> Key figures of comdirect bank group

Transcription

1 Annual Report 2009

2 > Key figures of comdirect bank group Change in % comdirect group as of * Customers number 2,150,563 2,078, Custody accounts number 1,419,037 1,427, Executed orders number 14,661,234 17,682, Total assets under custody in million 35,572 30, of which: portfolio volume in million 26,463 20, of which: deposit volume in million 9,110 10, comdirect business-to-customer (B2C)** business line as of Customers number 1,450,720 1,349, Custody accounts number 719, , Current accounts number 533, , Tagesgeld PLUS ( call money plus ) accounts number 960, , Advisory customers number 54,477 46, Executed orders number 7,319,045 9,231, Average order activity per custody account number Order volume per executed order in 4,512 4, Total assets under custody in million 22,241 20, of which: portfolio volume in million 13,158 9, of which: deposit volume in million 9,083 10, Credit volume in million comdirect business-to-business (B2B)** business line as of Customers/Custody accounts number 699, , Executed orders number 7,342,189 8,450, Total assets under custody in million 13,331 10, Earnings ratios* Net commission income in thousand 148, , Net interest income before provisions in thousand 108, , Administrative expenses in thousand 198, , Operating result in thousand 84,938 82, Pre-tax profit in thousand 75,993 82, Net profit in thousand 56,624 60, Earnings per share in Balance sheet key figures as of * Balance sheet total in million 9,785 11, Equity in million Equity ratio 1) in % Regulatory indicators under Basel II 2) as of Risk weighted assets 3) in million Eligible amount for operational risks in million Core capital in million Own funds for solvency purposes in million Own funds ratio 4) in % Relative ratios* Return on equity 5) in % Cost/income ratio 6) in % Employees figures as of 31.12* Employees number 1,155 1, Employees full-time basis number 1, , *) Previous year s figures adjusted to include contributions of ebase GmbH **) B2C: comdirect bank AG and comdirect private finance AG; B2B: ebase GmbH, excluding contributions from branch customers of Commerzbank AG 1) Equity ratio = Equity (excluding revaluation reserve) / balance sheet total 2) These figures are calculated on the basis of internal calculations; publication is voluntary and based on national implementation conversion and the figures are not reported to the Supervisory Authority 3) Risk weighted assets in accordance with Section 10c of the German Banking Act (KWG) (intragroup receivables are zero weighted) 4) Own funds ratio = own funds for solvency purposes / (risk weighted assets x eligible amounts for operational risks) 5) Return on equity = operating result / average equity (excluding revaluation reserve) in the reporting period 6) Before restructuring expenses

3 > Contents : Strong growth good result 02 Foreword by the Board of Managing Directors 03 My Plus 19 Report of the Supervisory Board 23 Group management report 24 Key developments 26 Business activities and framework parameters 31 Value-driven strategy and management system 36 Market environment 41 Business performance and earnings situation at the comdirect group 47 B2C business line 56 B2B business line 58 Financial situation and assets of the comdirect group 61 The share 64 Personnel report 66 Risk report 74 Opportunity report 76 Outlook 79 Supplementary report 80 Corporate Governance statement 88 Details in accordance with Section 315 (4) of the German Commercial Code (HGB) 89 Explanations of the Board of Managing Directors on details in accordance with Section 315 (4) of the German Commercial Code (HGB) 90 Declaration of the Board of Managing Directors on Section 312 of the German Stock Corporation Act (AktG) 91 Consolidated financial statements 94 Income statement 95 Balance sheet 96 Statement of changes in equity 97 Cash flow statement 98 Notes 148 Declaration of the Board of Managing Directors 149 Auditor s report 150 Glossary 154 Six-year overview of comdirect bank group 156 Financial calendar Contacts

4 > 2009: Strong growth good result Number of customers of comdirect group as of (in thousand) Total assets under custody of comdirect group as of (in billion) 2,079 2, , * * * excluding ebase * excluding ebase Operating result of comdirect group (in million) Dividend (in ) * * ** * excluding ebase * excluding ebase ** Dividend proposal Total income of comdirect group (in million) Administrative expenses of comdirect group (in million) * * * excluding ebase * excluding ebase

5 Through organic growth and the acquisition of ebase, in 2009 com direct achieved the strongest growth in its history. The number of customers increased by 800,000 to around 2.2 million, and assets under custody rose by 75% to 35.6bn. With 1.4 million custody accounts, the comdirect group is the clear No. 1 in online securities business. The complus programme has started well. Our current account has convinced 109,000 additional customers. 48% of customers already have 2 or more comdirect products. With our pioneering Anlageberatung PLUS investment advice service, we are establishing a new benchmark in the market. ebase, our brand for B2B business, recorded a rise in port folio volume of more than 25% to 13.3bn. Strong growth and a strong result: at 84.9m the operating result before tax was up 2.6% the previous year. The reduction in administrative expenses to less than 200m contributed to this development. Our shareholders will continue to benefit from dividend continuity and we will be proposing a distribution of 0.41 per share for 2009.

6 2 After strong growth and a good result in 2009, we are on the way to achieving new aims: to become a main bank for our customers through brokerage, banking and direct bank-type advisory services, as well as the leading B2B direct bank for our institutional partners. Michael Mandel, CEO of comdirect bank AG

7 Michael Mandel CEO Quickborn, March 2010 In 2009, the comdirect group recorded the strongest growth in the history of the bank. At the year-end, we directly and indirectly reached around 2.2 million investors in Germany, some 800 thousand more than in the previous year, and managed 1.4 million custody accounts. This growth was enhanced by a good result. Despite the unfavourable interest rate and capital market environment, the operating result stands at almost 85m, exceeding the previous year s figure. We compensated for the market-related decline in net interest and commission income with a positive result from financial investments and consistent cost management in all areas of the bank. Consequently, we are able to propose a dividend of 0.41 per share to the annual general meeting. In a year such as 2009 with one of the worst recessions for decades, this is a remarkable result. It shows that with the systems we have in place and our range of products and services, we can maintain our course in every market phase. Behind this success stands a strong team: the employees of the comdirect group. Whether the financial market crisis really is over and the recession behind us remains a matter of debate at the moment. In times such as these, gaining customer trust is a priority. This is why we are the only bank in Germany to have introduced a satisfaction guarantee for a product where competition is probably at its fiercest the current account. Anyone not satisfied and closing the account after a year of active use will receive 50. On top of that, we have redefined the particularly controversial issue of investment advice with a consistent focus on advising rather than selling, fair, system-backed advice that is both independent and non-pushy and very easy to access. We are ready to rise to the challenge, were my words at the launch of our complus programme. The two milestones already achieved the current account with satisfaction guarantee and our Anlageberatung PLUS investment advice service highlight what was meant by this: understanding customers needs, setting new standards in the market with convincing solutions, thereby attracting more and more modern investors. In 2009, we gained more than 100,000 customers. Moreover, we reached even more customers with our product offering: the number of current accounts, Tagesgeld PLUS ( call money PLUS ) accounts and custody accounts rose by 275,000. But comdirect has not only grown organically. With the acquisition of ebase, we gained around 700 thousand end customers with assets under custody of around 13bn at year-end As a result, we have not only consolidated our market leadership in online securities business, but also extended our business model with additional services for institutional partners.

8 We intend to continue our profitable growth and after five years of complus and successful implementation of our B2B strategy, we aim to achieve a result of between 150m and 170m with 3 million customers and assets under custody of 50bn in We want to achieve this through our consistent dual brand strategy for B2C direct business with modern investors (comdirect) and B2B business via financial partners (ebase). In the B2C business line, we will further improve our product and service offering and are working for example on additional direct bank-type advisory services. Consequently, we are more than honouring our claim to be a main bank a key precondition for gaining market share in banking. In online securities business, we aim to maintain our position as market leader. After expanding our fund and savings plan business in the previous year, we are focusing on new functionalities and products for ambitious and professional traders. In the B2B business line, we are strengthening the power of the Sales division in order to convince even more financial intermediaries and their end customers with our custody account solutions and services. The range of products and services is being expanded on a targeted basis to include B2B-type brokerage and banking products. The course here is clear: through ebase, our partners can use excellent products to manage their customers liquidity and the end customers receive the best of both worlds the attractive terms and conditions of a direct bank via their trusted contact while we are cultivating an additional and attractive target group through our range of products and services. The further development of comdirect as a main bank for our customers and ebase as the leading B2B direct bank is supported by optimisation of our IT architecture. Through the cooperation of comdirect and ebase at market, product and technology level, we will also leverage the earnings and cost synergies identified. However, difficult measures are also required if we are to expand our strengths in the competitive market place on a sustainable basis. At ebase, the aim in particular is to align personnel numbers in Customer Services with market requirements. In the B2C business line, after expanding our direct bank-type advisory models, we are withdrawing from local advisory services through the offices of comdirect private finance; this does not affect building finance advisory services at selected locations. We have recognised corresponding provisions for both measures. We have already achieved a great deal and the road ahead is very promising. I would like to take this opportunity to thank you as a shareholder for continuing to accompany us on this journey. Sincerely yours, CEO of comdirect bank AG

9 MY PLUS SUPERVISORY BOARD GROUP MANAGEMENT REPORT CONSOLIDATED FINANCIAL STATEMENTS 3 > My Plus 2009 did not offer banks an easy business environment. Nevertheless, comdirect achieved stronger growth in financial year 2009 than ever before. comdirect bank gained over 100,000 new private customers and at the same time successfully implemented key projects under the complus programme. 700,000 end customers were indirectly gained through the acquisition of ebase, our new force in business activities with professional financial intermediaries. Directly and indirectly we now reach around 2.2 million investors in Germany with 1.4 million custody accounts. Assets under custody in the group also reached a new record at 35.6bn at the year-end. Despite the adverse market environment, we achieved a good operating result of 84.9m and with pre-tax profit of 76.0m, we even slightly outperformed our target of 75m before tax. This achievement is essentially down to a very simple maxim: deliver real plus points and inspire customers, and you will achieve a respectable result in difficult times.

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11 Fee-free current account, fee-free ec/maestro and VISA card, fee-free cash withdrawals almost anywhere in the world, feefree Tagesgeld PLUS ( call money plus ) account and a bonus of 50 after three months if the current account is actively used because our current account offers more plus points than virtually any other account it came out top in the test carried out by Stiftung Warentest in (Finanztest, issue 7/2009, in a test of 67 current accounts, 17 completely feefree). For more information, see page 14. 5

12 6 First class services, personal support, top class offering comdirect first is the special service commitment for our top clients. Regardless of this however, all our customers have access to professional tools. From analysis to custody account management, comdirect covers every requirement. As the market leader in online securities business, we believe we owe our customers this level of service. For further information on our direct and individual customer contact, see page 15.

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15 Over the last years, modern online brokerage has become the standard and as market leader we play a key role in driving innovation. This is why we were again voted Online Broker of the Year in For further information on online brokerage, see page 16. 9

16 10 Our Anlageberatung PLUS investment advice service is a unique offering. Individual advice, a choice of products covering more than 3,000 securities not tied to any provider and continuous system-backed portfolio monitoring all at attractive prices with no sales commission. Anlageberatung PLUS has what it takes to set a new benchmark in investment advice. For more information on Anlageberatung PLUS, see page 16.

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19 With the acquisition of ebase, comdirect has now ramped up the business with institutional partners. As a full-service pro vider, ebase supports financial service providers, asset managers, insurance companies and investment companies with innovative solutions for fund custody account management and increasingly in banking as well, thereby strengthening comdirect s business model. For more information on ebase, see page

20 14 Delivering plus points, inspiring customers Behind comdirect bank s success in what has been a challenging 2009 is one simple question that we have been asking ourselves since our foundation: if modern investors could have their dream bank, what would it be like? Essentially modern investors have one very basic wish. Whether they are direct comdirect bank customers or customers working with an institutional partner and finance professional who we reach through our B2B platform ebase, they all just want the best. In banking, for example, this means a current account that really has no account charges, with worldwide no-cost access to cash via a fee-free ec/maestro and Visa card. Naturally the offering also includes fixed-term deposit and call money products with fair terms and conditions as well as all types of savings plans. In brokerage, the bank stands for professionalism without exception. The bank gives investors and frequent traders access to a range of professional tools they can use to obtain comprehensive information and trade securities both precisely and easily. Anywhere in the world, on the stock market or OTC, twenty four hours a day. In advice, the bank is a pioneer supporting its customers with individual, transparent and product-independent advice on key issues such as finding the right building finance or securities investment. Intelligent solutions at fair terms and conditions that s what modern investors expect here. And just as they generally assume that their bank is available round the clock, they expect their everyday banking transactions to be quick, easy and secure. And they want specially trained experts who can give them support when a question crops up that cannot be answered online. At the end of the day, investors are not only looking for real plus points on all products in banking, brokerage and advice, but also for a bank that in every aspect gives them the good feeling that they are getting the very best there is. Several years ago at comdirect bank, we set out to further develop our bank from an online broker to a full-service bank and then a main bank, covering all the needs of our target group of demanding, modern investors. This development is also at the heart of our complus programme launched at the start of This programme comprises several focal areas. We intend to provide a wider range of even more attractive products that offer clear advantages and are even more closely aligned with the needs of the individual target groups. We aim to further improve accessibility, the quality of our Customer Services and our IT infrastructure. And last but not least, we intend to develop innovative advisory formats that deliver solutions for complex advisory issues with an offering that is independent, transparent and with fair terms and conditions. comdirect is the market leader in online securities business and Germany s leading direct bank for modern investors and with complus we intend to expand this position and increase the value of the comdirect group on a permanent basis. Essentially, the same also applies to ebase. We aim to enable our institutional partners in turn to give their end customers the best the market has to offer. This includes expanding the range of products for banking and asset accumulation, as well as introducing innovative solutions for custody account management. Different methods, same rationale: in the B2B business line too, we are generating growth by helping our institutional partners inspire their end customers. Our aim is clear: by 2013 we intend to directly and indirectly service at least 3 million customers within the comdirect group, with assets under custody of 50bn and achieve a pre-tax profit of between 150m and 170m. And? Are we well on the way to achieving this? Absolutely. B2C: Well on the way with the complus programme After a little over a year of complus, we can see that our programme is working well. This can be clearly seen in our key figures. In the B2C business line, we have gained over 100,000 new customers since the start of Over the same period, assets under custody have risen by around 1.9bn to a total of 22.2bn despite the adverse market conditions. It is also reflected in the fact that we have achieved a great deal in qualitative terms and reached major milestones. Attractive: new highlights in brokerage and banking Our current account with satisfaction guarantee launched in spring 2009 has started well. Hardly surprising given the many plus points: a current account, ec/maestro and VISA card, cash withdrawals from over 7,000 ATMs in Germany and over 900,000 ATMs worldwide, attractive interest rates on deposits when combined with a Tagesgeld PLUS ( call money plus ) account all fee-free for the customer. In addition, every new customer actively using their account receives 50 after three months. In a test, Stiftung Warentest rated our current account top out of 67 comparable products (Finanztest, issue 7/2009). Our Tagesgeld PLUS account, which now pays tiered interest rates according to the sum invested, also continued to be very well received.

21 MY PLUS SUPERVISORY BOARD GROUP MANAGEMENT REPORT CONSOLIDATED FINANCIAL STATEMENTS 15 Whether our customers are investing in fixed-term deposit accounts, time deposit accounts or currency investment accounts, making a one-off investment, investing via a savings plan or in a combination of the two, or investing equally in a time deposit account and selected funds as with our fest & fonds fund offering, comdirect bank now offers the perfect solution for almost any configuration. In brokerage, the range of securities savings plans was expanded by almost 150 additional products. There are now over 80 ETF index funds eligible for inclusion in savings plans and are already very popular with investors. A large number of customers were inspired by our AktivSparplan savings plan in 2009 which enables them to invest in 20 extremely attractive actively managed funds from just 25 a month without any front-end load. Direct and individual: offering customers what they want We have always placed great emphasis on understanding our customers and their needs as good as possible not just since the launch of complus. To achieve this aim, we use our meetings with customers, work together with mystery shoppers, evaluate our marketing initiatives and press relations and also build on market observations and industry surveys. We intend to further improve customer satis faction, for example through targeted offers for customers with above-average income or assets (affluent customers) as well as professional traders. This in turn will be a key lever in increasing customer assets over the next few years. Michael Mandel, born 1966, has been CEO of comdirect bank AG since March He is responsible for Business Development and Corporate Communications. Mandel is also Chairman of the Supervisory Board of Commerz Direktservice GmbH and Deputy Chairman of the Supervisory Board of ebase and comdirect private finance AG. He is also the Deputy Chairman of the Exchange Council of the Frankfurt Stock Exchange and Chairman of the Executive Board of the Numeracy Foundation (Stiftung Rechnen). My Plus: Focusing on this goal, we also launched a series of initiatives which will enhance our product spectrum in These include giving private investors access for the first time to funds, which were previously only open to institutional investors due to the high minimum investment amounts. comdirect is also a partner for modern investors who want to gain some experience in investment funds before investing significant amounts or perhaps investing in other asset classes or who would like to accumulate a small amount of assets through monthly savings. To specifically address these needs, in 2009, amongst other things, we halved the minimum order amount for one-off investments in funds to 500. We know that many of our customers who are very capable of dealing with their own financial matters, nevertheless also want advice occasionally. In Anlageberatung PLUS, we have therefore developed an additional advisory format for which we see a great future.

