1.

Commerzbank Balance Sheet (Euro million)

2002

2003

2004

2005

2006

2007

2008

8,466
54,343
148,514
(5,376)
3,131
117,192
84,558
1,040
111
2,505
5,995
1,655
422,134

7,429
51,657
138,438
(5,510)
2,552
87,628
87,842
690
112
2,063
6,038
2,646
381,585

7,652
53,723
144,668
(4,960)
2,667
87,628
87,842
580
112
2,063
6,038
857
388,869

7,881
55,872
151,901
(5,194)
2,800
87,628
87,842
470
112
2,063
6,038
1,392
398,805

8,118
58,107
159,496
(5,440)
2,940
87,628
87,842
360
112
2,063
6,038
1,820
409,085

8,361
60,431
167,471
(5,698)
3,087
87,628
87,842
250
112
2,063
6,038
2,133
419,719

8,612
62,849
175,845
(5,967)
3,242
87,628
87,842
140
112
2,063
6,038
2,320
430,722

114,984
95,700
92,732
5,696
83,238
3,528
3,664
3,285
9,237
1,262
413,326
1,378
6,131
3,268
(769)
(1,248)
(6)
54
0
8,808
422,134

95,249
100,000
83,992
5,932
67,017
3,307
4,495
2,911
8,381
1,213
372,497
1,545
4,475
3,286
1,240
(1,236)
(219)
0
0
9,091
381,588

98,106
103,000
87,352
6,199
67,017
3,307
4,495
2,911
8,381
1,300
382,069
1,545
4,475
3,286
1,240
(1,236)
(219)
568
(2,858)
6,801
388,869

101,050
106,090
90,846
6,509
67,017
3,307
4,495
2,911
8,381
1,437
392,042
1,545
4,475
3,456
1,240
(1,236)
(219)
576
(3,074)
6,763
398,805

104,081
109,273
94,480
6,834
67,017
3,307
4,495
2,911
8,381
1,603
402,382
1,545
4,475
3,629
1,240
(1,236)
(219)
616
(3,347)
6,703
409,085

107,204
112,551
98,259
7,176
67,017
3,307
4,495
2,911
8,381
1,810
413,110
1,545
4,475
3,814
1,240
(1,236)
(219)
658
(3,668)
6,609
419,719

110,420
115,927
102,189
7,535
67,017
3,307
4,495
2,911
8,381
2,073
424,255
1,545
4,475
4,011
1,240
(1,236)
(219)
698
(4,047)
6,467
430,722

5,376
2.65%
0.65%

5,376
1,084
(950)
5,510
2.90%
0.57%

5,510
1,131
(1,785)
4,856
2.50%
0.57%

4,960
1,185
(1,068)
5,077
2.50%
0.57%

5,194
1,241
(1,118)
5,317
2.50%
0.57%

5,440
1,300
(1,171)
5,569
2.50%
0.57%

5,698
1,361
(1,226)
5,832
2.50%
0.57%

Assets
Cash reserve
Claims on banks
Claims on customers
Provisions for loan losses
Positive fair values from derivative hedging instruments
Assets held for dealing purposes
Investments and securities portfolio
Goodwill
Other intangible assets
Fixed assets
Tax assets
Other assets
Total assets
Liabilities
Liabilities to banks
Liabilities to customers
Securitised liabilities
Negative fair values from derivative hedging instruments
Liabilities from dealing activities
Provisions
Tax liabilities
Other liabilities
Subordinated capital
Minority interests
Total liabilities
Subscribed capital
Capital reserve
Retained earnings
Revaluation reserve
Measurement of cash flow hedges
Reserve from currency translation
Consolidated profit/loss
Treasury stock
Shareholders funds
Total liabilities and shareholders funds
Bad debt provisions
Opening provision for loan losses
Provision for year
Amounts utilised and other changes
Closing provision for loan losses
Provisions/claims on banks and customers (%)
Annual provision/claims on banks and customers (%)

