Commercial Real Estate Financing and Ship Finance will be transferred to the segment NCA and wound up while maximizing value and CommerzReal will be integrated into Private Customers segment.
In view of the continuing uncertain situation on the financial markets, the heightening of the sovereign debt crisis and the increasing regulatory burdens, Commerzbank intends to accelerate the path it has already taken, with its focus on customer-centric and profitable core business, the minimization of risks and a reduction in complexity.
The Board of Managing Directors has today, therefore, decided to wind up the business areas Commercial Real Estate and Ship Finance in the course of time. In addition, CommerzReal is to be integrated into the Core Bank segment Private Customers. Therefore, the new Core Bank segment Real Estate and Ship Finance (RES) will not be launched as had originally been planned.
"Against the background of the ongoing financial and sovereign debt crisis, an end to which is not foreseeable, and of the uncertain regulatory environment, we are subjecting all the business areas to a rigorous review in the framework of our strategic planning process. The strategic objective is that of consistently focusing Commerzbank on customer-centric and sustainably profitable core business and further minimizing risks and capital lockup.
"In the course of this process we have as an initial move, therefore, decided to reduce the business areas originally planned for the new Real Estate and Ship Finance segment in the course of time or transfer them to the Core Bank," said the Chairman of the Board of Managing Directors, Martin Blessing.
Commercial Real Estate and Ship Finance are to be transferred in full to the new segment Non Core Assets (NCA). The essential reasons for this are the high capital and the rising liquidity requirements under Basel 3, and especially for long-term financing, as well as the strong cyclical fluctuations which are to be expected in the results in the future. In private and corporate customer business, Commerzbank will naturally continue to offer real estate financing.
As already announced at the end of March, the Public Finance business of Eurohypo is also to be organizationally transferred for winding up to the NCA segment. As planned, the Commercial Real Estate and Public Finance portfolios remain in the legal entity Eurohypo AG. Eurohypo will be renamed 'Hypothekenbank Frankfurt AG' probably as of August 31, 2012.
Thus, Commerzbank is meeting a requirement of the European Commission in relation to the winding-up conditions for Eurohypo. The new name, which will also apply to subsidiaries of Eurohypo, refers to a predecessor institute of Eurohypo.
The CommerzReal business area will be integrated within the Core Bank into the Private Customers segment so as to orient the business more closely to the needs of customers in the future.
These changes will become effective as of August 9, 2012. Following the decision to significantly expand the NCA segment, the responsibilities on the Board of Managing Directors of Commerzbank will also be restructured as of this date.
Commerzbank is currently subjecting all its business areas to a review in the framework of the annual strategic planning process. The changes announced today are the first consequence of this. All the results of this process will be presented in the autumn.
The published targets and statements for the current business year remain valid. An update will be provided with the publication of the half-year results on August 9, 2012.