22 16 In 2009 we therefore continued our gradual further development as a bank that understands and serves its particular customer group very well. This makes the time from understanding and wanting to actually delivering plus points as short as possible. Alexander Boldyreff, born 1967, has been the CSO of comdirect bank AG since July Boldyreff heads up Marketing & Sales, Product Management as well as Treasury and is also responsible for Advice. He is also Chairman of the Supervisory Board of comdirect private finance AG and a member of the Supervisory Board of ebase. Operating excellence: our modern and effective banking platform Another important point on our complus agenda is the optimisation of our banking platform. Even better Customer Services, better accessibility and an even more effective IT infrastructure. The upgraded architecture means that new applications can be integrated into the website even more swiftly and the redesigned site is geared to user-friendly Web 2.0 technology. System availability reached a record level of 99.9% in 2009, an improvement of 0.2 percentage points on the previous year. Anyone familiar with operating IT systems will know although such increments may look small, they are the result of complex projects carried out to painstakingly perfect these systems. An ongoing process that never stops. We have also successfully enhanced the accessibility, quality and speed of our Customer Services. In 2009, Customer Services answered more than 80% of incoming calls in less than 30 seconds, a rise on the previous year. My Plus: More direct bank-type advice: Anlageberatung PLUS The introduction of our Anlageberatung PLUS investment advice service represents our further development in terms of advisory formats that offer greater transparency and independence, which is the fourth focal area of our complus programme. After two years of development and an extensive six-month trial, Anlageberatung PLUS was launched in November The customer response to date shows that Anlageberatung PLUS has what it takes to set a new benchmark in investment advice. Comprehensive advice for your custody account right from the start: Our fee-free BeratungsDepot (advice custody account) forms the basis for Anlageberatung PLUS. This is enhanced by ongoing advice tailored to your investment targets. 1. Initial discussion 2. Initial advice with portfolio analysis 3. Ongoing advice 4. Regular review

23 MY PLUS SUPERVISORY BOARD GROUP MANAGEMENT REPORT CONSOLIDATED FINANCIAL STATEMENTS 17 Various aspects that are usually kept separate are sensibly united for the first time in Anlageberatung PLUS. In-depth, individual advice geared to the individual wishes and options of the customer is combined with system-backed, continual and objective portfolio monitoring and management. The investment universe comprises over 3,000 securities and therefore offers a wider range than even a really good stockpicker could monitor closely. Investors can choose to invest in equities and bonds, funds, ETF index funds and ETCs. To ensure that investment decisions remain objective and are not influenced by commission, in Anlageberatung PLUS we consistently waive all sales and sales follow-up commission. Instead we charge a fixed monthly fee based on the average portfolio value or a minimum of Our advisers are permanent comdirect bank employees. Anlageberatung PLUS is therefore very different to most other advisory models to date. These rarely feature consistent systembacking and often take inadequate account of individual personal circumstances. We are confident that Anlageberatung PLUS can close these gaps in quality and serve as a model for a new generation of investment advice. The market potential is correspondingly great. We cautiously estimate there are around 5 million people in Germany for whom Anlageberatung PLUS is of interest. We therefore see considerable potential among both our existing customers and in new business. Dr. Christian Diekmann, born 1965, has been CFO of comdirect bank AG since May In addition to Finance, Controlling & Risk Management, Dr. Diekmann is responsible for Internal Audit, Legal Services & Compliance, Institutional Business and as Chairman of the Supervisory Board of ebase business-to-business activities. Dr. Diekmann is also a member of the Supervisory Board of comdirect private finance AG and Deputy Chairman of the Board of Trustees of the Numeracy Foundation (Stiftung Rechnen). My Plus: With Anlageberatung PLUS we are continuing what we started with Baufinanzierung PLUS building finance advice: the development and introduction of advisory formats for demanding private customers who want to find the best product in the market in each case, rather than be expected to take the first one they come across. The financial crisis has quite clearly demonstrated that there is a significant need for advice, not only with regard to securities investments and building finance, but also for other issues relating to individual asset accumulation and provisioning. We will therefore continue to invest in direct bank-type advisory models for demanding modern investors in the coming years. ebase: we are serious about B2B With the acquisition of ebase, or European Bank for Fund Services GmbH to give it its full name, we have considerably extended our business model in B2B activities and are from now on pursuing a dual brand strategy in the group. In 2009, the priority was naturally to establish the foundation and set the course for future growth through new products and solutions in custody account management and banking. The prospects are indeed very promising.

24 18 As a full-service partner for financial service providers, asset managers, insurance companies and investment companies, ebase is optimally positioned in the market. With the help of ebase, these institutional partners can offer their respective end customers both companies and their employees as well as private customers a comprehensive range of products and services for asset accumulation and provisioning. One such product is the Riester FörderRente flex fund savings plan, which enables customers to invest in various attractive funds as part of their pension provisioning and receive state subsidies at the same time. There are also custody account solutions, such as the bav (company pension) custody account for company pensions, which was being used by employees in over 1,300 companies in Germany at the end of Carsten Strauß, born 1967, has been a member of the Board of Managing Directors of comdirect bank AG since March He is responsible for Customer Services, Human Resources & Organisation, Process Management and IT. In addition, Strauß is a member of the Supervisory Board of ebase, a member of the Supervisory Board of Commerz Direktservice GmbH and Deputy Chairman of the Executive Board of the Numeracy Foundation (Stiftung Rechnen). My Plus: In short: ebase provides top class solutions from under one roof for all finance professionals managing money and assets on behalf of third parties, and enables these partners to offer new products in brokerage, and increasingly in banking, to their end customers, thereby gaining particularly more time to provide individual advice and support. comdirect has gained immediate and excellent access to a market with assets under custody of around 230bn as well as the best opportunities for growth. If that s not a win-win situation, what is? Although ebase did not record significantly strong growth in 2009 due to the difficult market conditions, we have still achieved a great deal. Key IT projects were launched and some have already been successfully completed, the brand strategy was defined, thereby laying the foundation for further growth. We will also be introducing additional banking products and brokerage solutions before the end of the year, creating lots more plus points. Taking both segments together, comdirect bank in B2C and ebase in B2B, with our extended business model and dual brand strategy we have made significant advances after only one year. And this is just the start.

25 MY PLUS SUPERVISORY BOARD GROUP MANAGEMENT REPORT CONSOLIDATED FINANCIAL STATEMENTS 19 > Report of the Supervisory Board Cooperation between the Board of Managing Directors and the Supervisory Board The Supervisory Board worked in close partnership with the Board of Managing Directors of comdirect bank during financial year 2009, providing regular advice and monitoring the management of the company. We have comprehensively carried out all the duties incumbent upon the Supervisory Board under the legal framework conditions, the bank s Articles of Association and the German Corporate Governance Code (GCGC). The Board of Managing Directors provided us with regular written and oral reports on the situation and development of comdirect bank and its subsidiaries. In addition to comdirect private finance AG, this referred for the first time to European Bank for Fund Services GmbH (ebase), which was acquired by comdirect bank in May The Supervisory Board approved this strategic extension of the business model through its Presiding Committee and dealt with questions relating to the acquisition in detail in the preliminary stages. We requested full and timely reports on all major business transactions as well as fundamental issues of business policy, management and corporate planning. We discussed the status of their implementation with the Board of Managing Directors at regular intervals. We were directly involved in all company decisions of vital importance, especially including all measures which may significantly affect comdirect bank s earnings situation, financial situation and assets. As part of our monitoring and control function, all documents submitted or presented to us have been checked for plausibility and questions on material issues have been followed up with the relevant comdirect bank contact persons, particularly the Board of Managing Directors. In addition, the Chairman of the Supervisory Board was continuously given detailed information on all events that were of significant importance for the assessment of the situation and development as well as for the management of the company. He maintained frequent contact with the CEO and conferred with him, in particular, on the strategy, business development and risk management of comdirect bank. He had sight of all minutes of the meetings of the Board of Managing Directors and arranged for important matters to be addressed by the Supervisory Board committees. Main focus in 2009 As in the previous year, the Supervisory Board met at five regularly convened meetings in financial year 2009 on 19 March, before and after the annual general meeting on 6 May, 27 August and 13 November One of the central topics was the launch and implementation of the new complus growth programme, through which comdirect bank intends to continue its dynamic growth, which includes further developing the product and service offering as well as establishing independent and transparent advisory models. Another focus was the strategic further development of ebase. We were informed in detail of the progress of the integration process by the Board of Managing Directors. With regard to comdirect private finance AG, we approved the withdrawal from advisory services in local offices. This does not affect advisory services for building finance in selected locations. As part of the deliberations on and approval of the medium-term strategy, we looked specifically in detail at the agenda for the following year. The Supervisory Board also looked at the risk position of the bank with one of the main areas relating to the discussions on the overall risk strategy in line with the minimum requirements for risk management (MaRisk). We also received information from the Board of Managing Directors on the subject of online security. Furthermore, we were informed by the Board of Managing Directors of comdirect bank of the performance of key indicators and their impact on the bank s earning situation, financial situation and assets. In this context, we also monitored the market and competitive environment of comdirect bank. Based on a recommendation by the Presiding Committee of the Supervisory Board, we specified the indicators to be used to assess the variable compensation component for the Board of Managing Directors for financial year In addition to face-to-face meetings, the Supervisory Board also adopted resolutions by means of written ballot procedure or conference calls. The Supervisory Board acknowledged amongst others the draft agenda for the annual general meeting together with proposals to be put to the annual general meeting, as well as the Corporate Governance report 2008 ahead of the relevant resolution in the accounts meeting.

26 20 Mr Alexander Boldyreff was appointed to the Board of Managing Directors of comdirect bank as of 1 July Activities of the committees Some matters were referred to the Presiding Committee or Audit Committee for a decision or preparation of resolutions in order to improve the efficiency of Supervisory Board activities and to deal with complex matters. The Audit Committee of the Supervisory Board met four times in the reporting year on 19 March 2009, 6 May 2009, 27 August 2009 and 13 November The meetings were also attended by a representative from the commissioned auditors for the year-end audit and audit review of the interim financial statements respectively. At the meeting on 19 March 2009, the Audit Committee of the Supervisory Board dealt with the preliminary examination of the financial statements and dependency report as well as the independence of the commissioned auditors for the annual and consolidated financial statements. The report of the auditors conducting the audit review of the interim financial statements was discussed at the other three meetings. The Audit Committee of the Supervisory Board discussed the risk management and risk position of the bank and its subsidiaries in depth at several meetings. The main focus was the current credit risk situation and further development of risk management at the bank and its subsidiaries. With regard to the financial market crisis, the Board of Managing Directors informed the Audit Committee in particular about the current market and credit risk situation in the Treasury portfolio. In light of this, the Audit Committee discussed the investment strategy of comdirect bank in depth as well as its plans for greater use of the Commerzbank Group for money market and capital market transactions. The Audit Committee received regular progress reports from the Board of Managing Directors, including the relevant opinions requested from external experts. The Audit Committee also requested reports on the main findings in the overall review report by Internal Audit for financial year 2008 as well as the credit risk positions in the Treasury portfolio of comdirect bank and received the report of the Compliance Officer. At the constituent meeting of the Audit Committee on 6 May 2009, Mr Martin Zielke was re-elected Chairman of the Audit Committee of the Supervisory Board and was authorised to sign the contract commissioning the auditors selected by the annual general meeting to audit the annual and consolidated financial statements, including the management reports as of 31 December Furthermore, the Audit Committee of the Supervisory Board dealt with the results of the annual custody account/securities Trading Act (WpHG) review and the main points of the audit of the 2009 financial statements and the additional requirements resulting from the Accounting Law Reform Act (BilMoG). It also approved the commissioning of PricewaterhouseCoopers Aktiengesellschaft Wirtschaftsprüfungsgesellschaft, Frankfurt/Main, Hamburg branch, with tax advisory services for financial year The Presiding Committee of the Supervisory Board adopted three key resolutions by means of a written ballot in These related to the acquisition of ebase, determination of the variable compensation for members of the Board of Managing Directors for financial year 2008 as well as the recommendation to the full Supervisory Board that Mr Alexander Boldyreff be appointed to the Board of Managing Directors of comdirect bank. The Presiding Committee also approved the acceptance of mandates by members of the Board of Managing Directors as well as loans granted to the Commerzbank Group. A detailed report of activities of the committees was provided at the full Supervisory Board meeting. The Supervisory Board has not formed any committees other than the Presiding Committee and the Audit Committee. Efficiency of Supervisory Board activities The Supervisory Board reviews the efficiency of its activities on an annual basis. Following the detailed efficiency review carried out in March 2008, we discussed the current status in our meeting on 19 March The activities of the Supervisory Board and its committees were again unanimously judged to be efficient. To prepare for the detailed efficiency review in March 2010, it was decided in the meeting on 13 November 2009 to once again conduct this review with the aid of a questionnaire. The Corporate Governance Officer provided a comprehensive written report to the Supervisory Board and prepared the Declaration of Compliance from the Board of Managing Directors and the Supervisory Board in accordance with Section 161 of the German Stock Corporation Act (AktG). This was approved at our meeting on 8 March 2010.

27 MY PLUS SUPERVISORY BOARD GROUP MANAGEMENT REPORT CONSOLIDATED FINANCIAL STATEMENTS 21 With regard to the resolutions adopted by the Supervisory Board in respect of the loan granted to Commerzbank as well as the acquisition of ebase, Dr. Kassow abstained from voting to avoid any conflicts of interest that could arise from his dual role as Chairman of the Supervisory Board of comdirect bank and a member of the Board of Managing Directors of Commerzbank. There were no further conflicts of interest among Supervisory Board members as defined by Section 5.5 of the GCGC in financial year In the meeting on 27 August 2009, in line with the recommendation in the GCGC we agreed a deductible for the relevant member of the Supervisory Board in the event of a claim under D&O insurance. The Audit Committee of the Supervisory Board commissioned the auditors elected by the annual general meeting on 6 May 2009, PricewaterhouseCoopers Aktiengesellschaft Wirtschaftsprüfungsgesellschaft, Frankfurt/ Main, Hamburg branch, to conduct the audit for financial year We have obtained a certificate of independence from the auditors. There are no business, financial, personal or other relations between the auditors and their executive bodies and audit managers on the one hand and comdirect bank and its Board members on the other, which could give rise to doubts with regard to their independence. Approval of the annual financial statements and dependency report The annual financial statements of comdirect bank (according to the German Commercial Code, HGB), the management report of comdirect bank (according to the German Commercial Code, HGB) and the consolidated financial statements and group management report (according to IAS/IFRS), including the underlying book-keeping for financial year 2009, have been examined by the auditors and issued an unqualified certification. The above documentation, the audit reports and the proposal of the Board of Managing Directors for appropriation of the distributable profit were made available to the members of the Supervisory Board in good time. The German public accountants who sign the annual financial statements took part in the meeting of the Audit Committee on 8 March 2010 and the subsequent meeting of the Supervisory Board dealing with the approval of the annual accounts. They reported on the key findings of the audit and answered questions. The result of the audit was discussed thoroughly with the Audit Committee. The Audit Committee then proposed to the Supervisory Board that the annual financial statements be approved. The Supervisory Board has acknowledged the results of the audit. Within the scope of the legal provisions, it has examined the annual financial statements and management report, the consolidated financial statements and group management report and the proposal of the Board of Managing Directors for the appropriation of the distributable profit and raised no objections. In its meeting on 8 March 2010, the Supervisory Board approved the financial statements and the consolidated statements prepared by the Board of Managing Directors. Accordingly, the annual financial statements are to be regarded as adopted. The Supervisory Board endorses the proposal for appropriation of the distributable profit. Furthermore, the report of the Board of Managing Directors on the bank s relationship with affiliated companies was submitted to the Supervisory Board together with the associated auditors report. After completing the examination, the auditors raised no objection to the report of the Board of Managing Directors and issued the following unqualified certification: After conducting our audit in accordance with the professional standards, we confirm that the actual details of the report are accurate and the fees paid by the company for the legal transactions detailed in the report were not disproportionately high. The Supervisory Board examined the report of the Board of Managing Directors and approves the report as well as the findings of the examination by the auditors. After completing the examination, the Supervisory Board finds no cause for objection to the concluding statement by the Board of Managing Directors in the report concerning the relationship with affiliated companies. As part of the audit, the auditors also assess whether the Board of Managing Directors has implemented a monitoring system and has fulfilled the legal requirements concerning the early detection of risks that are likely to threaten the existence of the company. The auditors have confirmed that the risks described in the management report are presented accurately and that the measures taken by the Board of Managing Directors according to Section 91 (2) of the German Stock Corporation Act (AktG) are conducive to the early detection of developments that are likely to threaten the continued existence of the company. Furthermore, the auditor confirmed the effectiveness of the accountingrelated internal control system.

28 22 Changes in the Board of Managing Directors With effect from 1 July 2009, the Supervisory Board appointed Alexander Boldyreff as a member of the Board of Managing Directors for a three-year term. In addition to extensive expertise, Mr Boldyreff has many years experience in the financial industry. As a member of the Board of Managing Directors, he is responsible for Marketing & Sales, Product Management, Treasury, Anlageberatung PLUS investment advice service and Baufinanzierung PLUS building finance advice as well as the development of comdirect private finance in his capacity as Chairman of its Supervisory Board. Dr. Christian Diekmann had already been appointed to the Board of Managing Directors of comdirect bank in the previous year for a three-year term with effect from 1 May Dr. Diekmann had joined comdirect bank on 1 December 2008 as an executive manager. He is now responsible for Finance, Controlling & Risk Management, as well as Internal Audit, Legal Services & Compliance, Institutional Business and for business-to-business activities as Chairman of the Supervisory Board of ebase. As CEO, Michael Mandel is responsible for Business Development and Corporate Communications. Carsten Strauß heads up Customer Services, Human Resources & Organisation, Process Management and IT. Thanks for rendered performance We would like to thank the members of the Board of Managing Directors and all employees of comdirect bank for their continued good performance in financial year We would like to thank the staff council for their constructive cooperation at all times. Frankfurt, 8 March 2010 The Supervisory Board Dr. Diekmann succeeded Torsten Daenert as a member of the Board of Managing Directors, who has taken on a new position in the Commerzbank Group and resigned as a member of the Board of Managing Directors on 30 April We would like to thank Mr. Daenert for his considerable commitment and his outstanding performance for comdirect bank, its employees and shareholders. Election of new Supervisory Board The elections of the new shareholder representatives on the Supervisory Board, which take place on a rotational basis, were held during the annual general meeting on 6 May The annual general meeting re-elected the shareholder representatives to the Supervisory Board for a further five years by a large majority. On 6 May 2009, Thorben Gruschka replaced Mitja Sack as the newly elected employee representative. The Supervisory Board thanks Mitja Sack for his commitment and performance in the interest of the company. At the constitutive meeting following the annual general meeting, Dr. Achim Kassow was elected Chairman and Klaus Müller-Gebel Deputy Chairman. Angelika Kierstein was elected as the third member of the Presiding Committee and Martin Zielke as the third member of the Audit Committee of the Supervisory Board.

