Commerzbank AG — Investor Presentation 2016

Sep 30, 2016

Commerzbank 4.0

Strictly confidential 1 Frankfurt/Main | 30 September 2016

Agenda

• 1 2 3 4 We have made Commerzbank more stable – and less risky We will rebuild the Bank, to boost profitability We will concentrate our customer business in two strong segments We will leverage our success in retail business for small business customers as well
• 5 We will focus on our main strengths for corporate clients, discontinuing non-core activities
• 6 We will digitalise our focused business model, across all processes
• 7 We will cut costs and enhance profitability

We have made Commerzbank more stable – and less risky

Frankfurt/Main | 30 September 2016 3

Banks are facing major challenges

Commerzbank 4.0: a strategic programme with three cornerstones

Commerzbank will have two strong customer segments going forward

Private Customers: successful business model in the challenging German market

› Private Customers business is already profitable (>20% RoTE), and growing

› Profit contribution has tripled since 2012 (FY 2015: €701 million)

› One million net new customers by the end of 2016 accomplished

› Pan-German presence, with approx. 1,000 branches – 450,000 visits each day

› New branch formats developed in pilots (flagships and city branches)

Private Customers: achieving faster growth by combining digital platform strategy with modern branch formats

Digital and personal

• › Multi-channel bank "One" is the IT platform for all channels and all customers
• › Two branch formats provide for broad market coverage at approximately 1,000 locations
• › Flagship branches with focus on advisory services
• › City branches deliver efficient customer services, with reduced infrastructure and operating costs

Private Customers: accelerated growth through attractive products and partnerships

Digital and personal

• › Digital instalment loans: high-margin product on own platform and on the Bank's own loan book
• › Digital asset management: Robo Advice and digital asset management via Comdirect
• › Partnership Banking: acquiring new customers through cooperations (Tchibo, Amazon, Lufthansa)
• › Simplified product portfolio

Target:

2 million net new customers in the German market by 2020

Small Business Customers: growth through regional proximity and digital advantage

Digital and personal

• › Competitive advantages by combining the strengths of PC (efficiency) and MSB (loans)
• › Digital offers and strong nationwide presence
• Customers have 24/7 access to small business customers offer, via online, mobile, and video advisory services
• Physical proximity and regional accessibility: small business customers advisors able to reach ~80% of all customers within 30 minutes
• › Tailor-made offering: business and private product offers from a single source

Target:

Raise market share from 5% to 8%

2 Corporate Clients: focus on core business – integration of investment bank

Improved client service, due to combined Mittelstandsbank and Corporates & Markets expertise

More efficient and more cost-effective structure through reduction of parts of trading activities

Corporate Clients: growth in international Trade Finance business

• › Foreign trade financing was the purpose for which the Bank was founded in 1870
• › Commerzbank finances more than 30% of German foreign trade
• › Strong position also in European foreign trade – approx. 19% market share

2016 2020

• › Investment in digitalisation will enhance efficiency and extend the service offer
• › Acquiring clients in the markets of the future, and along attractive trade corridors
• › Investment in Compliance is a prerequisite for further growth

Corporate Clients: sector expertise as a lever for growth

Automotive & Transport More than 4,000 clients

Chemicals & Pharma More than 3,000 clients

Engineering More than 2,500 clients

Energy & Infrastructure More than 1,500 clients

Consumer & Retail More than 5,000 clients

Expanding the sector-based approach

• › Broad client base in focus sectors
• › Strong market penetration, including a large number of world market leaders and "hidden champions"
• › Growth through
• winning new clients
• sector-based servicing of large corporates in Germany and Western Europe

Target: Top 5 in Europe

Corporate Clients: leading lender

• › Leading lender for German corporate clients – partner to the Mittelstand, up to capital market capability
• › Intelligent mix of traditional credit products and capital market products

2016 2020

• › Leveraging strong market position in Germany for growth in European core markets
• › High quality advisory services and first-class execution, with a high level of placement security

13%

Market share – lead arranger in Western Europe (ex Germany)

Focus on Corporate Client products

	Product offering today		Future product offering
MSB		› Credit › Trade Finance › Structured Finance › Cash Management	Corporate Clients	› Credit › Trade Finance › Structured Finance › Cash Management
CM	Advisory & DCM	› Corporate Advisory › Corporate Financing		› Corporate Advisory
	FIC	› Hedging products › Core investment products › Exotic investment products	Advisory & DCM	› Corporate Financing
	Commodities	› Hedging products › Investment products	FICC	› Hedging products FIC › Core investment products FIC
	Equity	› Structured equity products		› Commodity hedges

