Description
Description tell about investors day group strategy and turnaround program.
Investors’ Day
Group Strategy and Turnaround Program
Dr. Eric Strutz
Head of Group Strategy
Frankfurt, September 4, 2002
Investors’ Day September 4, 2002 1
Strategic repositioning:
All divisions under review
Reviews to be completed by end-2002
Retail Banking and Asset Management reviews
completed, new strategies currently being
implemented
Turnaround program
Measures to be completed by 2003
Major financial impact to be realized in 2002/03
Cost-cutting targets for 2001 and first half 2002 met
Group survey: Starting point
2001 2002 2003 2004+
Comprehensive turnaround program to return to a satisfactory
performance by 2003
Accompanied by a strategic review of all business lines,
focusing on the long-term competitiveness of the bank
Investors’ Day September 4, 2002 2
Cost-cutting initiative
Based on competitor-benchmarking
Targets: Cut total costs of €800m by 2003; reduce staff by 3,400 FTE
(plus 900 FTE) plus additional 1,700 FTE unfilled vacancies
CB 21
Focus on European clients
Extension of Bancassurance franchise (with Generali/AMB) and Private Banking
Restructuring of domestic branch network
Integration of Corporate and Investment Banking
Structural measures and new appointments
Appointment of regional board members to intensify relationship approach
Reorganization of the Corporate Banking (ZCB), Global Securities (ZGS) and
Retail Banking (ZPK) departments
Utilizing pricing levers
Increase margins/prices of products where possible
(Corporate and Retail Banking)
Credit portfolio check
Extraordinary review of the credit portfolio
Goals: Increase collateral or pricing where necessary/possible
3
1
2
5
4
Turnaround program
Investors’ Day September 4, 2002 3
K Alignment of organizational structure and concentration of know-how
in the business units
K Global responsibility of Group Treasury
K Implementation of I-Plus
K Concentration of domestic branch network from 929 (beginning 2001)
to currently 757 branches
Due to stock-market slump
Due to reduced expectations related to Bancassurance and
Asset Management
Further adjustments necessary
Milestones achieved so far
CB 21
Next steps
Off-set the gap with new/additional measures
(e.g. turnaround program in Retail Banking).
3
Investors’ Day September 4, 2002 4
5.9
5.5
? 5.5
6.3
4.5
Cost-cutting initiative: Operating expenses
return to 2000 level
Group operating expenses
in € billion
Original budget
1999 2000 2001 2001
2002
Start cost-
cutting
initiative
Target
Investors’ Day September 4, 2002 5
K Social plan completed
K Agreements signed with employees willing to leave the bank
K Sale of comdirect France
K Closure of comdirect Italy
K Re-negotiation of IT-maintenance and -licence contracts
K Implementation of new Asset Management organization ("Große KAG")
K Sale of CAMI
Outsourcing of premises management and set-up of organizational centres
Reorganization of credit risk management
Back-office centralization
Further concentration of the domestic branch network to 727 offices
Next steps
Milestones achieved so far
Cost-cutting initiative
Investors’ Day September 4, 2002 6
1000
1100
1200
1300
1400
1500
1600
1700
1
Q
0
0
2
Q
0
0
3
Q
0
0
4
Q
0
0
1
Q
0
1
2
Q
0
1
3
Q
0
1
4
Q
0
1
1
Q
0
2
2
Q
0
2
Cost-cutting initiative: Successful
implementation of measures
Group
operating
expenses
in € million
2000 2001 2002
Quarterly
average
in 2000
Target
per
quarter
in 2002
Operating expenses below budget in every month since March 2002
Investors’ Day September 4, 2002 7
Cost-cutting initiative: Status quo of
workforce reduction per 6/2002
3,400
520
1,580
1,130
170
Reduction target by
end-2003
Head-count
reduction per 6/02
(group)
Signed contracts
2H2002*)
Signed contracts for
2003*)
Remaining target by
end-2003
Net workforce reduction
(in FTE)
*) AG in Germany only; head-count reductions abroad (signed contracts)
in H2 2002 and 2003 not included
67%
Additional reduction of 900 FTE
in Retail Banking (not shown here)
Investors’ Day September 4, 2002 8
“Leading distributor of financial services in the heart of Europe”
stronger focus on adding value in distribution
The competent bank for
the sophisticated private
client in Germany
The creative relationship bank
• for corporates and
entrepreneurs in Germany
• for selected corporates in
Europe and the United States
Asset
Management
Corporate
Banking
Investment
Banking
Retail
Banking
Sharpening the strategic profile
8
Investors’ Day September 4, 2002 9
Strategic review of all business lines
Align strategies of business lines with overall group strategy
Strategic profile of Commerzbank Group
Stronger focus on distribution
Retail Banking/Asset Management
Expand German affluent and private banking business
Focus Asset Management on needs of distribution network
(“produce what will sell”) and on European core countries
Corporate Banking/Investment Banking
Expand business with upper-tier German “Mittelstand” customers
Outside Germany, focus on European and US customers with good credit quality
Align Commerzbank’s Investment Banking to needs of targeted customer groups
Improve management information/controlling systems
Including Value Portfolio Management and Value Monitor
Strategic repositioning
3
2
1
Investors’ Day September 4, 2002 10
E
x
p
e
c
t
e
d
r
e
t
u
r
n
t
t
0
Other
Structural changes
Risk/return measures
Non-core markets program
Revenue opportunities program
Customer potential exploitation
program
CB21/other
Cost-cutting initiative
Growth path restructuring program
doc_647937916.pdf
Description tell about investors day group strategy and turnaround program.
