone had a negative impact on the stock markets and the bank index. Allegations of corruption against the Spanish government and uncertainty over the outcome of the parliamentary elections in Italy and how the new government would be formed led to the DAX losing all its January gains at the start of February. The EURO STOXX Banks Index lost ground in February, as did the Commerzbank share price. Following the publication of preliminary figures for the 2012 financial year which were below expectations, the Commerzbank share fell almost 6% to €1.51 on 4 February.

A temporary stabilisation on the equity markets lost steam again as the financial crisis in Cyprus came to a head at the end of the quarter. The uncertain mood of capital market participants was evident from the performance of the Euro STOXX Banks Index, which was down by 8.8% at the end of the quarter. On the other hand the DAX, which had reached a new six-year high of 8,058 points on 14 March, was up by 2.4%.

On 13 March Commerzbank announced that it was planning a combined cash capital increase/capital increase through contributions in kind of €2.5bn with subscription rights in order to repay the silent participations of SoFFin and Allianz early and in full. The capital increase was an item on the agenda of the Commerzbank Annual General Meeting held on 19 April 2013. The Annual General Meeting also decided on a capital reduction by means of a reverse 10-to-1 stock split (see Report on events after the reporting period page 29). In the days following the announcement in mid-March of the planned capital increase, the Commerzbank share price lost around 15% and hovered around the €1.20 mark. The Commerzbank share fell by 19.6% overall in the first quarter of 2013. On the last day of the quarter, the Commerzbank share price stood at €1.15.

6 Our share

The daily turnover of Commerzbank shares – in terms of the number of shares traded – fell by about a quarter in the first three months of 2013 compared with the same period last year. The average daily trading volume was 63.6 million shares (first quarter 2012: 85.0 million). At the peak of trading on 13 March 2013, approximately 321 million shares were traded on German stock exchanges.

Commerzbank's market capitalisation stood at €6.7bn at the end of the first quarter.

Highlights of the Commerzbank share	1.1.–31.3.2013	1.1.–31.3.2012
Shares issued in million units (31.3.)	5,829.5	5,594.1
Xetra intraday prices in €
High	1.73	2.21
Low	1.12	1.17
Closing price (31.3.)	1.15	1.90
Daily trading volume1 in million units
High	320.8	208.5
Low	21.8	22.2
Average	63.6	85.0
Index weighting in % (31.3.)
DAX	0.7	1.3
EURO STOXX Banks	1.8	3.0
Earnings per share in €	– 0.02	0.06
Book value per share2 in € (31.3.)	3.98	4.13
Net asset value per share3 in € (31.3.)	3.72	3.90
Market value/Net asset value (31.3.)	0.31	0.49

1 Total of all German stock exchanges.

2 Excluding silent participations and non-controlling interests. 3

Excluding silent participations, non-controlling interests as well as cash flow hedges and less goodwill.

Interim Management Report

9 Business and overall conditions

• 9 Overall economic situation
• 10 Important business policy events

11 Earnings performance, assets and financial position

• 11 Income statement
• 13 Balance sheet
• 14 Funding and liquidity
• 16 Key figures

17 Segment reporting

• 17 Private Customers
• 18 Mittelstandsbank
• 19 Central & Eastern Europe
• 20 Corporates & Markets
• 21 Non-Core Assets
• 23 Others and Consolidation

24 Outlook and opportunities report

• 24 Future economic situation
• 25 Future situation in the banking sector
• 26 Financial outlook
• 28 General statement on the outlook for the Group

29 Report on events after the reporting period

• 9 Business and overall conditions
• 11 Earnings performance, assets and financial position
• 17 Segment reporting
• 24 Outlook and opportunities report 29 Report on events after the reporting period

Business and overall conditions

Overall economic situation

In the first quarter of 2013 the world economy continued to recover slightly, although the upturn was still neither extensive nor strong. The highest growth rates continued to be posted in the emerging markets, where the easing of monetary policy became increasingly noticeable. Nevertheless, growth rates are still below the figures achieved a year or two ago. In fact China's growth rates actually weakened slightly in the first three months compared with the same period of last year.

The US economy picked up further despite the tax rises which came into effect at the start of this year. Even if the increase of more than 3% for the first quarter exaggerates the underlying trend, there are increasing signs that the US economy is steadily overcoming the effects of earlier excesses, such as the real estate bubble and high levels of consumer debt.

By contrast, the eurozone economy seems to have stagnated at best in the first quarter, although this would still represent an improvement compared with the marked fall in GDP in the previous quarter. Whereas in Germany it was probably only the unusually cold weather that prevented real GDP from rising, the economy of the southern European currency union members deteriorated further.

The periphery countries in particular are still suffering economically from the sovereign debt crisis. Nothing has changed in this respect, although the situation on the financial markets has become calmer since the beginning of the year. The cross-border central bank transfers (TARGET2 balances) of the individual eurozone countries indicate that capital has been flowing into the periphery countries once again despite the recent concerns triggered by the uncertain political situation in Italy and the debate about the Cyprus bailout. On the financial markets this made investors noticeably more willing to take risks, with the result that the DAX momentarily hit a new six-year high, while the euro appreciated strongly against the US dollar and the risk premiums of periphery bonds fell again. However, the political stalemate in Italy and the uncertainty regarding future developments in Cyprus caused the DAX and the euro to decline once again, while risk premiums increased slightly. There was little change in the extremely low yields on ten-year Bunds.

Important business policy events

Commerzbank repays funds from the ECB's three-year tender

At the end of January 2013, Commerzbank repaid in full the €10bn taken up from the first three-year long-term refinancing operation (LTRO) of the European Central Bank (ECB). Commerzbank's subsidiary Hypothekenbank Frankfurt AG had participated in the ECB tender operation for the first time in December 2011.

At the end of February 2013, the €6bn taken up from the ECB's second three-year longterm refinancing operation (LTRO II) was also repaid in full. Entities of the Bank took part in the ECB's tender operations in February 2012 in order to reduce the need for intra-group funding and to fund European sovereign bonds held by the Bank directly in Commerzbank's foreign entities.

As a result of the stabilising measures taken by the ECB, the Bank repaid these funds well before payment became due, as previously announced.

Commerzbank's Board of Managing Directors issues policy statement on the planned staff reduction programme

As part of the cost savings in operating costs and personnel expenses announced in November 2012, the Bank is currently working on the assumption of Group job cuts in the order of 4,000 to 6,000 full-time staff by 2016.

According to a policy statement published on 22 February 2013, there are plans to cut 1,800 jobs in the branch network of the Private Customer business by no later than 31 December 2015. At the end of 2014, the Bank will conduct negotiations with the employee representatives regarding any further measures that may be necessary, on the basis of the strategic growth targets met by that date.

• 9 Business and overall conditions
• 11 Earnings performance, assets and financial position
• 17 Segment reporting 24 Outlook and opportunities report
• 29 Report on events after the reporting period

Earnings performance, assets and financial position

The year 2013 began with an environment that was marked by continuing uncertainty over the European sovereign debt crisis. First-quarter operating profit for the Commerzbank Group came to €469m. That represents a decline versus the first quarter of 2012 owing to lower revenues. The restructuring costs of just under half a billion euros that were booked led to negative consolidated earnings of €–94m after tax and non-controlling interests.

At the end of the first quarter, total assets stood at €647.3bn and risk-weighted assets at €209.8bn. Both figures were up slightly compared with the end of 2012. On the other hand, the portfolio reduction in the Non-Core Assets segment accelerated in the first three months of this year, reaching a volume of €7.3bn. At the end of March 2013, Commerzbank reported a core Tier I ratio of 11.5% and a core capital ratio of 12.6%. The Bank's liquidity position was comfortable throughout the reporting period, which is why in the first quarter of 2013 we repaid the funds from the ECB's tender operations two years before payment became due.

Various new IFRS requirements were implemented in the Commerzbank Group at the beginning of the first quarter of 2013. The prior-year figures have been restated accordingly and a basis of comparison with the equivalent period in the previous year was established. A significant reclassification in terms of amount resulted from the following: interest from trading activities is now reported as net interest income instead of net trading income. Detailed explanations about the changes are given in the notes to the interim financial statements on page 64 ff.

Income statement of the Commerzbank Group

Net interest income fell by 20.0% to €1,356m during the first three months of 2013 compared with the same period of the prior year, with all segments being involved. The decisive factor was that interest rates declined again compared with the previous year. This led to lower margins in the deposit business, particularly in the Mittelstandsbank segment, but also in the Private Customers and Central&Eastern Europe segments. Higher contributions from the lending business far from compensated for this development. There was also a marked reduction in the lending portfolios of the Corporates& Markets and Non-Core Assets segments. Finally, lower interest income from trading activities also contributed because of the change in the reporting method.

The net allocation to loan loss provisions rose by 25.9% compared with the first quarter of 2012, to €267m. The expected increase in the Core Bank, related to Private Customers and Mittelstandsbank segments. The latter still reported a net reversal in provisions in the equivalent period of last year. Loan loss provisions in the Non-Core Assets run-off segment remained largely steady compared with the first quarter of 2012.

Net commission income edged down by 2.0% to €847m during the first three months of this year. This was due to the discontinuation of new business in Non-Core Assets as well as lower corporate finance activity in Corporates&Markets. On the other hand, commission income increased in the Private Customers and Mittelstandsbank segments. The easing of the uncertainty on the financial markets caused a slight upturn in customer activity and thus to higher demand for capital market products. Revenues from securities lending transactions rose as a result.

Net trading income and net income from hedge accounting were up year-on-year, rising by 93.3% to €317m. This increase was attributable to the Corporates& Markets and Non-Core Assets segments. However, the net trading income of Group Treasury – reported in Others and Consolidation – remained significantly below the very high level achieved in the same quarter of the previous year. In Corporates& Markets, the positive remeasurement in the amount of €25m of own liabilities to fair value in line with IFRS led to a marked €182m rise in earnings. In the equivalent period of the previous year, charges of €–157m resulted from this remeasurement. Equity Markets&Commodities contributed to the higher earnings thanks to increased customer activity, as did Credit Portfolio Management and the reclassification of declining interest from trading activities. In the Non-Core Assets segment, the discontinuation of losses from the valuation of derivatives and from credit default swaps resulted in a significantly less negative result for net trading income.

Net income from financial investments came to €–6m. The figure of €–176m reported in the same period of 2012 was caused by losses on disposals from the reduction of the public finance portfolio.

Other net income came to €–62m compared with €21m a year earlier. The charge during the reporting period resulted from net new provisions made in respect of litigation risks.

Operating expenses in the first three months of this year were down 3.7% on the prioryear first quarter at €1,724m. Other operating expense including depreciation fell by 5.6%. This was mainly attributable to lower occupancy expense. Personnel expense edged down by 2.3%, primarily owing to lower expenditure on performance-related remuneration elements.

As a result of the developments described above, the Commerzbank Group posted an operating profit of €469m in the first quarter of the current year, compared with €576m in the same period last year.

In the first quarter of the reporting year, restructuring expenses of €493m were incurred. The reason for this was the planned job cuts, because personnel capacities are being adjusted to the changing market environment during the period to 2016. In the same period of last year, restructuring expenses of €34m were reported in connection with the European Commission requirement to wind down Hypothekenbank Frankfurt AG.

Pre-tax profit came to €–24m, compared with €542m in the same period of 2012.

• 9 Business and overall conditions
• 11 Earnings performance, assets and financial position
• 17 Segment reporting
• 24 Outlook and opportunities report 29 Report on events after the reporting period

Tax expense for the reporting period was €45m, compared with €159m for the first quarter of the previous year. Consolidated profit after tax amounted to €–69m, compared with €383m in the prior-year period. Net of non-controlling interests of €25m, a loss of €–94m was attributable to Commerzbank shareholders.

Operating earnings per share were €0.08 and the earnings per share €–0.02. In the prioryear period the comparable figures were €0.10 and €0.06 respectively.

Consolidated balance sheet

Total assets of the Commerzbank Group amounted to €647.3bn as at 31 March 2013. This slight rise of 1.8% or €11.3bn compared with year-end 2012 was attributable to the higher volume of collateralised money market transactions, which was partially offset by the decline in the cash reserve – particularly balances with central banks.

On the assets side, the rise in volume was mainly visible in claims on banks, which at €102.6bn were significantly higher than the €88.0bn posted at the end of the previous year. The increase of €14.6bn was due in particular to an increase in the reverse repos and cash collaterals held. Claims on customers were up slightly compared with year-end 2012, rising by €1.6bn to €280.1bn. While customer lending business decreased by €7.3bn, money market transactions rose by €9.1bn. At €144.1bn, trading assets were at the same level as at the end of 2012. While bonds and notes and other interest rate-related securities increased by €1.8bn and promissory note loans and equities went up by €7.2bn, the positive market values of derivative financial instruments – mainly interest-rate derivatives – declined by €9.1bn. Financial investments also remained unchanged compared with year-end 2012, at €89.1bn.

On the liabilities side the main effect was an increase in liabilities to banks and customers, which was partially offset by a decrease in securitised liabilities and trading liabilities. Liabilities to banks were up substantially by €18.3bn to €128.5bn, primarily due to a rise in repos and cash collateral business. Liabilities to customers were up compared with year-end 2012, rising by €7.1bn to €272.9bn, particularly at the short end. The €6.3bn decrease in securitised liabilities to €73.0bn versus the end of 2012 is attributable to maturing mortgage and public-sector Pfandbriefe of Hypothekenbank Frankfurt AG. At €110.0bn, trading liabilities were €6.1bn below the 2012 year-end figure. This was due in particular to a decline in negative market values of interest-rate derivatives. In contrast delivery commitments from securities transactions increased.

Equity

The equity capital reported in the balance sheet as at 31 March 2013 was €26.4bn, which was only slightly higher than the restated figure for year-end 2012. The slight increase of €0.1bn resulted mainly from the reduction in actuarial losses owing to the effect of the technical interest rate as well as a contribution from the revaluation reserve. Explanations of the effects of the application are given in the interim financial statements on page 65 ff.

At €8.7bn and €10.9bn respectively, both the capital reserve and retained earnings were unchanged from year-end 2012. Total silent participations were still €2.4bn as at the reporting date. Of this amount, around €1.6bn related to SoFFin's silent participation.

The revaluation reserve, the cash flow hedge reserve and the currency translation reserve were negative at €–2.2bn on the reporting date. This was €0.1bn less than at year-end 2012.

As at 31 March 2013, risk-weighted assets had edged up by €1.7bn compared with yearend 2012, to €209.8bn. The 1.0% increase was largely owing to the rise in risk-weighted assets in the area of market and credit risk. Regulatory Tier I capital fell by €0.8bn compared with the unadjusted year end 2012, to €26.5bn. In conjunction with the slightly higher level of risk-weighted assets the Tier I ratio fell to 12.6%. Core Tier I capital came to €24.2bn, or a ratio of 11.5%. The total capital ratio was 17.2% on the reporting date.

Funding and liquidity

Commerzbank had unrestricted access to the money and capital markets throughout the reporting period; its liquidity and solvency were adequate at all times. It was always able to raise the resources required for a balanced refinancing mix and reported a comfortable liquidity position in the first quarter of 2013.

• 9 Business and overall conditions 11 Earnings performance, assets and financial position
• 17 Segment reporting
• 24 Outlook and opportunities report
• 29 Report on events after the reporting period

In the first quarter of 2013 Commerzbank issued bonds totalling €1.2bn on the capital market. This includes a small- and mid-sized enterprises (SME) Structured Covered Bond with a volume of €0.5bn which was successfully issued by Commerzbank in February. This funding instrument is a contractual construct similar to a Pfandbrief; it is covered by a high-quality portfolio of selected SME loans. The Commerzbank issue has a maturity of five years and is the first transaction of this kind on the capital market.

In addition, private placements totalling €0.7bn with an average maturity of five years were issued in the unsecured segment. About 75% were structured bonds.

After significantly narrowing the funding spreads in the second half of 2012, they were below the average for 2012 in the first three months of 2013 but nevertheless rose slightly again during the quarter as a result of the general market trend.

Group capital market funding in the first three months of 2013 Volume €1.2bn

In order to compensate for unexpected short-term outflows of liquidity, Commerzbank has a central liquidity portfolio of highly liquid securities eligible for central bank borrowing purposes. This centrally managed liquidity portfolio, which is supplemented by freely available cash resources, credit balances with central banks and other liquid securities positions, forms Commerzbank's liquidity reserve. This liquidity reserve rose by around €14bn compared with the end of 2012, to €97.3bn. It thus accounted for about 15% of total assets.

The regulatory provisions applicable to liquidity as set out in the German Liquidity Regulation were complied with at all times during the period under review. At the end of the quarter, Commerzbank Aktiengesellschaft's key liquidity ratio calculated using the German Liquidity Regulation's standard approach was 1.32, still significantly higher than the minimum regulatory requirement of 1.00.

The eurozone money and capital markets were dominated in the reporting period by the early repayment of the ECB's three-year tender operations conducted in December 2011 and February 2012 and by various three-month tender operations. The funds taken up by Hypothekenbank Frankfurt in the first three-year long-term refinancing operation (LTRO) were also repaid by Commerzbank in January 2013. At the end of February, the €6bn taken up from the second three-year long-term refinancing operation (LTRO II) of the European Central Bank (ECB) was also repaid in full.

Thanks to its conservative and forward-looking funding strategy, Commerzbank is still not reliant on central bank liquidity facilities.

Key figures for the Commerzbank Group

As a result of the decline in revenues described above the main profitability ratios of the Commerzbank Group in the first three months of 2013 were down overall on the comparable period of 2012. The operating return on equity fell from 8.2% in the same period of last year to 6.5%. The return on equity based on the consolidated surplus was –1.4%, compared with 5.2% a year earlier. Despite the decline in revenues, the cost/income ratio was up only slightly to 70.1% thanks to reduced costs, compared with 69.4% in the same period of last year.

• 9 Business and overall conditions 11 Earnings performance, assets and financial position
• 17 Segment reporting
• 24 Outlook and opportunities report 29 Report on events after the reporting period

Segment reporting

The comments on segments' results in the first three months of 2013 are based on the segment structure that was applicable at year-end 2012. At the beginning of 2013 various new IFRS requirements were implemented in the Commerzbank Group, the effects of which are also reflected in the segment reporting. The corresponding prior-year figures have been restated for the purposes of comparison. Explanations on this topic and about the effects of the changes to accounting and measurement policies are given in the interim financial statements on page 64 ff.

The Core Bank achieved an operating profit of €556m in the reporting period. Compared with the same period of the previous year, this was a fall of €310m, resulting in particular from the persistently low market interest rates and another increase in loan loss provisions. Moreover, the result for the previous year still included significantly higher revenues from Group Treasury. The Non-Core Assets segment's losses fell significantly compared with the first three months of 2012.

€m	1.1.–31.3.2013	1.1.–31.3.2012	Change in %/%-points
Income before provisions	858	905	– 5.2
Loan loss provisions	– 35	– 8
Operating expenses	753	760	– 0.9
Operating profit/loss	70	137	– 48.9
Average capital employed	4,002	3,976	0.7
Operating return on equity (%)	7.0	13.8	– 6.8
Cost/income ratio in operating business (%)	87.8	84.0	3.8

Private Customers

In the first quarter of 2013 the Private Customers segment reported a slight increase in customer activity, particularly in the area of capital market transactions. Revenues from securities transactions and asset management products rose in the first three months of the year, compared with the first quarter of 2012. Nonetheless, the effects of the low interest rate environment in the eurozone are still noticeable and tend to overlie the increase in earnings. The operating profit was down 48.9% year on year to €70m.

Income before loan loss provisions was €858m for the first three months, compared with €905m in the same period of 2012. At €431m, net interest income was €40m lower than in the first quarter of 2012. However, the continuing positive trend in demand for credit cannot make up for the prevailing negative effect of low market interest rates in the deposit business. Net commission income rose by 2.6% year on year to €427m. Here, the upturn in customer activity reflected the fact that the uncertainty on the capital markets had eased in comparison with the previous financial year.

During the reporting period, loan loss provisions increased as expected in comparison with the prior-year period, rising by €27m to €–35m.

Operating expenses of €753m were at the same level as in the same period of 2012, as a result of ongoing active cost management.

The Private Customers segment reported a pre-tax profit of €70m in the first three months of the year, compared with €137m in the same period of 2012.

The operating return on equity based on average capital employed of €4.0bn was 7.0% (prior-year period: 13.8%). At 87.8%, the cost/income ratio was higher than in the first three months of 2012 (84.0%).

€m	1.1.–31.3.2013	1.1.–31.3.2012	Change in %/%-points
Income before provisions	728	790	– 7.8
Loan loss provisions	– 78	35
Operating expenses	325	339	– 4.1
Operating profit/loss	325	486	– 33.1
Average capital employed	5,829	5,974	– 2.4
Operating return on equity (%)	22.3	32.5	– 10.2
Cost/income ratio in operating business (%)	44.6	42.9	1.7

Mittelstandsbank

The Mittelstandsbank segment achieved an operating profit of €325m, compared with €486m in the prior-year period, against the backdrop of persistently low interest rates and an expected increase in loan loss provisions.

In the period under review, income before provisions came to €728m, which was 7.8% below the figure for the first three months of 2012. While there was growth in revenues from direct customer business in some categories, earnings were negatively impacted by low interest rates in particular. At €457m, net interest income was 15.7% lower than in the same period of 2012. In the deposit business higher volumes, together with lower margins related to market interest rates, led to a significant decline in net interest income, while the contribution made by credit business to net interest income increased compared with the prioryear period owing to higher lending margins. Overall, corporate customers remained very cautious in drawing down their credit lines. Net commission income also developed well in the first three months of 2013; it was up by 3.7% versus the prior-year period, to €280m. The increase over the first quarter of 2012 was due in particular to documentary business and customer demand for capital market products.

9 Business and overall conditions

• 11 Earnings performance, assets and financial position
• 17 Segment reporting
• 24 Outlook and opportunities report 29 Report on events after the reporting period

Net trading income was €1m, up €13m year-on-year, due largely to remeasurement effects from credit hedge transactions. Net investment income for the reporting period was €–12m compared with €–1m in the same period of the previous year. Other net income amounted to €2m compared with €–9m in the prior year period.

Loan loss provisions came to €–78m, which was €113m higher than the figure for the same period of 2012. The first quarter of 2013 was driven by additional loan loss provisions for individual commitments, whereas the first quarter of 2012 was characterised by the positive trend in portfolio loan loss provisions due to excellent portfolio quality and parameter updates.

Operating expenses fell to €325m which was 4.1% lower than the previous year's figure of €339m. The decrease in costs resulted from lower personnel expenses and other operating expenses, primarily however in the area of indirect costs.

All in all, the Mittelstandsbank segment generated pre-tax earnings of €325m in the first three months of the current year, which represents a decrease of around a third on the prioryear period.

The operating return on equity based on average capital employed of €5.8bn was 22.3% (prior-year period: 32.5%). The cost/income ratio was 44.6% compared with 42.9% in the same period of 2012.

€m	1.1.–31.3.2013	1.1.–31.3.2012	Change in %/%-points
Income before provisions	185	220	– 15.9
Loan loss provisions	– 6	– 18	– 66.7
Operating expenses	104	115	– 9.6
Operating profit/loss	75	87	– 13.8
Average capital employed	1,717	1,893	– 9.3
Operating return on equity (%)	17.5	18.4	– 0.9
Cost/income ratio in operating business (%)	56.2	52.3	3.9

Central&Eastern Europe

Since the sale of the Ukrainian Bank Forum in the second half of the 2012 financial year, the Central&Eastern Europe segment has contained the Polish subsidiary BRE Bank's universal banking and direct banking activities in Poland, the Czech Republic and Slovakia. The activities of Bank Forum were still included in the prior-year figures.

Economic growth remained muted in Central and Eastern Europe during the first quarter of this year. The National Bank of Poland reacted to the economic situation by easing monetary policy. A reluctance to invest was noticeable, particularly in corporate customers business. In the first three months of this year the segment generated an operating profit of €75m, compared with €87m in the prior-year period.

In the period under review, income before provisions came to €185m, which was €35m below the figure for the first quarter of 2012. The decline in net interest income reflects the significant cuts in the benchmark interest rate implemented by the National Bank of Poland in the first three months of this year. Whereas the benchmark interest rate still stood at 4.50% at the end of the first quarter of 2012, by the end of March 2013 this had been cut to 3.25% in five steps starting in November 2012. Furthermore, in the first quarter of 2012 income included the exchange-rate-related remeasurement effect of the sale option on the Russian Promsvyazbank, which amounted to €15m.

Loan loss provisions were reduced by €12m to €–6m, partly because of reversals.

Operating expenses fell to €104m which was 9.6% lower than the previous year's figure of €115m. The decrease resulted from the sale of Bank Forum, while BRE Bank reported a moderate increase in costs.

The Central&Eastern Europe segment reported a pre-tax profit of €75m in the first three months of this year, compared with €87m in the same period of 2012.

The operating return on equity based on average capital employed of €1.7bn was 17.5% (prior-year period: 18.4%). The cost/income ratio rose to 56.2%, from 52.3% in the same period of the previous year.