2. Commerzbank Profit and Loss Account (Euro million)

Interest received
Interest paid
Net interest income
Provisions for possible loan losses
Net interest income after provisioning
Commissions received
Commissions paid
Net commission income
Net result on hedge accounting
Trading profit
Net result on available for sale investments
Operating expenses
Other operating result
Operating profit
Amortization of goodwill
Profit before exceptional items
Exceptional items
Restructuring expenses
Profit before taxation
Taxation
Taxation rate (%)
Profit after taxation
Minority interest in profit
Profit attributable to ordinary shares
Transfer from capital reserve
Consolidated profit/loss
Ordinary dividends payable
Retained profit/loss
Payout ratio
Year end shares outstanding
Weighted average shares outstanding
Earnings per share
Dividends per share

2002

2003

2004

2005

2006

2007

2008

18,032
(14,899)
3,133
(1,321)
1,812
2,416
(296)
2,120
(56)
544
(11)
(5,155)
938
192
(108)
84
(247)
(209)
(372)
103
27.7%
(269)
(29)
(298)
352
54
0
54
0.0%

11,767
(8,991)
2,776
(1,084)
1,692
2,505
(369)
2,136
40
737
291
(4,511)
174
559
(110)
449
(2,325)
(104)
(1,980)
(249)
-12.6%
(2,229)
(91)
(2,320)
2,320
0
0
0
0.0%

11,672
(8,607)
3,065
(1,131)
1,933
2,580
(380)
2,200
0
737
297
(4,133)
167
1,200
(110)
1,090
0
0
1,090
(435)
39.9%
655
(87)
568
0
568
(398)
170
70.0%

12,339
(8,832)
3,507
(1,185)
2,322
2,658
(391)
2,266
0
737
297
(4,496)
171
1,296
(110)
1,186
0
0
1,186
(473)
39.9%
713
(136)
576
0
576
(403)
173
70.0%

13,049
(9,064)
3,985
(1,241)
2,744
2,737
(403)
2,334
0
737
297
(4,875)
175
1,412
(110)
1,302
0
0
1,302
(519)
39.9%
782
(166)
616
0
616
(431)
185
70.0%

13,795
(9,304)
4,491
(1,300)
3,191
2,819
(415)
2,404
0
737
297
(5,260)
179
1,549
(110)
1,439
0
0
1,439
(574)
39.9%
865
(207)
658
0
658
(461)
197
70.0%

14,578
(9,552)
5,027
(1,361)
3,665
2,904
(428)
2,476
0
737
297
(5,650)
184
1,709
(110)
1,599
0
0
1,599
(638)
39.9%
961
(263)
698
0
698
(489)
209
70.0%

529.9
533.6
-0.56
0.00

594.4
544.2
-4.26
0.00

407.8
501.1
1.13
0.97

393.7
400.8
1.44
1.02

375.9
384.8
1.60
1.15

355.0
365.4
1.80
1.30

330.2
342.6
2.04
1.48

3. Commerzbank Balance Sheet Drivers

2002

2003

2004

2005

2006

2007

2008

-12.2%
-4.9%
-6.8%
2.5%
-18.5%
-25.2%
3.9%
-33.7%
0.9%
-17.6%
0.7%
59.9%
-9.6%

3.0%
4.0%
4.5%
-10.0%
4.5%
0.0%
0.0%
-15.9%
0.0%
0.0%
0.0%
-67.6%
1.9%

3.0%
4.0%
5.0%
4.7%
5.0%
0.0%
0.0%
-19.0%
0.0%
0.0%
0.0%
62.5%
2.6%

3.0%
4.0%
5.0%
4.7%
5.0%
0.0%
0.0%
-23.4%
0.0%
0.0%
0.0%
30.8%
2.6%

3.0%
4.0%
5.0%
4.7%
5.0%
0.0%
0.0%
-30.6%
0.0%
0.0%
0.0%
17.2%
2.6%

3.0%
4.0%
5.0%
4.7%
5.0%
0.0%
0.0%
-44.0%
0.0%
0.0%
0.0%
8.7%
2.6%

-17.2%
4.5%
-9.4%
4.1%
-19.5%
-6.3%
22.7%
-11.4%
-9.3%
-3.9%
-9.9%
12.1%
-27.0%
0.6%
-261.2%
-1.0%
3550.0%
na
na
3.2%
-9.6%

3.00%
3.00%
4.00%
4.50%
0.0%
0.0%
0.0%
0.0%
0.0%
7.2%
2.6%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
na
na
-25.2%
1.9%