29 MY PLUS SUPERVISORY BOARD GROUP MANAGEMENT REPORT CONSOLIDATED FINANCIAL STATEMENTS 23 > Group management report The comdirect group can look back on the strongest growth in the history of the bank and a very good result. Through the acquisition of ebase and organic growth, the number of customers increased by 0.8 million to around 2.2 million and assets under custody totalled 35.6bn at the end of 2009; lower deposits were countered by a higher portfolio value. Despite problems in the market and provisions for restructuring at comdirect private finance and ebase, we exceeded our pre-tax profit target of 75m. Market-related losses in net interest and commission income were compensated for by a positive result from financial investments and consistent cost management. We will be proposing an unchanged dividend to the shareholders of 0.41 per share.

30 24 > Key developments In financial year 2009, the comdirect group recorded the strongest growth in the history of the bank and moreover achieved a very good result. Through the acquisition of ebase, the bank gained around 700 thousand end customer custody accounts with assets under custody of more than 13bn (as of end 2009); the business model was thereby extended to include additio nal services for institutional partners. Furthermore, despite the unfavourable interest rate and capital market environment, the bank achieved organic growth in direct business with modern, potential online banking customers and, in terms of service quality and range of products, has made considerable progress towards becoming a main bank. complus, the programme presented in February 2009, is based on clear product advantages, individual targeting of customer groups with particular potential, an effective banking platform and the transparent and independent advisory models. In the past few months we have already achieved major milestones, notably the current account with satisfaction guarantee, which was very well received by customers, and the Anlageberatung PLUS investment advice service, which aim to become a new benchmark in the market with its system-backed individual recommendations and commission-free advice. Overall at the year-end, the comdirect group directly and indirectly reaches around 2.2 million investors in Germany and with 1.4 million managed custody accounts it is the undisputed market leader in online securities business. Nonetheless, our muted expectations for the development of economic framework conditions were confirmed over the course of Despite historically low market interest rates and slow stock exchange trading, the bank s overall earnings matched the high levels of the previous year (excluding ebase). Thanks to our flexible cost base, we were able to ensure a very good operating pre-tax result for our shareholders of 84.9m. The bank s financial situation and assets as well as its risk position continued to remain stable in the second year of the financial market crisis. With its expanded range of products and services under complus and excellent market access in direct business (B2C) and via institutional partners (B2B), the comdirect group is well positioned for the financial years ahead. We anticipate additional impetus for our group result from the earnings and cost synergies identified in the cooperation between comdirect and ebase. Immediately after the acquisition we initiated measures to further develop ebase as the leading B2B direct bank in Germany with regards to the level of assets under custody placed by third parties in investment funds. This requires extensive investment in an improved sales orientation with simultaneous increase in efficiency and cost reduction measures. We have recognised a provision of 4.4m for these measures. In the B2C business line, as a result of our focus on direct bank-type advice, by mid we will withdraw completely from local advisory services through com direct private finance offices. This does not affect locations in which we place property finance through face-to-face services as part of our Baufinanzierung PLUS building finance advice service. A further sum of 4.5m was allocated to the provisions for this withdrawal. Even after provisions, with a pre-tax result of 76m, the comdirect group has outperformed its target of 75m, which was raised in December Acquisition of ebase European Bank for Fund Services GmbH (ebase), based in Haar near Munich, is a direct wholly-owned subsidiary of comdirect bank AG. It was acquired from Commerz Asset Management Holding GmbH, a subsidiary of Commerzbank AG, with retrospective effect as of 1 January The purchase price of 24.9m was confirmed as being in line with market prices in a fairness opinion provided by accounting group KPMG. Following the acquisition of ebase, comdirect is pursuing a dual brand strategy. As before, the comdirect brand stands for direct business with modern, demanding private investors. ebase is a brand for business with institutional partners. The company offers its B2B finance partners and their end customers an extensive range of products for provisioning and investments as well as convenient and cost-effective processing via its efficient online sales partner portal. ebase was included in the scope of consolidation of the com direct group as of 1 January As a transaction between comdirect bank AG as the buyer and Commerz Asset Management Holding GmbH as the seller constitutes a transaction between related parties under the common control of Commerzbank AG, predecessor accounting was applied in accordance with international accounting regulations. Consequently the comparative figures from the previous year (with the exception of the figures shown in the risk-taking capability calculation) have also been adjusted to include the contributions of ebase.

31 MY PLUS SUPERVISORY BOARD GROUP MANAGEMENT REPORT CONSOLIDATED FINANCIAL STATEMENTS 25 Realignment of business lines In accordance with IFRS 8 Segment reporting, which requires business segments to be identified on the basis of the management approach, following the acquisition of ebase we immediately realigned our activities into the B2C and B2B business lines: The B2C business line comprises the previous segments comdirect online (brokerage and banking fields of competence) and comdirect offline (advice field of competence). The segment therefore corresponds to the comdirect bank group before the acquisition of ebase essentially comprising comdirect bank AG and comdirect private finance AG. The previous year s figures for the business line agree with the figures published for the comdirect bank group in The business and earnings performance are shown on pages 47 to 55. The B2B business line comprises the activities of ebase GmbH. Details of the business and earnings performance are given on pages 56 to 57. ebase also provides custody account services for 271,3 thousand branch customers of Commerzbank AG (as of 31 December 2009). None of the indicators shown include these customers or their custody accounts or the assets under custody attributable to these customers. comdirect group > Brokerage maintain market leadership > Banking gain market share B2C B2B Platform/Operations

32 26 > Business activities and framework parameters comdirect bank offers investors all the key financial services and products for trading, securities and financial investment as well as payments and financing from under one roof. With our multiaward winning online offering in brokerage and banking and transparent and fair investment and building finance advisory services, we are already the partner for more than 1.4 million demanding customers. A further around 700 thousand customers are serviced via institutional partners and here we offer comprehensive product solutions for custody accounts. Through our innovative business model, we are able to extensively leverage all the opportunities offered by the growing direct banking market in Germany for the benefit of our customers and shareholders. Inclusion in the Commerzbank Group comdirect bank is listed in the Prime Standard (Regulated Market) and in terms of market capitalisation is one of the mid-size joint stock corporations on the SDAX % of the shares are held by Commerzbank Inlandsbanken Holding GmbH, a wholly-owned subsidiary of Commerzbank AG. Commerzbank AG provides a range of services for comdirect bank, such as the processing of securities trading transactions, payment transactions and services in risk management. In addition, the Treasury department of comdirect bank works closely with Commerzbank and generates interest income mainly from money and capital market transactions with Commerzbank AG and its affiliated companies. comdirect bank AG carries out administrative servi ces for Commerz Direktservice GmbH, which belongs to the Commerzbank Group. Branch customers of Commerzbank AG use the custody account services of ebase GmbH. A detailed overview of the business cooperation arrangements can be found in the group notes on pages 107 and 109. Fields of competence and group legal structure The business activities of comdirect group are divided into the business lines B2C (direct banking business with private customers) and B2B (business with institutional partners). We have pooled our range of products and services in the brokerage, banking and advice fields of competence in the B2C business line. In addition to Baufinanzierung PLUS and Anlageberatung PLUS, the advice field of competence comprises comdirect private finance AG, with which comdirect bank AG has concluded a profit-and-loss-transfer agreement. As a result of our focus on direct bank-type advice, by mid-2010 comdirect private finance will withdraw from local advisory ser vices through offices, whilst Baufinanzierung PLUS will continue to be offered at selected locations. The B2C business line also includes separate assets in the form of special funds which form part of the Treasury investments. Activities in the B2B business line are managed via ebase GmbH. Major locations The registered offices of comdirect bank AG and comdirect private finance AG are in Quickborn near Hamburg and those of ebase GmbH are in Haar near Munich. Online business is carried out primarily via the website, but also via other access channels such as mobile banking and HBCI banking software. The bank offers high-performing Customer Services for direct contact with customers by telephone, , fax or letter. Advisory services as part of Anlageberatung PLUS and Baufinanzierung PLUS are essentially provided by telephone; property finance is also currently placed through face-to-face services at selected locations and will continue to be offered in the future. As of 31 December 2009, comdirect private finance AG still had 17 offices in various German cities; these offices are to be closed by mid Management and control Management and control of the comdirect group comply with generally accepted high standards. These are explained in detail in the Corporate Governance statement on pages 80 to 87 including the Declaration of Compliance pursuant to Section 161 of the German Stock Corporation Act (AktG), the Corporate Gover nance report in accordance with Section 3.10 of the German Corporate Governance Code and the main features of the compensation system. There were two changes in the Board of Managing Directors in the reporting year. Dr. Christian Diekmann, previously executive manager of the bank, was appointed to the Board of Managing Directors of comdirect bank AG with effect from 1 May He took over responsibility for Finance from Torsten Daenert, who moved to head up Strategy and Products in the Credit division of the Retail Banking segment at Commerzbank. In addition to Finance, Dr. Diekmann is also responsible for Internal Audit and Legal Services & Compliance as well as for Institutional Business at comdirect bank and for the B2B business line as Chairman of the Supervisory Board of ebase GmbH.

33 MY PLUS SUPERVISORY BOARD GROUP MANAGEMENT REPORT CONSOLIDATED FINANCIAL STATEMENTS 27 The supervisory Board of comdirect bank AG appointed Alexander Boldyreff with effect from 1 July 2009 to the Board of Managing Directors of the bank. In a newly created CSO position, he heads up Marketing & Sales, Product Management and Treasury and is also responsible for the complus programme and the advisory offering. Mr Boldyreff also acts as Chairman of the Supervisory Board of comdirect private finance AG. The Board of Managing Directors continues to include CEO Michael Mandel and COO Carsten Strauß. Key products, services, business processes B2C business line Our range of products in the B2C business line is broken down into brokerage, banking and advice fields of competence. Brokerage In its brokerage field of competence, comdirect facilitates speedy, secure and cost-effective trading through user-friendly functions and provides a continually expanded and optimised selection of products for short, medium and long-term investments. We execute buy and sell orders for securities listed on German stock exchanges (spot and futures markets), including futures contracts. Furthermore, we offer access to 45 stock exchanges outside Germany (as of 31 December 2009). With comdirect LiveTrading, we additionally operate a highly efficient platform for OTC trading of equities, warrants, certificates, bonds and listed funds. Here we work together with 27 trading partners (as of 31 December 2009). In brokerage (B2C), comdirect primarily generates commission income from securities trading and associated services on the one hand and from front-end loads and sales follow-up commission in its funds business on the other. There is also interest income from loans to purchase securities. The main product is our custody account, which provides a detailed portfolio overview, transparent order book and a custody account manager, making it an easy-to-use basis for trading and investment strategies. For trading, we offer a range of professional tools. For example, comdirect Informer, a customisable instrument, provides market and share price information, comdirect ProTrader, an optimised trading interface for particularly fast trading functions, the realtime price information system comdirect TraderMatrix and comdirect s BörsenTicker stock market ticker. With the aid of innovative user-friendly order functionalities, such as One Cancels Other, Next Order and Trailing Stop, investment strategies can be implemented in a wide range of market scenarios and in part on an automated basis. With regard to systematic asset accumulation by means of securities, our customers have access to a wide range of funds and certificates, in some cases at considerably reduced front-end loads. At present more than 10,000 funds from over 150 fund companies are available (as of 31 December 2009). Through the FondsDiamanten offering, we provide a selection of currently 20 quality-checked funds, the quality of which have been attested by third parties, updated on a quarterly basis and all available with no front-end load. Freely combinable securities savings plans can be taken out for over 300 funds, 150 certificates and 80 ETF index funds; the selection was considerably expanded in the reporting year. Investors can also invest in 20 actively managed asset management and life cycle funds via the new AktivSparpläne savings plans (see page 49). comdirect bank AG acts as a partner to asset managers and other financial services providers, for whom we provide our high-performance internet platform with comprehensive order functions and maintain customer custody accounts. The institutional business activities of comdirect bank utilise the expertise of ebase and vice versa. Banking In its banking field of competence, comdirect offers attractive products for short through to long-term investment as well as daily money transactions. The Treasury department generates interest income by reinvesting customer deposits in the money and capital markets. We generate commission income to a lesser extent from the placement of consumer loans. The comdirect current account with satisfaction guarantee that was launched in the second quarter of 2009 is completely feefree; moreover, there is a start bonus of 50 for active customers and a further 50 for customers who are not satisfied and close the account after a year of active use. In addition, the account offers an ec/maestro card and a VISA card at no cost which can be used to withdraw cash from more than 7,000 Cash Group ATMs in Germany (free of charge with the ec/maestro card) and from over 900,000 ATMs abroad (free of charge with the VISA card). The service benefits of the comdirect current account also include the user-friendly money transfer function, convenient ATM search and extensive mobile banking functions.

34 28 With our Tagesgeld PLUS ( call money plus ) account, we pay tiered interest on call money deposits in line with the sum invested. The money savings plan based on Tagesgeld PLUS is ideal for flexible asset accumulation. The comdirect fixed-term deposit account provides a secure short-term investment for periods of one to three months, while comdirect time deposit accounts offer attractive interest rates for terms of six months to ten years. Through the comdirect currency investment account, investors can invest in 11 different foreign currencies. comdirect s fest & fonds offering combines a high interest six month fixed-term deposit account with an investment in one of ten quality-checked funds. comdirect bank also places consumer loans in cooperation with Süd-West-Kreditbank. Advice In the advice field of competence, comdirect focuses on direct bank-type advisory models. The core element of the Anlageberatung PLUS launched in November 2009 is telephone advice on investment issues. The advice ser vice is based on the systembacked monitoring and analysis of customer portfolios every trading day depending on yields and the risk profile of the investor. The resultant recommendations cover more than 3,000 straightforward investment products. The advisory services are remunerated via fee model which makes all the costs incurred transparent and comprehensive. Baufinanzierung PLUS facilitates a convenient, likewise systembacked comparison of the terms and conditions of 90 building finance partners (as of 31 December 2009). Experienced specialists in building finance advice support customers throughout the entire process to select the most suitable financing solution. Until mid-2010, comdirect private finance AG will still be providing local advice to customers through self-employed commercial agents. The focus here is private old-age provisioning, especially Riester and Rürup pension products, as well as participations in closed-end funds. B2B business line Through its B2B partners financial services providers, asset managers, insurance companies and investment companies ebase offers comprehensive, tailored solutions for asset accumulation and investments. End customers can choose from a range of 6,500 funds from 220 fund companies. 5,300 funds are eligible for savings plans. The effective online sales portal provides the partners with comprehensive services and offers easy access to portfolio and transaction data via customised product configurations. The earnings model of ebase primarily centres on fees for custody account management and is supplemented by commission from funds business as well as interest income. Custody account management is flanked by an extensive range of services, which include commission processing and professional data management as well as sales and marketing support for the partners. The ebase custody account is aimed at end customers of the institutional partners, and relieves these partners of the daily administrative tasks, enabling them to tailor their advisory services even more efficiently to the personal investment targets of their customers. On request, the custody account can be configured on a partner-specific basis (partner custody account). In addition to custody account management, since 2008 ebase has been offering its partners a combined settlement and call money account so that they can also manage their customers liquidity. Following further development of the custody account and current account architecture, since January 2010, a fixed-term deposit account has also been available to cooperation partners. Asset managers can also use the managed custody account. This product variant offers a range of special functions for modern processing of standardised asset management services with fund portfolios. The OrderDesk custody account offers a multi-investment company solution for the procurement and safekeeping of fund units. Insurance companies use this facility primarily for the custody of cover assets. The bav (company pension) custody account is a well-placed product for fund-backed company pensions. Another product in the company pension provisioning system is the working hours custody account, which is used to flexibly structure working time accounts. The product range is rounded off by an asset accumulation and investment solution through the Riester FörderRente flex fund savings plan which allows investors to select from 12 equity funds. Key sales markets and competitive position With a total of around 2.2 million customers and 1.4 million custody accounts in the B2C and B2B business lines, the comdirect group is the market leader in online securities business in Germany and the number 2 direct bank.