€m	1.1.–31.3.2013	1.1.–31.3.2012	Change in %/%-points
Income before provisions	583	398	46.5
Loan loss provisions	26	– 27
Operating expenses	338	341	– 0.9
Operating profit/loss	271	30
Average capital employed	3,254	3,244	0.3
Operating return on equity (%)	33.3	3.7	29.6
Cost/income ratio in operating business (%)	58.0	85.7	– 27.7

Corporates&Markets

The first quarter of 2013 was characterised by a slightly improving capital market environment, with signs of increasing investor confidence and greater customer activity. Against this backdrop, the Corporates& Markets segment posted an operating profit of €271m in the first quarter of 2013 compared with €30m in the same period last year. The result includes a positive valuation effect of €25m from the remeasurement of own liabilities, which compares with a negative effect of €–157m in the same period of 2012.

Owing to lower transaction activity, particularly in large loans and structured corporate solutions, Corporate Finance generated less income than in the first quarter of the previous year. Equity Markets&Commodities was able to increase its income year-on-year in the first three months of 2013 thanks to significantly higher customer activity in equity and derivatives business. During the reporting period, income in Fixed Income&Currencies was lower than in the previous year despite better performance in interest-rate trading; the decline was owing to weaker results in currency trading and trading with credit products. Credit Portfolio Management, which has reported separately since mid-2012 and is responsible for managing and optimising the credit portfolios and counterparty risk, boosted its income compared with the first quarter of 2012. Here, the structured credit legacy portfolio, which was taken

• 9 Business and overall conditions 11 Earnings performance, assets and financial position
• 17 Segment reporting
• 24 Outlook and opportunities report 29 Report on events after the reporting period

over from the former Portfolio Restructuring Unit and was not yet included in the prior-year figures, made a positive contribution.

Overall, income before loan loss provisions rose by €185m to €583m year on year. Net interest income declined by €99m to €196m due to a reduction in the credit portfolio and lower transaction activity for structured corporate solutions. Net commission income fell by €22m to €82m, mainly because of reduced activity in corporate finance business. Net trading income of €307m was significantly higher than the prior-year figure of €–2m. This rise of €309 resulted primarily from the improved remeasurement of own liabilities and the positive contribution from the structured credit legacy portfolio.

In the first quarter the net reversal of loan loss provisions amounted to €26m, while in the same period of 2012 there was a net allocation of €–27m.

Operating expenses were down slightly compared with the first quarter of last year, falling €3m to €338m.

Pre-tax profit amounted to €271m, compared with €30m a year earlier.

The operating return on equity based on average capital employed of €3.3bn was 33.3% (previous year: 3.7%). The cost/income ratio was 58.0%, compared with 85.7% one year before. Adjusted for the effects of the remeasurement of own liabilities, the operating return on equity would be 30.2% (prior-year period: 23.1%). The adjusted cost/income ratio would be 60.6%, compared with 61.4% a year earlier.

€m	1.1.–31.3.2013	1.1.–31.3.2012	Change in %/%-points
Income before provisions	171	– 178
Loan loss provisions	– 175	– 178	– 1.7
Operating expenses	83	98	– 15.3
Operating profit/loss	– 87	– 454	– 80.8
Average capital employed	10,058	10,226	– 1.6
Operating return on equity (%)	– 3.5	– 17.8	14.3
Cost/income ratio in operating business (%)	48.5	– 55.1

Non-Core Assets

In the first quarter of 2013 the Non-Core Assets (NCA) run-off segment posted a considerably improved, although still negative, operating result of €–87m. The corresponding prioryear figure was €–454m.

The portfolio reduction progressed well in what continued to be a challenging environment. Creditworthiness-related interest rate premiums on government bonds issued by the peripheral countries increased further in the first quarter of the year owing to the unsatisfactory political situation in Italy and the bailout measures needed in Cyprus, although they remained at a significantly lower level than in the same quarter of 2012, thanks to the ECB measures which boosted confidence on the capital markets. Most international commercial real estate markets posted relatively stable performance, although some markets, such as Spain, continued to weaken. There was no sign of a lasting recovery on the global shipping markets owing to the sluggish global economy and correspondingly modest trading volumes, along with high levels of fleet overcapacity.

Income before loan loss provisions for the reporting period was €171m compared with €–178m in the same period of the previous year. Thanks to significant changes to the conditions in cases where loan extensions were granted for financial reasons on the dates when interest rates were due to be adjusted, the fall in net interest income slowed (–8.6% to €169m). Owing to the complete cessation of new business, net commission income of €19m was about 37% below the prior-year level. Net trading income of €–43m (previous year: €–215m) reflects lower losses on the measurement of derivatives in accordance with IAS 39. Net income from financial investments was positive at €8m. At €–203m, the negative net income from financial investments in the same period of 2012 mainly comprised losses from the sale of the remaining Greek sovereign bond portfolio and negative effects from the targeted reduction of other European government bonds.

Loan loss provisions amounted to €–175m, which was similar to the prior-year figure of €–178m. In the Deutsche Schiffsbank group division, net provisions of €–138m in the first quarter of 2013 were slightly higher than in the same period of 2012 (€–114m).

Operating expenses fell by 15.3% to €83m as a result of rigorous cost management.

In the first quarter of 2013, the NCA segment reported a pre-tax loss of €–87m (prior-year period: €–488m).

Average capital employed stood at €10.1bn.

9 Business and overall conditions

• 11 Earnings performance, assets and financial position
• 17 Segment reporting
• 24 Outlook and opportunities report 29 Report on events after the reporting period

Others and Consolidation

The Others and Consolidation segment contains the income and expenses which are not attributable to the business segments. Reporting in this segment under "Others" comprises equity participations that are not assigned to business segments, as well as Group Treasury. The costs of the service units, which – except for integration and restructuring costs – are charged in full to the segments, are also shown here. Consolidation includes income and expense items that represent the reconciliation of internal management reporting figures shown in segment reporting with the consolidated financial statements in accordance with IFRS. The costs of the Group management units which are charged in full to the segments, except for integration and restructuring costs, are also reported under this heading.

Operating profit for the first quarter of 2013 came to €–185m compared with €126m in the prior-year period. Operating income before loan loss provisions fell from €251m in the first quarter of 2012 to €–65m in the first quarter of 2013. The decline of €316m is primarily attributable to Group Treasury, which was unable to repeat the excellent result achieved in the previous year. Operating expenses remained almost unchanged from the same period of 2012. Taking into account restructuring expenses of €493m, pre-tax profit for the first quarter of 2013 came to €–678m, compared with €126m in the first quarter of 2012.

Outlook and opportunities report

The following information should be read in conjunction with the Business and Economy section of this interim report as well as the Outlook and opportunities report of the 2012 Annual Report.

Future economic situation

The outlook for the global economy – and particularly for the economy in Germany and the other eurozone countries – is heavily dependent on how the sovereign debt crisis in the eurozone develops. The crisis has eased perceptibly since summer 2012, despite the latest debates about Italy, Slovenia and Cyprus. If this proves lasting – as indicated by the increasing return of capital to the eurozone periphery that has been perceptible in recent months – the global economy can be expected to grow more strongly once again.

Central banks throughout the world have relaxed their monetary policies further and most of them are pursuing a very expansionary course. This should allow the economy in the emerging markets in particular to grow faster again in 2013 and 2014.

The upturn is likely to gain more momentum in the USA, too, since the excesses of the past in consumer debt and the real estate market have largely been corrected and should impact the economy less and less.

It is also possible that the eurozone economy will emerge from recession this year, because if the sovereign debt crisis continues to ease, companies would be able to plan with more confidence, thus releasing the biggest brake on the economy in the core countries, while financing costs in the periphery countries would probably fall. However, the leading indicators have faltered again recently, so it may be some time before any such improvement becomes evident in the real economy. Even then, there will still be very large differences between the individual eurozone countries. While the economy will probably start growing again in Germany and its smaller neighbours in the next few quarters, the periphery countries will be able to emerge from recession only gradually. The economies of these countries will continue to be held back by highly restrictive fiscal policies for some time yet. In addition – unlike in the USA – the correction of earlier excesses is far from complete.

An end to the sovereign debt crisis and somewhat stronger growth in the world economy would give risky assets a considerable boost on the capital markets. The equity markets should continue their upward trend and risk premiums on bonds from the eurozone periphery countries should fall further, although they are likely to remain considerably higher than they were before the sovereign debt crisis began. Conversely, yields will rise on government bonds from the countries with the best credit ratings. This increase will be fairly modest, however, since the central banks in the major currency areas are unlikely to raise their key interest rates by very much in the next two years. Nevertheless, we think that the Federal Reserve will at least cut back on its bond purchases later this year, with the probable result that the US dollar will gain ground on the euro.

• 9 Business and overall conditions 11 Earnings performance, assets and financial position
• 17 Segment reporting
• 24 Outlook and opportunities report 29 Report on events after the reporting period

Future situation in the banking sector

Our views regarding the expected development of the banking sector over the medium term have not changed significantly since the statements published in the 2012 Annual Report.

The long-drawn-out efforts to form a government in Italy, the Cyprus bailout, various dampers on the previously prevailing optimism regarding the German economy and even the worsening of the Korean crisis have all failed to make any big impression on the equity and bond markets recently. In the case of Cyprus, the decision of the Eurogroup to make creditors, shareholders and large depositors participate in Laiki Bank's run-off losses has however prompted the markets to reassess banking risks. Bank stocks have therefore been valued significantly less favourably than the securities of other types of business on many European stock markets recently, and banks have seen their risk premiums increase noticeably in the credit loss insurance market. In the reporting period the banks in the periphery still depended heavily on ECB funding, while cross-border interbank lending remained at a low level. It is therefore still too early to sound the all-clear for the banking environment. Although the interventions by the ECB and European politicians are having a stabilising effect, they are nevertheless at the same time impairing the role of market prices as a reliable risk measure. Some industrialised countries have recently had to withdraw their forecasts of overall economic growth, and it will be some time before it is possible to assess the full impact on the real economy of the extraordinary monetary measures taken by the central banks.

Given the uncertain outcome of the unconventional monetary policy, an end to the uncertainty about the mid to long-term stability of the currency union cannot be expected very soon. All in all, 2013 will be another year of transition. If politicians succeed in laying a course for further integration in Europe, confidence will be reinforced, with a corresponding positive impact on banking in 2014. The likelihood that the high price fluctuations seen on the financial markets in recent years will ease off in 2013 and 2014 will also bring some relief to the banking sector.

Against this backdrop, with continuing differences between the positions of individual countries, there is likely to be only a gradual improvement in the earnings situation of European banks in the near future. This is because the regulatory processes that are already under way and the persistently fierce competition are restricting earnings potential. Restrictive fiscal policy and high unemployment overall in the eurozone are negative factors. The deleveraging process initiated in many countries and households is reducing the demand for credit at the moment and will increase pressure on the deposit business. Corporate investments and therefore demand for credit will probably remain low this year. Net interest income will once again be hit by flat differentials and the ensuing lack of scope for generating a structural contribution. Opportunities to use the ample supply of liquidity from central bank funds on the assets side of a bank's balance sheet are restricted because of the requirement to reduce risks. Stricter capital adequacy and liquidity requirements will continue to be the main dampers for the sector as regulation increases, despite the easing of liquidity requirements approved by the Basel Committee on Banking Supervision. This year and next, a number of new regulations will be implemented affecting the whole financial market, which will elicit some substantial interactions.

Given the growing pressure for change resulting from regulation, structural transformation and competition, European banks continue to face the challenge of strengthening their capital bases while downsizing their balance sheets. At the same time, high volumes of bank bonds are also due to mature in the coming years, thus clashing with the ongoing heavy borrowing requirements of governments. The major profit drivers of the past – such as high lending growth and falling credit default rates – will also have a much smaller impact on profits than before. In view of the persistent weakness of the economy, loan loss provisions will initially have an adverse impact – partly because of the decline in releases of provisions – and will thus act as a constraint on earnings growth in the corporate customer business. Furthermore, demand for new lending from domestic corporate customers will have a dampening effect. Corporate investment activity is not likely to pick up until 2014 thanks to the expected revival of the world economy and the predicted upturn in the eurozone economy; this should boost demand for credit. In private customer business, commission income will remain under pressure due to the still relatively pronounced preference for low-commission, highly liquid forms of investment. Aggressive price competition (particularly for deposits) and low interest rates, together with increasing price sensitivity on the part of customers and tougher competition from online banks, are also hampering the expansion of earnings potential. We do not expect a rapid recovery in investment banking given the still subdued levels of activity, especially in mergers and acquisitions, and globally we expect market adjustments as banks focus on core competencies and their own home region. Uncertainty is also being generated by the renewed discussion on introducing a segregated banking system, which would mean that capital market business would be separated from classical deposit and lending business in a different legal organisation.

Overall this environment will further intensify competition for deposits, which are the main way of refinancing independently of the interbank market, and for the comparatively crisis-proof business of German SMEs, which are seen as increasingly attractive customers and whose contributions to earnings have not been hit by value adjustments in recent years. For the time being there will be no change in the fragmented market structure, which in some cases is also characterised by overcapacities. This will not make the competitive situation any easier, and will limit the potential for generating capital from retained profit. Overall, the outlook – especially in the core business areas – will be largely dependent on the extent to which it proves possible to regain the customer confidence that has been lost.

Financial outlook for the Commerzbank Group

Financing plans

Commerzbank forecasts a capital market funding requirement of less than €10bn per annum over the medium term. We want to raise the greater part of this in collateralised form, primarily through Pfandbriefe issued by Commerzbank Aktiengesellschaft. The first issue of Commerzbank Pfandbriefe is expected during 2013.

Collateralised funding instruments have gained in importance as a result of the financial crisis and the accompanying new regulatory requirements, and this is reflected in part in higher investor demand for these products. They offer issuers relatively stable access to long-term funding with cost advantages compared with unsecured sources of funding. Commerzbank intends to launch unsecured capital market issues in the future as well: firstly private placements to meet demand from customers and secondly in the form of products that further diversify the Bank's funding base.

• 17 Segment reporting
• 24 Outlook and opportunities report 29 Report on events after the reporting period

Hypothekenbank Frankfurt AG will have no significant funding requirements on the capital market in 2013 because of its adapted business strategy.

By regularly reviewing and adjusting the assumptions used for liquidity management and the long-term funding requirement, Commerzbank will continue to respond actively to changes in the market environment in order to secure a comfortable liquidity cushion and an appropriate funding structure.

Planned investments

As part of its strategic realignment, Commerzbank has put in place cost-cutting programmes as well as growth initiatives. By 2016, operating expenses will therefore be around €7.1bn to €7.3bn despite the investments in the core business, the expected wage increases and rising operating costs. The Bank will continue its strict cost management and save costs in the coming years through, for example, more efficiently designed processes, the launch of the new branch structure, and the adjustment of personnel capacities. The Bank is currently working on the assumption of Group job cuts in the order of 4,000 to 6,000 full-time staff by 2016. €493m in restructuring costs were set aside for this purpose at Group level in the first quarter of 2013. Most of these costs will be allocated to the Private Customers segment and the service and Group management units.

In the period under review there has been no significant change in the investment planning discussed on pages 122–125 of the 2012 Annual Report.

Liquidity outlook

The marked easing on the liquidity and capital markets continued at the start of 2013. The market remains liquid following the repayment of almost 30% of the ECB's three-year longterm refinancing operation. The money market interest rate increased only marginally. After reaching record lows in December 2012, the three-month Euribor stood at 0.21% at the end of the quarter (year-end 2012: 0.19%).

Despite the renewed heightening of the euro crisis thanks to the events in Cyprus, the liquidity and credit markets for eurozone bonds were relatively unaffected. Nonetheless the ECB is keeping a close eye on developments in the eurozone and discussing further measures to counteract the impact of the euro crisis. These include making commercial loans much easier to access and more widely available in order to boost credit growth in the eurozone.

As announced in December 2012, the ECB is also prepared to cut interest rates again later in 2013 if the economic situation in Europe should deteriorate further. We think it probable that the top or main refinancing rate will be reduced by 25 basis points, with the ECB leaving the deposit facility at 0%. As 2013 progresses we expect the interest rate markets to move sideways. The same applies to refinancing costs in the major foreign currencies, since we are assuming that cross-currency basis swaps will also trend sideways at a low level. The Bank expects the credit markets to ease further, despite the latest crisis over Cyprus. In an environment of very low interest rates, credit risk premiums will narrow again owing to rising demand from investors for returns; this is expected to happen to good quality credit in particular. Here, demand will also be driven by the relaxed monetary policy of the Japanese central bank and the ECB's deliberations on taking steps to ease lending conditions for corporate loans in the eurozone periphery countries.

Liquidity management at Commerzbank is well prepared to cope with changing market conditions and is set to respond promptly to new market circumstances. The Bank has a comfortable liquidity position which is well above internal limits as well as the currently applicable requirements prescribed by the German Liquidity Regulation and MaRisk.

In order to compensate for unexpected outflows of liquidity, the Bank has a liquidity buffer comprising highly liquid assets eligible for central bank borrowing purposes. Our business planning is done such that a liquidity cushion can be maintained commensurate with the prevailing market conditions and related uncertainties as we see them. This is supported by the Bank's stable franchise in private and corporate customer business and its continued access to secured and unsecured loans in the money and capital markets.

General statement on the outlook for the Group

As part of its strategic realignment, Commerzbank has put in place growth initiatives and cost-cutting programmes which we shall implement rigorously in 2013 and subsequent years. The further development of our business model will be accompanied by a persistently challenging economic and capital market environment as the year progresses. It therefore remains difficult to formulate a reliable earnings forecast for 2013. However, we assume that the factors affecting the earnings situation (particularly the low interest rate environment) and the degree of customer caution still prevailing in large areas of the capital market and lending business will continue to obscure the successes of the strategic realignment launched last year, as well as the further development of our business model, for some time to come.

Commerzbank expects net interest income to continue to weaken slightly in 2013. It is still being hit by the markedly low demand for credit from our corporate customers and by persistently low market interest rates, with the resulting pressure on deposit spreads. Furthermore, in the NCA segment we shall actively continue to reduce risks and interest-bearing assets while preserving value. Even though customer activity will probably revive only slowly, we expect net commission income to benefit from our advisory approach in the Private Customers business, with its even stronger focus on customers, and our expanded range of services for SME customers – especially in foreign business and cash management.

For 2013 as a whole, we expect loan loss provisions to be slightly higher year on year within the Group. We still expect the Core Bank's loan loss provisions to be higher in 2013 than in the previous year, as the high reversals behind the excellent provision result in 2012 will not continue. High loan loss provisions will continue to have a negative impact on the Non-Core Assets segment due to the ongoing crisis on the shipping market.

On the costs side, investments recognised as expenses and aimed at increasing future earnings potential will lead to a year-on-year rise in total operating expenses in 2013. However, Commerzbank will systematically continue with its strict cost management policy in order to keep the potential increase within narrow limits.

• 9 Business and overall conditions 11 Earnings performance, assets and financial position
• 17 Segment reporting
• 24 Outlook and opportunities report 29 Report on events after the reporting period

Overall, against the backdrop of an economic and capital market environment which remains challenging, we assume that the continuing pressure on earnings, rising loan loss provisions and the investment-related increase in costs will have an impact on the operating result for full-year 2013 compared with the previous year. The pre-tax result of the Commerzbank Group for the 2013 financial year will be negatively impacted by the restructuring costs reported in the first quarter of 2013 in connection with the efficiency improvement measures that have been agreed.

During 2013 we shall continue to set our sights on reporting a Basel III core Tier I capital ratio of well over 9% under the phase-in arrangements.

Report on events after the reporting period

Commerzbank AGM approves capital increase to repay the silent participations of SoFFin and Allianz early and in full

At the Annual General Meeting held on 19 April 2013, a large majority of the Commerzbank shareholders voted in favour of the planned capital increase to repay the silent participations of the Financial Market Stabilisation Fund (SoFFin) and Allianz early and full. The transaction will significantly improve Commerzbank's capital structure. As part of the planned repayment of the silent participations, the Federal Government's stake in Commerzbank is expected to decrease from about 25% to less than 20%. Furthermore, the AGM approved by a large majority the management's proposals on the election of members and reserve members of the Supervisory Board and on reducing the subscribed capital. As planned, Commerzbank has implemented the reverse 10-to-1 stock split agreed by theAGM. In addition to the cancellation of 7 shares to smooth the company's existing subscribed capital, the reverse stock split has been entered in the commercial register. The number of issued shares therefore fell from around 5.83 billion shares to about 583 million. The converted shares have been traded on the stock market since 24 April 2013 with the new security identification number WKN CBK100 (ISIN DE000CBK1001).

Moody's downgrades Commerzbank's rating

On 23 April 2013, the rating agency Moody's downgraded Commerzbank's long-term debt rating by one notch from A3 to Baa1 with a stable outlook. The short-term debt rating remained unchanged at P-2. The financial strength rating fell one notch from Baa3 to Ba1. According to Moody's, the main reasons for the downgrade were the persistently challenging environment in the German private customer market as well as continuing high risks in parts of the Non-Core Assets segment, especially Ship Finance, and in relation to Italian and Spanish exposures.

There have been no other events of material significance.

Interim Risk Report

31 Risk-oriented overall bank management

• 31 Risk management organisation
• 31 Risk-bearing capacity and stress testing

33 Default risk

• 33 Commerzbank Group
• 35 Core Bank
• 36 Private Customers
• 37 Mittelstandsbank
• 38 Central & Eastern Europe
• 39 Corporates & Markets
• 41 Non-Core Assets
• 44 Other portfolio analyses

47 Market risk

• 47 Market risk in the trading book
• 49 Market risk in the banking book
• 49 Market liquidity risk

50 Liquidity risk

• 50 Management and monitoring
• 50 Quantification and stress testing

52 Operational risk

53 Other risks

33 Default risk

• 50 Liquidity risk
• 52 Operational risk
• 53 Other risks

Risk-oriented overall bank management

Risk management organisation

Commerzbank defines risk as the danger of possible losses or profits foregone due to internal or external factors. In risk management, we normally distinguish between quantifiable risks – those to which a value can normally be attached in financial statements or in regulatory capital requirements – and non-quantifiable types of risk such as reputational and compliance risk.

The Bank's Chief Risk Officer (CRO) is responsible for implementing the Group's risk policy guidelines for quantifiable risks laid down by the Board of Managing Directors. The CRO regularly reports to the Board of Managing Directors and the Risk Committee of the Supervisory Board on the overall risk situation within the Group.

Risk management activities are split between Credit Risk Management Core Bank, Credit Risk Management Non-Core Assets, Intensive Care, Market Risk Management and Risk Controlling and Capital Management. In contrast to the other business areas, responsibilities in the NCA segment are not separated into a performing loan area and Intensive Care, as credit risk management here has been merged into one unit across all rating levels. All areas have a structure which spans the Group and report directly to the CRO. The heads of these five risk management divisions together with the CRO make up the Risk Management Board within Group Management.

More detailed information on the risk management organisation at Commerzbank can be found in the Annual Report 2012.

Risk-bearing capacity and stress testing

The risk-bearing capacity analysis is a key part of overall bank management and Commerzbank's Internal Capital Adequacy Assessment Process (ICAAP). The purpose is to ensure that sufficient capital is held for Commerzbank Group's risk profile the at all times.

Commerzbank monitors risk-bearing capacity using a gone concern approach which seeks primarily to protect unsubordinated lenders. This objective should be achieved even in the event of extraordinarily high losses from an unlikely extreme event. In addition riskbearing capacity is assessed using macroeconomic stress scenarios. Details of the methodology used can be found in the Group Risk Report in the Annual Report 2012.

The results of the annual updating of the risk-bearing capacity concept were implemented at the beginning of 2013. This implied taking account of the property value change risk in economically required capital as an independent risk type. The property value change risk means the risk of the deterioration in the market value of the Group's properties (particularly real estate). It includes real estate risk which was contained in market risk until the end of 2012.

The following table shows the change in risk-bearing capacity in the first quarter of 2013.

Risk-bearing capacity Group €bn	31.3.2013	31.12.2012
Economic risk coverage potential1	28	29
Economically required capital	18	17
thereof for credit risk	13	13
thereof for market risk	5	4
thereof for property value change risk2	0	–
thereof for OpRisk	2	2
thereof diversification between risk types	– 2	– 2
RBC-ratio3	152%	161%

1 Business risk is considered as deductable amount in the risk coverage potential.

2 Including risk of unlisted investments.

3 RBC-ratio = economic risk coverage potential/economically required capital (including risk buffer).

In May 2012, the Enhanced Disclosure Task Force (EDTF) was created by the Financial Stability Board (FSB) to improve risk reporting by banks. The EDTF published an extensive paper containing numerous basic principles and recommendations on all aspects of reporting risk management. Commerzbank implemented a large part of the recommendations in its Annual Report 2012 and Disclosure Report 2012. Other points are planned for the 2013 risk reporting; some issues will only be dealt with at a later date.

33 Default risk

• 47 Market risk
• 50 Liquidity risk
• 52 Operational risk
• 53 Other risks

In the following sections, we report in detail on the risks Commerzbank is exposed to; beginning with the most important, namely default risk.

