Press Release Press Release


April 06, 2011

Commerzbank intends to largely reduce the silent participations of SoFFin


  • Redemption of some EUR 14.3 bn of the SoFFin silent participations of EUR 16.2 bn until June 2011
  • EUR 11.0 bn from capital increases, an additional EUR 3.27 bn from own funds
  • Conditional Mandatory Exchangeable Notes (first step), capital increase with subscription rights (second step)
  • SoFFin stake after completion of the capital measure unchanged at 25 % plus 1 share
  • Core Tier 1 ratio after redemption 8.8 %, Equity Tier 1 ratio 8.0 % (on a pro forma basis)

Commerzbank plans to reduce the silent participations of the Financial Market Stabilization Fund (SoFFin) totalling EUR 16.2 billion by around EUR 14.3 billion until June 2011, and thus to repay them to a large extent. A package for corporate action is foreseen which aims to attract new investors, safeguard the interests of the current shareholders, and guarantee the greatest-possible transaction certainty.

As a first step, Conditional Mandatory Exchangeable Notes (CoMEN) are to be placed through a book building process from April 6, 2011 onwards. After the occurrence of certain conditions, the CoMEN are to be exchanged for Commerzbank shares following the Annual General Meeting (AGM) in May 2011. The new shares necessary are to be created from new conditional capital through the conversion of silent participations of SoFFin. In return, SoFFin will receive the gross proceeds from the placement of the CoMEN. In order to maintain its shareholding of 25% plus 1 share SoFFin will then convert additional silent participations into shares. The ordinary AGM of Commerzbank, which has been brought forward from May 18, 2011 to May 6, 2011, is to pass a resolution on the creation of the required conditional capital.

As a second step, a capital increase with subscription rights is foreseen. It is to be executed from the end of May to the beginning of June 2011. To maintain its shareholding of 25% plus 1 share, SoFFin is contributing silent participations. The resolution required for the capital increase is also to be passed by the AGM. Some EUR 8.25 billion are to be raised from the capital markets in the framework of the transaction. In addition, silent participations of SoFFin to a total of some EUR 2.75 billion will be converted into Commerzbank shares (first step) or will be contributed to the rights issue (second step). In total, SoFFin silent participations of around EUR 11.0 billion are to be redeemed and replaced by the corporate action to the same amount with Equity Tier 1 capital. Additional SoFFin silent participations to the amount of EUR 3.27 billion are to be redeemed from excess regulatory capital.

An international syndicate of banks has undertaken to underwrite the targeted volume from the capital markets of some EUR 8.25 billion at customary market conditions; this presupposes that SoFFin participates in the overall transaction as planned. The syndicate will be lead by the global coordinators Commerzbank, Deutsche Bank, J.P.Morgan and Citi. Other joint bookrunners are Goldman Sachs, HSBC, ING and UBS.

"The government reacted courageously and quickly following the Lehman collapse: It stabilised the banking system and granted interim support. For this it deserves our respect and thanks," said Martin Blessing, Chairman of the Board of Managing Directors of Commerzbank. "We have returned to profitability one year earlier than expected, and we are also implementing the integration of Dresdner Bank in important areas more quickly than planned. Our business model bears fruit. This gives us the possibility to redeem the silent participations ahead of schedule and pay off around 90 % in one transaction. We intend to repay the then remaining sum of about EUR 1.9 billion from future excess regulatory capital by 2014 the latest," said Blessing. "We are keeping our promise of repaying the temporary assistance from the German government as quickly as possible. The taxpayer is also not to suffer any loss." In connection with the redemption of the silent participations, SoFFin is receiving a one-off payment of EUR 1.03 billion.

Placement of the CoMEN

In a first step, from April 6, 2011 onwards CoMEN totalling from some EUR 2.6 billion to around EUR 3.4 billion are to be placed with national and international investors by an international syndicate of banks using a book building process. Investors, who hold Commerzbank shares on April 6, 2011 (close of markets) are granted purchase rights; this means they can purchase one CoMEN for each share. The purchase period begins on April 7, 2011. SoFFin does not have purchase rights. In order to maintain its stake of 25% plus 1 share and depending on the volume of the transaction, however, SoFFin will convert additional silent participations in the amount of about EUR 0.9 billion to some EUR 1.1 billion into Commerzbank shares. The bank is endeavouring to place a total of some EUR 3.5 billion to around EUR 4.5 billion in the first step, but a maximum size of EUR 6.0 billion. The purchase price for the CoMEN is the same for existing shareholders and investors participating in the book building and will be determined in the book building process.

The number of CoMEN to be issued and their purchase price will be fixed after the end of the book building (April 13, 2011) and annouced immediately thereafter in an ad hoc release. Each CoMEN, subject to the occurrence of certain conditions - in particular the adoption and implementation of the necessary resolutions by the AGM - is to be exchanged for one Commerzbank share carrying full dividend rights from January 1, 2011 onwards. This is planned for the 19th calendar week 2011. The new shares necessary are to be created in May 2011 from conditional capital to be created by the AGM through the conversion of silent participations of SoFFin. In return, SoFFin is to receive the gross proceeds from the placement of the CoMEN.