35 MY PLUS SUPERVISORY BOARD GROUP MANAGEMENT REPORT CONSOLIDATED FINANCIAL STATEMENTS 29 In the B2C business line, we focus on the modern private investor who prefers to manage his financial transactions himself and who will seek advice as and when required. The long-term market trends remain positive: The number of online banking users has been rising for many years. Direct banks account for a growing proportion of the overall market. According to market surveys, the number of direct bank customers will increase by 5 million by 2013 (as of 2008). At the same time, the number of customers conducting their banking transactions exclusively via a direct bank is also trending upwards. For many bank customers, the range of products and improved functionalities offered by direct banks render the products and services of retail banks unnecessary. The number of investors trading securities on the stock market or OTC via a direct bank is also rising, despite the long-term decline in the number of shareholders and fund unitholders. Traditional advisory models are being increasingly called into question by investors, even in light of the financial market crisis. Direct banks have an opportunity here to gain market share through new advisory models. Over the past few years, we have continually expanded our position in the direct banking market. We are in competition with other direct banks and online brokers, traditional retail banks and financial advisory companies. The size of the relevant market offers extensive growth opportunities in all fields of competence. The customer base of the retail banks offers the greatest potential for direct banks. At present, less than 10% of the total financial assets of private households in Germany amounting to 1.5tn (as of 30 November 2009) is attributable to direct banks. The picture is similar for securities. In the B2B business line, the comdirect group operates through ebase in a target market with assets under custody of around 230bn. The main impetus comes from the continuing trend towards private provisioning and company pensions, which in Germany too are one of the most important employee benefits. As a result of the very long-term asset accumulation phases, company pensions make a growing contribution to portfolio volumes. In our opinion, the competitive environment in the B2B sector is favourable in the medium to long term. Economic developments mean that many financial service providers are having to review their business models and adjust to the changing conditions. Regulatory requirements, fiercer competition and changes in customer behaviour call for new answers for B2B partners. This means that there is a greater need to improve efficiency by using cost-effective custody account solutions and services. Investment companies also exploit savings potential by outsourcing their custody account services. The competitive environment for transaction and service banks is undergoing a sea change. Efforts to consolidate are leading to differentiation in business models, with pure settlement specialists on the one hand and integrated fund platforms with full banking status on the other. Given current developments, we believe the latter group offers the greatest potential. This group includes ebase, which provides a comprehensive range of services from under one roof. At present, the services of ebase are used by 113 sales partner organisations with more than 75 thousand affiliated active intermediaries. ebase is a market leader in the independent financial adviser (IFAs) segment. On the product side, ebase is well positioned with its fund-backed company pension (bav custody account) and the portfolio volume here already totals more than 1bn. Legal and economic influences We operate in highly regulated markets with our range of products and services. The Federal Financial Supervisory Authority (BAFin) and the Deutsche Bundesbank are responsible for the regulation of the banking industry in Germany. The main focal areas for supervisory regulations are solvency, liquidity and lending operations by banks. The market segments relevant for our advisory services are also highly regulated. Implementing new legal and regulatory requirements can at times cause considerable expense, such as for the extended documentation obligations for advisory services for example.

36 30 The economic influences differ for each of the business lines and fields of competence: In the B2C business line, the level of commission income in brokerage is mainly influenced by trading activity on the stock markets and OTC trading, which in turn is partly dependent on price movements. Share prices react by varying degrees to corporate development, to macroeconomic trends such as unemployment figures, energy and commodities prices and economic data, to interest rate decisions by central banks and external events such as political or financial crises. General trends in asset accumulation for private households are of major importance for long-term investments in securities. In banking, the terms and conditions in deposit and lending business and the interest margin achievable are primarily influenced by developments in the money and capital market interest rates, interest premiums (credit spreads) and liquidity premiums as well as the terms and conditions offered by competitors. Changes in the ratings of banks and companies and their bond issues are another important economic influence for the Treasury department, including as a result of defined minimum requirements for counterparties and issuers in trading. In advice, the trends in asset accumulation and old-age provision are particularly important and are also affected by state subsidies for provisioning and asset accumulation products. In the B2B business line, the number of custody accounts and the portfolio volume are determined on the one hand by the behaviour of our institutional partners, for example the demand from investment companies for outsourcing solutions, and the investment behaviour of their end customers on the other.

37 MY PLUS SUPERVISORY BOARD GROUP MANAGEMENT REPORT CONSOLIDATED FINANCIAL STATEMENTS 31 > Value-driven strategy and management system Value-driven strategy The comdirect group has extended its business model through the acquisition of ebase. Since the acquisition, it has been pursuing a dual brand strategy for private and institutional customers with four strategic focal areas. The first is to vigorously continue the development process we have already started to become a main bank by further enhancing our product spectrum and improving the accessibility of Customer Services. In connection with this, the second focus for the comdirect group is to expand its market leadership in online securities business and gain market share in banking. Thirdly, the earnings and cost synergies already identified are to be leveraged in the next few years through the cooperation between comdirect and ebase. In addition to this efficiency measures, a particular focus will be on expanding the range of products and services offered by ebase, as well as exploiting the greater impact of the B2B Sales division. The fourth strategic focus centres on optimising our IT architecture to realise efficiency advantages and to improve access for customers to the offering of the comdirect group. With this strategy of qualitative and profitable growth, by 2013 the comdirect group intends to increase the number of customers to 3 million and assets under custody to 50bn. In line with its long-term target to improve return on equity and the cost/income ratio, the comdirect group also adopted a comprehensive packet of measures for both business lines in the reporting year. In the B2C business line, we have developed direct bank-type advisory models with the launch of Baufinanzierung PLUS and Anlageberatung PLUS. In light of this, we started the process of withdrawing the local advisory services we had been offering via comdirect private finance offices; this does not affect advisory services for Baufinanzierung PLUS in selected locations. In addition to a stronger focus on sales, measures in the B2B business line are aimed at improving efficiency and cutting costs. In this regard, excess capacities in Customer Services are to be reduced (see page 32). Strategy in the B2C business line The comdirect brand stands for direct business with demanding private investors (B2C). In February 2009, we presented the complus programme aimed at expanding this business and shaping future growth. complus includes further developing well-positioned products and services, individual contact with customer groups, optimisation of the IT platform and Customer Services as well as independent and transparent advisory models for investments. In detail, the programme is based on four key elements: Attractive range of products and services. The aim here is to make the already well-positioned products and services the custody account, Tagesgeld PLUS account, current account with satisfaction guarantee and investment accounts accessible to significantly more investors through optimisation and advances. This should not only increase the deposit volume, but also the number of customers using comdirect as their main bank. The focus is on potential internet banking customers of retail banks, who we aim to convince through the advantages of the terms and conditions and the equally easy and user-friendly application of the products offered by our attractive direct bank business model. In financial year 2009, we achieved a major milestone with the launch of the current account with satisfaction guarantee (see pages 51 to 52). Direct and individual customer contact. Secondly, we are focusing on contact with customer groups with particular growth and earnings potential. We intend to offer these groups particularly high levels of customer satisfaction and encourage them to make even greater use of our products, and achieve a significant increase in assets under custody. Here we are concentrating especially on discerning and price-sensitive securities investors and intend to provide them with the most sophisticated technical solutions in the market. Other target groups with significant potential are households with above-average income or of above-average net worth (affluent segment). Modern and effective banking platform. Thirdly, we are working on modernising our banking platform. This means the continual optimisation of our infrastructure as well as the processes we implement. The focus here is on further improving the efficiency of Customer Services and the ongoing modernisation of the bank s IT architecture. We use our direct banking platform for new product and service concepts, through which we achieve cost advantages which enable us to offer our customers favourable terms and conditions on a permanent basis. In financial year 2009, we considerably enhanced the level of service in Customer Services (see page 48) and carried out extensive IT projects, including the launch of new products and the expansion and enhancement of functionalities for our customers (see page 27).

38 32 Independent and transparent advisory models. The fourth element is the development of new advisory models for investments and old-age provisioning, as well as the further development of Baufinanzierung PLUS. In these three areas, comdirect bank aims to combine a comprehensive product range using the direct banking platform with high quality, fair advisory services. In the financial year, we achieved a key milestone with the launch of Anlageberatung PLUS (see page 53). We also expanded our building finance offering. Strategy in the B2B business line ebase is our brand for B2B partners financial services providers, asset managers, insurance companies and investment companies and their end customers. Through ebase, we intend to become the leading B2B direct bank throughout Germany by expanding the customer base and successively extending the custody account service offering with banking products. For us, this means meeting the needs of the market by combining the typical advantages of a direct bank operating in retail banking such as a transparent and attractive product offering, standardised processes, advanced functionalities and favourable terms and conditions in brokerage and banking with experience and customer access in B2B business. The overriding aim is to optimally support the business models of our cooperation partners with suitable products and services. The key elements of the comdirect group s B2B strategy are Stronger focus on sales. ebase has strengthened the organisation of its Sales division and increased personnel numbers with the aim of intensifying market cultivation in defined customer segments. Expansion of customer base. ebase intends to exploit the opportunities offered by future market development and is set to gain new customers in its target segments through financial intermediaries. Enhanced product range. ebase s offering, which focuses primarily on fund custody account solutions, is to be successively supplemented by B2B-type banking products. Since January 2010, alongside the call money account, the range available has included a fixed-term deposit account. With solutions for holistically managing end customer money, ebase also offers additional benefits for its affiliated financial intermediaries. Extended offering of partner-specific services. Particular growth potential lies in offering custody account solutions which are customised for the respective B2B partner, either through co-branding or white labelling. By designing specific products and services, ebase supports its partners in the sales process. Furthermore, ebase is meeting the increased service requirements of its partners that also result from changes in the regulatory framework conditions by expanding its services for custody accounts. Securing a competitive cost position. The naturally limited margins in the B2B business demand an appropriately streamlined cost basis. In order to secure and improve the competitive position in the long term, ebase has introduced measures to reduce excess capacities in Customer Services. Social Responsibility comdirect bank bears responsibility that goes beyond its entrepreneurial actions. In the reporting year, we expressed this responsibility with the launch of the Numeracy Foundation ( Stiftung Rechnen ), which we set up in October Börse Stuttgart was one of our initial founders and since then other renowned partners have joined. The aim of the Foundation is to make numbers fun and to improve numeracy in Germany through projects. In addition, in financial year 2009 we supported a range of social projects and organisations such as SOS Children s Villages, children s charity Kinderhilfswerk Quickborn, Médecins sans Frontières and the German Red Cross. Value-driven management Intangible assets of the comdirect group The value-driven management of the comdirect group is based on its fields of competence and intangible assets. In addition to the assets reported in the balance sheet, these intangible assets determine the value of the company and as such form the basis for successful business development and earnings performance. The quality of our relationships with customers and institutional partners and the expertise of our employees as well as the effectiveness and efficiency of the processes we use are all decisive. As part of our value-oriented management system for the comdirect group, which was extended in the previous year to include ebase, we aim to further enhance these non-financial assets. The most important intangible asset is the quality of our customer relationships. By targeting customers via marketing campaigns, our website, Customer Services and investment and building finance advisers, we intend to make these relationships more stable and increase both customer satisfaction (see page 47) and customer activity. In addition our institutional partners are serviced by key account managers.

39 MY PLUS SUPERVISORY BOARD GROUP MANAGEMENT REPORT CONSOLIDATED FINANCIAL STATEMENTS 33 The high level of awareness of the comdirect and ebase brands and the values associated with the brands are a key competitive factor in existing and new customer business as well as in the capital market. We therefore strive to continually improve these brand values. Details of the comdirect group s presence in the capital market and its activities in investor relations in the reporting year are given on pages 61 to 62. Operating excellence in our largely automated yet individualised contact approach tailored to the different customer groups is also one of the strengths in the B2C business line, which impacts positively on the value of the company. This refers to gaining new customers and the ongoing servicing of customers as well as the efficient execution of campaigns. This presupposes a high level of customer-related knowledge, professional and flexible Customer Services (see page 48) and a high-performing IT system (see page 48). In the B2B business line, the comdirect group has broad market access to institutional partners through ebase, which will in future benefit from the comdirect s strength in the B2C business. The management quality, service expertise, process intelligence and innovative power of the bank depend essentially on the competence of its employees. We enhance these skills through a range of personnel and executive training measures. We promote expertise and create framework parameters for the positive development of teams, are involved in training and continued professional development and offer performance-related and profitoriented compensation (see page 65). Internal management system To systematically expand our core competences and intangible assets for the benefit of our stakeholders and to achieve our overarching goal of a permanently attractive return on equity, we manage the entire bank on an all-round basis taking account of all material risks and opportunities. Here we focus our attention not only on the development of financial performance indicators but also on non-financial performance indicators, which impact on the earnings situation and company value of the bank. The monthly overall bank management reporting shows whether the bank s financial and non-financial performance indicators are within the target range or whether unexpected variances have occurred. Selected performance indicators are monitored and managed at shorter intervals. With regard to the non-financial performance indicators, we distinguish between customer, market and product-related indicators, efficiency, risk and process-related indicators as well as employee-related indicators. Selected indicators are used in external reporting. The financial situation is illustrated by the return on equity and the cost/income ratio amongst others. Further important indicators are the development of net interest and net commission income as well as the profit per customer. As a result of the new advisory models in the B2C business line and the new B2B business line, we expanded our overall bank management in the reporting year and increased the number of key performance indicators. Selected financial performance indicators Performance indicator Definition business line B2C business line B2B Return on Equity before tax Operating result/average equity excluding revaluation reserve (in %) Cost/income ratio Administrative expenses/(net interest income before restructuring expenses before provisions + net commission income + result from financial investments + other operating income + result from hedge accounting + trading result) (in %) Net interest income per customer Net commission income per customer Profit per customer Net interest income after provisions/ number of customers on average for the year (in ) Net commission income/number of customers on average of the year (in ) Operating result/number of customers on average for the year (in )

40 34 Selected non-financial performance indicators Performance indicator Definition Customer, market and product-related performance indicators (B2C) Brand awareness Various performance indicators from aided and unaided recall surveys n.a.* n.a.* comdirect current account Number of current accounts/total number of customers (31.12.) product penetration 36.8% 31.5% Tagesgeld PLUS account Number of Tagesgeld PLUS accounts/ product penetration total number of customers (31.12.) 66.2% 60.4% Order activity Number of executed orders/number of custody accounts on average for the year Custody account Number of custody accounts/total number of product penetration customers (31.12.) 49.6% 51.7% Multi-product use Number of customers with a minimum of two products/ total number of customers (31.12.) 48% 44% Customer satisfaction Various performance indicators (including willingness to recommend, satisfaction with product and service quality) n.a.* n.a.* Customer, market and product-related performance indicators (B2B) ebase account product penetration Number of ebase accounts in relation to the number of end customer custody accounts with supplementary account agreement 2.5% 0.4% Partner-specific configuration Proportion of customised and white label products product penetration in relation to the total number of custody accounts 83.4% 84.3% Fund-based savings plan Number of fund-based savings plan customers product penetration in relation to the total number of custody accounts 18.3% 17.9% Efficiency, risk and process-related performance indicators (B2C) System availability Availability of customer-relevant website functionalities 99.9% 99.7% Service level (telephone) Proportion of incoming telephone calls answered within 30 seconds 83% 76% IT project efficiency Aggregated indicator for IT projects which measures as well as compliance with deadlines and budget, error rates and client satisfaction n.a.* n.a.* Marketing efficiency Various performance indicators (including marketing costs per new customer) n.a.* n.a.* Efficiency, risk and process-related performance indicators (comdirect group) Utilisation of risk-taking capability Economic risk capital/risk cover assets (31.12.) 29.1% 26.5% Employee-related indicators (comdirect Group) Employee satisfaction Various performance indicators n.a.* n.a.* Advanced Training Various performance indicators (including seminar days per employee and training status) n.a.* n.a.* * Not used in external reporting. Accounting-related risk management system and internal control system (ICS) The aim of ICS and the risk management system of comdirect bank with regard to the accounting process is to ensure the reliability of reporting and the annual and quarterly financial statements in line with generally accepted accounting principles. This aim is achieved by anchoring the system group-wide in the organisational structure and through the different components of the system. Organisation The internal control and risk management system in relation to the accounting process forms part of the remit of the Chief Financial Officer (CFO). Within the Management Board division, the Finance, Controlling & Risk Management department is responsible for financial reporting in line with the legal provisions and internal and external guidelines. Within the department, the Finance unit is responsible for external financial reporting and calculation of current and deferred taxes, while internal reporting is the responsibility of Controlling. Credit Risk Management

41 MY PLUS SUPERVISORY BOARD GROUP MANAGEMENT REPORT CONSOLIDATED FINANCIAL STATEMENTS 35 deals with management of the retail credit risk and Risk Monitoring with recording, managing and illustrating the trading risk. Furthermore, Compliance and Internal Audit report directly to the CFO. The pooling of these departments in one Management Board division facilitates an efficient management and control of group accounting. The Supervisory Board monitors the accounting process primarily via the Audit Committee, which is responsible in particular for questions regarding accounting, the required independence of the auditors, granting the audit contract to the auditors, determining the focal points of the audit and the agreed fee arrangement. The Audit Committee also monitors Compliance. The Rules of Procedure for the Supervisory Board demand that the Chairman of the Audit Committee has particular expertise and experience in the application of accounting principles and internal control procedures. Control functions relating to financial reporting are assumed by the Board of Managing Directors and the Supervisory Board on one hand and by various bodies within Finance on the other. On behalf of the Board of Managing Directors, Internal Audit provides independent, objective and risk-oriented auditing and advisory services aimed at optimising the business processes of the comdirect group in terms of correctness, security and costeffectiveness. Internal Audit supports the Board of Managing Directors by systematically assessing the effectiveness and appropriateness of the Internal Control System (ICS) and business processes on a targeted basis, providing auditing support for key projects and making recommendations. This helps safeguard business processes and assets. Internal Audit reports directly to the Board of Managing Directors. It carries out its tasks autonomously and independently. The reporting and evaluation of the audit findings are not bound by any instructions. When implementing the new requirements published in the minimum requirements for risk management (MaRisk) on 14 August 2009, measures will be taken to ensure that the Chairman of the Audit Committee of the Supervisory Board can obtain information directly from the Head of Internal Audit after clearance with the Board of Managing Directors. In relationship with Group Audit, the Internal Audit department of comdirect reports directly to the Board of Managing Directors and the Board is responsible for its management. Information is frequently exchanged between the Internal Audit department of comdirect and Group Audit with regular reporting to also ensure groupwide monitoring by Group Audit. Components Clear and binding accounting standards are in place within the comdirect group, which comply with legal provisions and the accounting standards of Commerzbank, the ultimate parent company. They are subject to auditing by the auditors and are continually reviewed with regard to the need for updating and adjusted if required. In addition to the accounting guidelines, various organisational measures contribute to reliable financial reporting. Consequently, there are clear lines of authority at comdirect, which ensure the allocation of specialist remits and responsibilities. Decisions are made exclusively in accordance with the allocated authorities. These regulations make a significant contribution to correct accounting at all times. A further fundamental element ensuring correct accounting is the principle of dual control, whereby critical actions must always be checked by another person. Furthermore, the Finance unit is structured in line with the segregation of duties principle, whereby incompatible activities are kept separate from each other in terms of organisation and are processed separately to avoid conflicts of interest. The IT systems are also a key component in the annual accounts process and must therefore comply with the requirements of the internal control and risk management system. Various software systems are used in the comdirect group to prepare the financial statements and comdirect makes extensive use of Commerzbank systems. comdirect utilises the Internal Audit department at Commerzbank to monitor and audit the systems used. Further more, comdirect receives the extracts from the report of the auditors of Commerzbank on an annual basis. In addition to standard software, the accounting also uses programmes that are specially configured for the requirements of the bank. All programmes are subject to numerous plausibility checks, which are an integral part of the system landscape used in accounting. All the systems used in the Finance unit are protected by an effective access authorisation concept. The entire accounting process and all instructions are documented in writing. The system described is reviewed annually and updated particularly in light of changes in the law, directives and accounting standards. comdirect is solely responsible for preparing the accounts and, through its qualified personnel in particular, is in possession of the required expertise.