3.00%
3.00%
4.00%
5.00%
0.00%
0.00%
0.00%
0.00%
0.00%
10.5%
2.6%
0.0%
0.0%
5.2%
0.0%
0.0%
0.0%
1.5%
7.6%
-0.6%
2.6%

3.00%
3.00%
4.00%
5.00%
0.00%
0.00%
0.00%
0.00%
0.00%
11.6%
2.6%
0.0%
0.0%
5.0%
0.0%
0.0%
0.0%
6.9%
8.9%
-0.9%
2.6%

3.00%
3.00%
4.00%
5.00%
0.00%
0.00%
0.00%
0.00%
0.00%
12.9%
2.7%
0.0%
0.0%
5.1%
0.0%
0.0%
0.0%
6.8%
9.6%
-1.4%
2.6%

3.00%
3.00%
4.00%
5.00%
0.00%
0.00%
0.00%
0.00%
0.00%
14.5%
2.7%
0.0%
0.0%
5.2%
0.0%
0.0%
0.0%
6.1%
10.3%
-2.2%
2.6%

Assets
Cash reserve
Claims on banks
Claims on customers
Provisions for loan losses
Positive fair values from derivative hedging instruments
Assets held for dealing purposes
Investments and securities portfolio
Goodwill
Other intangible assets
Fixed assets
Tax assets
Other assets
Total assets
Liabilities
Liabilities to banks
Liabilities to customers
Securitised liabilities
Negative fair values from derivative hedging instruments
Liabilities from dealing activities
Provisions
Tax liabilities
Other liabilities
Subordinated capital
Minority interests
Total liabilities
Subscribed capital
Capital reserve
Retained earnings
Revaluation reserve
Measurement of cash flow hedges
Reserve from currency translation
Consolidated profit/loss
Treasury stock
Shareholders funds
Total liabilities and shareholders funds

4. Commerzbank Profit and Loss Drivers

Interest received/average earning assets

Interest paid/average interest-bearing liabilities
Growth in commissions received
Growth in commissions paid
Growth in trading profit
Profit on investments/investments
Operating expenses/interest and commission income
Other operating result/total assets
Minority interest in profit

2003

2004

2005

2006

2007

2008

2.99%
1.20%
3.68%
24.66%
35.48%
0.34%
117.84%
0.04%
4.08%

3.09%
1.20%
3.00%
3.00%
0.00%
0.34%
100.00%
0.04%
13.34%

3.19%
1.20%
3.00%
3.00%
0.00%
0.34%
98.00%
0.04%
19.12%

3.29%
1.20%
3.00%
3.00%
0.00%
0.34%
96.00%
0.04%
21.24%

3.39%
1.20%
3.00%
3.00%
0.00%
0.34%
94.00%
0.04%
23.91%

3.49%
1.20%
3.00%
3.00%
0.00%
0.34%
92.00%
0.04%
27.38%

5. Commerzbank end 2003 economic capital (Euro billion)

2003
RWA
Market risk (trading book)
Market risk (banking book)
Market risk (equity holdings)
Credit risk
Operational risk
Business risk
Total
Diversification effects
Economic capital after diversification effects
Tier I capital
Implied surplus
Economic capital/RWA (%)

140.8
0.8
0.7
2.9
4.3
0.9
0.5
10.1
-2.2
7.9
10.3
2.4
5.61%

6. Commerzbank Regulatory Risk Weighted Assets and Capital Ratios (Euro million)

Total book assets

Risk weighted assets (RWA)
Risk weighted assets/total assets
Minimum Tier 1 ratio (%)
Regulatory minimum total capital ratio (%)
Core capital
Equity capital in balance sheet
Minority interests
Goodwill
Adjustments
Tier I capital
Core capital ratio
Target capital ratio
Target capital
Surplus capital
Supplementary capital
Core capital
Subordinated capital
Adjustments
Tier II capital
Tier III capital
Total capital
Total capital ratio