Our evolution into a digital enterprise

Target: 80% of all relevant processes are digital

Digital Campus as engine of transformation

E2E: Management Board responsibility

Business and IT experts working together in one place

All experts will commit 100% of their capacity

Priority for internal resources

Agile working methods

Shortening of implementation cycle

"Fail fast" principle

Digital transformation

Speed in digitalisation will secure competitive advantages

FTE reduction as a consequence of digitalisation and reduction of complexity

FTE reduction until 2020

Simulation H1 2016 of new customer segments

Specific growth measures and significant cost savings lead to CIR <66% and RoTE >6%

Substantial revenue increase from growth – revenues >€9.8bn in 2020 even in current interest rate environment

Revenue growth in core business in accordance with strict compliance and risk criteria

Frankfurt/Main | 30 September 2016 21 1) Based on analysts' consensus as of 15 August 2016

Specific growth and pricing measures compensate for adverse effects from current interest rate environment

• › Expected gross revenue decline under current interest rate conditions by 2020: ~€300m vs. 2016
• › Revenue loss will be reduced to ~€100m by …
• › growth initiative in residential mortgage lending

• › specific pricing measures in corporate clients business

• › Higher interest income up to €1.0bn due to …

• › return to positive rates on central bank deposits
• › high share of non-interest bearing customer deposits
• › higher returns from re-investment exess deposits

Source: Bloomberg, 2020e: Consensus forecast of independent economists.

Substantial additional revenues from new client segments

	Revenues 2017-2020
Private and Small Business Customers	€1.1-1.4bn	› Private Customers › Small Business Customers › M Bank	€450-550m €350-450m €300-400m
Corporate Clients	€0.3-0.5bn	› Customer growth and pricing › Trade Finance › Unrivalled sector expertise	€185-270m €40-60m €75-125m
Downsizing €-0.4bn trading activities		› Net capital relief of ~€500m › RWA reduction of €6bn and prevention of additional RWA through FRTB (~€8bn)
Run-down ACR	› Net capital relief of ~€300m €-0.1bn › Expected cumulative operating loss of ~€1.1bn for 2017-2020

Significant cost savings through digitalisation and reduction of complexity

Transformation requires two years with low profitability

Group RWA remain stable – ongoing portfolio optimisation

Pro forma H1 2016	RWA (€bn)	Path 2020
Private & Small Business Customers	38		Significant growth in capital efficient lending business with private and small business customers
Corporate Clients	102		Overall stable RWA development due to further portfolio optimisation gains used as source of funds for our growth initiatives
Others & Consolidation	29		Tight RWA management in Group Treasury
Asset & Capital Recovery	23		RWA relief as a result of further non-strategic assets run-down
Downsizing of trading activities	6		RWA relief and avoidance of additional RWA through FRTB of €8bn

CET 1 to be at ~12% during the transition period

• › Suspension of dividend payments to cover restructuring costs
• › Comfortable capital position including buffers against potential IFRS 9/Basel 4 effects
• › Additional potential of >100bps in case of higher interest rates in 2020

Transformation of Commerzbank 4.0 requires goodwill impairments in third quarter 2016

Expected Goodwill impact

€~170m

Goodwill allocations and intangible assets in CM see full impairments of ~€170m

€~530m

As a consequence of these goodwill impairments in CM, a goodwill impairment is also required in the new corporate clients segment ("inheritance effect")

Allocated goodwill in segments

Outlook on third quarter 2016

Q3 2016

We expect revenues in the third quarter to be flat compared to the preceding quarter

LLPs should be significantly above the two preceding quarters in 2016 due to sustained weakness within shipping market

We expect third-quarter operating profit to be lower than both the first and the second quarter

As a consequence of goodwill impairments net result in Q3 2016 should be negative

We expect CET 1 ratio to be higher than in the second quarter 2016

Outlook FY 2016

FY 2016

Despite goodwill impairments in Q3 2016, we expect a small net profit for the full year 2016

We expect the CET 1 ratio to stand at almost 12% at year-end 2016, provided no significant market distortions occur

To refinance our restructuring costs, dividend payments will be suspended

Targets 2020 of new strategy Commerzbank 4.0

	Current rates	Rising rates
Revenues (€bn)	9.8-10.3	11.3
Costs (€bn)	6.5	6.5
CIR (%)	<66	~60
Net RoTE (%)	>6	>8
CET1 (%)	>13	>13

Take-aways

Growth in Private and Small Business Customer segment

Leveraging market-leading position in corporate clients business

Evolution into a digital enterprise

Sustainable transformation and profitability

Sustainable business model

Commerzbank becomes a better bank for clients

For more information, please contact:

Margarita Thiel Leiterin External Communications +49 69 136-46646 margarita.thiel@commerzbank.com Alexander Cordes Leiter External Communications Finance & Strategy +49 69 136-42764 alexander.cordes@commerzbank.com

Karsten Swoboda +49 69 136-22339 karsten.swoboda@commerzbank.com Kathrin Wetzel +49 69 136-44011 kathrin.wetzel@commerzbank.com Maurice Farrouh +49 69 136-21947 maurice.farrouh@commerzbank.com

Disclaimer

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

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