42 36 > Market environment At a glance The comdirect group operated in a difficult market environment in financial year Compared with the previous year, the economic framework parameters deteriorated as expected as a result of the financial market crisis and its repercussions: Money market interest rates fell dramatically over the course of the year due to continued intervention by the central banks to ensure liquidity on the interbank market. Consequently, interest margins in banking were very limited. At the same time, deposit products generally became less attractive. Despite the easing in the financial markets during the year 2009 and the pleasing price rally in equity markets, investors traded considerably fewer securities than in the previous year. This affected both the spot market and the futures market. Fund-based and securities savings plans got off to a slow start in financial year 2009 as a result of the final withholding tax introduced at the start of the year. This development was exacerbated by the relatively high risk-aversion on the part of investors. Gross domestic product in the European Union (EU 27), which in 2008 still increased by 0.8%, declined by 4.1%. Germany saw stronger curbing effects again with a fall in economic output of 5.0%. Especially German exports, which were the main engine of growth for a long time, were hit by the recession in foreign markets and were down by around 14.7% on the already weaker figures for Nor was there any positive impetus from domestic demand. Private consumption was up by 0.5%, boosted by tax relief as well as state programmes such as the scrappage scheme, but gross investment fell by 12.5%. In summer 2009, the German economy began to stabilise, albeit at a low production level. This development was partly due to the upswing in construction investment as a result of demand from the public sector. Growth in GDP (adjusted for inflation in %) In contrast, the bond markets performed better than forecast at the start of the year. Spreads tightened as of the second quarter of Germany EU 27 Economic environment The downturn in the global economy triggered by the property and financial market crisis was ultimately not as severe during 2009 as had been feared at the start of the year. The programmes initiated by many governments to support the economy started to take effect. The national economies in the emerging countries recovered early on, followed by the United States and the industrialised nations in Europe. By the middle of 2009, the recession had already bottomed out from a global perspective. Although the global economy contracted by 2.2% within a year, the biggest decline since the Second World War, growth dominated again in the second half of the year. Source: Statistisches Bundesamt Compared with the previous year, private households saw incomes rise on an inflation-adjusted basis by only 0.4%. This was the lowest growth rate since reunification. The main reason was the increase in unemployment during the year to 3.3 million (previous year: 3.1 million), accompanied by a steep rise in shorttime working and widespread acceptance of pay cuts by employees to support the businesses where they work. The burden on private households was partially eased by the historically low inflation rate of 0.4% which was due above all to the recessionrelated fall in the price of oil in the first half of As the financial leeway remained virtually unchanged but private consumption rose, the savings ratio remained persistently at 11.2% of disposable income. Consequently, only limited funds were available for financial asset accumulation. The public sector budget deficit has increased considerably as a result of the two state economic programmes of around 50bn each, which were adopted in November 2008 and February

43 MY PLUS SUPERVISORY BOARD GROUP MANAGEMENT REPORT CONSOLIDATED FINANCIAL STATEMENTS , as well as the extensive measures to stabilise the financial industry. In the long run, the debit balances place a limit on measures to revive the economy, especially through tax relief, and mean that cutbacks in the social security system are necessary. This will make personal financial provisioning and old age provisioning all the more essential. Securities investment The easing in the global financial markets and improved economic data led during the year to a greater appetite for risk on the part of private and institutional investors. This trend was evident both in share prices, which recorded strong gains after a poor start to the year, as well as in lower risk premiums on corporate bonds. The recovery in these markets set in somewhat earlier than it did in the real economy, as sentiment indicators in the spring were already suggesting that the economy would soon bottom out. The performance of the German leading index, the DAX, was weak at the beginning of the year, but the index started to rise considerably as of the second quarter. At the end of the year, the index was up 23.8% to 5,957 points. The banking stocks that had been badly hit in the previous year were also on the road to recovery. However, as a result of the ongoing high level of uncertainty, investors were very tentative when it came to trading. In the German spot market, order figures were down on the previous year by 26.3%; however, it should be taken into account here that the market dislocations in 2008 had led to strong trading in highly volatile market phases. At 31.1%, the downturn was particularly evident on the Frankfurt stock exchange, while the regional stock markets were somewhat more stable by comparison with a decline of 20.9%. As the average price level for the year was lower, there was a disproportionately high reduction in trading volume of 43.8%. The trading volume attributable to equities virtually halved. In contrast, exchange traded funds (ETFs) and exchange traded commodities (ETCs) were up considerably on the previous year in terms of both number and volume. Number of orders on German stock exchanges (in million) Source: Deutsche Börse AG Other stock exchanges Investors were also exercising restraint in the futures markets. The number of contracts traded on the Eurex was down 30.7% compared with 2008, with index-linked derivatives and options recording a higher fall than shares. Activity also declined for investment certificates, which fell by around a third on the Stuttgart (EUWAX) and Frankfurt (Scoach) exchanges compared with the previous year with leveraged products performing slightly more stably than investment certificates. According to the BVI (Bundesverband Investment und Asset Management), investors withdrew net funds of 1.1bn from the retail investment funds of German investment companies. The slightly negative overall picture was determined almost entirely by massive fund outflows from money market funds. On a net basis, other fund categories attracted new investments and equity funds recorded particularly strong gains with fund inflows totalling 14.6bn, after a negative result had again been recorded in the previous year. At the same time, savings plans based on equity funds and mixed funds improved their long-term performance on the back of the price upswing in the current year. Securities-based saving has therefore become even more attractive for investors again. The number of shareholders and unitholders declined in 2009 from 9.3 million to 8.8 million according to the Deutsche Aktieninstitut. However, the numbers stabilised in the second half of the year at a low level: compared with the first half of the year, the number of investors invested directly in equities rose from 3.4 million to 3.6 million, while the downward trend with regard to fund investors continued. FFM XETRA

44 38 Investment and borrowing The framework parameters in banking were considerably affected by the interest rate decisions of the European Central Bank and its interventions in the interbank market. Through its expansive monetary policy and liquidity supply for the banking system, the central bank made an important contribution to containing the recession and stabilising the financial markets. The key lending rate for the eurozone was cut by a total of 150 basis points in four interest rate steps on 15 January, 5 March, 2 April and 7 May to an historical low of 1.00%. Three-month EURI BOR, which is decisive for the investment of our customer deposits, trended downwards into November 2009 and then stabilised at a very low level below the key lending rate. As of the year-end, EURIBOR stood at 0.70% which was more than 200 basis points lower than at the end of 2008 (2.89%). For longer terms, the money market interest rate stabilised somewhat earlier, and twelve-month EURIBOR, for example, rose slightly in the fourth quarter. This also indicates the moderate increase in market interest rates expected for The interest rate environment had changed dramatically and banks had to adjust the deposit interest rates accordingly. The interest rate for the demand deposits of private households declined from 1.85% at the end of 2008 to 0.75% in November This triggered a large-scale redirection of deposits. Short to medium-term fixed-term deposits with a term of up to one year declined sharply by 50.3% to the end of November 2009, while the performance of longer term deposits was largely stable. In contrast, demand deposits were up 27.2%. On the investment side, the market environment was determined by the low money market interest rate on the one hand, and performance on the bond markets on the other. While investors fears of loan defaults were still pronounced in the first quarter of 2009, as shown by the jump in credit spreads, considerable spread tightening then followed in subsequent months. This resulted in an upturn in the price of fixed-income securities. The REX bond index increased by 2.7% across all maturities over the course of the year. Interest rates in the lending business also declined. Residential property finance with a five to ten year fixed-interest period was disbursed in November 2009 with an effective interest rate of 4.35% (end 2008: 4.83%). Short-term consumer loans were higher than the level at the end of 2008 for almost all of the year, while interest rates on overdrafts dropped from 11.82% at the end of 2008 to 10.37%. Despite cheaper access to financing, the credit volume changed only marginally. Mortgage loans for residential property finance even declined slightly. Our own surveys show that in principle, private households are very willing to purchase property, but because of the economic situation and prices in the metropolitan regions, some are still waiting for the most favourable timing. The Building Finance Sentiment Index, calculated in conjunction with opinion research institute Forsa, improved year-on-year (January 2009 January 2010) from 96.9 to points. The index condenses the subjective attitude of Germans to their own home and their respective financing ability into an indicator. A value greater than 100 indicates a trend that more people are prepared to take out building finance (basis month: November 2008). In the second half of 2009, almost half of the respondents were of the opinion that it was a favourable time to purchase property. European key lending rate and Euribor (in %) EURIBOR 1) ECB interest rate 2) Sources: Deutsche Bundesbank, EURIBOR FBE 1) Three-month money 2) For main financing transactions

45 MY PLUS SUPERVISORY BOARD GROUP MANAGEMENT REPORT CONSOLIDATED FINANCIAL STATEMENTS 39 Building Finance Sentiment Index (January 2009 January 2010) (in points) Industry trend The measures taken in many countries to stabilise the banking system have so far had the desired effect. A systemic crisis was averted through capital injections, guarantees on bank liabilities, the purchase of troubled assets and liquidity support for banks. However, more recent isolated cases of companies in financial distress, such as that of SME financier CIT in the USA, highlight the ongoing fragile state of the financial system. Threatened loan defaults resulting from company insolvencies caused by the recession are now at the centre of the discussion. Jan March May July Sept Nov Financial planning and provision The restricted finances of private households caused by the financial market crisis and the recession have temporarily slowed but not interrupted the trend towards private provisioning. In the first three quarters of 2009, the number of Riester pensions increased by around 250 thousand to 12.9 million. Of these, 9.6m were insurance policies, 2.5m were investment fund policies, with the rest being divided into saving schemes and Wohn-Riester. The upward trend in Riester pensions contributed to the overall growth in premiums in life assurance. According to industry estimates, premiums at life assurance companies and pension funds were up 4.8% on the previous year s levels. By contrast, the number of new policies was down by around 7%. According to the pension report ( Alterssicherungsbericht ) published in November 2008 by the German government, the number of employees with entitlement to a company pension increased in recent years to 12.3 million; consequently around 52% of employees liable to pay social security contributions are benefiting from a company pension. The institutions were primarily pension funds and direct insurance companies. Pension funds recorded particularly strong growth. In contrast, companies reduced their working hours accounts in crisis year 2009 in order to make a contribution towards securing jobs. Jan In Germany, the 480bn Special Fund for Financial Market Stabilisation (SoFFin) had granted stabilisation aid amounting to 188.7bn to a total of 25 banks, including Commerzbank, by the end of Consequently, 39% of the maximum assistance available had been utilised by the year-end. Most of this was attributable to guarantees for newly issued debt securities and other liabilities of financial institutions. A further 42.1bn had been applied for. The comdirect group did not have to use the SoFFin facility. On 23 July 2009, the catalogue of measures was extended by the Act on the Further Development of the Financial Market Stabilisation (Gesetz zur Fortentwicklung der Finanzmarktstabilisierung). Under the new Act, banks can transfer distressed securities to a special purpose vehicle at book value less 10%. In return they receive bonds, for which a guarantee is issued by SoFFin for a maximum of 20 years. The difference between the price paid by the SPVs and the lower market value of the toxic paper can be compensated over the term of the guarantee in instalment payments which stem from the banks distributions. Overall, developments in the direct banking market have been stable even during the financial market crisis. The long-term industry trends, such as the growing use of the internet for banking transactions and increased acceptance of direct bank models, are still intact. According to a survey by the Study Group Online Research (Arbeitsgemeinschaft Online Forschung AGOF), 67% (previous year: 64%) of Germans were online in Of these, 56% (previous year: 55%) used online banking. One of the main reasons behind the increased use of the internet is the improved online convenience and in 2009, 71% (previous year: 69%) already had broadband.

46 40 Competition between individual direct banking products remains high. Some investment accounts are still paying interest rates that are considerably higher than the market interest rate. Retail banking customers continue to offer the greatest growth potential in both banking as well as securities investments. The market for financial advisory services was in a period of change during the reporting year. Representative studies confirm that independence, transparency and fairness are becoming more and more important when choosing an adviser; traditional commission-driven advisory models however, which in part proved to be problematic in the financial market crisis, are being increasingly called into question. New fee-based advisory models are starting to make headway in the market, including as a result of new legal initiatives aimed at protecting investors. comdirect responded very promptly to this development with the launch of Anlageberatung PLUS. Our surveys show that there is an equally significant need for advice in building finance. Most potential borrowers are not aware of the different types of mortgages, information relating to contract matters or the use of state subsidies. Against the backdrop of spectacular cases of inadequate investment advice, investor protection has increasingly become the focus of political attention. The Act to Reform Legal Relationships for Bonds Constituting Part of a Uniform Issue and to Improve the Enforceability of Investors Claims Based on Misselling (Gesetz zur Neuregelung der Rechtsverhältnisse bei Schuldver schreibungen aus Gesamtemissionen und zur verbesserten Durchsetzbarkeit von Ansprüchen von Anlegern aus Falschberatung), which came into force on 4 August 2009, further extended the advisory and documentation obligations. As of the start of 2010, investors must be given a detailed record of all investment advice discussions before concluding a transaction; if these records are incomplete or incorrect, the customer has the right to cancel within one week. The burden of proof lies with the advising investment service provider. Furthermore, the special statute of limitations on claims for compensation due to misselling of securities investments was also removed. Our new Anlageberatung PLUS meets the extended requirements in full. One of the requirements of the final withholding tax, a flat-rate tax of 25% on income from capital assets and private capital gains, introduced at the start of 2009, is that banks remit the tax due on interest credited, dividend payments and price gains to the tax authorities. The comdirect Group implemented all of the measures required on time. Companies operating in the field of traditional financial advisory services faced extraordinarily difficult framework parameters. Only a few customers were able to bring themselves to make long-term investment or financing decisions in the uncertain financial market environment. On top of the loss of income resulting from the decline in initial commission and commission on portfolio holdings, the implementation of regulatory measures also led to additional costs. Regulatory environment

47 MY PLUS SUPERVISORY BOARD GROUP MANAGEMENT REPORT CONSOLIDATED FINANCIAL STATEMENTS 41 > Business performance and earnings situation at the comdirect group Overall assessment of business performance and earnings situation Total assets under custody of comdirect group as of (in billion) The comdirect group expanded in financial year Through the acquisition of ebase we gained around 700 thousand end customer custody accounts and assets under custody of over 13bn (as of end 2009). The level of organic growth achieved in retail business (B2C business line) was also pleasing given the market environment. This growth resulted largely from the successful start of the complus programme and its associated product initiatives. With a total of around 2.2 million customers, more than 1.4 million custody accounts and assets under custody of 35.6bn at the end of 2009, the comdirect group is the market leader in online securities business and at the same time the second biggest direct bank in Germany. As a result of the applicable predecessor accounting rules, the previous year s figures have also been adjusted to include the contributions of ebase. Number of customers of comdirect group as of (in thousand) * * excluding ebase 26.5 Deposit volume Portfolio volume the bank s sustained profitability. By enhancing the quality of our products, services and advice, we positively influenced the customer structure. On average, customers were using more products from comdirect than in 2008 and the number of custody accounts, current accounts and Tagesgeld PLUS accounts increased by a total of thousand ,349 1,451 1, * Customers B2B Customers B2C Assets under custody also increased, because the money withdrawn from deposit accounts was largely moved into custody accounts also held with comdirect. The increased volume in these accounts was also boosted by price effects. This performance underscores the advantages of the strategic development of comdirect in recent years. Thanks to our extended range of products and services, we offer our customers the appropriate product for every market situation, and within the bank, custo mers can easily switch from banking to brokerage and vice versa. * excluding ebase Organic growth in the B2C business line slowed as expected compared with the previous year and net new customers totalled thousand in the reporting year as opposed to thousand in The main reason for this was the change in the market environment: attractive interest rate special offer campaigns would only have been possible with hefty interest subsidies; we largely refrained from offering these in view of Following the successful development in financial year 2009, we confirm the growth targets for the B2C business which were set to mark the launch of complus and have adjusted these to include the expected contributions from ebase. By the end of 2013, the number of customers is to be increased to 3 million and assets under custody to 50bn. Thanks to the diverse product initiatives under complus Anlageberatung PLUS, current account with satisfaction guarantee and expansion of the funds and savings Medium-term quantitative targets of the comdirect group Target end 2013 As of end 2009 % of targets As of end 2008 % of targets Number of customers (thousand) 3,000 2, , Assets under custody ( million) 50,000 35, ,

