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November 12, 2002

Commerzbank's interim report of
September 30, 2002

Rheinhyp income used for write-downs on investments;
core capital ratio rises to 6.7%; cuts in investment banking

The Commerzbank Group is posting a result on ordinary activities (before restructuring expenses) of minus 101m euros for the third quarter of 2002 (previous year: -279m euros). For the January-September period, a positive pre-tax profit of 45m euros remains. The quarterly result was dominated by non-recurring income of 721m euros from the deconsolidation of the former Rheinische Hypothekenbank. However, this was not used to boost profits but rather to cover write-downs on investments and securities, following impairment tests.

Provisioning was increased to 436m euros in the third quarter. For the year as a whole, the Board of Managing Directors expects a need for value allowances in the order of just over 1.3bn euros. In view of the extreme market volatility, they see no point in forecasting the result for 2002 as a whole. The bank's cost-cutting offensive is proceeding according to plan: after nine months, operating expenses were already 9.9% lower than a year previously.

Due in part to the deconsolidation of Rheinhyp, the core capital ratio (BIS) improved substantially to 6.7%. The bank's overall own funds ratio now stands at 11.5%.

In order to bring investment-banking capacity into line with lower demand, the Board of Managing Directors has resolved to scale down the relevant activities considerably in overseas financial centres. This will affect roughly a quarter of the staff in investment banking. In the related back-office areas, at least 150 jobs will be shed.


Key income statements items

In million euros

Jan-Sept.
02
Jan-Sept.
01
3rd qtr
02
3rd qtr
01
Net interest income:2,455*2,693721*859
Provisioning:-998-571-436-242
Net commission income:1,6301,785501569
Trading profit:4536603658
Result on investments/
securities:
-379105-531-74
Other operating result853-42858-5
Operating expenses3,9354,3681,2291,459
Pre-tax profit45290-133-279

*) as from August 1, 2002: without Rheinhyp


The report is available on the internet here .

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