Investors’ Day
Group Strategy and Turnaround Program
Dr. Eric Strutz
Head of Group Strategy
Frankfurt, September 4, 2002
Investors’ Day September 4, 2002 1
Strategic repositioning:
All divisions under review
Reviews to be completed by end-2002
Retail Banking and Asset Management reviews
completed, new strategies currently being
implemented
Turnaround program
Measures to be completed by 2003
Major financial impact to be realized in 2002/03
Cost-cutting targets for 2001 and first half 2002 met
Group survey: Starting point
2001 2002 2003 2004+
Comprehensive turnaround program to return to a satisfactory
performance by 2003
Accompanied by a strategic review of all business lines,
focusing on the long-term competitiveness of the bank
Investors’ Day September 4, 2002 2
Cost-cutting initiative
Based on competitor-benchmarking
Targets: Cut total costs of €800m by 2003; reduce staff by 3,400 FTE
(plus 900 FTE) plus additional 1,700 FTE unfilled vacancies
CB 21
Focus on European clients
Extension of Bancassurance franchise (with Generali/AMB) and Private Banking
Restructuring of domestic branch network
Integration of Corporate and Investment Banking
Structural measures and new appointments
Appointment of regional board members to intensify relationship approach
Reorganization of the Corporate Banking (ZCB), Global Securities (ZGS) and
Retail Banking (ZPK) departments
Utilizing pricing levers
Increase margins/prices of products where possible
(Corporate and Retail Banking)
Credit portfolio check
Extraordinary review of the credit portfolio
Goals: Increase collateral or pricing where necessary/possible
3
1
2
5
4
Turnaround program
Investors’ Day September 4, 2002 3
K Alignment of organizational structure and concentration of know-how
in the business units
K Global responsibility of Group Treasury
K Implementation of I-Plus
K Concentration of domestic branch network from 929 (beginning 2001)
to currently 757 branches
Due to stock-market slump
Due to reduced expectations related to Bancassurance and
Asset Management
Further adjustments necessary
Milestones achieved so far
CB 21
Next steps
Off-set the gap with new/additional measures
(e.g. turnaround program in Retail Banking).
3
Investors’ Day September 4, 2002 4
5.9
5.5
? 5.5
6.3
4.5
Cost-cutting initiative: Operating expenses
return to 2000 level
Group operating expenses
in € billion
Original budget
1999 2000 2001 2001
2002
Start cost-
cutting
initiative
Target
Investors’ Day September 4, 2002 5
K Social plan completed
K Agreements signed with employees willing to leave the bank
K Sale of comdirect France
K Closure of comdirect Italy
K Re-negotiation of IT-maintenance and -licence contracts
K Implementation of new Asset Management organization ("Große KAG")
K Sale of CAMI
Outsourcing of premises management and set-up of organizational centres
Reorganization of credit risk management
Back-office centralization
Further concentration of the domestic branch network to 727 offices
Next steps
Milestones achieved so far
Cost-cutting initiative
Investors’ Day September 4, 2002 6
1000
1100
1200
1300
1400
1500
1600
1700
1
Q
0
0
2
Q
0
0
3
Q
0
0
4
Q
0
0
1
Q
0
1
2
Q
0
1
3
Q
0
1
4
Q
0
1
1
Q
0
2
2
Q
0
2
Cost-cutting initiative: Successful
implementation of measures
Group
operating
expenses
in € million
2000 2001 2002
Quarterly
average
in 2000
Target
per
quarter
in 2002
Operating expenses below budget in every month since March 2002
Investors’ Day September 4, 2002 7
Cost-cutting initiative: Status quo of
workforce reduction per 6/2002
3,400
520
1,580
1,130
170
Reduction target by
end-2003
Head-count
reduction per 6/02
(group)
Signed contracts
2H2002*)
Signed contracts for
2003*)
Remaining target by
end-2003
Net workforce reduction
(in FTE)
*) AG in Germany only; head-count reductions abroad (signed contracts)
in H2 2002 and 2003 not included
67%
Additional reduction of 900 FTE
in Retail Banking (not shown here)
Investors’ Day September 4, 2002 8
“Leading distributor of financial services in the heart of Europe”
stronger focus on adding value in distribution
The competent bank for
the sophisticated private
client in Germany
The creative relationship bank
• for corporates and
entrepreneurs in Germany
• for selected corporates in
Europe and the United States
Asset
Management
Corporate
Banking
Investment
Banking
Retail
Banking
Sharpening the strategic profile
8
Investors’ Day September 4, 2002 9
Strategic review of all business lines
Align strategies of business lines with overall group strategy
Strategic profile of Commerzbank Group
Stronger focus on distribution
Retail Banking/Asset Management
Expand German affluent and private banking business
Focus Asset Management on needs of distribution network
(“produce what will sell”) and on European core countries
Corporate Banking/Investment Banking
Expand business with upper-tier German “Mittelstand” customers
Outside Germany, focus on European and US customers with good credit quality
Align Commerzbank’s Investment Banking to needs of targeted customer groups
Improve management information/controlling systems
Including Value Portfolio Management and Value Monitor
Strategic repositioning
3
2
1
Investors’ Day September 4, 2002 10
E
x
p
e
c
t
e
d
r
e
t
u
r
n
t
t
0
Other
Structural changes
Risk/return measures
Non-core markets program
Revenue opportunities program
Customer potential exploitation
program
CB21/other
Cost-cutting initiative
Growth path restructuring program
doc_647937916.pdf