48 42 plan universe and the strategy adopted for business with institutional partners, we have created a good starting position for the coming years. The financial market crisis and the various measures taken to counter it affected the business activities of the comdirect group in 2009, with the adverse factors prevailing: Continued intervention by the central banks to ensure a liquid interbank market pushed the money market interest rate to an historical low. This adversely affected the attractiveness of interest-bearing investments such as Tagesgeld PLUS and net interest income declined accordingly. Following significant price volatility in the previous year accompanied by high levels of trading, the equity markets have calmed considerably. Although expectations that the recession would soon be over led to a price upsurge, many investors still held back from investing. There was a correspondingly high reduction in the number of orders and consequently also in net commission income. New business in funds and savings plans was also adversely affected by the market environment, and this affected both business lines in the comdirect group. Interest in traditional financial advisory services has waned sharply as a result of the financial market crisis; at the same time, legislation has been passed to improve investor protection, which resulted in high implementation costs. This development affected B2C advice as well as the institutional partners of ebase. Although there were some positive developments alongside the problems, these were unable to compensate for the negative factors: The normalisation phase that started in the bond markets in the reporting year led to tighter credit spreads on bonds and promissory notes with the corresponding positive price effects. This enabled us to realise price gains. Furthermore, the revaluation reserve was positively affected by the increase in the measurement of the Treasury portfolio at fair value. Stabilisation in the securities markets produced higher collateral values for loans to purchase securities. In the midst of this predominantly negative environment, the comdirect group s key performance indicators consistantly met, and in some cases exceeded, the targets for financial year 2009 (see table). The fall in net interest and commission income was offset by the positive result from financial investments and consistent cost management in all divisions of the group. At 84.9m, the operating pre-tax result outstripped the previous year s figure by 2.6%. After provisions totalling 8.9m for the measures to be implemented imminently at comdirect private finance and ebase, the pre-tax result of 76.0m exceeded our target of 75m. The initiatives already in place should contribute positively to Target/actual comparison of selected key performance indicators in financial year Target 2009 Actual 2009 Net interest income before provisions million Decline Net commission income million Decline Administrative expenses million Decline Operating result million 82.8 Hold 84.9 Pre-tax result million Deposit volume million ,479 Decline 9,110 Number of customers B2C ,349,297 Increase 1,450,720 Multi-product use B2C % Increase 48 Number of employees ,163 Increase 1,155

49 MY PLUS SUPERVISORY BOARD GROUP MANAGEMENT REPORT CONSOLIDATED FINANCIAL STATEMENTS 43 earnings at the comdirect group in 2010, especially as a result of the new strategic focus in Sales and cost synergies at ebase. Operating pre-tax result of comdirect group (in million) Business performance With the number of customers totalling 2.15 million including ebase at the end of 2009, the comdirect group recorded a rise of 3.4% on the adjusted value from the previous year. The increase is attributable to organic growth in the B2C business line, where the number of customers climbed by thousand year-onyear to 1.45 million, primarily as a result of the popularity of the new current account with satisfaction guarantee (see page 51) among customers. In the B2B business line, the number of customers, which equates to the number of end customer custody accounts, declined during the year by 4.1% to thousand. In the first half of the year in particular, market pressures affected capital-building payments (VL contracts) and one-off investments in funds (see page 56). The drop in customer numbers had only a negligible influence on the development of profits at ebase, as on average the new customers gained made a bigger contribution to value added, offsetting the higher decline in customer numbers. The significant rise in assets under custody of 4.64bn, or 15.0%, to 35.57bn highlights the comdirect group s good market positioning in B2C and B2B business. In addition to price gains, which affected the second half of 2009 in particular, this development reflects high net fund inflows relating to existing customers. At 1.42 million (end 2008: 1.43 million) the number of custody accounts remained almost constant despite the unfavourable development of the capital markets. The number of custody accounts increased in the higher margin B2C business, while the number at ebase dipped slightly. At million, the number of trades at group level was down 17.1% on the previous year (17.68 million). The reduction affected both business lines. However, in the B2B business line, the number of orders executed has very little influence on economic success (see page 28) as the business model is predominantly based on custody account fees and commission in the funds business. Earnings situation With an operating pre-tax result of 84.9m, the comdirect group was able to exceed the previous year s figure ( 82.8m) despite the deterioration in market conditions. Taking account of provisions for the measures to be carried out imminently with regard 2007* * excluding ebase to comdirect private finance and ebase, pre-tax result stands at 76.0m. The fundamentally changed interest rate environment and restrained overall order activity resulted in a 13.5% fall in total income to 282.6m (previous year: 326.7m). However, the market-related decline in income was absorbed by ongoing strict cost discipline in all divisions of the bank, particularly by refraining from carrying out cost-intensive marketing formats. At 198.9m, administrative expenses were down 18.1% on the previous year ( 242.8m). The operating cost/income ratio improved to 70.4% (previous year: 74.3%). A significant proportion of the decline in net interest income was therefore offset by the positive trend in the result from financial investments. Earnings per customer fell by 36.5% to The decisive factor above all was the lower net interest income per customer. In turn, expenses per customer reduced by 40.3% to 94.1 essentially as a result of restricted expenditure in new business. The change in the cost/income ratio highlights the fact that through its flexible cost structure, the comdirect group is able to react quickly to changes in the earnings situation and consequently also achieve profitable growth in difficult market phases. Based on the operating result and average equity in financial year 2009 (excluding revaluation reserve), the return on equity stands at 17.6% (previous year: 17.0%). The tax rate reduced slightly compared with the previous year (26.5%) to 25.5%. At 6.9%, the drop in consolidated net profit to 56.6m (previous year: 60.8m) was consequently marginally lower than the drop in income. This produces earnings per share of 0.40 (previous year: 0.43).

50 44 Proposal for appropriation of profits The Board of Managing Directors and the Supervisory Board will propose to the annual general meeting in Hamburg on 7 May 2010 that the balance-sheet profit of comdirect bank AG is used for a dividend of 0.41 per share as in the previous year. Earnings per share (in ) Net interest income At 108.7m, net interest income before provisions was down 33.5% on the previous year s strong result (previous year: 163.4m). As a result of lower money market interest rates in particular, interest income declined by 44.9% to 265.9m. However, the share of total interest income from credit and money market transactions dropped from 68.3% to 49.9%, while 49.4% (previous year: 30.8%) of interest income was generated by fixed-income securities and floaters (available-for-sale) (see note (30), page 110). This was due to the implementation of a modified Treasury strategy (see page 58). Net interest income before provisions (in million) * * excluding ebase Holistic view of earnings in banking In banking, the comdirect group s business model is based on reinvesting customer deposits in the money market and in securities (see page 27). The Treasury department actively manages this portfolio of investments. Depending on the situation in the market, there can at times be opposing trends in net interest income, the result from financial investments, trading result and result from hedge accounting and consequently these are not to be viewed separately but as a whole. In financial year 2009, lower market interests curbed the interest margin in deposit business, but conversely opened up opportunities to realise profits on the sale of fixed-income securities. A significant proportion of the decline in net interest income was therefore offset by the positive trend in the result from financial investments. Together, the above earnings components totalled 130.4m (previous year: 144.5m) in the reporting year. Furthermore, the revaluation reserve reflects the changes in the value of the portfolio resulting from market price fluctuations. This position is reported directly under equity. In addition, these changes in value are also a component of the comprehensive income of the comdirect group. Following the positive change in the revaluation reserve during the course of the year, comprehensive income stands considerably higher than the comparative figure for 2008 ( 58.0m) at 118.2m. 2007* * excluding ebase The reduced interest income was countered by a fall in interest expenses of 50.7% to 157.2m. The bank responded promptly to the changed framework parameters for customer investments by adjusting its terms and conditions. The bank largely refrained from carrying out time-limited special interest rate campaigns and this produced a slightly disproportionately higher reduction in interest expenses. The special offers expiring in financial year 2009 were not extended. Provisions for possible loan losses were positive at 1.3m (previous year: 1.2m). This was due to the depreciation of risk provisioning components related to loans to purchase securities. The direct write-downs on uncollectible debts included in the provisions were down on the previous year s already low figure (see note (31), page 110). Net interest income after provisions stood at 110.0m (previous year: 162.2m).

51 MY PLUS SUPERVISORY BOARD GROUP MANAGEMENT REPORT CONSOLIDATED FINANCIAL STATEMENTS 45 Net result from financial investments Our Treasury department consistently utilised earnings opportunities in the bond markets. Price gains were realised from the disposal of bank debt securities and other bonds from first class issuers, which had seen only marginal widening of credit spreads as a result of their very good ratings, and to a lesser extent gains from the disposal of shares. This more than compensated for the impairments that had to be recognised for securities amounting to 5.9m (previous year: 7.4m). Consequently, the result from financial investments totalled 20.9m (previous year: 19.3m). New investments related mainly to promissory notes, Pfandbriefe and floating rate notes issued by Commerzbank or its subsidiaries. Overall, there were no counterparty defaults in the Treasury portfolio of comdirect bank. Trading result Up to and during the third quarter of 2009, the comdirect group used interest rate swaps to manage the interest book of deposit positions, with forward rate agreements also used temporarily in the previous year. In the third quarter, the last interest rate swap with a nominal volume of 200m was terminated prematurely due to the current interest rate environment. The contribution to earnings from this swap is included in the trading result of 0.8m (previous year: 0.5m). As of 31 December 2009, no derivative financial instruments were held (see page 58). Net commission income (in million) * * excluding ebase Net commission income from payment transactions, which results primarily from current account fees and credit card income, largely mirrored the previous year of 5.7m with 5.5m. Other commission fell from 9.1m to 3.5m. This was mainly because of difficult market conditions for the advisory services of comdirect private finance; net commission income from the placement of insurance products fell by 49.2%. The advisory models for building finance and investment advice have not yet made a material contribution to net commission income. Result from hedge accounting There was no result from hedge accounting in the entire reporting period. The previous year s figure of 0.1m was caused by the hedging of individual bonds in the Treasury portfolio against losses. The interest rate swaps used were measured at fair value through profit or loss together with the underlying transaction. Opposing, market interest-related measurement effects are shown net. Net commission and net interest income on a quarterly comparison 2009 (in million) Net commission income Net commission income fell 16.0% to 148.8m compared with the previous year ( 177.0m) as net commission income from securities business was down by 13.9% on the previous year at 139.7m. This is primarily due to the 14.9% drop in order commission in B2C business, which particularly reflects the decline in the number of orders in stock exchange and OTC securities trading. Lower front-end loads in funds business in the B2C business line and the reduction in custody account fees in B2B business also affected development, although to a lesser extent. Sales follow-up commission was down by 14.3% over the year, reflecting the lower volume in investment funds on average for the year. Q1 Q2 Q3 Q4 Net commission income Net interest income before provisions

52 46 Other operating result The other operating result totalled 3.4m (previous year: 5.1m). Other operating income of 20.2m (previous year: 15.3m) includes income contributions from administrative services carried out by comdirect bank AG for Commerz Direktservice GmbH (formerly: Commerz Service Gesellschaft für Kundenbetreuung mbh), which acts as a service centre for the private and business customers of Commerzbank AG. Further income resulted from passing on costs to advisers at the comdirect private finance offices. Individual provisions and accruals were also reversed and recognised as income. There was a correspondingly sharp reduction in other administrative expenses. Compared with the previous year ( 171.8m), the figure fell by 27.7% to 124.2m. In addition to marketing expenses, communication and consulting expenses also declined. We also made further savings on the expenses for external services. This was achieved, for example, by providing previously outsourced IT services in-house. The total for these measures highlights the sustained cost discipline in all divisions of the bank. Structure of other administrative expenses (in million) At 16.8m, other operating expenses were clearly up on the previous year s figure of 10.1m. This was in part due to a provision for non-income related taxes for previous years. The comparative value for 2008 included a non-recurring effect of 4.5m from the revaluation of the balances for offices of comdirect private finance in light of changes in the legal framework parameters. Loan loss provisions of 1.3m were recognised for adviser balances in the reporting year. Administrative expenses Our flexible cost management has made a significant contribution to increasing the operating result. The fall in the comdirect group s total income of 44.1m was countered by a reduction in administrative expenses of 43.9m, or 18.1%, to 198.9m. The previous year s figure of 242.8m was dominated to a large extent by additional expenses for the propelled market offensive under comvalue, the growth programme at the time. With the complus programme, we have initially centred our focus on further developing the range of products and services as well as extending the business model with new advisory models. The marketing budget was adjusted in line with market conditions and reduced by more than half. Administrative expenses (in million) * * excluding ebase Sundry administrative expenses External services Consulting Communication Marketing At 62.3m, personnel expenses were 6.0% higher than the figure for the previous year of 58.8m. This was mainly due to the rise in the number of employees on average during the reporting period (see page 64) as a result of the expansion of new advisory models in particular, as well as the insourcing of IT services. At 12.4m (previous year: 12.1m), depreciation remained low. As in 2008, the major portion of this figure ( 7.7m) was attributable to intangible assets, primarily internally generated and purchased software. Furthermore, the customer relationships acquired from American Express Bank GmbH in 2006 were written down as planned. Depreciation of 4.6m related to office furniture and equipment after 4.6m, in the previous year (see note (36) on pages 111 to 112) * Depreciation Other administrative expenses Personnel expenses * excluding ebase

53 MY PLUS SUPERVISORY BOARD GROUP MANAGEMENT REPORT CONSOLIDATED FINANCIAL STATEMENTS 47 > B2C business line In direct business with modern investors, the comdirect group further developed its business model and continued its course for profitable growth with the complus programme. In all the fields of competence, customers are benefiting from the expanded range of products and services: in brokerage from the considerably expanded fund and savings plan offering, in banking from the new current account with satisfaction guarantee, in advice from the pioneering Anlageberatung PLUS. The advice field of competence comprises this new advisory model as well as the Baufinanzierung PLUS and the local advisory services of comdirect private finance which are in the process of being withdrawn. Marketing, brand awareness and reach In light of the situation in the market, the comdirect group consciously exercised restraint with regard to marketing and significantly cut its budget. Contrary to the previous year and its propelled market offensive for Tagesgeld PLUS, we almost completely refrained from using expensive advertising formats such as TV. The focus of our activities was marketing in the online media for the new current account with satisfaction guarantee, especially via keyword advertising on search engines. Existing customers were primarily addressed via comdirect s website as well as mailing campaigns. We ended some of our sales cooperations due to the change in the market environment. This also affected our cooperation with Tchibo, which ceased at the end of Up until the middle of the year, time-limited special offers on call money and fixed-term deposit accounts had been marketed through this cooperation. comdirect s brand awareness dipped only marginally during 2009 despite the considerable cut-back in advertising. Here the bank is moving in line with the industry trend and the aided and unaided brand awareness of its main competitors in brokerage and banking also declined. Both brand awareness and brand likeability, as well as the high level of customer satisfaction, show comdirect to be the second biggest brand among direct banks. comdirect s website again played a large part in the bank s high level of brand awareness. With more than 175 million (previous year: more than 190 million) page impressions on average a month, it was once more one of Germany s most frequently visited financial websites in financial year Our print formats, such as our customer magazine compass and customer newsletter compact also achieved high levels of awareness. Customer satisfaction Customer satisfaction is determined once a year by an independent market research organisation. It shows the extent to which we have understood customers requirements and translated this understanding into the corresponding product offerings and services in the B2C business line. In 2009, the customer satisfaction and loyalty levels largely matched the high levels of the previous year. As in 2008, customer loyalty was particularly strong among current account users. Around three quarters of current account users described comdirect as their main bank. The main benefits named included good terms and conditions, user-friendly order processing as well as the simple and straightforward product offering. We also scored well for expert advice and fast and friendly customer services and there was praise for the further increase in the speed of our response times to customer enquiries. With our effective product and service offering, we again achieved good placings in comparison tests and customer surveys in the reporting year: For the first time in three years, we once more secured the title of Online Broker of the Year, awarded by brokerwahl.de. In the same competition, we won Fund Broker of the Year for the fourth year in a row and ranked third for Certificate Broker of the Year. In Germany s biggest banking test, Beste Bank 2009, conducted by financial magazine uro, we came a very good second with the same number of points as the winner, having won the award in the previous year. As in 2008, we received the award for the best direct building finance placed by banks in the Focus Money comparison test, which compared the offerings of seven financial services providers.

