230967 com titel gb 02 e

6 MANAGEMENT REPORT
Customers with the
Commerzbank Group
in millions
4.2
5.2
5.7
6.0 6.0
1998 1999 2000 2001 2002
The decline in our customer base
caused by the deconsolidation of
Rheinhyp was offset by expansion
at several of our subsidiaries,
above all at BRE Bank.
survey of the commerzbank group
World economy: still no upswing
World-economic growth was again disappointing in 2002. The US economy certainly
moved out of recession more quickly than expected and at 2.4% registered
a much stronger rise in real GDP than a year earlier. In Western Europe, however,
the revival of economic activity lost momentum, yielding average growth of only
1% in 2002. Mounting tensions in the Middle East increased the risk premium on
the oil price; confidence in the sustainability of the US recovery disappeared and
equity prices plunged once again, not least due to accounting scandals in the
United States.
Seen over the year as a whole, the stagnation in Germany which had begun
in mid-2000 continued. Economic growth, at 0.2%, again fell short of that in
other EU countries. This was largely due to the unique financial burdens
imposed by German unification, whose impact can still be felt. Construction
investment shrank further last year and was even lower than in 1991. The very
heavy burden of taxes and social-security contributions – only in part the result
of unification – was not eased. This led to the loss of 396,000 jobs in the course
of the year and the number of unemployed rose by 262,000 to 4.2 million. At the
same time, company insolvencies reached a new record level of 38,000.
No major improvement is likely in 2003. Again, economic growth in Germany
will remain below 1%. Only once the uncertainty generated by the Iraq crisis is
over will the forces of growth prevail. However, far-reaching structural reforms
in the public finances, social-security schemes and labour market are essential
over the medium term in order to realize higher growth and more jobs.
Commerzbank balance sheet reflects Rheinhyp deconsolidation and reduction
of risk-weighted assets
The Commerzbank Group’s balance-sheet total contracted by 15.8%, or 779.2bn,
to 7422.1bn in the course of 2002, due in large measure to the deconsolidation
of Rheinhyp and its subsidiaries. In addition, the weak US dollar caused the
balance-sheet total to shrink by about 715bn.
Last year, we also systematically reduced our risk-weighted assets, including
market risk, by 743.4bn to 7160.2bn. Adjusted for Rheinhyp, interbank lending
was 75.8bn lower at 754.3bn; claims on customers were trimmed by 712.2bn to
7148.5bn – partly through the issue of asset-backed securities.
The 721.4bn rise in assets held for dealing purposes to 7117.2bn was due
exclusively to the positive fair values of derivative instruments, which were substantially
higher thanks to the widening of the spread between fixed and floating
interest rates in the wake of last year’s fall in rates.
Our investments and securities portfolio contracted by 719.9bn to 784.6bn.
No less than 717.4bn of this was caused by the deconsolidation of Rheinhyp. By
contrast, the 72.7bn increase in investments in associated companies mainly
reflects the inclusion for the first time of EUROHYPO AG, which we consolidate
on an at equity basis.