Capital increase with subscription rights

As a second step a capital increase with subscription rights is foreseen. The shares delivered in exchange for CoMEN in the first step are also entitled to subscription rights. The size of the capital increase is determined to achieve a reduction of the silent participations in a total of EUR 11.0 billion. The corresponding resolution on the capital increase is to be passed by the AGM on May 6, 2011. The new shares are to be offered to the shareholders for subscription from the end of May 2011 to the beginning of June 2011. The subscription ratio will depend on the final number of shares on offer. The subscription price is to be determined based on a discount on the market price on the day it is determined. The Board of Managing Directors of Commerzbank is to decide on the number of shares to be issued and further details of the capital increase with the consent of the Supervisory Board. The new shares to be issued in the second step are likewise to be endowed with full dividend rights from January 1, 2011 onwards. It is foreseen that SoFFin will participate in the capital increase by contributing silent participations to maintain its current shareholding of 25% plus 1 share. Allianz has expressed its intention to exercise its subscription rights in the second step in considerable size.

Annual General Meeting brought forward to May 6, 2011

At the AGM, which has been brought forward from May 18, 2011 to May 6, 2011, the Board of Managing Directors and Supervisory Board of Commerzbank will propose that the necessary resolutions for the implementation of the overall transaction be passed. In this respect it will also be proposed to the AGM that the arithmetic value of each share as a proportion of the capital stock be reclassified. In this respect, EUR 2.1 billion of the subscribed capital (totalling EUR 3.5 billion) stated on Commerzbank AG's financial statement according to German GAAP as of December 31, 2010 are to be transferred into the capital reserve. This balance sheet measure does not have any effect on the amount of the equity capital or the number of shares issued. Commerzbank shares do not have a notional value. The reclassification, therefore, merely leads to the arithmetical portion of a share in the subscribed capital being reduced from EUR 2.60 to EUR 1.00. The full agenda of the AGM, which also includes the precise wording of the proposed resolutions for both steps, will be published on April 8, 2011.

Repayment from excess regulatory capital

Against the background of its customer-centric and performing business model, and with a view to its comfortable capital resources, Commerzbank is redeeming silent participations of SoFFin to the amount of EUR 3.27 billion from excess regulatory capital in the framework of the overall transaction. The necessary approvals have been granted. As of December 31, 2010 the Core Tier 1 capital of Commerzbank amounted to some EUR 26.7 billion, the Core Tier 1 ratio was 10.0%. After the completion of the entire transaction the Core Tier 1 capital of the bank - taking into account the SoFFin one-off payment (EUR 1.03 billion), the transaction costs and the capital increase from January 2011 - will amount to some EUR 23.5 billion; the Core Tier 1 ratio will be 8.8%, the Equity Tier 1 ratio 8.0% (on a pro forma basis as of December 31, 2010). Together with the measures from the first and second step, which will reduce the silent participations by EUR 11.0 billion, the silent participations of SoFFin can thus be reduced by a total of some EUR 14.3 billion.

Outlook: first quarter of 2011 above plan

"Since the beginning of 2011 we have already completed several successful capital market transactions to optimise our capital structure. In just six weeks we have raised equity that meets the Basel III guidelines of considerably more than EUR 3 billion. With the implementation of the announced corporate action we will further strengthen our Equity Tier 1 capital. Thus, we are well prepared for Basel III requirements," said Martin Blessing. "Investors know what Commerzbank has to offer them: We are leading in the business with small- and medium-sized companies. We have great potential in private customer business, and in the framework of the Dresdner Bank integration we intend to attain annual synergies totalling EUR 2.4 billion after 2013," said CFO Eric Strutz.

On the whole the bank expects, on the basis of preliminary figures for the first quarter of 2011, an operating profit above plan. January and February were particularly positive in the Private Customers and Mittelstandsbank segments. Corporates & Markets also displayed a good development; on the whole, however, the performance was somewhat weaker than the very strong respective quarter in the previous year. Loan loss provisions in the group also saw a further decrease. The bank assumes - with a stable market environment and without taking into account the SoFFin one-off payment - that it will conclude 2011 with an operating profit according to IFRS that is higher than in 2010. The one-off payment to SoFFin will already be accounted for in the second quarter of 2011.

"Our 'Roadmap 2012' objective of achieving an operating profit of more than four billion euros in 2012 in a stable market environment and without taking into account the impact of regulatory changes remains unchanged," said Blessing. From its present stance, Commerzbank assumes that it will be able to distribute a dividend for the 2012 financial year. "For the period thereafter Commerzbank also has ambitious goals. We will not content ourselves with achieving the 'Roadmap 2012'. On the contrary: We intend to bring about a clear increase in profit subsequently."

Press contact:
Richard Lips +49 69 136 22461
Armin Guhl +49 69 136 42764
Reiner Roßmann +49 69 136 46646


Press Conference

A press conference will be held today, Wednesday, April 6, 2011 at 10:30 a.m. (CEST) in the 49th floor of Commerzbank AG, Kaiserplatz, Frankfurt am Main. During the press conference, Martin Blessing and Eric Strutz will comment on the planned measures to redeem the SoFFin silent participations. Before the beginning of the press conference presentations will be provided on the website of Commerzbank. The conference will be transmitted live via internet.


About Commerzbank

Commerzbank is a leading bank for private and corporate customers in Germany. With the segments Private Clients, Mittelstandsbank, Corporates & Markets, Central & Eastern Europe as well as Asset Based Finance, the Bank offers its customers an attractive product portfolio, and is a strong partner for the export-oriented SME sector in Germany and worldwide. With a future total of some 1,200 branches, Commerzbank has one of the densest networks of branches among German private banks. It has around 60 sites in 50 countries and serves approximately 14 million private clients as well as one million business and corporate clients worldwide. In 2010 it posted gross revenues of EUR 12.7 billion with some 59,100 employees.



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