54 48 To understand our customers and their needs even more clearly, we carry out continual market research and evaluate customer feedback on a systematic basis. We also carry out pilot tests for newly developed products and services with selected customers. Furthermore, we look at the underlying, long-term trends in customer behaviour. Our third study already into customer motives, carried out this time in conjunction with market research institute Forsa, which we published at the end of March 2009, looked at the attitudes of Germans to money, how they dealt with the financial market crisis and their financial knowledge. Customer Services Customer Services again played a major part in the success of the bank and the high customer satisfaction levels in financial year As a result of the decrease in the number of new customers compared to 2008 and thanks to increasingly automated services, for instance for opening an account or managing account mandates, the number of transactions in Customer Services fell by 14.6% compared with the previous year. Customers Services considerably improved its service levels by comparison with the previous year. Around 83% (previous year: 76%) of incoming calls were answered within 30 seconds and the response time for s was cut by a third compared with For written orders, which mainly arrive via the customer s digital inbox, the processing time for initial customer contact was also considerably reduced. We again achieved even higher service levels for the support services we provide to our top clients (comdirect first): 95% of incoming calls were answered by Customer Service staff within just 15 seconds. comdirect first is open to all customers who carry out at least 125 trades per half year, have assets of 500,000, or make a monthly deposit into their account of at least 10,000. The efficiency improvements in Customer Services are the result of consistent automation of standard processes. All customerrelated transactions, even incoming faxes, have been fully digitised since All transactions are seamlessly passed to the workstations of the Customer Services team according to their level of priority. In this regard, the number of employees in the multi-channel teams increased. The employees in these teams process customer enquiries via all channels, i.e. telephone, letter, fax and , and can therefore respond extremely flexibly to customer requirements and temporary peak workflow periods. Measures carried out to increase process speed and improve software ergonomics based on our own tests conducted in the previous year also contributed to greater efficiency. IT infrastructure Major progress was again made on modernising comdirect bank s system and application landscape on the basis of Java technology in the reporting year. Numerous functions relating to securities were programmed into the new IT architecture and should be available to customers in full as of mid Following the changeover in IT architecture, new applications, such as Anlageberatung PLUS launched in the reporting year, can be integrated more quickly into the existing website offering and the time required for updating and maintenance is also reduced. The modernised architecture also makes it easier to carry out the comprehensive redesign of comdirect s website on the basis of Web 2.0 technology scheduled for the next few years. The integration framework facilitates the seamless integration of the information elements delivered by various providers; in addition, the migration of price information to a new platform was completed. The focus is now on the market data. This information service is set to go live in revised form in Upgrading our data server has also helped further improved the availability, performance and stability of the systems. System availability reached a new record level of 99.9% (previous year: 99.7%) in the reporting year. Business development in brokerage In the brokerage field of competence, order activity recovered somewhat during financial year 2009 after a very slow start to the year. However, as expected, the number of orders was down on the figure in 2008 which was characterised by a high level of trading activity due to the at times very volatile phases in the stock markets. The portfolio volume increased as a result of price effects and net investments.

55 MY PLUS SUPERVISORY BOARD GROUP MANAGEMENT REPORT CONSOLIDATED FINANCIAL STATEMENTS 49 Development in brokerage In financial year 2009, we extended our functionalities for feefree and reduced fee securities trading, opening up opportunities for traders to invest cost-effectively in numerous asset classes traded on various exchanges. Via our LiveTrading platform for OTC securities trading, investors were able to trade selected equities, funds, certificates and reverse convertible bonds in 16 no-fee campaigns. There were also two no-fee campaigns for exchange trading. Customers did not have to pay the order fee which was paid by the respective product provider. Furthermore, we carried out a time-limited campaign in conjunction with the exchange operators which offered trading for a reasonable flat fee, regardless of the order volume. The successful flat-fee campaign with the Munich stock exchange for DAX stocks trading was followed by a campaign with the Stuttgart exchange for trading in a total of 30 government and bank bonds as well as Jumbo Pfandbriefe. Another product highlight was the free-buy campaign in spring for ETF index funds from the leading provider ishares. Customers were able to order all of the ETFs listed in Germany by ishares fee-free via XETRA for a period of almost two months. We considerably expanded our range of products for securities savers and fund investors with a focus on securities savings plans: Through the AktivSparpläne savings plans launched in April 2009, investors were able to invest in 20 actively managed funds in different investment classes with individually tailored savings rates without any front-end load, thereby exploiting attractive yield opportunities. The selection includes ten asset management funds in different categories and with varying risk profiles; experienced asset managers align the fund portfolio to the respective market situation. The other ten funds implement lifecycle strategies and dynamically adjust over the term from investments geared to opportunities to those offering a reliable return; seven of these funds have a maximum value guarantee and therefore ensure gains in weak stock market phases. Other advantages include no custody account charges if money is paid in regularly and investments can be reallocated within the funds on a tax-neutral basis for fund management at any time. In October 2009, the range of securities savings plans was expanded by almost 150 additional products. Over 80 ETF index funds, 300 investment funds and 150 certificates are now eligible for inclusion in savings plans. Consequently the savings plans are able to replicate considerably more investment strategies. The range of ETFs has more than doubled and now comprises additional share indices and issuers. Furthermore, our customers can now also save using ETCs (Exchange Trade Commodities), which reflect the performance of commodities. Freely combinable securities savings plans can be concluded for all asset classes. We halved the minimum order amount for one-off investments in funds to 500, thereby also reaching customers that only want to invest small sums in investment funds. We updated our Fonds Diamanten fund offering of 20 selected funds with above-average valuations and tightened the selection criteria at the same time. In addition to good assessments from Stiftung Warentest, the funds now have to score well in the performance-based rating as well as in the new Morningstar qualitative rating, if applicable. We also use the new rating, which measures the fund management and investment process quality as well, for our fest & fonds offering as well as the successful fund of the month format. In addition, comdirect customers can download detailed reports which include product information and references to opportunities and risks that are material to an investment decision. comdirect is the first, and so far only, direct bank to provide this service in cooperation with Morningstar. To meet the increased requirements for product transparency and investor protection, we also enhanced the information offering for certificates. Investors can now directly view the issuer prospectuses and term sheets for most of the certificates on our website, providing them with a convenient means of gaining an insight into the structure and functioning of the individual investment products. Securities trading In line with developments in the market, comdirect customers placed fewer orders than in the previous year. The downturn was particularly clear in the first half of the year, with many investors refraining from investments in securities involving risk given the uncertain prospects in the capital markets. Furthermore, the final withholding tax that came into force at the start of January 2009 impacted negatively on funds business. Trading activity revived in the second half of the year as a result of the price rise on the stock markets. However, the level was moderate as the upswing was dominated by a low level of volatility and therefore offered just limited opportunities for short-term trading profits.

56 50 In a year-on-year comparison, the number of executed orders fell from 9.23 million to 7.32 million. In the previous year, the crisis-ridden fourth quarter in particular saw very strong trading activity; the drop in the number of orders therefore reflects the easing in the capital markets and is to be viewed as positive in the long term. Around 38% (previous year: 39%) of the orders were executed on our LiveTrading platform for OTC securities trading. We therefore maintained our leading position in this market segment in Germany. Trades by type of securities (in %) Equities* Warrants Certificates* Funds including ETFs* Securities savings plans Bonds and other Executed orders B2C (in million) * excluding securities savings plans As a result of higher average order volumes, at 33.02bn, securities turnover (B2C) was down by only 16.9% on the previous year s volume ( 39.73bn). This produces a volume per executed order of 4,512 (previous year: 4,304) The number of trades in equities trading was 17.3% down on the previous year. Funds and certificates fell behind in the first half of 2009 because of the financial market crisis and the final withholding tax, but started to gain ground again as of the middle of the year. A total of 27.2% of trades were attributable to certificate trading (previous year: 22.2%) and 30.9% to investment funds and securities savings plans including ETFs (previous year: 34.0%). The recovery in savings plans is due in part to the AktivSparplan savings plan launched in April. At the end of 2009, this product already accounted for 5.2% of the savings plan orders, with strong demand for the asset management funds. Portfolio volume The portfolio holdings of B2C customers rose sharply by 33.2% to 13.16bn during the financial year, with investment funds accounting for 34.8%. 59.6% of the 3.28bn increase is due to price gains with a nearly similar proportion attributable to net investments by our customers totalling around 1.3bn. The reallocation to custody assets shows that investors are once more increasingly using the money held in deposit accounts for investments in equities, funds and certificates. Two custody account transfer campaigns in spring and autumn 2009 also had an effect here. With a bonus amounting to a maximum of 1% of the fund volume transferred, we offered investors an incentive to pool their securities at comdirect and secure themselves numerous other benefits such as simple income/loss offsetting and a fee-free second custody account. Through the successful custody account transfer campaigns, as well as cross-selling effects relating to the current account and Tagesgeld PLUS account, the number of custody accounts increased to thousand (end 2008: thousand).

57 MY PLUS SUPERVISORY BOARD GROUP MANAGEMENT REPORT CONSOLIDATED FINANCIAL STATEMENTS 51 Portfolio volume B2C as of (in billion) Development in banking In 2009, we honoured a central claim of complus to establish an attractive range of products and services with the launch of the new current account with satisfaction guarantee. In addition, there were other product initiatives such as Tagesgeld PLUS with tiered interest rates, as well as the new ten-year time deposit account Custody accounts B2C as of (in thousand) The completely fee-free current account with satisfaction guarantee has been available to our customers since April The fee-free status of the account no longer depends on a minimum amount being paid in each month (previously 1,250). This measure alone considerably improved the competitiveness of the account. Combined with the satisfaction guarantee, this makes the new account unmistakeable: customers carrying out a minimum number of transactions receive a start bonus of 50 at the end of three months. Anyone not satisfied and closing the account after a year of active use receives a further 50. The campaign Unser Giro-Fairsprechen ( our fair current account promise ) was designed to target new customers via print advertisements and online advertising in particular Business development in banking As a result of the extremely active use of the new account, we are confident that, apart from a few exceptions, customers will be convinced long term by the advantages of the attractive product. Since its launch, the features offered by the current account have been further enhanced. As of the third quarter of 2009, customers have been issued with VISA cards which in addition to the magnetic strip also have an EMV-compliant chip. The customer data stored on this chip is protected from fraud and copying. The comprehensive service functions of the current account were also extended and customers can now for example return direct debits via comdirect s website for instance. In the banking field of competence, the new current account with satisfaction guarantee represented the achievement of the first milestone under the complus programme. This was very well received by customers and after just a short space of time, the new account has proven itself as a key growth driver for the bank. With the realignment of the Tagesgeld PLUS account which now offers higher interest rates for longer terms, we have provided our customers with the right products during the current interest rate low. The decline in the deposit volume was affected by movements in market interest rates on one hand and changes in securities investments on the other. We realigned the Tagesgeld PLUS account in the second quarter of 2009 and structured interest rates for all customers into tiers according to investment sums. Tagesgeld PLUS emerged as the winner from an online practical test of various call money accounts carried out by Stiftung Warentest (Finanztest 3/09). The test assessed the speed and user friendliness of opening and maintaining an account as well as aspects relevant to security. The new ten-year time deposit account enhanced our offering in fixed-term deposits. The high return of 4.0% (as of 31 December 2009) makes it a particularly attractive offering for long-term investments. Customers can also secure good returns for shorter terms as well: highlights here are deposit interest on terms of 36

58 52 months (2.25% p.a.) and 60 months (3.0% p.a., in each case as of 31 December 2009). For fixed-term deposits with terms of one to three months, we have lowered the minimum investment from 5,000 to 500, thereby addressing a broader target group. Deposit business The decline in the appeal of interest-bearing investments is also reflected in deposit business in the B2C business line. The deposit volume reduced during the reporting year by 1.38bn to 9.08bn. Number of Tagesgeld PLUS accounts as of (in thousand) Deposit volume B2C as of (in billion) The average deposit per Tagesgeld PLUS account fell sharply to 5,800 (previous year: 7,207). This was due on the one hand to higher interest rates on investments up to 5,000 and on the other to the positive customer response to the highly flexible money savings plan launched in This builds on the Tagesgeld PLUS account and offers the same interest rate on investments up to 100,000. As some of the deposit volume in money savings plans is built up through small savings amounts, the figure is still below the average for one-off deposits. More than half of this development is due to the fact that customers have withdrawn deposits, especially from fixed-term deposit and short-term time deposit accounts, to use for securities investments. Custody accounts recorded net investments of more than 1.3bn (see page 50). Moreover, the scheduled expiry of time-limited call money and fixed-term deposit accounts with guaranteed interest rates were not replaced by new special offer campaigns due to the generally reduced attractiveness of call money accounts in the current market environment. At the year-end, 5.57bn was invested in Tagesgeld PLUS accounts, a year-on-year decline of 5.0%. As of the reporting date, 61.4% of the deposit volume (previous year: 56.1%) was therefore attributable to Tagesgeld PLUS. The number of Tagesgeld PLUS accounts rose by 18.0% compared with the end of 2008 to thousand. This is primarily due to the product combination with the current account. With the introduction of tiered deposit interest rates based on the sum invested in the second quarter of 2009, this combination remained attractive. The deposit volume in fixed-term deposit and time deposit accounts reduced as expected by 58.5% overall because of the prompt adjustment in line with lower market interest rates. The drop in fixed-term deposits with a term of one to three months was disproportionately high. Of the longer term fixed-term deposits in time deposit accounts, 36 and 60-month money bucked the trend thanks to attractive interest rates. The number of new current accounts opened far exceeded our expectations. Year-on-year, the number of accounts climbed by thousand, or 25.6%, to thousand. In the first quarter, the main impetus was the attractive start credit of 75. After the launch of the new current account with satisfaction guarantee, a second wave of growth started in May. The design of the new account, which requires a minimum number of transactions for payment of the start bonus, boosted the deposit volume as well as the average level of activity. The new current account therefore makes an important contribution to achieving the targets under complus.

59 MY PLUS SUPERVISORY BOARD GROUP MANAGEMENT REPORT CONSOLIDATED FINANCIAL STATEMENTS 53 Number of current accounts as of (in thousand) Development in advice The independent and transparent Anlageberatung PLUS was launched in November 2009 after a six-month trial involving around 400 customers. The customer response during this pilot phase and the successful market launch confirm that with its distinctive combined offering, Anlageberatung PLUS is unmistakeable and is well placed to become the new benchmark in the market. Anlageberatung PLUS offers customers four central advantages: As a result of the disproportionally high decline in fixed-term deposits and the growing credit balance in current accounts, the structure by remaining lifetimes has shifted. 89.7% of the deposit volume was attributable to deposits due on demand and unlimited in time (previous year: 78.5%), 4.3% to terms of up to three months (previous year: 12.9%) and 6.0% to longer terms (previous year: 8.6%). Independent and straightforward products. Independent advice in the interests of the customer is continuously assured. Advisers are not remunerated on a sales performance basis; any sales follow-up commission received is reimbursed and there are no initial commission charges. The active recommendations cover more than 3,000 individual securities. These are exclusively straightforward investment products such as ETFs, funds, ETCs, equities and bonds. The consistent inclusion of ETFs, which are in great demand by investors, is particularly noteworthy as this advice is not generally offered by commission-based advisory models. Lending and placement business The volume of loans to private customers in the B2C business line stood at 182.6m at the end of 2009 (end 2008: 201.8m). Overdrafts on current accounts dipped slightly by 2.4% to 24.7m despite the rise in the number of accounts. The fall in the volume of loans to purchase securities was considerably steeper with the figure reducing from 165.5m in 2008 to 147.2m. This corresponded to 80.6% (previous year: 82.0%) of the lending volume to private customers. comdirect bank acts as an intermediary for building finance and consumer loans. Both offerings therefore had no impact on the bank s lending volume. Business development in advice There was a further major addition to the advice field of competence in financial year 2009 through the launch of the Anlageberatung PLUS as part of the complus programme. Together with the Baufinanzierung PLUS introduced in 2008, Anlageberatung PLUS stands for new, independent and transparent advisory models of comdirect. In conjunction with the focus on direct bank-type advisory models, the decision was taken to withdraw from faceto-face local advisory services through the offices of comdirect private finance. This process is set to be complete by mid Baufinanzierung PLUS will continue to be offered, alongside the telephone advice service, at selected locations. Transparent and fair prices. Charges are levied according to the portfolio volume. There are no hidden commission charges and the service is transparent at all times. For the comprehensive service package, customers pay 0.05% of their portfolio volume (minimum 24.90) a month plus transaction costs. Individual and direct support. The individual wishes and preferences of the investors and their risk profile are systematically recorded and always taken into consideration for every recommendation. A permanent team of advisers is available for the customers every trading day from 8 a.m. to 8 p.m. with the contact frequency determined by the customer. Systematic and swift portfolio management. The portfolio risk across the entire investment universe is monitored every trading day on a system-backed basis. Logical action recommendations are derived by computer from the comparison caried out every trading day with a benchmark that fits the investor s risk profile is carried out every trading day to produce action recommendations. The customer decides whether to implement the recommendations and orders can be executed directly by telephone or online at comdirect s favourable transaction fees.

60 54 This system, which uses technical portfolio analysis, is based in part on in-house developments by the comdirect group and was protected against imitation through exclusivity agreements. With its standardised and objective advisory process, strict portfolio management in line with risk profiles and largely automated documenting of all advisory steps, Anlageberatung PLUS complies with the requirements resulting from the Insurance Mediation Directive introduced in 2007, the Markets in Financial Instruments Directive Implementation Act (FRUG) of 2008 and the current law strengthening investor rights. Business performance in advice Anlageberatung PLUS Anlageberatung PLUS has made a very promising start. Of the more than 400 customers testing the offering free of charge in the pilot phase ahead of the market launch, a large number decided to continue to use the service. As of financial year 2010, the success of Anlageberatung PLUS will be measured using key performance indicators such as the portfolio volume and the number of advisory customers. Baufinanzierung PLUS In the midst of a declining market, building finance advice delivered a stable performance. The attractive combination of a broad product spectrum of 90 financing partners, favourable terms and conditions and expert individual advice has therefore paid off. The volume of building finance placed increased year-on-year by 31% to 269m. The regional presence was further expanded and face-to-face local advisory services are available in the offices in Berlin, Frankfurt/Main, Hamburg and Munich. The portfolio of building finance partners increased during the year from 50 to 90. The newcomers were primarily regional providers such as savings banks. comdirect s building finance themes have also been increasingly picked up in the press. The Building Finance Sentiment Index that is published every other month established itself well in 2009 and there was a high level of interest in comdirect s city reports on Berlin, Frankfurt/Main, Hamburg and Munich as well as the survey into how well Germans understand building finance. comdirect private finance As expected, developments in financial advisory services through comdirect private finance offices were muted as a result of the difficult market environment. New legal regulations (see page 29) also had a detrimental effect on the cost structure and the risk position in local advisory services. The main focus of customer interest remained provisioning products. Nonetheless, in line with the trend in the market, the volume of Riester policies and Riester fund-based savings plans placed did not match the level of the previous year. With regard to capital investments in investment funds and closed-end investments, there was an increased requirement for advice and information in the wake of the financial market crisis. We had already reduced the number of locations by 15 to 17 in financial year 2009 through the amalgamation or closure of individual offices. The number of advisory customers of comdirect private finance was up on the end of 2008 by 16.9% to 54.5 thousand. Net commission income was adversely affected by the low level of demand for capital investment products, as well as the slight fall in provisioning business. Restructuring expenses were incurred during the reporting year for the closure of individual comdirect private finance offices, which resulted for example from the premature discharge of long-term leases. Further charges arose from the revaluation of adviser balances. Earnings situation in the B2C business line The B2C business line achieved an operating pre-tax result of 78.5m (previous year: 77.8m). This produces a cost/income ratio of 68.3% (previous year: 72.6%). Taking account of the provision amounting to 4.5m for the withdrawal from comdirect private finance offices, the pre-tax result stands at 74.0m (see Note (68) on page 138).