Default risk

Default risk refers to the risk of losses due to defaults by counterparties as well as to changes in this risk. In addition to credit default risk and risk from third-party debtors, Commerzbank also includes under default risk issuer and counterparty risk as well as country and transfer risk.

Commerzbank Group

In looking at Commerzbank Group, we will go into more detail on credit risk parameters, the breakdown of the portfolio by region, loan loss provisions and the default portfolio. To manage and limit default risks, we use the following risk parameters: exposure at default (EaD)1 , loss at default (LaD), expected loss (EL), risk density (EL/EaD), credit value at risk (CVaR = economic capital required for credit risk with a confidence interval of 99.91% and a holding period of one year), risk-weighted assets and "all-in" for bulk risk.

Credit risk parameters The credit risk parameters in the Commerzbank Group are distributed in the rating levels 1.0 to 5.8 as follows over the Core Bank and Non-Core Assets:

Credit risk parameters as at 31.3.2013	Exposure at default	Expected loss	Risk density	CVaR
	€bn	€m	bp	€m
Core Bank	322	884	28	7,343
Non-Core Assets	132	949	72	5,824
Group	453	1,834	40	13,167

The following table shows the breakdown of the Group portfolio by internal rating classifications, based on the PD ratings:

Rating breakdown as at 31.3.2013 EaD in %	1.0 –1.8	2.0 –2.8	3.0 –3.8	4.0 –4.8	5.0 –5.8
Core Bank	31	48	15	4	2
Non-Core Assets	31	35	20	8	6
Group	31	44	17	5	3

The regional breakdown of the exposure is in line with the Bank's strategic direction and reflects the main areas of its global business activities. Around half of the Bank's exposure relates to Germany, another third to other countries in Europe and 7% to North America. The rest is broadly diversified and is split between a large number of countries where we serve German exporters in particular or where Commerzbank has a local presence.

¹ Expected exposure amount taking into account a potential (partial) drawing of open lines and contingent liabilities that will adversely affect risk-bearing capacity at default. For Public Finance securities the nominal is reported as EaD.

Group portfolio by region as at 31.3.2013	Exposure at default €bn	Expected loss €m	Risk density bp
Germany	228	560	25
Western Europe	111	475	43
Central and Eastern Europe	41	211	52
North America	30	69	23
Other	44	519	117
Group	453	1,834	40

The table below shows the exposure to Greece, Ireland, Italy, Portugal and Spain based on the member state where the head office or the asset is located. The exposure to Cyprus amounted to €0.3bn as at 31 March 2013, of which only a small portion was related to sovereign and banks.

EaD1 as at 31.3.2013 €bn	Sovereign2	Banks	CRE	Corporates/ Other	Total 31.3.2013	Total 2012
Greece	0.0	0.0	0.2	0.1	0.3	0.2
Ireland	0.0	0.6	0.1	1.1	1.8	1.6
Italy	9.2	0.7	2.0	2.3	14.3	14.2
Portugal	0.9	0.3	1.5	0.3	2.9	3.0
Spain	2.5	3.7	3.5	2.5	12.2	12.8

1 Excluding exposure from ship finance.

2 Including sub-sovereigns.

Provisions for loan losses The following table illustrates the development of Group loan loss provisions:

	2013	2012
Loan loss provisions €m	Q1	Total	Q4	Q3	Q2	Q1
Core Bank	92	283	102	47	116	18
Non-Core Assets	175	1,374	512	383	301	178
Group1	267	1,660	614	430	404	212

1 Including the PRU's provisions for loan losses of €3m in 2012.

The loan loss provisions relating to the Group's credit business in the first quarter of 2013 amounted to €267m and thus were €55m higher than in the first quarter of the previous year. It has to be taken into account that in the first quarter of 2012 the amount was influenced by a net release of portfolio loan loss provisions in the amount of €91m due to the regular annual parameter update as part of the recalibration of the rating systems.

For 2013 as a whole, we expect risk provisions to be slightly higher year on year for the Group. We still expect the Core Bank's loan loss provisions will revert to a higher level in 2013, as the high reversals behind the excellent provision result in 2012 will not continue. High loan loss provisions will continue to have a negative impact on NCA due to the ongoing crisis on the shipping market.

31 Risk-oriented overall bank management 33 Default risk

• 47 Market risk
• 50 Liquidity risk 52 Operational risk
• 53 Other risks

The risks related to the macroeconomic framework are still high. If a massive economic downturn or defaults at financial institutions should arise, fuelled by the impact of the continuing sovereign debt crisis on the real economy, it is possible that significantly higher loan loss provisions may be necessary under certain circumstances.

Default portfolio The table below illustrates the development of the default portfolio in the Group:

		31.3.2013			31.12.2012
Default portfolio €m	Group	Core Bank	NCA	Group	Core Bank	NCA
Default volume	18,077	6,242	11,836	18,926	6,799	12,128
Loan loss provisions	6,962	3,219	3,744	7,148	3,264	3,884
GLLP	880	470	409	887	470	417
Collaterals	8,858	1,302	7,556	9,296	1,451	7,845
Coverage ratio excl. GLLP (%)	88	72	95	87	69	97
Coverage ratio incl. GLLP (%)	92	80	99	92	76	100
NPL ratio (%)1	3.8	1.9	8.3	4.0	2.1	8.1

1 NPL ratio: default volume (non-performing loans – NPL) as a proportion of total exposure (EaD including NPL).

The default portfolio fell by €849m in the first quarter of 2013 compared to 31 December 2012. The volume is equivalent to claims that are in default in the category LaR.

Core Bank

The Core Bank comprises the segments Private Customers, Mittelstandsbank, Central& Eastern Europe, Corporates& Markets and Others and Consolidation.

Credit risk parameters The credit risk parameters are distributed in the rating levels 1.0 to 5.8 as follows over the Core Bank's segments:

Credit risk parameters as at 31.3.2013	Exposure at default €bn	Expected loss €m	Risk density bp	CVaR €m
Private Customers	77	205	27	820
Mittelstandsbank	113	325	29	2,968
Central & Eastern Europe	25	150	59	550
Corporates & Markets	66	144	22	1,954
Others and Consolidation	40	61	15	1,051
Core Bank	322	884	28	7,343

Exposure and risk density in the Core Bank remained nearly stable at €322bn (2012: €321bn) and 28 basis points (2012: 27 basis points), respectively.

The following table shows the breakdown of the Core Bank portfolio by internal rating classifications based on PD ratings:

Rating breakdown as at 31.3.2013 EaD in %	1.0–1.8	2.0–2.8	3.0–3.8	4.0–4.8	5.0–5.8
Private Customers	28	49	17	4	2
Mittelstandsbank	12	61	20	5	2
Central & Eastern Europe	27	40	22	9	3
Corporates & Markets	45	41	10	2	1
Core Bank1	31	48	15	4	2

1 Including Others and Consolidation.

Loan loss provisions The following table shows the development of loan loss provisions in the Core Bank's segments:

	2013	2012
Loan loss provisions €m	Q1	Total	Q4	Q3	Q2	Q1
Private Customers	35	95	16	45	26	8
Mittelstandsbank	78	30	42	– 9	32	– 35
Central & Eastern Europe	6	105	24	28	35	18
Corporates & Markets	– 26	52	19	– 17	23	27
Others and Consolidation	– 1	1	1	0	0	0
Core Bank	92	283	102	47	116	18

Loan loss provisions in the Core Bank amounted to €92m in the first quarter of 2013. Compared to the same period last year, this was a rise of €74m , due mainly to the fact that loan loss provisions in the first quarter of 2012 were exceptionally low because of reversals of portfolio loan loss provisions in Private Customers and Mittelstandsbank (due in part to updated parameters).

Default portfolio The Core Bank's default portfolio benefited from high outflows through successful restructurings, in particular in the Corporates& Markets segment.

Default portfolio Core Bank €m	31.3.2013	31.12.2012
Default volume	6,242	6,799
Loan loss provisions	3,219	3,264
GLLP	470	470
Collaterals	1,302	1,451
Coverage ratios excl. GLLP (%)	72	69
Coverage ratios incl. GLLP (%)	80	76
NPL ratio (%)	1.9	2.1

Private Customers

The Private Customers segment covers the activities of the Private Customers Group division, which includes branch business in Germany for private and business customers, Wealth Management, Direct Banking and Commerz Real.

• 31 Risk-oriented overall bank management

• 33 Default risk

• 50 Liquidity risk

• 52 Operational risk

The risks in private customer business depend mainly on the economic environment, trends in unemployment levels and real estate prices. Risks are managed in part through defined credit standards, active new business controlling, close monitoring of the real estate market and IT-supported overdraft management. Furthermore, loans that stand out are identified through selected triggers and processed in a special way in the early risk identification area.

Exposure at default €bn	Expected loss €m	Risk density bp
46	95	20
5	12	22
12	46	40
9	39	41
3	7	27
1	6	52
77	205	27

We meet the financing needs of our customers with a broad and modern product range. The focus of the portfolio is on traditional owner-occupied home financing and the financing of real estate capital investments (residential mortgage loans and investment properties with EaD of €52bn). Another major activity is to ensure the supply of credit services for our business customers (individual loans €12bn). In addition, we meet our customers' day-to-day demand for credit with consumer loans (consumer and instalment loans, credit cards €9bn).

There was continued growth in customer business, particularly construction financing. Compared to the year-end, the risk density was stable at 27 basis points.

Loan loss provisions in private customer business stood at €35m in the first quarter of 2013 which was a rise on the previous year of €27m. Adjusted for the effects of parameter updating in the first quarter of 2012, loan loss provisions overall were slightly below the previous year's level.

Private Customers saw a slight reduction of €60m in the default portfolio.

Default portfolio Private Customers €m	31.3.2013	31.12.2012
Default volume	1,075	1,135
Loan loss provisions	419	392
GLLP	134	128
Collaterals	506	527
Coverage ratios excl. GLLP (%)	86	81
Coverage ratios incl. GLLP (%)	98	92
NPL ratio (%)	1.4	1.5

Mittelstandsbank

This segment comprises all the Group's activities with mainly mid-size corporate customers, the public sector and institutional customers (where they are not assigned to other segments). The segment is also responsible for the Group's relationships with domestic and foreign banks, financial institutions and central banks. In line with the Mittelstandsbank segment's focus on German corporate customers and international corporate customers connected to Germany through their core business, growth is pursued in these areas. The risk appetite is geared towards the assessment of the relevant sector, but also towards the market conditions in the main countries in which the companies operate. Regardless of these market conditions, every exposure is subject to an individual analysis of the creditworthiness and sustainability of the customer's business model.

Credit risk parameters as at 31.3.2013	Exposure at default €bn	Expected loss €m	Risk density bp
Financial Institutions	22	64	29
Corporates Domestic	76	218	29
Corporates International	15	42	29
Mittelstandsbank	113	325	29

The economic environment in Germany continued to be satisfactory in the first quarter of 2013. This was reflected in the Corporates Domestic sub-portfolio by still above average risk parameters. The risk density in this area was at comparatively low 29 basis points at 31 March 2013.

In Corporates International, EaD totalled €15bn at 31 March 2013. Risk density here also was 29 basis points.

Despite demand for credit still being low, the EaD figure in Mittelstandsbank of €113bn was relatively constant in the first quarter of 2013. For details of developments in the Financial Institutions portfolio see page 45.

Provisions for loan losses in Mittelstandsbank totalled €78m in the first quarter of 2013 which was €113m higher than in the same quarter last year. The first quarter of 2013 was driven by additional loan loss provisions in individual cases, whereas the first quarter of 2012 was affected by the positive trend in portfolio loan loss provisions due to good portfolio quality and updated parameters.

Compared to 31 December 2012 Mittelstandsbank's default portfolio remained nearly stable.

Default portfolio Mittelstandsbank €m	31.3.2013	31.12.2012
Default volume	2,609	2,632
Loan loss provisions	1,422	1,439
GLLP	234	232
Collaterals	429	482
Coverage ratios excl. GLLP (%)	71	73
Coverage ratios incl. GLLP (%)	80	82
NPL ratio (%)	2.3	2.3

Central & Eastern Europe

The CEE segment largely covers the activities of BRE Bank, Commerzbank's operating unit in Poland. The BRE Bank Group's main areas of business cover private customer business with complementary direct bank units in Poland, the Czech Republic and Slovakia as well as corporate business with a broad and modern product range which includes corporate finance, corporate treasury sales, leasing and factoring. The segment's strategic focus lies on organic growth in Polish Mittelstand business and private customer business.

• 31 Risk-oriented overall bank management
• 33 Default risk
• 47 Market risk
• 50 Liquidity risk
• 52 Operational risk
• 53 Other risks

Credit risk parameters as at 31.3.2013	Exposure at default €bn	Expected loss €m	Risk density bp
Central & Eastern Europe	25	150	59

After several years of above-average economic growth, the Polish economy is currently losing momentum. We have also noticed a decline in demand for credit both among private households and businesses since the middle of last year. Despite the economic slowdown, we are still expecting positive economic growth in Poland.

Due to rigorous risk management, risk density was maintained at a stable level compared to the end of 2012. Taking account of the current economic environment, we expect the portfolio quality to deteriorate slightly by the end of 2013.

In the first quarter of 2013, loan loss provisions for Central&Eastern Europe amounted to €6m which was a fall of €12m compared to the previous year's quarter. This was mainly due to reversals as a result of successful restructurings.

In the Central&Eastern Europe segment, default volume remained nearly stable compared with the previous year.

Default portfolio CEE €m	31.3.2013	31.12.2012
Default volume	1,050	1,069
Loan loss provisions	552	579
GLLP	51	54
Collaterals	357	383
Coverage ratios excl. GLLP (%)	87	90
Coverage ratios incl. GLLP (%)	91	95
NPL ratio (%)	4.0	4.0

Corporates & Markets

This segment covers customer-oriented capital market activities (Markets), including commercial business with multinationals, institutional clients and selected large corporate customers (Corporates) of Commerzbank Group.

The regional focus of the segment is on Germany and Western Europe, which account for just under three-quarters of exposure; North America accounted for around €9bn at the end of March 2013. At €66bn, the EaD figure was marginally higher than in the first quarter of 2012 (€65bn) but below that at the end of December 2012 (€68bn).

Credit risk parameters as at 31.3.2013	Exposure at default €bn	Expected loss €m	Risk density bp
Germany	23	50	22
Western Europe	26	62	23
Central and Eastern Europe	2	5	27
North America	9	23	24
Other	6	4	7
Corporates & Markets	66	144	22

Corporates& Markets focuses among others on actively supporting its customers over the long term in all funding opportunities (such as equities, bonds, syndicated loans) with a range of services in underwriting and new issues. Underwriting risk for all product types is necessarily restricted through strict guidelines and defined limits. The positions that remain on the Bank's books through its activity as lead arranger or market maker are closely monitored from market and credit risk perspectives as well as at counterparty and portfolio level.

The Bank continues to focus on systematically reducing bulk risks, especially with banks. There has been closer scrutiny of risk management in relation to stock exchanges and clearing houses due to the new regulatory requirements on derivatives.

Since the beginning of the year, the nominal volume of the structured credit sub-portfolio has fallen by €0.3bn to €10.5bn, and risk values1 declined by €0.2bn to €5.2bn (including the default portfolio in each case). The following table shows the composition and changes in the structured credit portfolio.

		31.3.2013			31.12.2012
Structured credit portfolio	Nominal values €bn	Risk values €bn	Markdown ratio1 %	Nominal values €bn	Risk values €bn	Markdown ratio1 %
RMBS	1.6	1.1	28	1.6	1.1	30
CMBS	0.2	0.1	50	0.2	0.1	51
CDO	4.3	3.0	30	4.5	3.1	30
Other ABS	1.2	1.0	22	1.3	1.1	20
Further structured credit exposure	3.2	0.0	–	3.2	0.0	–
Total	10.5	5.2	50	10.8	5.4	50

1 Markdown ratio = 1 − (risk value/nominal value).

The bulk of the portfolio consists of collateralised debt obligations (CDOs). These largely securitise corporate loans in the USA and Europe (CLOs). Residential mortgage-backed securities (RMBSs) are instruments that securitise private, largely European, real estate loans.

We expect there to be more write-ups over the residual life of the portfolio. Possible future losses on assets such as US RMBSs, which have already been heavily written down, will probably be offset by the ongoing positive performance of other assets. However, these will be limited due to the sizeable reduction of holdings. The long period that has now passed since the structures were launched enables a more and more reliable basis for the assessment of the future performance of the portfolio. The economies that are important to us are performing in line with our risk assessment.

1 Risk value is the balance sheet value of cash instruments. For long CDS positions it comprises the nominal value of the reference instrument less the net present value of the credit derivative.

• 31 Risk-oriented overall bank management

• 33 Default risk

• 47 Market risk
• 50 Liquidity risk 52 Operational risk
• 53 Other risks

Corporates& Markets is heavily influenced by movements in individual exposures and reported a net reversal of loan loss provisions amounting to €26m for the first quarter of 2013, largely due to the restructuring of a large individual case. Loan loss provisions were therefore much lower compared to the previous year's quarter (€27m).

The default portfolio in the Corporates& Markets segment was reduced by €454m in 2012, in particular due to the aforementioned large individual case.

Default portfolio Corporates & Markets €m	31.3.2013	31.12.2012
Default volume	1,507	1,961
Loan loss provisions	826	853
GLLP	51	54
Collaterals	10	59
Coverage ratios excl. GLLP (%)	55	47
Coverage ratios incl. GLLP (%)	59	49
NPL ratio (%)	2.2	2.8

Non-Core Assets

Commercial Real Estate, Deutsche Schiffsbank and Public Finance are bundled in the Non-Core Assets run-off segment. All portfolios in these areas are due to be wound up completely in the course of time.

Exposure at default for the segment totalled €132bn as at 31 March 2013, which is €7bn less than at the end of 2012.

Credit risk parameters as at 31.3.2013	Exposure at Default €bn	Expected loss €m	Risk density bp	CVaR €m
Commercial Real Estate	44	272	62
Deutsche Schiffsbank	14	451	329
Public Finance	74	226	30
Non-Core Assets	132	949	72	5,824

The table below illustrates the development of loan loss provisions in the Non-Core Assets segment:

	2013			2012
Loan loss provisions l €m	Q1	Total	Q4	Q3	Q2	Q1
Commercial Real Estate	38	625	224	213	131	57
Deutsche Schiffsbank	138	741	296	160	170	114
Public Finance	– 2	8	– 9	10	0	7
Non-Core Assets	175	1,374	512	383	301	178

The loan loss provision in Non-Core Assets came to €175m in the first quarter of 2013. This was driven in particular by continuing high defaults in the shipping portfolio as a result of the still tough conditions on the shipping market.

The default volume for Non-Core Assets fell by €292m compared to 31 December 2012.

Default portfolio Non-Core Assets €m	31.3.2013	31.12.2012
Default volume	11,836	12,128
Loan loss provisions	3,744	3,884
GLLP	409	417
Collaterals	7,556	7,845
Coverage ratio excl. GLLP (%)	95	97
Coverage ratio incl. GLLP (%)	99	100
NPL ratio (%)	8.3	8.1

Commercial Real Estate

In the first quarter of 2013, holdings were reduced in line with strategy, primarily at Hypothekenbank Frankfurt. Total EaD in the performing loan book decreased by €3bn to €44bn. The relative portfolio composition by type of uses remains unchanged. The main components of exposure are the sub-portfolios office (€16bn), retail (€14bn) and residential real estate (€7bn).

Overall, the economic development in the eurozone is disappointing so far. Thus for CRE rental markets only restrained activity can be stated. However, due to the risk-oriented focus of investors on well-established and liquid markets, CRE investment markets in the US and in particular in Germany have shown a good start since the beginning of the year. Moreover, due to the shortening supply of high-value objects, the investment horizon slowly widens. CRE market values remain stable in most countries but are further easing in the southern crisis countries.

CRE-portfolio by region EaD in €bn	31.3.2013	31.12.2012
Germany	21	22
Western Europe	16	18
Central and Eastern Europe	4	4
North America	2	2
Other	1	1
Commercial Real Estate	44	47

Compared to the previous year's quarter, loan loss provisions for Commercial Real Estate in the first quarter of 2013 fell by €19m, thus resulting in €38m.

The default portfolio for Commercial Real Estate fell compared to 31 December 2012.

• 31 Risk-oriented overall bank management
• 33 Default risk
• 47 Market risk
• 50 Liquidity risk
• 52 Operational risk
• 53 Other risks

		31.12.2012
Default portfolio CRE by country €m	Total	Germany	Spain	UK	US	Total
Default volume	7,253	2,497	1,737	1,305	496	7,643
Loan loss provisions	2,390	690	743	289	76	2,672
GLLP	141	40	19	9	7	130
Collaterals	4,841	1,761	1,003	1,017	403	5,056
Coverage ratio excl. GLLP (%)	100	98	100	100	97	101
Coverage ratio incl. GLLP (%)	102	100	102	101	98	103
NPL ratio (%)	14.2	10.7	32.5	22.3	25.0	14.0

Deutsche Schiffsbank

Compared to 31 December 2012, exposure to ship finance in the performing loan book was largely unchanged at €14bn.

The exposure is divided into three standard types of ship, i.e. containers (€5bn), tankers (€3bn) and bulkers (€3bn). The rest of the portfolio consists of various special tonnages which are well diversified across the various ship segments.

Market trends in the first quarter of 2013 were dominated by further falls in charter rates in tanker and bulker markets, as well as in container markets.

The continued systematic reduction in risk in the existing portfolio is also the focus of our activities under the defined, value-preserving reduction strategy for 2013. We do not expect shipping markets to recover in 2013.

Net loan loss provisions at the Deutsche Schiffsbank division stood at €138m in the first quarter of 2013 which was higher than in the previous year's quarter (€114m). Other defaults with a corresponding loan loss provision are expected for subsequent quarters as the conditions continue to be difficult.

The default portfolio increased slightly compared to 31 December 2012.

		31.3.2013
Default portfolio DSB by ship type €m	Total	Container	Tanker	Bulker	Total
Default volume	4,580	2,118	1,244	627	4,482
Loan loss provisions	1,353	612	395	155	1,211
GLLP	255	139	69	33	272
Collaterals	2,715	1,257	700	443	2,789
Coverage ratio excl. GLLP (%)	89	88	88	95	89
Coverage ratio incl. GLLP (%)	94	95	94	101	95
NPL ratio (%)	25.1	31.7	28.6	18.0	23.7

Public Finance

Commerzbank's NCA segment holds a large part of the government financing positions plus, in particular, secured and unsecured bond issues/loans from banks, held available as substitute cover for Pfandbrief issues. The Public Finance portfolio comprises receivables and securities held in our subsidiaries Hypothekenbank Frankfurt and Erste Europäische Pfandbrief- und Kommunalkreditbank (EEPK).

The Private Finance Initiative (PFI) portfolio, with an EaD of €3bn, was transferred to the NCA segment from the Portfolio Restructuring Unit in the third quarter 2012. It comprises the long-term financing of public sector facilities and services, such as hospitals and water utilities in the United Kingdom. Most of the PFI portfolio is secured and is set to be wound down over time in a value-preserving manner.

The borrowers in the Public Finance business in NCA (€48bn EaD) are sovereigns, federal states, regions, cities and local authorities as well as supranational institutions. The main exposure is in Germany and Western Europe.

The remaining Public Finance portfolio in NCA is accounted for by banks (€23bn EaD), where the focus is again on Germany and Western Europe (approximately 93%). Most of the bank portfolio comprises securities/loans which to a large extent are covered by grandfathering, guarantee/maintenance obligations or other public guarantees, or were issued in the form of covered bonds.

The Public Finance EaD, cut by €52bn to €77bn in the period from 2010 to 2012 largely by using maturities but also through active portfolio reduction, fell further to €74bn as at 31 March 2013. It is planned to reduce the portfolio to around €55bn by the end of 2016.

As in the first quarter of 2012, loan loss provisions in Public Finance were driven solely by portfolio loan loss provisions in the first quarter of 2013. With net reversals of €2m in the first quarter of 2013, loan loss provisions were €9m lower than the previous year's figure.

Other portfolio analyses

It is important to note that the following positions are already contained in full in the preceding Group and segment presentations.

Corporates portfolio by sector

The following table shows the breakdown of the Bank's corporates exposure by sector, regardless of the existing segment allocation:

31 Risk-oriented overall bank management

33 Default risk

• 47 Market risk
• 50 Liquidity risk
• 52 Operational risk 53 Other risks

		31.3.2013			31.12.2012
Sub-portfolio corporates by sector	Exposure at default €bn	Expected loss €m	Risk density bp	Exposure at default €bn	Expected loss €m	Risk density bp
Basic materials/ Energy/Metals	25	117	47	25	130	51
Consumption	21	88	41	22	85	39
Chemicals/Plastics	11	49	44	11	48	43
Transport/Tourism	11	25	23	11	22	20
Automotive	9	24	27	9	21	23
Services/Media	8	27	33	8	29	35
Technology/ Electrical industry	8	23	29	9	25	27
Mechanical engineering	8	18	23	8	20	26
Construction	4	20	46	4	17	39
Other	13	27	21	15	34	23
Total	119	419	35	122	430	35

Financial Institutions portfolio

In the first quarter of 2013, the Financial Institutions sub-portfolio still focused on critically monitoring the eurozone, appraising country risks from a risk-driven perspective and incorporating these risks in the context of the business strategy. Despite the prevailing view at the beginning of the year that the euro crisis had abated, events in Cyprus highlighted the appropriateness of our conservative approach. Proactive risk reduction in the sub-portfolio was offset here by new business with clients from the trade finance area of Mittelstandsbank as well as capital market activities from Corporates& Markets. Bulk risks in the sub-portfolio are being further reduced.

