Acquisition of Bank Forum

Acquisition of Bank Forum
Analyst/Investor information
Frankfurt, September 18th, 2007
Agenda
1.
Transaction highlights
2.
Ukrainian banking market
3.
Bank Forum – top 10 player in Ukraine by assets
4.
Strategic fit and transaction details
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Transaction summary of Bank Forum acquisition
• First step: Majority holding – initial acquisition of 60% + 1 share
Transaction
• Second step: Call options (after 36 months) to acquire a further up to 25% to
reach qualified majority
• The pricing of the call options will be based on the company value applicable at
that time
Facts
Strategic fit
• Purchase of US-$ 600 m (approx. € 435 m) including capital increase
• Financing out of own capital strength
• Acquisition of Bank Forum fits with CB’s CEE-strategy to enlarge its
presence by selective growth in the most important and attractive CEE markets
• Bank Forum fits with CB’s criteria for investments
• Opportunity to improve on our top 10 position in the booming Ukraine market
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Agenda
1.
Transaction highlights
2.
Ukrainian banking market
3.
Bank Forum – top 10 player in Ukraine by assets
4.
Strategic fit and transaction details
3 / 15
Ukrainian Banking Market
Share of international investors bank capital
in %
66
76
85
88
91
98
• Banking sector size by total assets with an
average compounded annual growth of
more than 50% in the last five years
• Low banking penetration
Slovakia
Croatia
Romania
Czech Rep.
Hungary
Bulgaria
Poland
Ukraine
Serbia
29
19
Slovenia
Russia
9
70
84
• Well developed regulatory framework
Source: KPMG: „Banking in CEE – Bank sellers windfall“ 10/2006
in EUR bn
CAGR 2000 – 2006: 46%
48
61
33
8
9
2000
2001
2002
14
17
2003
2004
• Low level of market share of foreign-owned
banks
• Commerzbank is already present in Kiev
with a representative office since 1994
Growth of Banking Assets
5
• Booming market with huge GDP growth
development (6% expected for 2007)
2005
2006
1H 2007
The purchase of Bank Forum
provides Commerzbank with
access to the attractive SME and
retail customer markets
Source: Association of the Ukrainian Banks
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Agenda
1.
Transaction highlights
2.
Ukrainian banking market
3.
Bank Forum – top 10 player in Ukraine by assets
4.
Strategic fit and transaction details
5 / 15
Profile Bank Forum
Branch Network (as of June 2007)
• Top 10 market player by assets with 2.3%
market share
• Nationwide branch network
• All main cities / regional
centres are covered
• Representative office
in Czech Republic and
Kazakhstan
• Clear ownership structure
• 12,000 corporate clients thereof 9,500
SME clients
• 230,000 retail clients
Source: Bank Forum
Shareholder structure (before acquisition)
TOV Elmak*
11.6%
Other
individuals*
6.4%
Bank of New
York**
7.8%
• Nationwide branch network with 230
sales units
• Around 3,100 employees
Julius Bär IEF
5.8%
* Controlled by Mr. Yurushev
and his family
** Bank of New York is a Nominee
holder of the GDRs, ultimate
owners — portfolio investors
Provita
Insurance*
Company
66.5%
At present Bank Forum finds itself in an
intensive growth and investment phase
Source: Bank Forum
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Development and Strategic Goals
100%
7%
Branch Network
Development
12%
20%
20%
22%
80%
450
60%
400
350
40%
300
250
20%
200
0%
150
100
50
0
28%
25%
29%
32%
26%
28% 410 26%
350
65%
63%
194
300
51%
48%
95
167
2005
2006
3m2007
4m2007
72
subordinated
loan
27 own debt securities,
30
30
23 Funds f rom IFO,
Funds f rom other banks
2005
2006
Funds
of clients
Regional
branches
2007p
•
Efficiency in customer service and product
development
•
Strategic focus on high-margin retail segment
and SME franchise
•
Develop branch network to 370 outlets by
2009 and 410 by 2011
•
Development of client related securities
business
•
Development of data warehouse and CRM
system
48%
380
320
270
2004
50%
Strategic Goals
2007 Р
30
2008p
2011p
Operational offices
Source: Bank Forum
Growth of Loan Portfolio in EUR m
4,500
4,000
3,500
3,000
%
11: 48
5 – 20
0
0
2
CAGR
2,500
2,000
4,227
Commerzbank is planning for an
investment phase taking place
over the next 3 to 5 years
1,500
2,059
1,000
500
0
400
2005
742
2006
1,176
2007p
2008p
2011p
Medium term goal: Strengthening market position with market share ~ 4%
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Agenda
1.