2002

2003

2004

2005

2006

2007

2008

422,134
160,190
37.95%

381,585
140,829
36.91%

388,869
145,542
37.43%

398,805
149,261
37.43%

409,085
153,108
37.43%

419,719
157,088
37.43%

430,722
161,206
37.43%

4.00%
8.00%

4.00%
8.00%

4.00%
8.00%

4.00%
8.00%

4.00%
8.00%

4.00%
8.00%

4.00%
8.00%

8,808
1,262
(1,040)
2,661
11,691
7.30%

9,091
1,213
(690)
643
10,257
7.28%
5.61%
7,900
2,357

6,801
1,300
(580)
643
8,164
5.61%
5.61%
8,164
0

6,763
1,437
(470)
643
8,373
5.61%
5.61%
8,373
0

6,703
1,603
(360)
643
8,589
5.61%
5.61%
8,589
0

6,609
1,810
(250)
643
8,812
5.61%
5.61%
8,812
0

6,467
2,073
(140)
643
9,043
5.61%
5.61%
9,043
0

11,691
9,237
(1,475)
19,453
209
19,662
12.27%

10,257
8,381
(513)
18,125
125
18,250
12.96%

8,164
8,381
(513)
16,032
125
16,157
11.10%

8,373
8,381
(513)
16,241
125
16,366
10.96%

8,589
8,381
(513)
16,457
125
16,582
10.83%

8,812
8,381
(513)
16,680
125
16,805
10.70%

9,043
8,381
(513)
16,911
125
17,036
10.57%

7. Commerzbank Equity (Euro million)

2003
Share price (Euro)
Par value (Euro)
Equity issued
Equity bought back
Shares issued
Shares bought back

2004

2005

2006

2007

2008

0
(2,858)

0
(217)

0
(273)

0
(320)

0
(379)

0
(187)

0
(14)

0
(18)

0
(21)

0
(25)

15.32
2.60

8. Commerzbank Performance Ratios

2002

2003

2004

2005

2006

2007

2008

Income margin
Income/opening total assets
Return on opening total assets
Opening shareholders' funds/total assets
Return on equity

-5.67%

-47.23%
1.16%
-0.55%
2.09%
-26.34%

10.79%
1.38%
0.15%
2.38%
6.25%

9.98%
1.48%
0.15%
1.75%
8.48%

9.75%
1.58%
0.15%
1.70%
9.11%

9.54%
1.69%
0.16%
1.64%
9.82%

9.30%
1.79%
0.17%
1.57%
10.56%

Cost/income ratio

98.13%

91.84%

78.51%

77.89%

77.15%

76.28%

75.31%

9. Commerzbank cost of equity

Current cost of equity:
Risk free rate
Equity risk premium
Beta
Current cost of equity

4.02%
4.00%
1.17
8.70%

Market capitalisation
Surplus capital
Target capitalisation

9,106
(2,357)
6,749

Proforma Beta
Proforma cost of equity

1.58
10.33%

-25.88%
74.12%

10. Commerzbank Valuation (Euro million)

2004

2005

2006

2007

616
676
(60)
6,763
9.11%
10.33%
(83)

658
751
(93)
6,703
9.82%
10.33%
(35)

Terminus assumptions:
Assumed long term growth rate
Assumed long term ROE

2.00%
10.33%

Inputs from forecasts:

Profit after taxation
Cash flow to/(from) equity
Retained earnings
Opening shareholders' funds
Return on opening shareholders' funds
Cost of equity
Implied residual income

568
2,858
(2,290)
9,091
6.25%
10.33%
(372)

576
614
(38)
6,801
8.48%
10.33%
(126)

Discounted cash to equity value:

NPV five year free cash flow
NPV terminal value
Value of shareholders' funds
Shares issued (million)
Value per share (Eur)
Share price
Premium/(discount)

4,619
4,212
8,831
594
14.86
15.32
-3.01%

52.3%
47.7%
100.0%

Residual income valuation:

Opening shareholders' funds
PV five year residual income
PV terminal value (ex incremental investment)
PV terminal value (incremental investment)
Value of shareholders' funds
Shares issued (million)
Value per share (Eur)
Share price
Premium/(discount)

9,091
(517)
257
0
8,831
594
14.86
15.32
-3.01%

102.9%
-5.9%
2.9%
0.0%
100.0%

2008 Terminus

698
840
(142)
6,609
10.56%
10.33%
15

712
574
6,467
10.33%
10.33%
43