		31.3.2013		31.12.2012
FI portfolio by region1	Exposure at default €bn	Expected loss €m	Risk density bp	Exposure at default €bn	Expected loss €m	Risk density bp
Germany	15	9	6	14	8	6
Western Europe	29	49	17	28	49	18
Central/Eastern Europe	9	24	27	9	22	25
North America	2	1	4	1	< 1	3
Asia	10	27	26	7	19	27
Other	7	25	37	6	21	35
Total	72	135	19	65	121	19

1 Excluding exceptional debtors.

Non-Bank Financial Institutions portfolio

The Non-Bank Financial Institutions (NBFI) portfolio continues to focus on attractive new business with clients of good credit standing and further portfolio optimisation. Despite predominantly positive results in our clients' operating business, we regard the uncertainty arising from the continuing sovereign debt crisis in Europe as a significant adverse factor for the sector.

		31.3.2013 31.12.2012
NBFI portfolio by region	Exposure at default €bn	Expected loss €m	Risk density bp	Exposure at default €bn	Expected loss €m	Risk density bp
Germany	10	18	18	11	24	22
Western Europe	17	45	27	18	41	23
Central/Eastern Europe	1	4	31	1	4	27
North America	8	19	24	8	22	29
Other	2	4	23	2	4	23
Total	38	91	24	40	96	24

Originator positions

Commerzbank and Hypothekenbank Frankfurt have in recent years securitised loan receivables due from the Bank's customers with a current volume of €7.4bn, primarily for capital management purposes. As at the reporting date of 31 March 2013, risk positions of €5.0bn were retained, with by far the largest portion of these positions (€4.8bn) consisting of senior tranches which are nearly all rated as good to very good.

Securitisation pool €bn	Maturity	Senior	Mezzanine	First loss piece	Total volume1 31.3.2013	Total volume1 31.12.2012
Corporates	2020 – 2022	4.5	0.1	< 0.1	5.0	5.0
MezzCAP	2036	< 0.1	< 0.1	< 0.1	0.1	0.1
RMBS	2048	< 0.1	< 0.1	< 0.1	0.1	0.1
CMBS	2013 – 2084	0.3	< 0.1	< 0.1	2.2	2.3
Total		4.8	0.1	0.1	7.4	7.5

1 Tranches/retentions (nominal): banking and trading book.

Conduit exposure and other asset-backed exposures

Commerzbank sponsors the multi-seller asset-backed commercial paper conduit Silver Tower and in this conduit arranges the securitisation of receivables of Mittelstandsbank and Corporates& Markets customers, mainly trading and leasing receivables. The conduit in turn is usually financed through the issue of asset-backed commercial papers (ABCPs) or – if no ABCP is placed – through the drawing of credit lines (liquidity lines).

Other asset-backed exposures comprise mainly government guaranteed ABSs issued by Hypothekenbank Frankfurt in the Public Finance area and Commerz Europe (Ireland).

• 31 Risk-oriented overall bank management
• 33 Default risk
• 47 Market risk
• 50 Liquidity risk 52 Operational risk
• 53 Other risks

	31.3.2013			31.12.2012
Conduit and other asset-backed exposures €bn	Nominal values	Risk values	Nominal values	Risk values
Conduit exposure	3.1	3.1	3.1	3.1
Other asset-backed exposures	5.5	5.4	5.5	5.4
Total	8.7	8.5	8.6	8.5

Market risk

Market risk is the risk of financial losses due to changes in market prices (interest rates, commodities, credit spreads, exchange rates and equity prices) or in parameters that affect prices such as volatilities and correlations. The losses may impact profit or loss directly, e.g. in the case of trading book positions, or may be reflected in the revaluation reserve or in hidden liabilities/reserves in the case of banking book positions.

Market risk in the trading book

A standardised value at risk model incorporating all positions is used for the internal management of market risk. VaR quantifies the potential loss from financial instruments as a result of changed market conditions during a pre-defined time horizon and with a fixed probability. For internal management purposes, a confidence level of 97.5% and a holding period of 1 day are assumed. The value at risk concept allows risks in various business areas to be compared and enables many positions to be aggregated, taking account of correlations between different assets. This ensures a consolidated view of the market risk at all times.

A 10-day holding period and confidence level of 99% are used for regulatory capital adequacy requirements. These assumptions meet the requirements of the Basel Committee and other international standards on the management of market risk. VaR is also calculated on a 1-day holding period for other evaluations, such as backtesting or disclosure. In order to provide for a consistent presentation of the risk parameters in this report all figures relating to VaR are based on a confidence level of 99% and a holding period of 1 day.

VaR in the trading book fell at the end of the first quarter of 2013 from €28m to €26m. This slight fall was due mainly to interest rate-related trading activities in Corporates& Markets. The market turbulence that followed the Italian elections had only a minimal impact on Commerzbank's market risk.

VaR of portfolios in the trading book1 €m	Q1 2013	2012
Minimum	21	21
Median	26	39
Maximum	32	70
Quarter-/year-end figure	26	28

1 99% confidence level, holding period 1 day, equally-weighted market data, 254 days history.

The market risk profile is diversified across all asset classes. The dominant asset classes are interest risk and credit spread risk. Value at risk in the first quarter of 2013 was largely stable in the various risk types, but was down only for interest rate risk. This risk class also contains basis and inflation risk. Basis risk arises if, for example, positions are closed through hedging transactions with a different pricing type to the underlying transaction.

VaR contribution by risk type in the trading book1 €m	31.3.2013	31.12.2012
Credit spreads	8	7
Interest rates	11	15
Equities	2	2
FX	4	3
Commodities	1	1
Total	26	28

1 99% confidence level, holding period 1 day, equally-weighted market data, 254 days history.

Further risk parameters are being calculated for regulatory capital adequacy as part of Basel 2.5 reporting. This includes in particular the calculation of stressed VaR, which evaluates the risk arising from the current positioning in the trading book with market movements in a fixed crisis period. Stressed VaR rose in the first quarter of 2013 by €4m to €39m. The crisis observation period used for this is checked regularly through model validation and approval processes and adjusted where necessary. Last adjustment was made accordingly in the first half of 2012.

The reliability of the internal models is checked on a daily basis using backtesting methods. The calculated VaR data is compared with the profits and losses generated from actual price changes on the market. This provides the basis for the assessment of the internal risk models by the supervisory authorities. If the actual resulting loss exceeds the loss predicted using the value at risk model, this is referred to as a negative backtesting outlier. If, however, the resulting profit exceeds the predicted return, this is referred to as a positive backtesting outlier.

Analysing the results of backtesting provides important guidance for checking parameters and improving the market risk model. Furthermore, all negative outliers at Group level are classified under a traffic-light system laid down by the supervisory authorities and are reported immediately to the supervisory authorities with details on the extent and cause of the failure. No negative outliers were measured in the first quarter of 2013.

As the VaR concept gives a prediction of potential losses on the assumption of normal market conditions, it is supplemented by the calculation of stress tests. These tests measure the risk which Commerzbank is exposed to, based on extraordinary but still plausible events. These events may be simulated using extreme movements on various financial markets. The key scenarios relate to major changes in credit spreads, interest rates and yield curves, exchange rates, share prices and commodities prices. Extensive group-wide stress tests and scenario analyses are carried out as part of risk monitoring.

VaR and stress test models are permanently validated. In the first quarter of 2013, model adjustments were implemented that helped improve the accuracy of risk measurement.

31 Risk-oriented overall bank management

• 33 Default risk
• 47 Market risk
• 50 Liquidity risk
• 52 Operational risk 53 Other risks

Market risk in the banking book

The key driver of market risk in the banking book is the credit spread risk in the Public Finance portfolio, including the positions held by the subsidiaries Hypothekenbank Frankfurt and Erste Europäische Pfandbrief- und Kommunalkreditbank. This area was allocated to Non-Core Assets in 2012 and continues to be systematically run down. The Treasury portfolios with their credit spread risk, interest rate risk, and basis risk also have a particular impact on market risk in the banking book.

The following diagram documents the development of credit spread sensitivities for all securities and derivative positions (excluding loans) at Commerzbank Group. There was very little change in credit spread sensitivities which ended the first quarter at €57m. Close on 80% of credit spread sensitivities relate to securities positions classified as loans and receivables (LaR). Changes in credit spreads have no impact on the revaluation reserve or the income statement for these portfolios.

Market liquidity risk

Market liquidity risk is the risk of the Bank not being able to liquidate or hedge risky positions in a timely manner, to the desired extent and on acceptable terms as a result of insufficient liquidity in the market.

Market liquidity risk is measured by creating a liquidation profile for each portfolio in order to classify the portfolio in terms of its convertibility into cash using a market liquidity factor. Market risk based on a one-year view is weighted with the market liquidity factor to calculate the market liquidity risk.

At the end of the first quarter of 2013, Commerzbank earmarked €0.2bn in economic capital to cover market liquidity risk in the trading and banking book. Securities which are more susceptible to market liquidity risk include in particular asset-backed securities and other run-off portfolios.

Liquidity risk

Liquidity risk is defined in the narrower sense as the risk that Commerzbank will be unable to meet its payment obligations on a day-to-day basis. In a broader sense, liquidity risk is the risk that future payments cannot be funded as and when they fall due, in full, in the correct currency and at standard market conditions.

Management and monitoring

Commerzbank uses a wide range of quantitative and qualitative tools – based on an internal liquidity risk model – to manage and monitor liquidity risks. Key decisions on liquidity risk management and monitoring are taken by the central Asset Liability Committee, with final approval coming from the Board of Managing Directors. At an operating level, additional sub-committees are responsible for dealing with liquidity risk issues at a local level and with methodological issues regarding the quantification and limitation of liquidity risks that are of lesser significance for the Group.

Quantification and stress testing

The internal bank liquidity risk model is the basis for liquidity management and reporting to the Board of Managing Directors. Referring to a reference date, this risk measurement approach calculates the available net liquidity (ANL) for the next twelve months based on various scenarios. Commerzbank's available net liquidity is calculated for various stress scenarios using the following three components: deterministic, i.e. contractually agreed cash flows, statistically expected economic cash flows for the relevant scenario, and the realisable assets in the relevant scenario.

Liquidity risk management is performed centrally through the existing liquidity risk limit structure and takes into account liquidity risk tolerance. The stress scenario used by management which underlies the modelling allows for the impact of both a bank-specific stress event and a broader market crisis when calculating liquidity and setting limits. The parameterisation of the stress scenario comes from the risk tolerance that was set in accordance with the overall risk strategy. This also includes defining scenarios that are not covered by risk tolerance.

Risk concentrations can lead to increased outflows of liquidity, particularly in a stress situation, and thus to increased liquidity risk. Risk concentrations occur in the liquidity risk management environment in various forms, for example, in terms of maturities, large individual creditors or currencies. With the support of ongoing monitoring and reporting, risk concentrations on the funding front are recognised through this in a timely manner.

Additional components of liquidity risk management are a survival period calculation in terms of MaRisk plus the analysis of additional inverse stress scenarios.

The relevant stress scenarios in the ANL model are run daily and reported to management. The underlying assumptions and the limits set are checked regularly and adjusted to reflect changed market conditions as necessary. In addition, the stress scenarios described form the basis of the above contingency plans, in the context of which the central Asset Liability Committee can approve various measures to secure liquidity.

31 Risk-oriented overall bank management

• 33 Default risk
• 47 Market risk
• 50 Liquidity risk 52 Operational risk
• 53 Other risks

The following ANL graph shows that under the stress scenario relevant for the risk management calculated at the end of March 2013, a sufficient liquidity surplus existed throughout the period analysed.

Available net liquidity in the combined stress scenario of the internal liquidity risk model €bn

Once again in the first quarter of 2013, Commerzbank's internal liquidity risk ratios were always significantly higher than the limit set by the Board of Managing Directors. The same applies to compliance with the external regulatory German Liquidity Regulation and the survival period calculation set down by MaRisk.

In liquidity management, Commerzbank continues to benefit from its core business activities in retail and corporate banking and a widely diversified funding base in terms of products, regions and investors in the money and capital markets. In order to cope with short-term liquidity bottlenecks, the Bank has a liquidity buffer of assets eligible for discounting at the central bank and cash reserves. The amount, composition and availability of these assets are checked and reported on daily. The regular analyses focus in particular on the quality of the assets contained and on reasonable diversification. At the end of March 2013, the volume of freely available assets eligible for discounting at the central bank after haircut that was included in ANL modelling, plus central bank deposits was €97.3bn. The Bank has also taken measures to react to a possible break-up of the euro and mitigate the liquidity impact this would have.

The internal ANL model with a time horizon of up to one year is supplemented by the stable funding concept with a horizon of more than one year. The stable funding concept forms the basis for the internal offsetting of liquidity costs and is used to determine the volume of issues planned on the capital markets. The structural liquidity requirement for the Bank's core lending business is compared to the liabilities available long-term to the Bank, including core customer deposit bases.

The Bank is looking closely at the central issues arising from Basel III, the offsetting of liquidity costs and the management of liquidity risk within the internal liquidity risk model. It is continuing to systematically enhance the range of management tools as part of a strategic project. The Bank is increasing the analysis options available for liquidity risk reporting by continuously developing the infrastructure used for this purpose.

Operational risk

Commerzbank actively measures and manages operational risk (OpRisk) using a group-wide consistent framework aimed at systematically identifying OpRisk profile and risk concentrations as well as defining and prioritising measures to mitigate risk. Operational risk is defined according to the German Solvency Regulation as the risk of loss resulting from the inadequacy or failure of internal processes, systems and people or from external events. This definition includes legal risks; it does not cover reputational and strategic risks.

OpRisk and governance of the internal control system (ICS) are closely linked at Commerzbank both in terms of organisational structure and methodology. This close connection is due to the fact that the causes of many OpRisk cases are linked to the failure of control mechanisms. This means that an effective ICS plays a part in reducing or avoiding operational risk. Conversely, the systems for operational risk offer the possibility of gearing the ICS so that it is risk-oriented and consistent with OpRisk management.

The management and limitation of operational risks differs systematically from limiting credit and market risk, since the relevant management units are not made up of individual clients or positions but internal processes. For this type of risk, the focus is on anticipatory management by the segments and cross-sectional units based on an overarching risk strategy for operational risks and their specific aspects.

OpRisk ratios at Group level are managed through economic capital and regulatory capital. Commerzbank uses various methods for OpRisk management. These include:

• Annual evaluation of the Bank's ICS and carrying out risk scenario assessments.
• Continuous analysis of OpRisk loss events.
• Carrying out lessons learned activities for loss events ≥ €1m.
• Systematic evaluation of external OpRisk events at competitors.

Risk weighted assets for operational risks using the internal AMA model amounted to €22.6bn as at the end of the first quarter as well as at 31 December 2012. Of this amount, approximately 96% related to the Core Bank. The use of the integrated AMA-model allows the Bank to manage economic and regulatory capital for operational risk within one model approach.

31 Risk-oriented overall bank management

33 Default risk

• 52 Operational risk
• 53 Other risks

Other risks

In terms of all other risks, there were no significant changes in the first quarter of 2013 compared to the position reported in the Annual Report 2012.

Disclaimer

Commerzbank's internal risk measurement methods and models which form the basis for the calculation of the figures shown in this report are state-of-the-art and based on banking sector practice. The results obtained with the risk models are suitable for the purposes of the management of the Bank. The measurement approaches are regularly reviewed by Risk Control and Internal Audit, external auditors and the German supervisory authorities. Despite the careful development of the models and regular controls, models cannot capture all the influencing factors that may arise in reality, nor the complex behaviour and interactions of these factors. These limits to risk modelling apply particularly in extreme situations. Supplementary stress tests and scenario analyses can only show examples of the risks to which a portfolio may be exposed in extreme market situations; stress testing all imaginable scenarios however is unfeasible. The analyses cannot give a definitive indication of the maximum loss in the case of an extreme event.

Interim Financial Statements

55 Statement of comprehensive income

• 55 Income statement
• 56 Condensed statement of comprehensive income
• 57 Income statement (by quarter)
• 58 Balance sheet
• 60 Statement of changes in equity
• 63 Cash flow statement (condensed version)

64 Selected notes

• 64 General information
• 71 Notes to the income statement
• 82 Notes to the balance sheet
• 91 Other notes

107 Boards of Commerzbank Aktiengesellschaft

108 Review report

55 Statement of comprehensive income

58 Balance sheet

60 Statement of changes in equity

63 Cash flow statement 64 Selected notes

Statement of comprehensive income

Income statement

€m	Notes	1.1.–31.3.2013	1.1.-31.3.20121	Change in %
Interest income		3,292	4,403	– 25.2
Interest expense		1,936	2,709	– 28.5
Net interest income	(1)	1,356	1,694	– 20.0
Loan loss provisions	(2)	– 267	– 212	25.9
Net interest income after loan loss provisions		1,089	1,482	– 26.5
Commission income		984	984	0.0
Commission expense		137	120	14.2
Net commission income	(3)	847	864	– 2.0
Net trading income	(4)	276	171	61.4
Net income from hedge accounting		41	– 7
Net trading income and net income from hedge accounting		317	164	93.3
Net investment income	(5)	– 6	– 176	– 96.6
Current net income from companies
accounted for using the equity method		8	11	– 27.3
Other net income	(6)	– 62	21
Operating expenses	(7)	1,724	1,790	– 3.7
Impairments of goodwill and brand names		–	–
Restructuring expenses	(8)	493	34
Net gain or loss from sale of disposal groups		–	–
Pre-tax profit or loss		– 24	542
Taxes on income	(9)	45	159	– 71.7
Consolidated profit or loss		– 69	383
Consolidated profit or loss attributable to
non-controlling interests		25	28	– 10.7
Consolidated profit or loss attributable to
Commerzbank shareholders		– 94	355

1 Prior-year figures restated due to the first-time application of the amended IAS 19 and other disclosure changes (see page 65ff.).

Earnings per share €	1.1.–31.3.2013	1.1.–31.3.2012	Change in %
Earnings per share	– 0.02	0.06

The earnings per share, calculated in accordance with IAS 33, are based on the consolidated profit or loss attributable to Commerzbank shareholders. No conversion or option rights were outstanding in the current year or comparable prioryear period. The figure for diluted earnings was therefore identical to the undiluted figure.

Condensed statement of comprehensive income

€m	1.1.–31.3.2013	1.1.-31.3.20121	Change in %
Consolidated profit or loss	– 69	383
Change in actuarial gains or losses
not recognised in income statement	150	– 153
Items not recyclable through profit or loss	150	– 153
Change in revaluation reserve
Reclassified to income statement	– 32	8
Change in value not recognised in income statement	145	717	– 79.8
Change in cash flow hedge reserve
Reclassified to income statement	47	47	0.0
Change in value not recognised in income statement	5	13	– 61.5
Change in currency translation reserve
Reclassified to income statement	–	22	– 100.0
Change in value not recognised in income statement	– 58	67
Change in companies accounted for using the equity method	1	–
Items recyclable through profit or loss	108	874	– 87.6
Other comprehensive income	258	721	– 64.2
Total comprehensive income	189	1,104	– 82.9
Comprehensive income attributable to non-controlling interests	5	80	– 93.8
Comprehensive income attributable to Commerzbank shareholders	184	1,024	– 82.0

1 Prior-year figures restated due to the first-time application of the amended IAS 19 and other disclosure changes (see page 65ff.).

Other comprehensive income €m		1.1.–31.3.2013			1.1.-31.3.20121
	Before taxes	Taxes	After taxes	Before taxes	Taxes	After taxes
Change in actuarial gains/losses	200	– 50	150	– 211	58	– 153
Change in revaluation reserve	153	– 40	113	986	– 261	725
Change in cash flow hedge reserve	73	– 21	52	81	– 21	60
Change in currency translation reserve	– 58	–	– 58	89	–	89
Change in companies accounted for using the equity method	1	–	1	–	–	–
Other comprehensive income	369	– 111	258	945	– 224	721

1 Prior-year figures restated due to the first-time application of the amended IAS 19 and other disclosure changes (see page 65ff.).

• 55 Statement of comprehensive income 58 Balance sheet
• • 60 Statement of changes in equity
• 63 Cash flow statement
• 64 Selected notes

Income statement (by quarter)

€m	2013	20121
	1st quarter	4th quarter	3rd quarter	2nd quarter	1st quarter
Net interest income	1,356	1,728	1,281	1,784	1,694
Loan loss provisions	– 267	– 614	– 430	– 404	– 212
Net interest income after loan loss provisions	1,089	1,114	851	1,380	1,482
Net commission income	847	764	852	769	864
Net trading income	276	– 411	218	103	171
Net income from hedge accounting	41	28	6	– 19	– 7
Net trading income and net income from hedge accounting	317	– 383	224	84	164
Net investment income	– 6	250	30	– 23	– 176
Current net income from companies accounted for using the equity method	8	12	16	7	11
Other net income	– 62	– 22	– 33	– 43	21
Operating expenses	1,724	1,775	1,732	1,732	1,790
Impairments of goodwill and brand names	–	–	–	–	–
Restructuring expenses	493	–	–	9	34
Net gain or loss from sale of disposal groups	–	– 185	3	– 86	–
Pre-tax profit or loss	– 24	– 225	211	347	542
Taxes on income	45	477	118	52	159
Consolidated profit or loss	– 69	– 702	93	295	383
Consolidated profit or loss attributable to
non-controlling interests	25	24	26	25	28
Consolidated profit or loss attributable to Commerzbank shareholders	– 94	– 726	67	270	355

1 Prior-year figures restated due to the first-time application of the amended IAS 19 and other disclosure changes (see page 65ff.).

Balance sheet

Assets €m	Notes	31.3.2013	31.12.2012	Change in %	1.1.20121
Cash reserve		11,051	15,755	– 29.9	6,075
Claims on banks	(11,13,14)	102,622	88,028	16.6	87,790
of which pledged as collateral		47	45	4.4	77
Claims on customers	(12,13,14)	280,136	278,546	0.6	296,586
of which pledged as collateral		–	–		–
Value adjustment portfolio fair value hedges		182	202	– 9.9	147
Positive fair values of derivative
hedging instruments		5,222	6,057	– 13.8	5,132
Trading assets	(15)	144,091	144,144	0.0	155,700
of which pledged as collateral		28,382	12,680		16,025
Financial investments	(16)	89,133	89,142	0.0	94,523
of which pledged as collateral		2,807	2,495	12.5	3,062
Holdings in companies accounted for
using the equity method		738	744	– 0.8	694
Intangible assets	(17)	3,054	3,051	0.1	3,038
Fixed assets	(18)	1,737	1,372	26.6	1,399
Investment properties		727	637	14.1	808
Non-current assets and disposal groups
held for sale		793	757	4.8	1,759
Current tax assets		810	790	2.5	716
Deferred tax assets		3,304	3,216	2.7	4,229
Other assets	(19)	3,700	3,571	3.6	3,242
Total		647,300	636,012	1.8	661,838

1 1 January 2012 is equivalent to 31 December 2011 after restatement due to the first-time application

of the amended IAS 19 and changes in the reporting of equity (see page 65 ff.).

• 55 Statement of comprehensive income 58 Balance sheet
• • 60 Statement of changes in equity 63 Cash flow statement

64 Selected notes

Liabilities and equity €m	Notes	31.3.2013	31.12.2012	Change in %	1.1.20121
Liabilities to banks	(20)	128,547	110,242	16.6	98,481
Liabilities to customers	(21)	272,946	265,842	2.7	255,344
Securitised liabilities	(22)	72,994	79,332	– 8.0	105,673
Value adjustment portfolio fair value hedges		1,188	1,467	– 19.0	938
Negative fair values of
derivative hedging instruments		10,580	11,739	– 9.9	11,427
Trading liabilities	(23)	110,001	116,111	– 5.3	137,847
Provisions	(24)	4,250	4,099	3.7	4,107
Current tax liabilities		286	324	– 11.7	680
Deferred tax liabilities		248	91		189
Liabilities from disposal groups held for sale		2	2	0.0	592
Other liabilities	(25)	6,385	6,523	– 2.1	6,568
Subordinated capital	(26)	11,814	12,316	– 4.1	13,285
Hybrid capital	(27)	1,610	1,597	0.8	2,175
Equity		26,449	26,327	0.5	24,532
Subscribed capital		5,827	5,828	0.0	5,113
Capital reserve		8,732	8,730	0.0	8,232
Retained earnings		10,854	10,860	– 0.1	11,477
Silent participations		2,376	2,376	0.0	2,687
Other reserves		– 2,225	– 2,353	– 5.4	– 3,676
Total before non-controlling interests		25,564	25,441	0.5	23,833
Non-controlling interests		885	886	– 0.1	699
Total		647,300	636,012	1.8	661,838

1 1 January 2012 is equivalent to 31 December 2011 after restatement due to the first-time application

of the amended IAS 19 and changes in the reporting of equity (see page 65 ff.).