Transaction highlights
2.
Ukrainian banking market
3.
Bank Forum – top 10 player in Ukraine by assets
4.
Strategic fit and transaction details
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Impact of transaction on Commerzbank Group
Impact on Tier 1 ratio
No material impact on Tier 1 ratio
Consolidation
full consolidation after closing
Impact on segment
Mittelstandsbank
(2008 – 2010)
• Operating income after risk provisions: slight increase
envisioned
• Pre-tax profit: small decrease due to Forum’s planned
investments
• CIR: increase by 1%
Bank Forum acquisition creates shareholder value for Commerzbank
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Strategic fit of Bank Forum acquisition
Market
• Booming market
• Dynamic GDP
development
• Comparably low
banking penetration
• Low level of market
share of foreignowned banks
Huge upside
potential
Target
• Top 10 Ukrainian
universal bank
• Acquisition of
majority stake with
step-up plan to reach
qualified majority
• Clear ownership
structure
Attractive price-risk
profile
CB group
presence in Ukraine
• One of the very
limited opportunities
to reach a top
position in this
booming market
• Good platform for
retail development
• Improved capacity to
serve German clients
Nationwide branch
network/ first
German Bank in
Ukrainian market
Business lines
• Universal bank with
focus on corporate
and retail banking
• Corporate Banking
focussed on SME
business with room
for product
development
• Retail Banking:
Possibility of nation
wide market
penetration
supported by CB and
BRE knowledge
Fitting business
model with room for
improvement
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CB presence in CEE / CIS - strong platform for further growth
Poland
BRE Bank* (70.2%)
Headcount:
3,878
Total assets:
€ 11,099 m
Pre tax profit:
€ 135 m
Russia
CB (Eurasija) SAO* (100%)
Headcount:
83
Total assets:
€ 1,070 m
Pre tax profit: € 34 m
Promsvyazbank (15.32%)
Financial investment
Prague branch incl. Bratislava*
(100%)
Headcount:
148
Total assets:
€ 2,101 m
Pre tax profit:
€ 16 m
Czech Republic/
Slovakia
Hungary
CB Budapest Rt* (100%)
Headcount:
113
Total assets:
€ 843 m
Pre tax profit: € 12 m
Representative offices
Belarus / Croatia / Kazakhstan / Romania / Russia / Serbia- Montenegro /
Ukraine / Uzbekistan
Ukraine
Bank Forum* (60%)
Headcount:
2,506
Total assets:
€ 1,102 m
Pre tax profit: € 2.5 m
ProCredit Banks
Albania / Bosnia-Herzegovina / Bulgaria / Georgia / Kosovo /
Romania / Serbia
* Data as per 12 / 2006
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Appendix
Key financials of Bank Forum
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Key financials of Bank Forum
2004
2005
2006
Total assets € m
251
626
1,102
1,393
Totals loans € m
168
400
742
928
Total equity €m
33
65
110
140
5,400 / 55,000
7,000 / 106,000
11,000 / 191,000
12,000 / 230,000
Clients (Corporate / Retail)
H1 2007
Employees
856
1,530
2,506
3,118
Operating revenues € m
17.6
30.5
44.7
34.1
Operating expenses € m
-7.5
-18.1
-30.8
-22.3
Profit before tax € m
3.4
5.7
2.5
2.5
Net income €m
2.5
4.1
1.6
1.6
42.2%
58.4%
70.0%
65.4%
9.8%
7.7%
1.9%
Cost/Income ratio
RoAE*
*Calculation based on local currency
2.6% **
**Extrapolated for the whole year
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For more information, please contact Commerzbank´s IR-team:
Jürgen Ackermann (Head of IR)
P: +49 69 136 22338
M: [email protected]
Ute Heiserer-Jäckel
P: +49 69 136 41874
M: [email protected]
Karsten Swoboda
P: +49 69 136 22339
M: [email protected]
Sandra Büschken (Deputy Head of IR)
P: +49 69 136 23617
M: [email protected]
Simone Nuxoll
P: +49 69 136 45660
M: [email protected]
Andrea Flügel (Assistant)
P: +49 69 136 22255
M: [email protected]
Wennemar von Bodelschwingh
P: +49 69 136 43611
M: [email protected]
Stefan Philippi
P: +49 69 136 45231
M: [email protected]
www.commerzbank.com/ir
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