Statement of changes in equity

€m	Sub scribed capital	Capital reserve	Retained earnings	Silent partici pations	Revalu ation reserve	Other reserves Cash flow hedge reserve	Currency translation reserve	Total before non control ling interests	Non control ling interests	Equity
Equity as at 31.12.2011	5,113	11,158	8,822	2,687	– 2,511	– 810	– 355	24,104	699	24,803
Change due to retrospective adjustments		– 2,926	2,655					– 271		– 271
Equity as at 1.1.2012	5,113	8,232	11,477	2,687	– 2,511	– 810	– 355	23,833	699	24,532
Total comprehensive income	–	–	– 422	–	813	194	142	727	206	933
Consolidated profit or loss			– 34					– 34	103	69
Change in actuarial gains/losses			– 388					– 388	– 1	– 389
Change in revaluation reserve					813			813	51	864
Change in cash flow hedge reserve						194		194		194
Change in currency translation reserve							137	137	53	190
Change in companies accounted for using the equity method							5	5		5
Dividend paid on silent participations			– 221					– 221		– 221
Dividend paid on shares								–	– 16	– 16
Capital increases	717	498						1,215	– 2	1,213
Withdrawal from retained earnings								–		–
Decrease in silent participations				– 311				– 311		– 311
Change in ownership interests			– 5					– 5	– 2	– 7
Other changes1	– 2	–	31		– 1		175	203	1	204
Equity as at 31.12.2012	5,828	8,730	10,860	2,376	– 1,699	– 616	– 38	25,441	886	26,327

1 Including change in treasury shares, change in derivatives on own equity instruments and

changes in the group of consolidated companies.

• 55 Statement of comprehensive income
• 58 Balance sheet 60 Statement of changes in equity
• 63 Cash flow statement
• 64 Selected notes

€m	Sub scribed capital	Capital reserve	Retained earnings	Silent partici pations	Revalu ation reserve	Other reserves Cash flow hedge reserve	Currency translation reserve	Total before non control ling interests	Non control ling interests	Equity
Equity as at 31.12.2012	5,828	8,730	10,860	2,376	– 1,699	– 616	– 38	25,441	886	26,327
Total comprehensive income	–	–	56	–	115	52	– 39	184	5	189
Consolidated profit or loss			– 94					– 94	25	– 69
Change in actuarial gains/losses			150					150	–	150
Change in revaluation reserve					115			115	– 2	113
Change in cash flow hedge reserve						52		52	–	52
Change in currency translation reserve							– 40	– 40	– 18	– 58
Change in companies accounted for using the equity method							1	1		1
Dividend paid on silent participations								–		–
Dividend paid on shares								–	–	–
Change in accounting par value								–		–
Capital increases								–		–
Withdrawal from retained earnings								–		–
Decrease in silent participations								–		–
Change in ownership interests			–					–	–	–
Other changes1	– 1	2	– 62					– 61	– 6	– 67
Equity as at 31.3.2013	5,827	8,732	10,854	2,376	– 1,584	– 564	– 77	25,564	885	26,449

1 Including change in treasury shares, change in derivatives on own equity instruments and changes in the group of consolidated companies.

The restatement of retained earnings on 1 January 2012 was due in part to the retrospective application of the amended IAS 19. In addition, retained earnings and the capital reserve were affected by the changes in the accounting treatment of certain items within equity (see page 65 ff.).

As at 31 March 2013, the subscribed capital of Commerzbank Aktiengesellschaft pursuant to the Bank's articles of association stood at €5,830m and was divided into 5,829,513,857 no-par-value shares with an accounting value per share of €1.00. The average number of ordinary shares in issue was 5,827,510,114 (31 March 2012: 5,232,551,891 shares).

There was no impact on the other reserves from assets and disposal groups held for sale as at 31 March 2013.

There were no changes in ownership interests in the first quarter of 2013 as there were neither disposals of shares in subsidiaries that continue to be consolidated nor purchases of additional shares in already consolidated companies.

For information: Statement of changes in equity from 1 January to 31 March 2012

€m	Sub scribed capital	Capital reserve	Retained earnings	Silent partici pations	Revalu ation reserve	Other reserves Cash flow hedge reserve	Currency translation reserve	Total before non control ling interests	Non control ling interests	Equity
Equity as at 31.12.2011	5,113	11,158	8,822	2,687	– 2,511	– 810	– 355	24,104	699	24,803
Change due to retrospective adjustments1		– 2,926	2,655					– 271		– 271
Equity as at 1.1.2012	5,113	8,232	11,477	2,687	– 2,511	– 810	– 355	23,833	699	24,532
Total comprehensive income	–	–	203	–	713	60	48	1,024	80	1,104
Consolidated profit or loss			355					355	28	383
Change in actuarial gains/losses			– 152					– 152	– 1	– 153
Change in revaluation reserve					713			713	12	725
Change in cash flow hedge reserve						60		60		60
Change in currency translation reserve							48	48	41	89
Change in companies accounted for using the equity method							–	–		–
Dividend paid on silent participations								–		–
Dividend paid on shares								–		–
Change in accounting par value								–		–
Capital increases	481	440						921		921
Withdrawal from retained earnings								–		–
Decrease in silent participations				– 231				– 231		– 231
Change in ownership interests			–					–	1	1
Other changes1,2	– 1	–	68					67	2	69
Equity as at 31.3.2012	5,593	8,672	11,748	2,456	– 1,798	– 750	– 307	25,614	782	26,396

1 Prior-year figures restated due to the first-time application of the amended IAS 19

and other disclosure changes (see page 65 ff.).

2 Including change in treasury shares, change in derivatives on own equity instruments

and changes in the group of consolidated companies.

• 55 Statement of comprehensive income
• 58 Balance sheet
• 60 Statement of changes in equity
• 63 Cash flow statement 64 Selected notes

Cash flow statement (condensed version)

€m	2013	20121
Cash and cash equivalents as at 1.1.	15,755	6,075
Net cash from operating activities	– 3,407	– 3,066
Net cash from investing activities	– 902	2,648
Net cash from financing activities	– 488	86
Total net cash	– 4,797	– 332
Effects from exchange rate changes	118	– 71
Effects from non-controlling interests	– 25	– 29
Cash and cash equivalents as at 31.3.	11,051	5,643

1 Prior-year figures restated due to the first-time application of the amended IAS 19 and other disclosure changes (see page 65 ff.).

The cash flow statement shows the changes in cash and cash equivalents for the Commerzbank Group. These correspond to the cash reserve item in the balance sheet and consist of cash on hand, balances with central banks, as well as debt issues of public-sector borrowers and bills of exchange rediscountable at central banks.

The cash flow statement of Commerzbank Group is not very informative. For us the cash flow statement replaces neither liquidity planning nor financial planning, nor is it employed as a management tool.

Selected notes

General information

Accounting policies

The interim financial statements of the Commerzbank Group as at 31 March 2013 were prepared in accordance with Art. 315 a (1) of the German Commercial Code (HGB) and Regulation (EC) No. 1606/2002 of the European Parliament and of the Council of 19 July 2002 (the IAS Regulation), together with other regulations for adopting certain international accounting standards on the basis of the International Financial Reporting Standards (IFRS) approved and published by the International Accounting Standards Board (IASB) and their interpretation by the International Financial Reporting Interpretations Committee (IFRIC). This report takes particular account of the requirements of IAS 34 relating to interim financial reporting.

Uniform accounting and measurement methods are used throughout the Commerzbank Group in preparing the financial statements. For fully consolidated companies and holdings in companies accounted for using the equity method we predominantly used financial statements prepared as at 31 March 2013. The reporting currency of the consolidated financial statements is the euro. Unless otherwise indicated, all amounts are shown in millions of euros. In the statement of comprehensive income, the balance sheet, the statement of changes in equity and the condensed cash flow statement amounts under €500,000.00 are shown as €0m; where an item is €0.00 this is denoted by a dash. In all other notes amounts rounded down to €0m and zero items are both indicated by a dash.

Application of new and revised standards and changes to accounting policies

In preparing these financial statements, we have employed the same accounting policies as in our consolidated financial statements as at 31 December 2012 (see page 190 ff. of our 2012 Annual Report). These financial statements take into account the standards and interpretations that must be applied in the EU from 1 January 2013.

The new IFRS 10, 11 and 12 standards and the amended IAS 27 and 28 standards were voluntarily applied for the first time during the current financial year; application of the new

Effects of new and amended standards

As a consequence of the application of the amended IAS 1, information about reclassifications from equity to profit or loss ("recycling") was added to the statement of comprehensive income.

The new IFRS 10 (consolidated financial statements) stipulates rules for the consolidation of companies and replaces IAS 27 and SIC Interpretation 12. The most important change is the new definition of "control" within the conIFRS 13 standard and the amended standards IAS 1 and 19 as well as IFRS 7 was mandatory. Where retrospective application of the new or amended standards was required, the prior-year figures were restated accordingly so as to allow comparisons with the previous year or period. We also made several changes to the accounting policies. Where necessary, we have restated the prior-year figures accordingly. Significant changes from the previous year are set out below.

text of the parent-subsidiary relationship. Under IFRS 10, a company has control if:

• it has the power to direct the activities of the other company,
• it has exposure, or rights, to variable returns from its involvement, and

• it is able to use its power over the other company to affect the amount of its returns.

• 55 Statement of comprehensive income

• 58 Balance sheet 60 Statement of changes in equity
• 63 Cash flow statement
• 64 Selected notes

This principle is also to be applied to special purpose entities. As regards to the first-time consolidations and deconsolidations resulting from the first-time application of these standards, please refer to the information on consolidated companies (page 69 f.).

The new IFRS 11 (joint arrangements) governs the accounting of jointly controlled entities or joint arrangements where two or more companies share joint control. It replaces IAS 31 and SIC Interpretation 13. Commensurate with the changes to the definitions under IFRS 11, joint arrangements are now classified as either

• a joint venture or
• a joint operation.

The most significant change is the cessation of proportionate consolidation. Partner companies of a joint venture are now required to apply the equity method.

Companies participating in joint operations are subject to accounting rules similar to those which applied previously to joint assets or joint operations (proportionate recognition of assets, liabilities, expense and income).

The first-time application of this standard did not result in any changes in the companies accounted for using the equity method.

The new IFRS 12 (disclosure of interests in other entities) incorporates the requirements of IFRS 10 and IFRS 11, the application of which is not binding until 31 December 2013.

IFRS 10, 11 and 12 will be applied prospectively in the current financial year for the first time. The restatement of retained earnings amounted to €–69m and was entirely attributable to the changes in the group of consolidated companies. The first-time consolidations and deconsolidations resulted in a net increase of total assets by €0.2bn.

The new IFRS 13, which is to be applied prospectively, brings together the rules for measuring fair value, which until now were in several standards. We have also harmonised and expanded the relevant notes in these interim financial statements (see Note 31).

Fair value is now defined as the realisable price, i.e. the price that the market participant would receive to sell a financial instrument or pay to transfer a liability in an orderly transaction. As previously, the 3-level fair value hierarchy is applied in the measurement of fair value in accordance with IFRS 7. When valuing liabilities, non-performance risk must also be taken into account and a graduated valuation procedure applied. If it is not possible to value a liability due to a lack of quoted market prices, the valuation may instead be based on an identical instrument held as an asset by a third party. If this is not possible either, another appropriate valuation method is to be used. Moreover, under certain circumstances, a group valuation may also be possible for financial assets and liabilities which are managed on a net basis with respect to the market and credit risk. The first-time application of this standard had no significant impact on the statement of comprehensive income or the balance sheet as compared with the rules applicable up until now (see also the 2012 Annual Report, page 274 ff.).

Application of the amended IAS 19 (employee benefits) changes the treatment of actuarial gains and losses.

As previously, pension obligations are valued according to a number of parameters (including retirement age, life expectancy, staff turnover). The difference between the revaluation of the pension obligation on the balance sheet date as compared with the value projected at the beginning of the year is the actuarial gain or loss. The "corridor" option for recognising actuarial gains or losses, which the Commerzbank Group has used up until now, has been abolished. Instead, actuarial gains and losses are recognised directly in equity in retained earnings.

In addition, the past service cost resulting from retrospective plan changes must now be recognised in the income statement immediately and in full. Up to now, this was distributed on a straight-line basis until commencement of the vested benefits. In addition, partial retirement top-up payments are also now accumulated on a straight-line basis up to the end of the working period instead of being recognised in full on the grant date as previously.

Offsetting pension liabilities and plan assets while recognising actuarial gains and losses means that the effective net pension obligation is recognised in the balance sheet.

Furthermore, net interest costs must be calculated pursuant to the amended IAS 19 when pension liabilities are financed by plan assets. This involves calculating the interest on the net debt or net assets (defined benefit obligation less fair value of plan assets) at a uniform interest rate. In the previous standard, there were different rules for determining the interest rate used to discount the obligation and the interest rate used to calculate the anticipated income from plan assets.

The changes described above are coupled with certain requirements concerning reporting in the statement of comprehensive income. Past service cost and net interest must be recognised in profit or loss, while remeasurement effects (actuarial gain or loss) must be recognised in other comprehensive income.

In the first quarter of 2012, the impact of the retrospective restatements due to the first-time application of the amended IAS 19 was €5m for interest expense, €3m for operating expenses and €6m for taxes on income, which resulted in a reduction in consolidated profit by €–14m from €369m to €355m as at 31 March 2012. In the subsequent quarters of the 2012 financial year, the retrospective restatement of consolidated profit attributable to Commerzbank shareholders was as follows:

€m	Original Group financial statements	Adjustment	Restated Group financial statements
1.1.-31.3.2012	369	– 14	355
1.4.-30.6.2012	275	– 5	270
1.7.-30.9.2012	78	– 11	67
1.10.-31.12.2012	– 716	– 10	– 726

For the 2012 financial year, the earnings per share were €–0.05, compared to the earnings per share of €-0.04 as published for the previous year; in the first quarter of 2012, earnings per share were unchanged at €0.06. Retained earnings were adjusted downwards by €271m as at 1 January 2012 and by €705m as at 31 December 2012. Provisions for pensions and similar commitments increased by a net €346m as at 1 January 2012 (of which €–7m related to provisions for age-related part-time working) and by €840m as at 31 December 2012 (of which €–2m for age-related part-time working). As compared with 31 December 2012, other assets declined by €67m and non-controlling interests by €2m, while deferred tax assets were adjusted upwards by €201m (+€75m as at 1 January 2012) and deferred tax liabilities by €1m.

The restatements affected the statement of comprehensive income, the balance sheet, the statement of changes in equity, segment reporting and other notes.

The amendments to IFRS 7 require further information to be provided in the notes on the netting of financial instruments for the 2013 financial year and the preceding year. This must disclose the gross and net amounts of financial assets and liabilities resulting from offsetting and amounts of existing netting rights which do not satisfy the netting criteria (see Note 34). This improves the comparability of the netting of financial instruments with users of US GAAP.

• 55 Statement of comprehensive income 58 Balance sheet
• 60 Statement of changes in equity
• 63 Cash flow statement 64 Selected notes

Changes to accounting policies

The IFRS standards do not lay down any particular rules on how to structure equity, and nor do they define clear criteria for the treatment of certain items. These items include the transaction costs of capital-raising measures, share-based payments settled in the form of equity instruments, and withdrawals from capital reserves to balance net losses in the Commerzbank Aktiengesellschaft's parent company financial statements in accordance with German accounting principles.

The composition of equity in the Commerzbank Group applies a structure common within the German legal system. For capital components that have a guarantee function (subscribed capital and capital reserve), we now apply the definition of Art. 272 (1) and (2) HGB for the Group, as for the individual financial statements under German GAAP. Since 1 January 2013, transaction costs in connection with capital increases, which under IAS 32.35 are to be shown as a deduction from equity, have therefore been deducted from retained earnings instead of from the capital reserve as was previously the case.

IFRS 2.10 stipulates that the fair value of share-based payments settled in the form of equity instruments is to be recognised in equity as at the grant date. Since 1 January 2013, we have also recognised these instruments in retained earnings instead of the capital reserve, as was previously the case. As under German GAAP, they are not shown in subscribed capital and the capital reserve until they are definitively drawn down by the recipient.

If the Company reports a net loss for the year under German GAAP and this is wholly or partly offset by a withdrawal from the capital reserve, the same amount is also transferred from the capital reserve in the consolidated financial statements under IFRS to the Group's retained earnings.

As a result, subscribed capital and capital reserves are consistent with the definitions under German company law and accounting regulations, thus increasing transparency.

We have restated the prior-year figures in the balance sheet and the statement of changes in equity accordingly. The reclassification from capital reserves to retained earnings amounted to €2,926m as at 1 January 2012 and €2,951m as at 1 January 2013. However, these reclassifications had no impact on consolidated profit or loss or earnings per share for the financial years 2011 and 2012.

In 2013 we have refined the process of recognising counterparty default adjustments (CDA), which reflect the expected loss in the event the counterparty should default, in particular for OTC derivatives. Since 1 January 2013, counterparty default risk has been accounted for by recognising credit valuation adjustments (CVA) for positive derivative exposures and debit value adjustments (DVA) for negative derivative exposures. This change led to an income of €41m within net trading income in the first quarter.

IAS 1.82 requires that financing costs be reported separately. Up until 31 December 2012 we reported these costs as interest expense in net interest income or net trading income. However, it is now common practice to show interest from trading activities within net interest income. In order to report interest within the Commerzbank Group on a consistent basis, we have therefore decided to report interest from both the banking and trading books in net interest income with effect from 1 January 2013.

Income and expenses from trading transactions are only reported as interest income and expense if they clearly have interest-like characteristics and are not included in the valuation of the instrument. This also applies to interest effects from the purchase or sale of financial instruments in the trading transactions related to capital commitments.

To ensure that net trading income only reflects gains and losses on disposal and remeasurement of trading transactions, we also decided to reclassify commission income from syndication business to net commission income, previously recorded in net trading income.

In the first quarter of 2012, reclassifications of €293m from net trading income to net interest income were €272m (net balance of €452m in interest income and €180m in interest expense) and reclassifications to net commission income were €21m. However, these reclassifications had no impact on the consolidated profit, the balance sheet, the statement of changes in equity or earnings per share.

In order to present interest income and expense on a consistent basis we have also decided to recognise the interest components of IAS 19 (net interest) in net interest income as at 1 January 2013, instead of in operating expenses, as has been the case until now. The reclassification for the first quarter of 2012 amounted to €2m and increased interest expense. Operating expenses declined accordingly. However, these reclassifications had no impact on the consolidated profit, the balance sheet, the statement of changes in equity or earnings per share.

Moreover, since 1 January 2013 we have reported all effects arising from the dedesignation of hedge accounting in other interest expense. This pertains to the amortisation of effects from underlying transactions and the reversal of hedged transactions when fair value hedge accounting is ended. The cash flow hedge reserve and the associated hedging instruments from the cash flow hedge accounting ended in the 2009 financial year are also recognised. The effects arising from the ending of hedge accounting are recognised in other interest income or other interest expense, depending on the net balance. In the first quarter of 2012, the net balance in other interest expense was €5m. Thus far, €89m of this was recognised in interest income in the loans and receivables category and €68m as other interest expense. A further €–26m was offset against interest income from available-for-sale financial instruments. However, these reclassifications had no impact on the consolidated profit, the balance sheet, the statement of changes in equity or earnings per share.

In addition, since 1 January 2013, we have recognised commission income from electronic banking in commission income from payment transactions and foreign business, instead of in other commission income as previously. The reclassification for the first quarter of 2012 totalled €16m. Since 1 January 2013 we have also reported commission from syndicated business and similar transactions in commission income from syndications across the Group. The reclassification from intermediary business in the first quarter of 2012 amounted to €9m. However, these reclassifications had no impact on the consolidated profit, the balance sheet, the statement of changes in equity or earnings per share.

The table below shows the material restatements for the 2012 financial year and for each quarter, including the effects of the application of the amended IAS 19 on the income statement:

€m	Original Group financial statements		Adjustment
	1.1.- 31.12.2012	1.1.- 31.3.2012	1.4.- 30.6.2012	1.7.- 30.9.2012	1.10.- 31.12.202	1.1.- 31.12.2012	1.1.- 31.12.2012
Net interest income	5,539	265	451	– 98	330	948	6,487
Interest income	14,559	389	711	174	547	1,821	16,380
Interest expense	9,020	124	260	272	217	873	9,893
Net commission income1	3,191	21	12	12	13	58	3,249
Net trading income	1,113	– 293	– 471	78	– 346	– 1,032	81
Operating expenses	7,025	1	1	–	2	4	7,029
Pre-tax profit or loss	905	– 8	– 9	– 8	– 5	– 30	875
Taxes on income	796	6	– 4	3	5	10	806
Consolidated profit or loss	109	– 14	– 5	– 11	– 10	– 40	69
Consolidated profit or loss attribu table to Commerzbank shareholders	6	– 14	– 5	– 11	– 10	– 40	– 34

1 Restatement affected commission income only.

We have restated the prior-year figures for the changes in interest income, commission income, trading income and operating expenses noted above in the income statement, the relevant notes and the segment reporting.

• 55 Statement of comprehensive income
• 58 Balance sheet 60 Statement of changes in equity
• 63 Cash flow statement 64 Selected notes

Consolidated companies

The following companies were consolidated for the first time as at 31 March 2013:

Name of company	Equity share and voting rights	Acquisition cost	Assets	Liabilities
	%	€m	€m	€m
Aspiro S.A., Lodz, Poland	69.7	12.4	37.2	5.0
BRE Centrum Operacji Sp. z o.o, Aleksandrów Lódzki, Poland	69.7	7.5	13.9	3.1
BRE Wealth Management S.A., Warsaw, Poland	69.7	2.9	6.8	0.8
ComStage ETF S&P SMIT 40 Index TRN, Luxembourg	77.6	0.0	30.3	30.3
Dr. Gubelt Beteiligungsgesellschaft mbH & Co. Alpha Objekt Hauptverwaltung Frankfurt KG, Düsseldorf1	0.0	0.0	218.9	218.9
Dr. Gubelt Beteiligungsgesellschaft mbH & Co. Beta Objekt Hauptverwaltung Frankfurt KG, Düsseldorf1	0.0	0.0	219.0	219.0
Dr. Gubelt Grundstücks Vermietungsgesellschaft mbH & Co. Objekt Frankfurt Neue Mainzer Straße KG, Düsseldorf1	0.0	0.0	113.9	191.0
Dr. Gubelt Beteiligungsgesellschaft mbH & Co. Objekt Halle am Markt KG, Düsseldorf1	0.0	0.0	7.5	10.9
Dr. Gubelt Beteiligungsgesellschaft mbH & Co. Objekt Erfurt KG, Düsseldorf1	0.0	0.0	20.1	22.8
Dr.Gubelt Grundstücks-Vermietungsges.mbH &Co. Objekt Schwabing KG, Düsseldorf1	0.0	0.0	37.3	39.4
Dr.Gubelt Grundstücks-Vermietungsges.mbH &Co. Objekt Essen, Linden KG, Düsseldorf1	0.0	0.0	11.6	17.6
Garbary Sp. z o.o., Poznan, Poland	69.7	13.6	11.1	2.1
GRAMOLINDA Vermietungsgesellschaft mbH, Grünwald1	50.0	0.0	0.0	0.0
GRAMOLINDA Vermietungsgesellschaft mbH & Co. Objekt Frankfurt KG, Grünwald1,2	97.0	0.0	80.3	80.4
MOLARIS Verwaltungs- und Vermietungsgesellschaft mbH, Düsseldorf1	0.0	0.0	12.6	12.4
Number X Bologna S.r.l., Milan, Italy	100.0	7.5	11.3	4.3
SME Commerz SCB GmbH, Frankfurt/Main	100.0	0.0	605.4	605.2

1 As a result of the first-time application of IFRS 10.

2 Differing voting rights of 70.0%.

The entities listed above were consolidated due to the first-time application of IFRS 10, or were newly formed or acquired, some in the course of structured financing transactions.

The first-time consolidations did not give rise to any goodwill.

The following companies were liquidated, permanently fell below our materiality threshold for consolidation, or are no longer consolidated due to the first-time application of IFRS 10:

• Asset Securitisation Programme for Insured Receivables Ltd. (ASPIRE), Dublin, Ireland1
• Classic I (Netherlands) BV 2008– 1, Amsterdam, Netherlands
• EH MoLu IV, LLC, Dover, Delaware, USA²
• FAF Inc., George Town, Grand Cayman¹
• Idilias SPC Inc., George Town, Grand Cayman¹
• Loxodrome Inc., George Town, Grand Cayman¹
• MORE Global Inc., George Town, Grand Cayman¹
• Semper Finance 2006–1 Ltd., St. Helier, Jersey¹
• Semper Finance 2007–1 GmbH, Frankfurt/Main¹
• Steel Finance Inc., George Town, Grand Cayman¹
• Truckman Inc, George Town, Grand Cayman¹

Captain Holdings S.à.r.l., Luxembourg is no longer accounted for using the equity method. There were no other changes in the companies accounted for using the equity method.

The following companies:

• CG New Venture 2 Verwaltungsgesellschaft mbH,
• Wiesbaden and – GO German Office GmbH, Wiesbaden³

are reported as held for sale in accordance with IFRS 5 as there are plans to sell them and their sale is highly probable within one year.

Receivables and investment fund units are also held for sale in the Non-Core Assets and Private Customers segments, and an office building is held for sale in the Others and Consolidation segment.

Until the definitive transfer of the holdings, we measure non-current assets and disposal groups held for sale and liabilities from disposal groups held for sale in accordance with IFRS 5 and report them separately in the relevant balance sheet items and in the statement of changes in equity.

³ CG New Venture 4 GmbH & Co. KG, Wiesbaden was merged with GO German Office GmbH, Wiesbaden.

• 55 Statement of comprehensive income
• 58 Balance sheet 60 Statement of changes in equity
• 63 Cash flow statement 64 Selected notes

Notes to the income statement

(1) Net interest income

€m	1.1.–31.3.2013	1.1.-31.3.20121	Change in %
Interest income	3,292	4,403	– 25.2
Interest income from lending and money market transactions and from the securities portfolio (available-for-sale)	255	261	– 2.3
Interest income from lending and money market transactions and from the securities portfolio (loans and receivables)	2,689	3,537	– 24.0
Interest income from lending and money market transactions and from the securities portfolio (due to application of fair value option)	67	208	– 67.8
Interest income from lending and money market transactions and from the securities portfolio (held for trading)	120	23
Prepayment penalty fees	33	26	26.9
Gains on the sale of loans and receivables and repurchase of liabilities	70	59	18.6
Dividends from securities	9	18	– 50.0
Current net income from equity holdings and non-consolidated subsidiaries	8	3
Current income from properties held for sale and from investment properties	16	20	– 20.0
Other interest income	25	248	– 89.9
Interest expense	1,936	2,709	– 28.5
Interest expense from subordinated and hybrid capital and from securitised and other liabilities	1,763	2,462	– 28.4
Interest expense from applying the fair value option	100	176	– 43.2
Interest expense from securitised liabilities held for trading	26	27	– 3.7
Loss on the sale of loans and receivables and repurchase of liabilities	15	17	– 11.8
Current expenses from properties held for sale and from investment properties	14	12	16.7
Other interest expense	18	15	20.0
Total	1,356	1,694	– 20.0

1 Prior-year restated (see page 65 ff.). Before the restatement interest income was €4,014m,

interest expense was €2,585m and net interest income was €1,429m.

The unwinding effect for the period 1 January to 31 March 2013 was €37m (previous year: €50m).

books) is recognised in other interest income or other interest expense, depending on the net balance.

Other interest expense includes net interest expense for pensions. Net interest from derivatives (banking and trading

(2) Loan loss provisions

The breakdown of loan loss provisions in the consolidated income statement was as follows:

€m	1.1.–31.3.2013	1.1.–31.3.2012	Change in %
Allocations to loan loss provisions1	– 871	– 855	1.9
Reversals of loan loss provisions1	617	658	– 6.2
Net balance of direct write-downs, write-ups and amounts recovered on claims written-down	– 13	– 15	– 13.3
Total	– 267	– 212	25.9

1 Gross figures (e.g. migrations between different types of provisions are not netted off).

(3) Net commission income

€m	1.1.–31.3.2013	1.1.–31.3.2012	Change in %
Securities transactions	260	228	14.0
Asset management	48	40	20.0
Payment transactions and foreign business1	308	328	– 6.1
Real estate lending business	21	36	– 41.7
Guarantees	47	44	6.8
Net income from syndicated business1	68	73	– 6.8
Intermediary business1	44	58	– 24.1
Fiduciary transactions	1	1	0.0
Other1	50	56	– 10.7
Total2	847	864	– 2.0

1 Prior-year restated (see page 65 ff.). Before the restatement commission income was €963m

and net commission income was €843m.

2 Of which commission expense: €137m (prior year: €120m).

(4) Net trading income

We have split net trading income into two components:

• Net trading gain or loss (this includes trading in securities, promissory note loans, precious metals and derivative instruments plus the net gain or loss on the remeasurement of derivative financial instruments that do not qualify for hedge accounting)
• Net gain or loss from applying the fair value option (including changes in the fair value of related derivatives).

All financial instruments held for trading purposes are measured at fair value. Fair value is derived from both quoted market prices and internal pricing models (primarily net present value and option pricing models). Interest-rate and cross-currency interest-rate derivatives are measured taking account of the fixing frequency for variable payments.

• 55 Statement of comprehensive income 58 Balance sheet
• 60 Statement of changes in equity
• 63 Cash flow statement 64 Selected notes

€m	1.1.–31.3.2013	1.1.–31.3.2012	Change in %
Net trading gain or loss1,2	247	262	– 5.7
Net gain or loss from applying the fair value option	29	– 91
Total	276	171	61.4

1 Including net gain or loss on the remeasurement of derivative financial instruments.

2 Prior-year restated (see page 65 ff.). Before the restatement the net trading gain was €555m

and overall net trading income was €464m.

(5) Net investment income

Net investment income contains gains or losses on the disposal and remeasurement of securities in the loans and receivables and available-for-sale categories, equity holdings, holdings in companies accounted for using the equity method and subsidiaries.

€m	1.1.–31.3.2013	1.1.–31.3.2012	Change in %
Net gain or loss from interest-bearing business	– 6	– 160	– 96.3
In the available-for-sale category	– 4	15
Gain on disposals (including reclassification from revaluation reserve)1	30	94	– 68.1
Loss on disposals (including reclassification from revaluation reserve)1	– 26	– 81	– 67.9
Net remeasurement gain or loss1	– 8	2
In the loans and receivables category	– 2	– 175	– 98.9
Gain on disposals	1	12	– 91.7
Loss on disposals	– 3	– 185	– 98.4
Net remeasurement gain or loss2	–	– 2	– 100.0
Net gain or loss on equity instruments	–	– 16	– 100.0
In the available-for-sale category	7	6	16.7
Gain on disposals (including reclassification from revaluation reserve)1	7	6	16.7
Loss on disposals (including reclassification from revaluation reserve)1	–	–
In the available-for-sale category, measured at acquisition cost	17	–
Net remeasurement gain or loss1	– 1	–
Net gain or loss on disposals and remeasurement of companies accounted for using the equity method	– 23	– 22	4.5
Total	– 6	– 176	– 96.6

1 Includes a net €–6m (previous year: €53m) of reclassifications from the revaluation reserve

created in the financial year 2013.

2 Includes reversals of portfolio valuation allowances of €2m (previous year: allocations of €2m) for reclassified securities.

(6) Other net income

€m	1.1.–31.3.2013	1.1.–31.3.2012	Change in %
Other material items of expense	158	104	51.9
Operating lease expenses	33	43	– 23.3
Allocations to provisions	125	61
Other material items of income	69	110	– 37.3
Operating lease income	40	65	– 38.5
Reversals of provisions	29	45	– 35.6
Balance of sundry other income/expenses	27	15	80.0
Total	– 62	21

The increase in allocations to provisions in the first quarter of 2013 compared with the same period last year was largely due to revisions of our estimates of litigation losses.

(7) Operating expenses

€m	1.1.–31.3.2013	1.1.–31.3.2012	Change in %
Personnel expenses1	1,022	1,046	– 2.3
Operating expenses	611	646	– 5.4
Depreciation/amortisation of fixed assets and other intangible assets	91	98	– 7.1
Total	1,724	1,790	– 3.7

1 Prior-year restated (see page 65 ff.). Before the restatement personnel expenses were €1,045m

and the overall operating expenses were €1,789m.

(8) Restructuring expenses

€m	1.1.–31.3.2013	1.1.–31.3.2012	Change in %
Expenses for restructuring measures initiated	493	34
Total	493	34

The restructuring expenses in the first three months of 2013 were due to Commerzbank's new strategy and the resultant planned adjustment to personnel capacities. The expenses in the previous year derived from the realignment of the Group in compliance with the European Commission requirement to wind down Hypothekenbank Frankfurt (formerly Eurohypo).

(9) Taxes on income

Group tax expense was €45m as at 31 March 2013. With pre-tax profit of €–24m the Group's effective tax rate was therefore –187.5% (Group income tax rate: 31.23%). Tax expense in the first quarter of 2013 derived primarily from current tax expenses of BRE Bank and Commerzbank Aktiengesellschaft in Luxembourg.

55 Statement of comprehensive income 58 Balance sheet

60 Statement of changes in equity

63 Cash flow statement 64 Selected notes

(10) Segment reporting

Segment reporting reflects the results of the operating business segments within the Commerzbank Group. The segment information below is based on IFRS 8 Operating Segments, which applies the management approach. In accordance with this standard, segment information must be prepared on the basis of the internal reporting information that is evaluated by the chief operating decision-maker to assess the performance of the operating segments and make decisions regarding the allocation of resources to the operating segments. Within the Commerzbank Group, the function of chief operating decisionmaker is exercised by the Board of Managing Directors.

Our segment reporting covers five operating segments plus the Others and Consolidation segment. The Portfolio Restructuring Unit (PRU), which was wound up on 1 July 2012, is shown separately with its results for the same period last year. This reflects the Commerzbank Group's organisational structure and forms the basis for internal management reporting. The business segments are divided up on the basis of distinctions between products, services and/or customer target groups. In 2013 we have further refined the segmentation of assets. Minor modifications in the segments' business models led to slight adjustments in the business responsibilities of the segments. The prior-year figures were restated accordingly. Various new IFRS requirements were implemented in the Commerzbank Group in 2013 (see page 65 ff.), the effects of which are also reflected in the segment reporting.

• The Private Customers segment comprises the activities of Private Customers, Direct Banking and Commerz Real. The Private Customers division combines the classic branch business with retail and corporate customers and private banking. The dense national network of local branches offers a full service range of banking products including loan, deposit, security, payments traffic and pension products. Wealth Management provides services to wealthy clients in Germany and abroad and also includes the Group's portfolio management activities. The focus is on services such as securities and portfolio management, credit management and loans and real estate management. We also provide advice on trust and inheritance issues and corporate investments. Moreover, this segment includes Commerz Direktservice GmbH, which provides call centre services for Commerzbank customers. The Joint Venture Commerz Finanz, which is focused on consumer lending, is managed centrally by the Private Customers segment and also reports its results there. Since 1 July 2012 the private real estate portfolio of the Private Customer portfolio of Hypothekenbank Frankfurt Aktiengesellschaft (formerly Eurohypo Aktiengesellschaft) has been part of the Private Customers division. The Direct Banking division comprises the activities of the comdirect Group. The B2B (ebase) and B2C businesses (comdirect) contained in Direct Banking provide standardised, primarily internet-based advisory and service offerings for customers. Commerz Real has been a division of the Private Customers segment since July 2012 (except for the warehouse section). Its products range from open-ended real estate funds (hausinvest), to closed-end funds in real estate, aircraft, ships and renewable energy, institutional investments and structured investments as well as equipment leasing.

• The Mittelstandsbank segment is divided into the three group divisions Mittelstand Germany, Corporate Banking&International and Financial Institutions. The Mittelstand Germany division serves small and mid-sized customers, the public sector and institutional clients. Our comprehensive service offering includes payments and cash management solutions, flexible financing solutions, interest rate and currency management products, professional investment advisory services and innovative investment banking solutions. In the Corporate Banking&International division we concentrate on serving corporate groups with revenues of over €500m (except for multinational corporates, which are handled by Client Relationship Management within the Corporates& Markets segment). Smaller groups with a strong capital market affinity or significant operations outside Germany are also serviced by this division. With our foreign branch offices we act as a strategic partner for both the international activities of our German corporate customers and for international companies with business activities in our home market of Germany. The Corporate Banking & International division also includes the competence centre for companies from the renewable energy sector. The Financial Institutions division is responsible for relationships with banks and financial institutions in Germany and abroad, as well as with central banks. The strategic focus is on Commerzbank becoming customers' preferred source of trade finance services. Financial Institutions uses a global network of correspondent banks, together with business relationships in emerging markets, to support the Group's financing and processing of foreign trade activities on behalf of all Commerzbank Group customers throughout the world.

• The Central&Eastern Europe (CEE) segment comprises the universal banking and direct banking activities in this region during the reporting period. It includes in particular our Polish subsidiary BRE Bank, which offers banking products for corporate customers as well as financial services for private customers under the mBank and Multi-Bank brands in Poland, the Czech Republic and Slovakia. The CEE segment also has an investment in a microfinance bank which has not yet been sold.
• Corporates& Markets consists of four main businesses: Equity Markets&Commodities comprises trading and sales of equity and commodity-related financial products. Fixed Income&Currencies includes trading and sales of interest rate, credit and currency instruments. Corporate Finance provides arrangement and advisory services for equity, debt and hybrid instruments, securitisation solutions and mergers&acquisitions. Credit Portfolio Management is responsible for actively managing the credit risk portfolio of Corporates& Markets on a uniform global basis. The assets transferred from the Portfolio Restructuring Unit are also worked out in this division in a value-maximising manner. Corporates& Markets also houses Client Relationship Management, which is responsible for servicing German multinational industrial companies, German and international insurers, private equity investors, sovereign wealth funds and public sector customers.

• The Non-Core Assets (NCA) segment was created with effect from 1 July 2012. The NCA segment groups together the results from the Commercial Real Estate (CRE) Germany, Commercial Real Estate (CRE) International, Public Finance (including Private Finance Initiatives, which were transferred from the PRU to NCA with effect from 1 July 2012) and Deutsche Schiffsbank (DSB) divisions. CRE Germany, CRE International and Public Finance belong almost entirely to the Commerzbank subsidiary Hypothekenbank Frankfurt Aktiengesellschaft. The DSB division contains the ship financing business of the Commerzbank Group, including all ship financing activities of the former Deutsche Schiffsbank Aktiengesellschaft as well as the warehouse assets of Commerz Real Aktiengesellschaft.

• The Portfolio Restructuring Unit segment was dissolved as at 1 July 2012. The remaining assets were transferred either to the Corporates& Markets segment or to the Non-Core Assets (NCA) segment. The Portfolio Restructuring Unit was responsible for reducing assets related to proprietary trading and investment activities which no longer fitted into Commerzbank's client-centric strategy and were discontinued in 2009. The segment's goal was to reduce the portfolio in a way that optimised the bank's capital position. The positions managed by this segment initially included asset-backed securities (ABSs) without a state guarantee, other structured credit products, proprietary trading positions in corporate or financial bonds and exotic credit derivatives. These positions were primarily transferred from the Corporates& Markets and former Commercial Real Estate segments to the Portfolio Restructuring Unit.

• The Others and Consolidation segment contains the income and expenses which are not attributable to the operating business segments. The Others category within this segment includes equity holdings which are not assigned to the operating segments as well as Group Treasury. The costs of the service units, which – except for integration and restructuring costs – are charged in full to the segments, are also shown here. The restructuring expenses for implementing the strategic agenda up until 2016 are recognised under "Others". Consolidation includes income and expense items that represent the reconciliation of internal management reporting figures shown in segment reporting with the consolidated financial statements in accordance with IFRS. The costs of the Group management units which are charged in full to the segments, except for integration and restructuring costs, are also reported under this heading.

• 55 Statement of comprehensive income

• 58 Balance sheet 60 Statement of changes in equity
• 63 Cash flow statement
• 64 Selected notes

The performance of each segment is measured in terms of operating profit or loss and pre-tax profit or loss, as well as return on equity and the cost/income ratio. Operating profit or loss is defined as the sum of net interest income after loan loss provisions, net commission income, net trading income and net income from hedge accounting, net investment income, current net income from companies accounted for using the equity method and other net income less operating expenses. As we report pre-tax profits, non-controlling interests are included in the figures for both profit or loss and average capital employed. All the revenue for which a segment is responsible is thus reflected in the pre-tax profit.

The return on equity is calculated as the ratio of profit (both operating and pre-tax) to average capital employed. It shows the return on the capital employed in a given segment. The cost/income ratio in operating business reflects the cost efficiency of the various segments and expresses the relationship of operating expenses to income before loan loss provisions.

Income and expenses are reported in the segments by originating unit and at market prices, with the market interest rate method being used for interest rate operations. The actual funding costs for the segment-specific equity holdings allocated to each segment are shown in net interest income. The Group's return on capital employed is allocated to the net interest income of the various segments in proportion to the average capital employed in the segment. The interest rate used is the long-term risk-free rate on the capital market. The average capital employed is calculated using the Basel II methodology, based on average risk-weighted assets and the capital charges for market risk positions (risk-weighted asset equivalents). At Group level, investors' capital is shown, which is used to calculate the return on equity. The regulatory capital requirement for risk-weighted assets assumed for segment reporting purposes is 9%. The capital allocation for the risks of EU government bonds required by the EBA is shown in the NCA segment.

The segment reporting of the Commerzbank Group shows the segments' pre-tax profit or loss. To reflect the impact on earnings of specific tax-related transactions in the Corporates& Markets segment, the net interest income of Corporates& Markets includes a pre-tax equivalent of the after-tax income from these transactions. When segment reporting is reconciled with the figures from external accounting this pre-tax equivalent is eliminated in Others and Consolidation.

The operating expenses reported under operating profit or loss contain personnel expenses, other operating expenses as well as depreciation and write-downs on fixed assets and other intangible assets. Restructuring expenses and impairments on goodwill and brand names are reported below the operating profit line in pre-tax profit or loss. Operating expenses are attributed to the individual segments on the basis of cost causation. The indirect expenses arising in connection with internal services are charged to the user of the service and credited to the segment performing the service. The provision of intra-group services is charged at market prices or at full cost.

The carrying amounts of companies accounted for using the equity method were €738m (previous year: €694m) and are divided over the segments as follows: Private Customers €362m (previous year: €285m), Mittelstandsbank €95m (previous year: €94m), Corporates&Markets €92m (previous year: €89m), Non-Core Assets €105m (previous year: €145m) and Others and Consolidation €84m (previous year: €81m).

With respect to the Portfolio Restructuring Unit, which was dissolved, assets of €7.2bn were attributable to the Corporates & Markets segment and assets of €917m to the Non-Core Assets segment with effect as at 31 March 2013. The main profit components arising from these assets were as follows: €48m net trading income, €–4.5m loan loss provisions and €39m pre-tax profit was attributable to the Corporates & Markets segment, while €–48m net trading income and €–49m pre-tax profit was attributable to the NCA segment.

The tables below contain information on the segments as at 31 March 2013 and on the comparative figures for the previous financial year.

1.1.–31.3.2013	Private Custo	Mittel stands	Central & Eastern	Corporates &Markets	Non Core	Others and Consoli	Group
€m	mers	bank	Europe		Assets	dation
Net interest income	431	457	103	196	169	–	1,356
Loan loss provisions	– 35	– 78	– 6	26	– 175	1	– 267
Net interest income after
loan loss provisions	396	379	97	222	– 6	1	1,089
Net commission income	427	280	47	82	19	– 8	847
Net trading income and net income from hedge accounting	1	1	23	307	– 43	28	317
Net investment income	5	– 12	–	– 6	8	– 1	– 6
Current net income from companies accounted for using the equity method	9	–	–	2	– 2	– 1	8
Other net income	– 15	2	12	2	20	– 83	– 62
Income before loan loss provisions	858	728	185	583	171	– 65	2,460
Income after loan loss provisions	823	650	179	609	– 4	– 64	2,193
Operating expenses	753	325	104	338	83	121	1,724
Operating profit or loss	70	325	75	271	– 87	– 185	469
Impairments of goodwill
and brand names	–	–	–	–	–	–	–
Restructuring expenses	–	–	–	–	–	493	493
Net gain or loss from sale of
disposal groups	–	–	–	–	–	–	–
Pre-tax profit or loss	70	325	75	271	– 87	– 678	– 24
Assets	67,663	78,110	24,620	232,151	158,749	86,007	647,300
Average capital employed	4,002	5,829	1,717	3,254	10,058	3,814	28,674
Operating return on equity1 (%)	7.0	22.3	17.5	33.3	– 3.5		6.5
Cost/income ratio in
operating business (%)	87.8	44.6	56.2	58.0	48.5		70.1
Return on equity of pre-tax profit or loss1 (%)	7.0	22.3	17.5	33.3	– 3.5		– 0.3
Staff (average headcount)	16,846	5,417	7,727	1,871	667	17,984	50,512

1 Annualised.

• 55 Statement of comprehensive income 58 Balance sheet
• 60 Statement of changes in equity
• 63 Cash flow statement

64 Selected notes

Pre-tax profit or loss	137	486	87	30	– 488	164	126	542
Net gain or loss from sale of disposal groups	–	–	–	–	–	–	–	–
Restructuring expenses	–	–	–	–	34	–	–	34
Impairments of goodwill and brand names	–	–	–	–	–	–	–	–
Operating profit or loss	137	486	87	30	– 454	164	126	576
Operating expenses	760	339	115	341	98	12	125	1,790
Income after loan loss provisions	897	825	202	371	– 356	176	251	2,366
Income before loan loss provisions	905	790	220	398	– 178	192	251	2,578
Other net income	8	– 9	11	– 8	26	1	– 8	21
Current net income from companies accounted for using the equity method	7	–	–	6	– 1	–	– 1	11
Net investment income	2	– 1	1	3	– 203	17	5	– 176
Net trading income and net income from hedge accounting	1	– 12	34	– 2	– 215	138	220	164
Net commission income	416	270	50	104	30	–	– 6	864
Net interest income after loan loss provisions	463	577	106	268	7	20	41	1,482
Loan loss provisions	– 8	35	– 18	– 27	– 178	– 16	–	– 212
Net interest income	471	542	124	295	185	36	41	1,694
1.1.–31.3.20121 €m	Private Custo mers	Mittel stands bank	Central & Eastern Europe	Corporates &Markets	Non Core Assets	Portfolio Restruc turing Unit2	Others and Consoli dation	Group

Assets	68,283	85,954	23,365	224,480	182,433	12,175	94,449	691,139
Average capital employed	3,976	5,974	1,893	3,244	10,226	1,704	1,236	28,253
Operating return on equity3 (%)	13.8	32.5	18.4	3.7	– 17.8			8.2
Cost/income ratio in operating business (%)	84.0	42.9	52.3	85.7				69.4
Return on equity of pre-tax profit or loss3 (%)	13.8	32.5	18.4	3.7	– 19.1			7.7
Staff (average headcount)	17,330	5,554	9,100	1,861	768	24	19,048	53,685

1 Prior-year figures restated due to the first-time application of the amended IAS 19 and other disclosure changes (see page 65 ff.).

2 The assets of the dissolved Portfolio Restructuring Unit (PRU) segment were transferred as at 1 July 2012 either to the Corporates &

Markets segment or the Non-Core Assets (NCA) segment. The results of this segment up to then will continue to be reported.

3 Annualised.

Details for Others and Consolidation:

€m		1.1.–31.3.2013			1.1.-31.3.20121
	Others	Consoli dation	Others and Consoli dation	Others	Consoli dation	Others and Consoli dation
Net interest income	13	– 13	–	66	– 25	41
Loan loss provisions	1	–	1	–	–	–
Net interest income after loan loss provisions	14	– 13	1	66	– 25	41
Net commission income	– 8	–	– 8	– 6	–	– 6
Net trading income and net income from hedge accounting	22	6	28	214	6	220
Net investment income	1	– 2	– 1	2	3	5
Current net income from companies accounted for using the equity method	– 1	–	– 1	– 1	–	– 1
Other net income	– 79	– 4	– 83	– 8	–	– 8
Income before loan loss provisions	– 52	– 13	– 65	267	– 16	251
Income after loan loss provisions	– 51	– 13	– 64	267	– 16	251
Operating expenses	129	– 8	121	129	– 4	125
Operating profit or loss	– 180	– 5	– 185	138	– 12	126
Impairments of goodwill and brand names	–	–	–	–	–	–
Restructuring expenses	493	–	493	–	–	–
Net gain or loss from sale of disposal groups	–	–	–	–	–	–
Pre-tax profit or loss	– 673	– 5	– 678	138	– 12	126
Assets	86,007	–	86,007	94,449	–	94,449

1 Prior-year figures restated due to the first-time application of the amended IAS 19 and other disclosure changes (see page 65 ff.).

Under Consolidation we report consolidation and reconciliation items between the results of the segments and the Others category on the one hand and the consolidated financial statements on the other. This includes the following items among others:

• Remeasurement effects from the application of hedge accounting to intra-bank transactions as per IAS 39 are shown in Consolidation.
• The pre-tax equivalent of tax-related transactions allocated to net interest income in the Corporates& Markets segment is eliminated again under Consolidation.
• Net remeasurement gains or losses on own bonds and shares incurred in the segments are eliminated under Consolidation.
• Other consolidation effects from intra-group transactions are also reported here.

• Integration and restructuring costs of the Group management units are reported under Consolidation.

• 55 Statement of comprehensive income

• 58 Balance sheet 60 Statement of changes in equity

63 Cash flow statement

64 Selected notes

Segmentation on the basis of the location of the branch or group company (geographic markets) produced the following breakdown:

1.1.–31.3.2013	Germany	Europe	America	Asia	Others	Total
€m		excluding Germany
Net interest income	953	371	17	15	–	1,356
Loan loss provisions	– 225	– 56	16	– 2	–	– 267
Net interest income after loan loss provisions	728	315	33	13	–	1,089
Net commission income	711	107	12	17	–	847
Net trading income and net income from hedge accounting	– 1	287	15	16	–	317
Net investment income	11	– 17	–	–	–	– 6
Current net income from companies accounted for using the equity method	9	– 2	1	–	–	8
Other net income	– 81	19	–	–	–	– 62
Income before loan loss provisions	1,602	765	45	48	–	2,460
Income after loan loss provisions	1,377	709	61	46	–	2,193
Operating expenses	1,363	305	32	24	–	1,724
Operating profit or loss	14	404	29	22	–	469
Credit-risk-weighted assets	113,097	55,559	3,670	3,323	–	175,649

In the prior-year period we achieved the following results in the various geographic markets:

1.1.–31.3.20121	Germany	Europe excluding	America	Asia	Others	Total
€m		Germany
Net interest income	1,191	445	36	22	–	1,694
Loan loss provisions	– 89	– 112	6	– 17	–	– 212
Net interest income after loan loss provisions	1,102	333	42	5	–	1,482
Net commission income	740	103	12	9	–	864
Net trading income and net income
from hedge accounting	15	128	24	– 3	–	164
Net investment income	– 199	23	–	–	–	– 176
Current net income from companies
accounted for using the equity method	6	4	1	–	–	11
Other net income	– 104	126	1	– 2	–	21
Income before loan loss provisions	1,649	829	74	26	–	2,578
Income after loan loss provisions	1,560	717	80	9	–	2,366
Operating expenses	1,387	339	38	26	–	1,790
Operating profit or loss	173	378	42	– 17	–	576
Credit-risk-weighted assets	112,442	55,431	6,238	3,418	–	177,529

1 Prior-year figures restated due to the first-time application of the amended IAS 19 and other disclosure changes (see page 65 ff.).

Credit risk-weighted assets are shown for the geographic segments rather than assets. In accordance with IFRS 8.32, Commerzbank has decided not to provide a breakdown of the Commerzbank Group's total profits by products and services. Neither internal management activities nor management reporting are based on this information.

Notes to the balance sheet

(11) Claims on banks

€m	31.3.2013	31.12.2012	Change in %
Due on demand	39,914	34,492	15.7
With a residual term	62,804	53,642	17.1
up to three months	42,703	34,180	24.9
over three months to one year	11,511	10,597	8.6
over one year to five years	8,089	8,125	– 0.4
over five years	501	740	– 32.3
Total	102,718	88,134	16.5
of which reverse repos and cash collaterals	68,323	55,861	22.3
of which relate to the category:
Loans and receivables	54,910	53,453	2.7
Available-for-sale financial assets	–	–
At fair value through profit or loss (fair value option)	47,808	34,681	37.9

Claims on banks after deduction of loan loss provisions amounted to €102,622m (previous year: €88,028m).

(12) Claims on customers

€m	31.3.2013	31.12.2012	Change in %
With an indefinite residual term	31,409	29,308	7.2
With a residual term	256,160	256,892	– 0.3
up to three months	43,270	45,564	– 5.0
over three months to one year	42,422	37,340	13.6
over one year to five years	83,808	84,913	– 1.3
over five years	86,660	89,075	– 2.7
Total	287,569	286,200	0.5
of which reverse repos and cash collaterals	43,067	33,924	27.0
of which relate to the category:
Loans and receivables	246,441	255,157	– 3.4
Available-for-sale financial assets	–	–
At fair value through profit or loss (fair value option)	41,128	31,043	32.5

Claims on customers after deduction of loan loss provisions amounted to €280,136m (previous year: €278,546m).

• 55 Statement of comprehensive income 58 Balance sheet
• 60 Statement of changes in equity
• 63 Cash flow statement 64 Selected notes

(13) Total lending

€m	31.3.2013	31.12.2012	Change in %
Loans to banks	21,746	21,041	3.4
Loans to customers	244,506	251,807	– 2.9
Total	266,252	272,848	– 2.4

We distinguish loans from claims on banks and customers such that only claims for which a special loan agreement has been concluded with the borrower are shown as loans. Interbank money market transactions and reverse repo transactions, for example, are thus not shown as loans. Acceptance credits are also included in loans to customers.

(14) Loan loss provisions

Provisions for loan losses are made in accordance with rules that apply Group-wide and cover all discernible credit risks. For loan losses that have already occurred but are not yet known, portfolio valuation allowances have been calculated in line with procedures derived from Basel II methodology.

Development of provisioning  €m	2013	2012	Change in %
As at 1.1.	8,092	8,663	– 6.6
Allocations	871	855	1.9
Deductions	1,084	1,038	4.4
Utilisation	467	380	22.9
Reversals	617	658	– 6.2
Changes in group of consolidated companies	–	6	– 100.0
Exchange rate changes/reclassifications/unwinding	– 37	– 11
As at 31.3.	7,842	8,475	– 7.5

With direct write-downs, write-ups and recoveries on written-down claims taken into account, the allocations and reversals recognised in profit or loss resulted in loan loss provisions of €267m (31 March 2012: €212m) (see Note 2).

Loan loss provisions  €m	31.3.2013	31.12.2012	Change in %
Specific valuation allowances	6,771	6,993	– 3.2
Portfolio valuation allowances	758	767	– 1.2
Provisions for on-balance-sheet loan losses	7,529	7,760	– 3.0
Specific loan loss provisions	192	212	– 9.4
Portfolio loan loss provisions	121	120	0.8
Provisions for off-balance-sheet loan losses	313	332	– 5.7
Total	7,842	8,092	– 3.1

For claims on banks, loan loss provisions amounted to €96m (previous year: €106m) and for claims on customers to €7,433m (previous year: €7,654m).

(15) Trading assets

The Group's trading activities include trading in:

• Bonds, notes and other interest-rate-related securities,
• Shares and other equity-related securities and units in investment funds,
• Promissory note loans and other claims,
• Foreign currencies and precious metals,
• Derivative financial instruments and
• Other trading assets.

Other assets held for trading comprise positive fair values of loans for syndication and emission permits as well as loans and money market trading transactions.

All the items in the trading portfolio are reported at fair value.

The positive fair values also include derivative financial instruments which cannot be used as hedging instruments in hedge accounting.

€m	31.3.2013	31.12.2012	Change in %
Bonds, notes and other interest-rate-related securities	20,222	18,381	10.0
Promissory note loans	1,507	1,366	10.3
Shares, other equity-related securities and units in investment funds	24,784	17,759	39.6
Positive fair values of derivative financial instruments	97,333	106,400	– 8.5
Currency-related derivative transactions	12,278	12,939	– 5.1
Interest-rate-related derivative transactions	80,150	89,139	– 10.1
Other derivative transactions	4,905	4,322	13.5
Other trading assets	245	238	2.9
Total	144,091	144,144	0.0

Other transactions involving positive fair values of derivative financial instruments consist mainly of €2,100m in equity derivatives (previous year: €1,917m) and €2,461m in credit derivatives (previous year: €2,104m).

• 55 Statement of comprehensive income
• 58 Balance sheet 60 Statement of changes in equity
• 63 Cash flow statement 64 Selected notes

(16) Financial investments

Financial investments are financial instruments not assigned to any other balance sheet item. They comprise bonds, notes and other interest-rate-related securities, shares and other equity-related securities not used for trading purposes, as well as units in investment funds, equity holdings (including companies not accounted for using the equity method and joint ventures) and holdings in non-consolidated subsidiaries.

€m	31.3.2013	31.12.2012	Change in %
Bonds, notes and other interest-rate-related securities1	87,689	87,548	0.2
Shares, other equity-related securities and
units in investment funds	1,181	1,299	– 9.1
Equity holdings	128	138	– 7.2
Holdings in non-consolidated subsidiaries	135	157	– 14.0
Total	89,133	89,142	0.0
of which relate to the category:
Loans and receivables1	51,106	52,427	– 2.5
Available-for-sale financial assets	35,402	34,268	3.3
of which measured at amortised cost	254	423	– 40.0
At fair value through profit or loss (fair value option)	2,625	2,447	7.3

1 Reduced by portfolio valuation allowances for reclassified securities of €147m (previous year: €149m).

In its press release of 13 October 2008, the IASB issued an amendment to IAS 39 relating to the reclassification of financial instruments. In accordance with the amendment, securities in the Public Finance portfolio for which there was no active market were reclassified from the IAS 39 availablefor-sale financial assets category to the IAS 39 loans and receivables category in the financial years 2008 and 2009. The fair value at the date of reclassification was recognised as the new carrying amount of these securities.

The revaluation reserve after deferred taxes for all the securities reclassified in financial years 2008 and 2009 was €– 0.7bn as at 31 March 2013 (previous year: €– 0.7bn). Without these reclassifications, the revaluation reserve for these portfolios after deferred taxes would have been €– 3.6bn (previous year: €– 4.2bn) as at 31 March 2013; the carrying amount of these portfolios on the balance sheet date was €48.6bn (previous year: €50.0bn) and fair value was €44.4bn (previous year: €45.0bn).

(17) Intangible assets

€m	31.3.2013	31.12.2012	Change in %
Goodwill	2,080	2,080	0.0
Other intangible assets	974	971	0.3
Customer relationships	426	438	– 2.7
Brand names	–	–
In-house developed software	368	349	5.4
Other	180	184	– 2.2
Total	3,054	3,051	0.1

(18) Fixed assets

€m	31.3.2013	31.12.2012	Change in %
Land and buildings	1,238	851	45.5
Office furniture and equipment	499	521	– 4.2
Total	1,737	1,372	26.6

(19) Other assets

€m	31.3.2013	31.12.2012	Change in %
Collection items	13	311	– 95.8
Precious metals	685	666	2.9
Leased equipment	857	851	0.7
Accrued and deferred items	461	256	80.1
Initial/variation margins receivable	307	296	3.7
Other assets1	1,377	1,191	15.6
Total	3,700	3,571	3.6

1 Prior-year figures restated due to the first-time application of the amended IAS 19 (see page 65 ff.).

• 55 Statement of comprehensive income 58 Balance sheet
• 60 Statement of changes in equity
• 63 Cash flow statement
• 64 Selected notes

(20) Liabilities to banks

€m	31.3.2013	31.12.2012	Change in %
Due on demand	59,303	43,089	37.6
With a residual term	69,244	67,153	3.1
up to three months	37,234	21,670	71.8
over three months to one year	7,597	5,382	41.2
over one year to five years	13,201	27,396	– 51.8
over five years	11,212	12,705	– 11.8
Total	128,547	110,242	16.6
of which repos und cash collaterals	47,313	23,850	98.4
of which relate to the category:
Liabilities measured at amortised cost	84,610	90,206	– 6.2
At fair value through profit or loss (fair value option)	43,937	20,036

(21) Liabilities to customers

€m	31.3.2013	31.12.2012	Change in %
Savings deposits	6,130	12,960	– 52.7
With an agreed period of notice of
three months	6,020	10,807	– 44.3
over three months	110	2,153	– 94.9
Other liabilities to customers	266,816	252,882	5.5
Due on demand	149,956	142,377	5.3
With a residual term	116,860	110,505	5.8
up to three months	54,831	50,556	8.5
over three months to one year	18,694	14,610	28.0
over one year to five years	15,641	16,049	– 2.5
over five years	27,694	29,290	– 5.4
Total	272,946	265,842	2.7
of which repos und cash collaterals	39,954	31,997	24.9
of which relate to the category:
Liabilities measured at amortised cost	224,156	228,643	– 2.0
At fair value through profit or loss (fair value option)	48,790	37,199	31.2

(22) Securitised liabilities

Securitised liabilities consist of bonds and notes, including mortgage and public Pfandbriefe, money market instruments (e.g. certificates of deposit, euro notes and commercial paper), index certificates, own acceptances and promissory notes outstanding.

€m	31.3.2013	31.12.2012	Change in %
Bonds and notes issued	71,125	78,855	– 9.8
of which Mortgage Pfandbriefe	20,632	21,530	– 4.2
Public Pfandbriefe	21,907	27,758	– 21.1
Money market instruments issued	1,862	466
Own acceptances and promissory notes outstanding	7	11	– 36.4
Total	72,994	79,332	– 8.0
of which relate to the category:
Liabilities measured at amortised cost	69,760	75,903	– 8.1
At fair value through profit or loss (fair value option)	3,234	3,429	– 5.7

Residual maturities of securitised liabilities €m	31.3.2013	31.12.2012	Change in %
Due on demand	–	–
With a residual term	72,994	79,332	– 8.0
up to three months	4,408	8,301	– 46.9
over three months to one year	12,406	9,662	28.4
over one year to five years	42,918	47,302	– 9.3
over five years	13,262	14,067	– 5.7
Total	72,994	79,332	– 8.0

In the first three months of 2013, material new issues with a total volume of €3.6bn were floated. In the same period, the volume of redemptions and repurchases amounted to €0.5bn and the volume of bonds maturing to €9.5bn.

• 55 Statement of comprehensive income 58 Balance sheet

• 60 Statement of changes in equity

• 63 Cash flow statement 64 Selected notes

(23) Trading liabilities

Trading liabilities show the negative fair values of derivative financial instruments that do not qualify for hedge accounting as well as lending commitments with negative fair values. Own issues in the trading book and delivery commitments arising from short sales of securities are also included under trading liabilities.

€m	31.3.2013	31.12.2012	Change in %
Currency-related derivative transactions	14,243	13,959	2.0
Interest-rate-related derivative transactions	76,814	85,503	– 10.2
Other derivative transactions	6,154	5,672	8.5
Certificates and other notes issued	5,452	5,201	4.8
Delivery commitments arising from short sales of securities, negative market values of lending commitments and other trading liabilities	7,338	5,776	27.0
Total	110,001	116,111	– 5.3

Other derivative transactions consisted mainly of €3,566m in equity derivatives (previous year: €3,220m) and €2,291m in credit derivatives (previous year: €2,183m).

(24) Provisions

€m	31.3.2013	31.12.2012	Change in %
Provisions for pensions and similar commitments1	810	1,050	– 22.9
Other provisions	3,440	3,049	12.8
Total	4,250	4,099	3.7

1 Prior-year figures restated due to the first-time application of the amended IAS 19 (see page 65 ff.).

Following restatement due to the retrospective application of the amended IAS 19, provisions were €4,107m as at 31 December 2011 or 1 January 2012 respectively.

(25) Other liabilities

€m	31.3.2013	31.12.2012	Change in %
Liabilities attributable to film funds	1,906	1,915	– 0.5
Liabilities attributable to non-controlling interests	2,562	2,441	5.0
Accrued and deferred items	571	439	30.1
Variation margins payable	161	162	– 0.6
Other liabilities	1,185	1,566	– 24.3
Total	6,385	6,523	– 2.1

(26) Subordinated capital

€m	31.3.2013	31.12.2012	Change in %
Subordinated liabilities	10,801	11,186	– 3.4
Profit-sharing certificates	865	865	0.0
Accrued interest, including discounts	– 260	– 161	61.5
Remeasurement effects	408	426	– 4.2
Total	11,814	12,316	– 4.1
of which relate to the category:
Liabilities measured at amortised cost	11,805	12,308	– 4.1
At fair value through profit or loss (fair value option)	9	8	12.5

€0.3bn of subordinated liabilities matured in the first three months of 2013. There were no other material changes.

(27) Hybrid capital

€m	31.3.2013	31.12.2012	Change in %
Hybrid capital	2,079	2,057	1.1
Accrued interest, including discounts	– 943	– 969	– 2.7
Remeasurement effects	474	509	– 6.9
Total	1,610	1,597	0.8
of which relate to the category:
Liabilities measured at amortised cost	1,610	1,597	0.8
At fair value through profit or loss (fair value option)	–	–

There were no material changes to report in the first three months of financial year 2013.

• 55 Statement of comprehensive income 58 Balance sheet
• 60 Statement of changes in equity
• 63 Cash flow statement 64 Selected notes

Other notes

(28) Capital requirements and capital ratios

€m	31.3.2013	31.12.2012	Change in %
Core Tier I	24,166	24,986	– 3.3
Hybrid capital	2,284	2,259	1.1
Total Tier I	26,450	27,245	– 2.9
Tier II capital	9,657	9,878	– 2.2
Total capital	36,107	37,123	– 2.7

		Capital adequacy requirement	Risk-weighted assets1
€m	31.3.2013	31.12.2012	31.3.2013	31.12.2012	Change in %
Credit risk	14,052	13,967	175,649	174,584	0.6
Market risk	924	880	11,554	10,999	5.0
Operational risk	1,807	1,804	22,593	22,552	0.2
Total capital requirement	16,783	16,651	209,796	208,135	0.8
Core Tier I	24,166	24,986
Tier I capital	26,450	27,245
Total capital	36,107	37,123
Core Tier I capital ratio (%)	11.5	12.0
Tier I capital ratio (%)	12.6	13.1
Total capital ratio (%)	17.2	17.8

1 Risk-weighted assets are calculated by multiplying the capital requirements by 12,5.

(29) Contingent liabilities and irrevocable lending commitments

€m	31.3.2013	31.12.2012	Change in %
Contingent liabilities	35,565	35,837	– 0.8
from rediscounted bills of exchange credited to borrowers	5	5	0.0
from guarantees and indemnity agreements	35,511	35,783	– 0.8
from other commitments	49	49	0.0
Irrevocable lending commitments	50,669	49,747	1.9

Provisions for contingent liabilities and irrevocable lending commitments have been deducted from the respective items.

(30) Derivative transactions

The nominal amounts and fair values of derivative transactions after netting the fair values of derivatives and any variation margins payable on them were as set out below.

The netting volume as at 31 March 2013 totalled €140,286m (previous year: €162,271m). On the assets side, €136,517m of this was attributable to positive fair values and €3,769m to variation margins received. Netting on the liabilities side involved negative fair values of €140,137m and liabilities for variation margin payments of €149m.

Nominal amount by residual term							Fair values
31.3.2013 €m	due on demand	up to 3 months	3 months to 1 year	1 year to 5 years	more than 5 years	Total	positive	negative
Foreign-currency based forward transactions	65	298,655	166,098	177,785	121,059	763,662	12,833	14,393
Interest-based forward
transactions	19	451,693	2,414,183	1,994,932	1,681,248	6,542,075	221,300	227,348
Other forward transactions	1,262	70,790	64,159	132,542	22,603	291,356	4,939	6,187
Total	1,346	821,138	2,644,440	2,305,259	1,824,910	7,597,093	239,072	247,928
of which exchange-traded	–	41,168	64,577	25,397	12,229	143,371
Net position in the balance sheet							102,555	107,791

Nominal amount by residual term							Fair values
31.12.2012 €m	due on demand	up to 3 months	3 months to 1 year	1 year to 5 years	more than 5 years	Total	positive	negative
Foreign-currency based forward transactions	6	283,437	159,023	170,519	118,569	731,554	13,592	14,119
Interest-based forward transactions	16	525,624	2,092,073	2,024,487	1,739,143	6,381,343	253,072	259,183
Other forward transactions	1,013	44,994	76,422	129,138	17,155	268,722	4,354	5,704
Total	1,035	854,055	2,327,518	2,324,144	1,874,867	7,381,619	271,018	279,006
of which exchange-traded	–	30,304	112,507	22,591	11,174	176,576
Net position in the balance sheet							112,457	116,873

• 55 Statement of comprehensive income 58 Balance sheet
• 60 Statement of changes in equity
• 63 Cash flow statement 64 Selected notes

(31) Fair value and fair value hierarchy of financial instruments

Under IAS 39, all financial instruments are initially recognised at fair value; in the case of financial instruments that are not classified as at fair value through profit or loss, fair value plus certain transaction costs. The subsequent measurement of financial instruments classified as at fair value through profit or loss or available-for-sale financial assets are measured at fair value on an ongoing basis. For this purpose, at fair value through profit or loss includes derivatives, instruments held for trading and instruments designated at fair value.

Under IFRS 13, the fair value of an asset is the amount for which it could be sold between knowledgeable, willing, independent parties in an arm's length transaction. The fair value therefore corresponds to a realisable price. For liabilities, fair value is defined as the price which would be paid to transfer the liability in question in an orderly transaction with a third party. The fair value of a liability also reflects non-performance risk. If third parties provide security for our liabilities (e.g. guarantees), this security is not taken into account in the valuation of the liability, as the Bank's repayment obligation remains the same.

The most suitable measure of fair value is the quoted price for an identical instrument in an active market (fair value hierarchy level I). Thus, quoted prices are to be used if they are available. The relevant market for determining the fair value is generally the most active market. To reflect the price at which an asset could be exchanged or a liability settled, asset positions are measured at the bid price and liability positions are measured at the offer price.

If quoted prices are not available, valuation is based on quoted prices for similar instruments in active markets. Where quoted prices are not available for identical or similar financial instruments, fair value is derived using an appropriate valuation model where the data inputs are obtained, as far as possible, from observable market sources (fair value hierarchy level II).

While most valuation techniques rely on data from observable market sources, certain financial instruments are measured using models that incorporate other inputs for which there is insufficient recent observable market data. IFRS 13 recognises the market approach, income approach and cost approach as potential methods of measurement. The market approach relies on measurements based on information about identical or comparable assets and liabilities. The income approach reflects current expectations about future cash flows, expenses and income. The income approach may also include option price models. The cost approach (which may only be applied to nonfinancial instruments) defines fair value as the current replacement cost of the asset, taking into account the asset's current condition. These valuation methods inherently include a greater level of management judgement. These unobservable inputs may include data that is extrapolated or interpolated or may be derived by approximation to correlated or historical data. However, such inputs maximise market or third-party inputs and rely as little as possible on company-specific inputs (fair value hierarchy level III).

The fair values which can be realised at a later date may deviate from the fair values as calculated under Level III.

Valuation models must be consistent with accepted economic methodologies for pricing financial instruments and must incorporate all factors that market participants would consider appropriate in setting a price. All fair values are subject to the Group's internal controls and procedures which set out the standards for independently verifying or validating fair values. These controls and procedures are managed by the Independent Price Verification (IPV) Group within the Finance function. The models, inputs and resulting fair values are reviewed regularly by Senior Management and the Risk function.

Fair value hierarchy

Under IFRS 7, financial instruments carried at fair value are assigned to the three levels of the fair value hierarchy as follows (see also measurement of financial instruments above):

• Level I: Financial instruments where the fair value is based on quoted prices for identical financial instruments in an active market;
• Level II: Financial instruments where no quoted prices are available for identical instruments in an active market and the fair value is established using valuation techniques;
• Level III: Financial instruments where valuation techniques are used that incorporate inputs for which there is insufficient observable market data and where these inputs have a more than insignificant impact on the fair value.

The allocation of certain financial instruments to the relevant level is subject to the judgement of management on a systematic basis, particularly if the valuation is based both on observable market data and unobservable market data. An instrument's classification may change over time, to take account of changes in market liquidity and in the interests of price transparency.

In the tables below the financial instruments reported in the balance sheet at fair value are grouped by balance sheet item and valuation category. They are broken down according to whether fair value is based on quoted market prices (Level I), observable market data (Level II) or unobservable market data (Level III).

Financial assets €bn			31.3.2013			31.12.2012
		Level I	Level II	Level III	Total	Level I	Level II	Level III	Total
Claims on banks	At fair value through profit or loss	–	47.8	–	47.8	–	34.7	–	34.7
Claims on customers	At fair value through profit or loss	–	40.8	0.3	41.1	–	30.7	0.3	31.0
Positive fair values of derivative hedging	Hedge accounting
instruments		–	5.2	–	5.2	–	6.1	–	6.1
Trading assets	Held for trading	42.8	99.1	2.2	144.1	34.6	107.3	2.2	144.1
of which positive fair values from derivatives		–	96.4	0.9	97.3	–	105.4	1.0	106.4
Financial investments	At fair value through profit or loss	2.6	–	–	2.6	2.3	–	0.1	2.4
	Available-for-sale financial assets	31.5	3.2	0.7	35.4	30.7	3.0	0.6	34.3
Total		76.9	196.1	3.2	276.2	67.6	181.8	3.2	252.6

• 55 Statement of comprehensive income 58 Balance sheet
• 60 Statement of changes in equity

63 Cash flow statement 64 Selected notes

Financial liabilities €bn		31.3.2013			31.12.2012
		Level I	Level II	Level III	Total	Level I	Level II	Level III	Total
Liabilities to banks	At fair value through profit or loss	–	43.9	–	43.9	–	20.0	–	20.0
Liabilities to customers	At fair value through profit or loss	–	48.8	–	48.8	–	37.2	–	37.2
Securitised liabilities	At fair value through profit or loss	3.2	–	–	3.2	3.4	–	–	3.4
Negative fair values of derivative hedging	Hedge accounting
instruments		–	10.6	–	10.6	–	11.7	–	11.7
Trading liabilities	Held for trading	12.6	96.5	0.9	110.0	10.8	104.5	0.8	116.1
of which negative fair values from derivatives		–	96.5	0.7	97.2	–	104.5	0.7	105.2
Subordinated capital	At fair value through profit or loss	–	–	–	–	–	–	–	–
Total		15.8	199.8	0.9	216.5	14.2	173.4	0.8	188.4

In the first quarter of 2013 we reclassified €0,4bn of available-for-sale bonds and money market transactions and €1,4bn of securities held for trading from Level I to Level II, as no quoted market prices were available. The reclassifications were determined on the basis of the holdings on 31 December 2012. Apart from this, there were no other significant reclassifications between Level I, Level II and Level III.

The changes in financial instruments in the Level III category were as follows:

Financial assets €m	Claims on customers	Trading assets	of which positive fair values from derivatives	Financial investments		Total
	At fair value through profit or loss	Held for trading	Held for trading	At fair value through profit or loss	Available-for-sale financial assets
Fair value as at 1.1.2012	192	4,224	2,536	163	827	5,406
Changes in group of consolidated companies	–	–	–	–	–	–
Gains or losses recognised in the income statement during the period	– 6	– 60	– 48	8	–	– 58
Gains or losses recognised in revaluation reserve	–	–	–	–	–	–
Purchases	–	98	3	–	–	98
Sales	–	– 1,232	– 760	– 18	– 164	– 1,414
Issues	–	–	–	–	–	–
Redemptions	–	– 61	– 1	– 96	– 8	– 165
Reclassification	116	– 794	– 776	– 4	– 10	– 692
Fair value as at 31.12.2012	302	2,175	954	53	645	3,175
Changes in group of consolidated companies	–	–	–	–	–	–
Gains or losses recognised in the income statement during the period	– 14	– 53	– 31	– 19	42	– 44
of which unrealised gains/losses	– 1	142	107	1	41	183
Gains or losses recognised in revaluation reserve	–	–	–	–	–	–
Purchases	–	82	–	–	–	82
Sales	–	–	–	–	–	–
Issues	–	–	–	–	–	–
Redemptions	–	–	–	–	–	–
Reclassification into level III	–	31	–	–	–	31
Reclassifications out of level III	–	– 60	–	–	– 32	– 92
Fair value as at 31.3.2013	288	2,175	923	34	655	3,152

Unrealised gains or losses from financial instruments held for trading purposes (trading assets and derivatives) are included in net trading income. Unrealised gains or losses from claims and financial investments measured at fair value through profit or loss are accounted for in the net gain or loss from applying the fair value option.

• 55 Statement of comprehensive income 58 Balance sheet
• 60 Statement of changes in equity

63 Cash flow statement 64 Selected notes

Financial liabilities €m	Trading liabilities	of which negative fair values from derivatives	Total
	Held for trading	Held for trading
Fair value as at 1.1.2012	1,403	1,162	1,403
Changes in group of consolidated companies	–	–	–
Gains or losses recognised in the income statement during the period	– 48	– 48	– 48
Purchases	89	89	89
Sales	2	2	2
Issues	–	–	–
Redemptions	– 47	– 47	– 47
Reclassification	– 559	– 476	– 559
Fair value as at 31.12.2012	840	682	840
Changes in group of consolidated companies	–	–	–
Gains or losses recognised in the income statement during the
period	– 42	– 42	– 42
of which unrealised gains/losses	– 33	– 33	– 33
Purchases	105	6	105
Sales	–	–	–
Issues	–	–	–
Redemptions	– 5	– 5	– 5
Reclassification into level III	63	63	63
Reclassifications out of level III	– 91	– 91	– 91
Fair value as at 31.3.2013	870	613	870

Unrealised gains or losses from financial instruments held for trading purposes (trading liabilities and derivatives) are included in net trading income.

Sensitivity analysis

Where the value of financial instruments is based on unobservable input parameters (Level III), the precise level of these parameters at the balance sheet date may be derived from a range of reasonable possible alternatives at the discretion of management. In preparing the financial statements, appropriate levels for these unobservable input parameters are chosen which are consistent with existing market evidence and in line with the Group's valuation control approach.

The purpose of this disclosure is to illustrate the potential impact of the relative uncertainty in the fair values of financial instruments with valuations based on unobservable input parameters (Level III). These parameters lie at the extremes of their range of reasonable possible alternatives. In practice, however, it is unlikely that all unobservable parameters would simultaneously lie at the extremes of this range. Consequently, the estimates provided are likely to exceed the actual uncertainty in the fair values of these instruments. The purpose of these figures is not to estimate or predict future changes in fair value. The unobservable parameters were either shifted by 1% to 10% as deemed appropriate by our independent valuation experts for each type of instrument or a measure of standard deviation was applied.

The table below shows the impact on the income statement of reasonable parameter estimates on the edges of these ranges for instruments in the fair value hierarchy level III. This sensitivity analysis for financial instruments in the fair value hierarchy level III is broken down by type of instrument:

€m		2013
	Positive effects on income statement	Negative effects on income statement	Changed parameters
Derivatives	74	– 76
Equity-related transactions	–	–	Cash flow
Credit derivatives	54	– 56	Correlation, discount yield
Interest-rate-related transactions	20	– 20	Mean reversion, correlation
Other transactions	–	–
Securities	101	– 70
Interest-rate-related transactions	101	– 70	Credit spread, discount yield
of which ABS	59	– 29	Yield, recovery rate, credit spread
Equity-related transactions	–	–
Loans	–	–

Day one profit or loss

The Commerzbank Group has entered into transactions where the fair value was calculated using a valuation model and where not all material input parameters are based on observable market parameters. The initial carrying value of such transactions is the transaction price. The difference between the transaction price and the fair value of the valuation model is termed the day one profit or loss. The day one profit or loss is not recognised in profit or loss immediately, but over the tenor of the respective transaction. As soon as there is a quoted market price on an active market for such transactions or all material input parameters become observable, the accrued day one profit or loss is immediately recognised in net trading income. A cumulated difference between transaction price and model valuation is calculated for all Level III inventory.

• 55 Statement of comprehensive income
• 58 Balance sheet 60 Statement of changes in equity

63 Cash flow statement 64 Selected notes

Material impacts only result from financial instruments held for trading. The development was as follows:

€m	Day One Profit or Loss
	Trading assets	Trading liabilities	Total
Balance as at 1.1.2012	–	3	3
Allocations not recognised in income statement	–	1	1
Reversals recognised in income statement	–	2	2
Balance as at 31.12.2012	–	2	2
Allocations not recognised in income statement	–	– 1	– 1
Reversals recognised in income statement	–	–	–
Balance as at 31.3.2013	–	1	1

In the following we provide more information on the fair values of financial instruments which are not recognised at fair value in the balance sheet, but for which a fair value must be disclosed. For the financial instruments reported in the balance sheet at fair value, the accounting methodology is set out in the section on fair value hierarchy.

The nominal value of financial instruments that fall due on a daily basis is taken as their fair value. These instruments include the cash reserve as well as overdrafts and demand deposits in the claims on banks and customers or liabilities to banks and customers items.

Market prices are not available for loans and deposits as there are no organised markets in which these financial instruments are traded. Fair value is determined for these instruments by using recognised mathematical valuation methods with current market parameters.

A discounted cash flow model is used for loans with parameters based on a risk-free yield curve (swap curve), credit spreads and a maturity-based premium to cover liquidity spreads, plus fixed premiums for administrative expenses and the cost of capital.

A risk-free yield curve is also used to determine the fair value of liabilities, with Commerzbank Aktiengesellschaft's own credit spread and a premium for administrative costs being incorporated separately. The model also uses market risk premiums for mortgage Pfandbriefe, public Pfandbriefe and loans taken out by the Bank.

The fair value of securitised liabilities, subordinated liabilities and hybrid capital is determined on the basis of available market prices. A number of different factors, including current market interest rates and the Group's credit rating are taken into account in determining fair value. If market prices are not available, the fair values are determined on the basis of mathematical valuation models (e.g. discounted cash flow or option price models), which are in turn based on yield curves, volatilities, own credit spreads etc. Particularly in cases where the Bank has issued structured debt instruments, which are measured at fair value, the Bank's own credit spread is used in determining fair value.

The table below compares the fair values of the balance sheet items with their carrying amounts:

	Fair value		Carrying amount		Difference
€bn	31.3.2013	31.12.2012	31.3.2013	31.12.2012	31.3.2013	31.12.2012
Assets
Cash reserve	11.1	15.8	11.1	15.8	–	–
Claims on banks	102.7	87.9	102.6	88.0	0.1	– 0.1
Claims on customers	282.6	281.5	280.1	278.5	2.5	3.0
Value adjustment portfolio fair value hedges1	0.0	0.0	0.2	0.2	– 0.2	– 0.2
Positive fair values of derivative hedging instruments	5.2	6.1	5.2	6.1	–	–
Trading assets	144.1	144.1	144.1	144.1	–	–
Financial investments	84.9	84.3	89.1	89.1	– 4.2	– 4.8
Other assets2	14.9	14.1	14.9	14.1	–	–
Liabilities
Liabilities to banks	128.6	110.3	128.5	110.2	0.1	0.1
Liabilities to customers	272.8	266.1	272.9	265.8	– 0.1	0.3
Securitised liabilities	76.5	83.0	73.0	79.3	3.5	3.7
Value adjustment portfolio fair value hedges1	0.0	0.0	1.2	1.5	– 1.2	– 1.5
Negative fair values of derivative hedging instruments	10.6	11.7	10.6	11.7	–	–
Trading liabilities	110.0	116.1	110.0	116.1	–	–
Subordinated and hybrid capital	13.2	13.2	13.4	13.9	– 0.2	– 0.7
Other liabilities2	11.2	11.0	11.2	11.0	–	–

1 The fair value adjustments on portfolio fair value hedges are contained in the relevant balance sheet line items

for the hedged items.

2 Prior-year figures restated due to the first-time application of the amended IAS 19 (see page 65 ff.).

(32) Treasury shares

	Number of shares in units	Accounting par value1 in €1,000	Percentage of share capital
Balance as at 31.3.2013	2,256,263	2,256	0.04
Largest number acquired during the financial year	5,368,055	5,368	0.09
Total shares pledged by customers as collateral as at 31.3.2013	34,582,455	34,582	0.59
Shares acquired during the financial year	60,727,705	60,728
Shares disposed of during the financial year	59,664,795	59,665

1 Accounting par value per share €1.00.

55 Statement of comprehensive income

58 Balance sheet

• 60 Statement of changes in equity
• 63 Cash flow statement 64 Selected notes

(33) Related party transactions

As part of its normal business activities, the Commerzbank Group does business with related parties. These include subsidiaries that are controlled but not consolidated for reasons of materiality, companies accounted for using the equity method, equity holdings, external providers of occupational pensions for employees of Commerzbank Aktiengesellschaft, key management personnel and members of their families as well as companies controlled by these persons. Key management personnel refers exclusively to members of Commerzbank Aktiengesellschaft's Board of Managing Directors and Supervisory Board.

As the guarantor of the Financial Market Stabilisation Authority (FMSA), which administers the Financial Market Stabilisation Fund (SoFFin), the German federal government holds a stake of 25% plus 1 share in Commerzbank Aktiengesellschaft, which gives it the potential to exert significant influence over the Bank. As a result, the German federal government and entities controlled by it constitute related parties as defined by IAS 24. In the tables below we present relationships with federal government-controlled entities and agencies separately from relationships with other related parties.

Assets, liabilities and off-balance-sheet items involving related parties (excluding federal government-controlled entities) were as follows:

€m	31.3.2013	31.12.2012	Change in %
Claims on banks	144	172	– 16.3
Claims on customers	1,839	1,569	17.2
Trading assets	36	37	– 2.7
Financial investments	12	188	– 93.6
Other assets	227	271	– 16.2
Total	2,258	2,237	0.9
Liabilities to banks	–	–
Liabilities to customers	1,158	1,145	1.1
Trading liabilities	2	–
Subordinated capital	627	620	1.1
Other liabilities	31	21	47.6
Total	1,818	1,786	1.8
Off-balance-sheet items
Guarantees and collaterals granted	102	109	– 6.4
Guarantees and collaterals received	1	8	– 87.5

The following income and expenses arose from loan agreements with, deposits from and services provided in connection with related parties (excluding federal governmentcontrolled entities):

€m	1.1.–31.3.2013	1.1.–31.3.2012	Change in %
Income
Interests1	28	28	0.0
Commission income	5	4	25.0
Goods and services	1	1	0.0
Expenses
Interest income	12	14	– 14.3
Commission income	–	9	– 100.0
Operating expenses	4	2
Goods and services	12	7	71.4
Write-downs/impairments	23	22	4.5

1 Prior-year restated.

The Commerzbank Group conducts transactions with federal government-controlled entities as part of its ordinary business activities at standard market terms and conditions. Assets and liabilities and off-balance-sheet items in connection with federal government-controlled entities changed as follows:

€m	31.3.2013	31.12.2012	Change in %
Cash reserve	1,960	5,637	– 65.2
Claims on banks	128	129	– 0.8
Claims on customers	2,100	2,114	– 0.7
Trading assets	2,968	2,761	7.5
Financial investments	4,136	4,066	1.7
Total	11,292	14,707	– 23.2
Liabilities to banks	16,186	14,866	8.9
Liabilities to customers	97	382	– 74.6
Trading liabilities	2,040	1,312	55.5
Silent participation	1,626	1,626	0.0
Total	19,949	18,186	9.7
Off-balance-sheet items
Guarantees and collaterals granted	331	333	– 0.6
Guarantees and collaterals received	–	–

• 55 Statement of comprehensive income 58 Balance sheet
• 60 Statement of changes in equity
• 63 Cash flow statement
• 64 Selected notes

Income and expenses for transactions with federal government-controlled entities were as follows:

€m	1.1.–31.3.2013	1.1.–31.3.2012	Change in %
Income
Interest income	98	135	– 27.4
Commission income	2	2	0.0
Goods and services	–	1	– 100.0
Expenses
Interest income	14	12	16.7
Commission income	–	2	– 100.0
Goods and services	–	–
Write-downs/impairments	–	–

(34) Information on netting of financial instruments

The table below shows the reconciliation of amounts before and after offsetting, as well as the amounts of existing netting rights which do not satisfy the netting criteria, separately for all recognised financial assets and liabilities which

• are already netted in accordance with IAS 32.42 (financial instruments I) and
• are subject to an enforceable, bilateral master netting agreement or a similar agreement but are not netted in the balance sheet (financial instruments II).

With regard to netting agreements, we conclude master agreements with our counterparties (such as 1992 ISDA Master Agreement Multi-Currency Cross-Border; German Master Agreement for Financial Futures). These netting agreements allow us to offset the positive and negative fair values of the derivatives contracts covered by a master agreement against one another. This netting process reduces the credit risk to a single net claim on the party to the contract (close-out netting).

We apply netting to receivables and liabilities from repurchase agreements (reverse repos and repos) and to positive and negative fair values of derivatives. Netting in the balance sheet concerns transactions with central counterparties.

Assets €m		31.3.2013		31.12.2012
	Reverse repos	Positive fair values of derivative financial instruments	Reverse repos	Positive fair values of derivative financial instruments
Gross amount of financial instruments	89,801	239,072	71,208	271,018
Book values not eligible for netting	4,652	8,039	4,606	9,244
a) Gross amount of financial instruments I & II	85,149	231,033	66,602	261,774
b) Amount netted in the balance sheet for financial instruments I	15,520	136,517	13,323	158,561
c) Net amount of financial instruments I & II = a) – b)	69,629	94,516	53,279	103,213
d) Master agreements not already accounted for in b)
Amount of financial instruments II which do not fulfil or only partially fulfil the criteria under IAS 32.421	9,922	76,036	4,595	82,974
Fair value of financial collaterals relating to financial instruments I & II not already accounted for in b)2
Non-cash collaterals3	38,760	1,118	30,891	1,260
Cash collaterals	69	9,685	23	10,678
e) Net amount of financial instruments I & II = c) – d)	20,878	7,677	17,770	8,301

1 Lesser amount of assets and liabilities.

2 Excluding rights or obligations to return arising from the transfer of securities. 3

Including financial instruments not reported on the balance sheet (e.g. securities provided as collateral in repo transactions).

• 55 Statement of comprehensive income 58 Balance sheet
• 60 Statement of changes in equity
• 63 Cash flow statement 64 Selected notes

Liabilities €m	31.3.2013		31.12.2012
	Repos	Negative fair values of derivative financial instruments	Repos	Negative fair values of derivative financial instruments
Gross amount of financial instruments	75,410	247,928	50,185	279,006
Book values not eligible for netting	3,668	5,910	2,843	6,439
a) Gross amount of financial instruments I & II	71,742	242,018	47,342	272,567
b) Amount netted in the balance sheet for financial instruments I	15,520	140,137	13,323	162,133
c) Net amount of financial instruments I & II = a) – b)	56,222	101,881	34,019	110,434
d) Master agreements not already accounted for in b)
Amount of financial instruments II which do not fulfil or only partially fulfil the criteria under IAS 32.421	9,922	76,036	4,595	82,974
Fair value of financial collaterals relating to financial instruments I & II not already accounted for in b)2
Non-cash collaterals3	28,754	1,497	13,280	1,876
Cash collaterals	4	21,508	1	22,366
e) Net amount of financial instruments I & II = c) – d)	17,542	2,840	16,143	3,218

1 Lesser amount of assets and liabilities.

2 Excluding rights or obligations to return arising from the transfer of securities. 3

Including financial instruments not reported on the balance sheet (e.g. securities provided as collateral in repo transactions).

The reported net amounts of financial instruments result almost completely from reverse repos and repos with central counterparties and are covered in full by collateral.

Frankfurt/Main, 29 April 2013 The Board of Managing Directors

Martin Blessing Frank Annuscheit Markus Beumer

Stefan Schmittmann Ulrich Sieber Martin Zielke

Stephan Engels Jochen Klösges Michael Reuther

• 55 Statement of comprehensive income 58 Balance sheet
• 60 Statement of changes in equity
• 63 Cash flow statement
• 64 Selected notes

Boards of Commerzbank Aktiengesellschaft

Supervisory Board

Klaus-Peter Müller Chairman

Uwe Tschäge1 Deputy Chairman

Hans-Hermann Altenschmidt¹

Dr.-Ing. Burckhard Bergmann (until 19.4.2013)

Dr. Nikolaus von Bomhard

Karin van Brummelen1 (until 19.4.2013)

Gunnar de Buhr¹ (since 19.4.2013)

Stefan Burghardt¹ (since 19.4.2013)

Astrid Evers¹ (until 19.4.2013)

Karl-Heinz Flöther (since 19.4.2013)

1 Elected by the Bank's employees.

Board of Managing Directors

Martin Blessing Chairman

Frank Annuscheit

Markus Beumer

Uwe Foullong¹ (until 19.4.2013)

Daniel Hampel1 (until 19.4.2013)

Dr.-Ing. Otto Happel (until 19.4.2013)

Beate Hoffmann1 (until 19.4.2013)

Prof. Dr.-Ing. Dr.-Ing. E.h. Hans-Peter Keitel

Dr. Markus Kerber (since 19.4.2013)

Alexandra Krieger1

Oliver Leiberich1 (since 19.4.2013)

Beate Mensch¹ (since 19.4.2013) Dr. h.c. Edgar Meister (until 19.4.2013)

Prof. h.c. (CHN) Dr. rer. oec. Ulrich Middelmann

Dr. Helmut Perlet

Barbara Priester1

Mark Roach1

Petra Schadeberg-Herrmann (since 19.4.2013)

Dr. Marcus Schenck

Margit Schoffer1 (since 19.4.2013 )

Dr. Gertrude Tumpel-Gugerell

Dr. Walter Seipp Honorary Chairman

Stephan Engels Jochen Klösges Michael Reuther Dr. Stefan Schmittmann Ulrich Sieber Martin Zielke

Review report

To COMMERZBANK Aktiengesellschaft, Frankfurt am Main

We have reviewed the condensed consolidated interim financial statements – comprising the statement of financial position, statement of comprehensive income, condensed statement of cash flows, statement of changes in equity and selected explanatory notes – and the interim group management report of COMMERZBANK Aktiengesellschaft, Frankfurt am Main, for the period from 1 January to 31 March 2013 which are part of the quarterly financial report pursuant to § (Article) 37 x para. 3 WpHG ("Wertpapierhandelsgesetz": German Securities Trading Act). The preparation of the condensed consolidated interim financial statements in accordance with the IFRS applicable to interim financial reporting as adopted by the EU and of the interim group management report in accordance with the provisions of the German Securities Trading Act applicable to interim group management reports is the responsibility of the parent Company's Board of Managing Directors. Our responsibility is to issue a review report on the condensed consolidated interim financial statements and on the interim group management report based on our review.

We conducted our review of the condensed consolidated interim financial statements and the interim group management report in accordance with German generally accepted standards for the review of financial statements promulgated by the Institut der Wirtschaftsprüfer (Institute of Public Auditors in Germany) (IDW). Those standards require that we plan and perform the review so that we can preclude through critical evaluation, with moderate assurance, that the condensed consolidated interim financial statements have not been prepared, in all material respects, in accordance with the IFRS applicable to interim financial reporting as adopted by the EU and that the interim group management report has not been prepared, in all material respects, in accordance with the provisions of the German Securities Trading Act applicable to interim group management reports. A review is limited primarily to inquiries of company personnel and analytical procedures and therefore does not provide the assurance attainable in a financial statement audit. Since, in accordance with our engagement, we have not performed a financial statement audit, we cannot express an audit opinion.

Based on our review, no matters have come to our attention that cause us to presume that the condensed consolidated interim financial statements have not been prepared, in all material respects, in accordance with the IFRS applicable to interim financial reporting as adopted by the EU nor that the interim group management report has not been prepared, in all material respects, in accordance with the provisions of the German Securities Trading Act applicable to interim group management reports.

Frankfurt/Main, 30 April 2013

PricewaterhouseCoopers Aktiengesellschaft Wirtschaftsprüfungsgesellschaft

Peter Goldschmidt Caroline Gass

Wirtschaftsprüfer Wirtschaftsprüferin

(German Public Auditor) (German Public Auditor)

Significant subsidiaries and associates

	Germany

Atlas Vermögensverwaltungsgesellschaft mbH, Frankfurt am Main

comdirect bank AG, Quickborn Commerz Real AG, Eschborn

Hypothekenbank Frankfurt AG, Eschborn

Abroad
BRE Bank SA, Warsaw
Commerzbank (Eurasija) SAO, Moscow
Commerzbank International S.A., Luxembourg
Commerzbank Zrt., Budapest
Commerz Europe (Ireland), Dublin
Commerz Markets LLC, New York
Erste Europäische Pfandbrief- und Kommunalkreditbank AG, Luxembourg

Operative foreign branches

Amsterdam, Barcelona, Bratislava, Beijing, Brno (office), Brussels, Dubai, Hong Kong, London, Luxembourg, Madrid, Milan, New York, Ostrava (office), Paris, Plzeň (office), Prague, Shanghai, Singapore, Tianjin, Tokyo, Vienna, Zurich

Representative Offices and Financial Institutions Desks

Addis Ababa, Almaty, Ashgabat, Baku, Bangkok, Beijing (FI Desk), Beirut, Belgrade, Brussels (Liaison Office to the European Union), Bucharest, Buenos Aires, Cairo, Caracas, Dhaka, Dubai (FI Desk), Ho Chi Minh City, Hong Kong (FI Desk), Istanbul, Jakarta, Johannesburg, Kiev, Kuala Lumpur, Lagos, Luanda, Melbourne, Milan (FI Desk), Minsk, Moscow, Mumbai, New York (FI Desk), Novosibirsk, Panama City, Riga, Santiago de Chile, São Paulo, Seoul, Shanghai (FI Desk), Singapore (FI Desk), Taipei, Tashkent, Tblisi, Tokyo (FI Desk), Tripoli, Zagreb

Disclaimer

Reservation regarding forward-looking statements

This interim report contains forward-looking statements on Commerzbank's business and earnings performance, which are based upon our current plans, estimates, forecasts and expectations. The statements entail risks and uncertainties, as there are a variety of factors which influence our business and to a great extent lie beyond our sphere of influence. Above all, these include the economic situation, the state of the financial markets worldwide and possible loan losses. Actual results and developments may, therefore, diverge considerably from our current assumptions, which, for this reason, are valid only at the time of publication. We undertake no obligation to revise our forward-looking statements in the light of either new information or unexpected events.

Cover Lena Kuske Manager of a Commerzbank branch in Hamburg

2013/2014 Financial calendar
8 August 2013	Interim Report Q2 2013
7 November 2013	Interim Report Q3 2013
End-March 2014	Annual Report 2013
Early-May 2014	Interim Report Q1 2014

Commerzbank AG

Head Office Kaiserplatz Frankfurt am Main www.commerzbank.com

Postal address 60261 Frankfurt am Main Tel. +49 69 136-20 info@commerzbank.com

Investor Relations Tel. +49 69 136-22255 Fax +49 69 136-29492 ir@commerzbank.com

VKI 02051