61 MY PLUS SUPERVISORY BOARD GROUP MANAGEMENT REPORT CONSOLIDATED FINANCIAL STATEMENTS 55 Operating pre-tax profit B2C (in million) The earnings components relating to the comdirect group s deposit business net interest income, trading result and result from financial investments stem almost completely from the B2C business line. For further details, please see the explanation of these items at group level on pages 44 to 45. At 111.6m, net commission income was down on the previous year s high figure of 138.4m. The decline of 19.4% is mainly due to the drop in the number of orders executed. In addition, the level of front-end loads and sales follow-up commission in our B2C activities was lower. This was because of the increased number of investment fund products offered without front-end loads as well as muted funds business due to market conditions. The reduction in administrative expenses to 166.7m (previous year: 208.7m) reflects cost-cuts in all divisions of the bank and our restraint in marketing in particular. Other administrative expenses include expenses for the closure of individual comdirect private finance offices in financial year These stem predominantly from the premature termination of lease agreements. At 2.1m, the other operating result was below the previous year ( 4.7m). The figure for 2008 included expenses relating to the revaluation of balances for comdirect private finance offices of 4.5m. In the reporting year, the revaluation of adviser balances resulted in expenses amounting to 1.3m.

62 56 > B2B business line Business development in the B2B business line In financial year 2009, ebase experienced positive developments on the whole despite the difficult market conditions in the investment fund segment. Many sales partner organisations of ebase have adapted their business models as a result of market developments. In a consolidation phase, several financial service providers merged in order to remain competitive, while others pulled out of the market. Nonetheless, at 113, the number of sales partner organisations at the end of 2009 was virtually on a par with the previous year. ebase initiated new partnerships in all market segments through consistent key account management and extended its existing business relationships. The sustained trend towards private provisioning and company pensions is reflected in the development of individual custody account solutions by ebase. By the end of the year, employees from over 1,300 companies were already saving for old-age provisioning using the bav custody account. The fund volume attributable to bav custody accounts exceeded the 1bn mark and by the year-end totalled 1.10bn (previous year: 0.84bn). In addition to the increased number of custody accounts, this growth was due to the rise in the average volume resulting from long-term asset accumulation. Through this account, ebase has been expanding its market position as a fund platform for fundback company pensions. ebase s partners are able to offer their corporate customers a broad spectrum of services for company pensions. Customers can choose between an individual custody account for each employee and a collective custody account. Custody accounts B2B as of (in thousand) The working hours custody account meets the requirements of the Flex II Act and simply and cost-effectively implements the amendments for improved insolvency protection of assets. The volume in these custody accounts fell somewhat as a result of market conditions. In 2008, ebase launched its state-subsidised pension product for private provisioning Riester FörderRente flex. This custody account solution enables B2B partners to offer their customers a very flexible offering for Riester fund-based savings comprising a choice of a total of 12 yield-oriented equity funds and safety-oriented fixed-income funds. Despite growth in provisioning products, the number of end customer custody accounts (excluding Commerzbank AG branch customers) declined by 4.1% in the reporting year to thousand. This fall was mainly attributable to the partner custody accounts managed on behalf of capital investment companies, which represent the biggest share of the custody accounts by far. Investment companies and insurance companies use this variant of the custody account to outsource their custody account management in full but still keep their own name in the foreground; ebase can already look back on eight successful migrations here. In the first quarter in particular, the maturing of capital-building payments (VL contracts) led to corresponding outflows. Moreover, in light of the challenging conditions in the market, some customers used the expiry of their contract as an opportunity to close their custody account. The number of ebase custody accounts held for financial service providers and investment advisers also fell slightly. Although this development stabilised significantly in the second half of the year on the back of the recovery in the capital market environment, the number of fund-based savings plans fell year-on-year by 3.8% to thousand. In contrast, the portfolio volume developed positively compared with the previous year. At the end of 2009, the volume stood at 13.30bn, exceeding the previous year s figure ( 10.58bn) by 25.8%. The average portfolio volume increased by 31.1% to 19.0 thousand (end 2008: 14.5 thousand). This pleasing rise was largely attributable to price gains, with around one fifth however, coming from net fund inflows. OrderDesk custody accounts also recorded growth; these are primarily used for the custody of cover assets.

63 MY PLUS SUPERVISORY BOARD GROUP MANAGEMENT REPORT CONSOLIDATED FINANCIAL STATEMENTS 57 Total assets under custody B2B as of (in billion) The deposit business, which was launched at the end of 2008 after the company obtained full-bank status, expanded in the reporting year. More than 50 sales partners have already established the contractual basis for selling the call money and settlement account which represents a convenient supplement to the investment custody account. At the end of 2009, the deposit volume totalled around 26m (previous year: 13m) in 5.9 thousand (previous year: 1.2 thousand) call money accounts. Earnings situation in the B2B business line The slight drop in net commission income to 37.1m (previous year: 38.6m) was essentially due to the fall in the number of end customer custody accounts. This resulted in ebase receiving lower custody account fees than in In contrast, commission income from funds business was more stable, partially offsetting the decline in custody account fees. At 0.3m, net interest income before provisions was down on the previous year s figure ( 1.0m) despite moderate growth in interest income from deposit business. This was due to the fact that higher ongoing interest income was generated on securities in the previous year. The result from financial investments, which in 2008 ( 1.0m) was significantly affected by loan loss provisions on investment funds held as fixed assets, improved to 0.2m. The increase in the other operating result to 1.4m (previous year: 0.4m) stemmed from the refund of special contributions to the Entschädigungseinrichtung der Wertpapierhandelsunternehmen (EdW Compensatory Fund of Securities Trading Companies) following decisions by the administrative court. Total income in the business line remained virtually stable at 38.6m (previous year: 39.0m), while administrative expenses reduced to 32.2m (previous year: 34.0m). The moderate fall in costs stemmed from savings in IT and process-related costs, partly as a result of technical optimisations which made maintaining custody accounts more straightforward. At 6.4m, the operating pre-tax result was up 28.5% on the previous year s figure ( 5.0m). The cost/income ratio calculated on this basis improved from 87.2% in 2008 to 83.4%. Restructuring expenses of 4.4m relate to provisions for the measures scheduled which are required to ensure the long-term competitiveness of ebase. After restructuring expense, the re-tax result amounted to 2.0m (see note (68), page 138). Operating pre-tax result B2B (in million)

64 58 > Financial situation and assets of the comdirect group Main features of financial management and Treasury The comdirect group pursues a conservative and risk-aware Treasury strategy. As a result of the liquidity surplus provided by customer deposits, comdirect bank does not need to raise additional liquidity in the money and capital markets. By investing customer deposits in the money and capital markets, the comdirect group achieves a positive interest margin. Here the bank exploits synergies within the Commerzbank Group and carries out a significant share of the investments with companies in the Commerzbank Group; these investments are comprehensively collateralised. Furthermore, the Treasury department of com direct bank ensures adequate cash holdings at all times and manages the liquidity risk (see pages 71 to 72). Investments (in million) * * excluding ebase 7.4 Intangible assets Office furniture and equipment As a result of new findings relating to customer behaviour, including from capital commitment analyses, we further developed our investment strategy in the reporting year and restructured assets. Overall, the proportion of fixed-term deposits was reduced in favour of largely collateralised securities investments, especially promissory notes and Pfandbriefe as well as floating rate notes. The interest rate derivatives temporarily used to finetune the Treasury portfolio were terminated in the reporting year due to the current market situation. As of the reporting date, no derivative financial instruments were used. The majority of the investments in the money and capital markets are carried out via Commerzbank. There are also five special funds which are included in the comdirect group s accounts. The financial situation and assets of the bank were once again very sound in financial year The bank more than complied with the regulatory capital requirements at all times. The equity ratio and the core capital ratio amounted to 45.5% (previous year: 49.1%) as of 31 December Investments The most important growth measure in 2009 was the acquisition of ebase for a purchase price of 24.9m. As a result of the applicable retrospective adjustment of the consolidated financial statements in line with predecessor accounting, this payment is not evident in the statement of investments. Intangible assets accounted for 9.1m (previous year: 11.2m). As in 2008, most of this related to internally generated software, including for amending the website, further developing the IT architecture and expanding the IT infrastructure (see page 48). In addition, software amounting to 1.2m, (previous year: 1.6m) was purchased. Taking account of depreciation on intangible assets, the net investment volume stood at 1.4m. As in the previous year, fixed asset investments of 3.4m (previous year: 7.4m) related exclusively to office furniture and equipment, especially network and server components, as well as the expansion of hardware in Customer Services (see page 48). Net investments amounted to 1.2m (previous year: 3.4m). There are no material subsequent financial obligations under current investment projects for financial years 2010 and Balance sheet structure of the comdirect group The inclusion of ebase has impacted on various positions in the consolidated balance sheet. These effects are described in detail in note (5) on page 100. The decline in deposit volume led to a 12.3% reduction in the consolidated balance sheet of the comdirect group to 9.79bn as of 31 December 2009 (end 2008: 11.16bn). In the reporting year, balance-sheet additions to fixed assets totalled 12.6m and were consequently down on the previous year s figure of 18.5m. Segment investments amounted to 9.9m (previous year: 15.1m) in the B2C business line and 2.6m (previous year: 3.5m) in the B2B business line.

65 MY PLUS SUPERVISORY BOARD GROUP MANAGEMENT REPORT CONSOLIDATED FINANCIAL STATEMENTS 59 Assets The modified Treasury strategy is reflected in the assets side of the balance sheet. The share of money market investments in the Treasury portfolio fell compared with the previous year (57%) to 35%. Claims on banks declined accordingly by 28.1% year-onyear to 4.76bn (previous year: 6.62bn). In contrast, the portfolio of financial investments rose from 4.03bn to 4.48bn; this balance sheet item includes mainly Pfandbriefe, bonds and notes, primarily issued by banks. As in the previous year, there were no significant holdings of equities and money market instruments. There were no debtor defaults in the Treasury portfolio (see pages 70 to 71). Structure of consolidated balance sheet ASSETS (in million) ,946 4, ,032 6, * * excluding ebase ,479 4,761 Other assets Claims on customers Financial investments Claims on banks The decline in claims on customers to 206.2m (previous year: 227.6m) stems from the fall in the use of loans to purchase securities. There was a slight rise in overdrafts on current accounts. At the 2009 year-end, the comdirect group did not hold any trading assets on its books; the interest rate swaps previously used to fine-tune the Treasury portfolio were closed in the third quarter. The previous year s figure of 8.7m corresponds to the positive fair value of interest rate swaps outside hedge accounting, which had a nominal volume of 300m. As a result of the higher balances at Deutsche Bundesbank, the cash reserve rose as of 31 December 2009 to 282.8m (previous year: 209.6m). The minimum reserve requirement of the comdirect group amounted to 174.6m (end 2008: 209.3m). Current income tax assets amounting to 3.8m (previous year: 3.0m) also related to corporate income tax credit balances from previous years. Financing The financing side of the balance sheet is dominated by the deposits of private customers. Liabilities to customers totalled 9.12bn (end 2008: 10.51bn) at the end of This corresponded to 93.3% (previous year: 94.2%) of liabilities. Liabilities to banks fell during the year from 52.8m to 0.9m. They stem mainly from the ongoing clearing account at Commerzbank. At 49.6m, provisions were significantly up on the previous year ( 33.5m). An amount of 8.9m was transferred to restructuring provisions reported under other provisions. This sum was due in equal measure to the withdrawal from local advisory services through comdirect private finance and the measures to be carried out imminently at ebase. For this reason in particular, other provisions increased to 36.6m (previous year: 21.4m). As of 31 December 2009, pension provisions stood at 12.9m (end 2008: 12.1m). Pension obligations with a net present value of 17.4m (previous year: 13.9m) were countered by trust assets with a market value of 3.7m (previous year: 3.9m) administered by Commerzbank Pension Trust e.v. (see note (54), from page 120). Other liabilities of 42.9m (previous year: 80.2m) relate primarily to trade liabilities. In addition, the main items were provisions for non-income related taxes as well as for staff, which relate primarily to bonus payments scheduled for 2010 (see note (54) from page 120). In the reporting year, performance shares under the comdirect group s Long Term Incentive Programme (LTIP), became due for payment in the amount of 0.3m as a result of the share price performance since the issue of the performance shares. The relevant provisions rose to 0.7m. The performance shares were issued to members of the Board of Managing Directors as well as selected specialist and executive employees for the first time in 2005 under the Long Term Incentive Plan. Deferred income tax liabilities amounted to 18.9m (previous year: 5.9m). These were essentially recognised in relation to financial assets, mainly with an income-neutral effect. Assets and liabilities are netted out in the line item (see note (55) from page 123).

66 60 Structure of consolidated balance sheet LIABILITIES (in million) 61 7, , * * excluding ebase 127 9, Other liabilities Liabilities to customers Equity Cash flow statement of the comdirect group The cash flow from operating activities amounting to 170.9m (previous year: 90.5m) was affected among other things by the development in customer deposits as well as management of the Treasury portfolio. The capital outflow resulting from the fall in customer deposits of 1.36bn (previous year: inflow of 2.78bn) was countered by inflows from the decline in claims on banks of 1.83bn. The cash flow from investment activities of 12.4m (previous year: 18.5m) also reflects the low level of payments in the reporting year for the purchase of fixed assets and intangible assets. Expenses under complus, such as for product development, are largely recorded directly as expenses. Equity increased by 12.2% to 533.4m (end 2008: 475.5m), primarily as a result of the positive change in the revaluation reserve, which stood at 51.6m at the end of 2009 (end 2008: 10.0m). The rise of 61.6m is attributable to the valuation of securities in the available for sale category at the fair value. The valuation rose sharply in the changed interest rate environment, but also as a result of tighter credit spreads. The regulatory own funds ratio remained comfortable at 45.5% (end 2008: 49.1%). It corresponds to the own funds of comdirect bank AG in relation to risk assets including operational risks. No more options were exercised under the stock option programme that expired this year. By the end of the programme, 2,383,765 of the total 3,104,580 subscription rights issued had lapsed. Due to the end of the programme, there are no further outstanding subscription rights. Structure of customer deposits (by remaining lifetimes in %) The cash outflows from financing activities of 85.2m (previous year: 60.8m) primarily result from the dividend distribution of 0.41 per share in May In addition, the payment of 24.9m for the acquisition of ebase had an effect here and the figure also includes the profit distribution from ebase to its former parent company Commerz Asset Management Holding. As of the reporting date, the comdirect group had a cash reserve of 282.8m (end 2008: 209.6m). The increase is exclusively due to higher credit balances at Deutsche Bundesbank. Deposit Protection comdirect bank AG is a member of the deposit insurance scheme of the Bundesverband deutscher Banken e.v., through which each customer was insured up to a deposit amount of 108.3m as of 31 December In addition, customer deposits are legally insured under the German banks compensation fund (Entschädigungsfonds deutscher Banken, EdB). 2007* More than three months Up to three months Due on demand and unlimited in time * excluding ebase

67 MY PLUS SUPERVISORY BOARD GROUP MANAGEMENT REPORT CONSOLIDATED FINANCIAL STATEMENTS 61 > The share Share price performance, trading volume, shareholder structure With a price rise of 7.0% to 6.61 (end 2008: 6.18), comdirect shares performed less well in the reporting year than its benchmark indices. The SDAX gained 26.7% in the year, while the DAXsector Financial Services Performance Index rose by 17.9%. However, in the wake of the financial market crisis, both comparative indices lost considerably more in the previous year than comdirect bank. Including the dividend payment in May of 0.41 per share, shareholders achieved a total shareholder return of 13.6% in The development of the share price reflects the movement in the capital market. In the first half of the year, which was adversely affected by the financial market crisis in particular, comdirect shares fell by 19.3%, reaching a low of 4.57 on 3 March As of the middle of the year, the share price gained a total of 32.5% and the high for the year was reached on 17 September 2009 at As of 31 December 2009 Commerzbank AG continued to hold 80.53% of the shares with 19.47% of the shares in free float. At the end of 2009, the market value of comdirect bank totalled 933.5m (end 2008: 872.7m). Of this, 181.7m was attributable to free float. This market capitalisation again puts comdirect bank AG in the middle of the SDAX. On average, 72,109 units were traded a day, 39.9% less than in the previous year. Of this trading volume, 86.9% were traded on XETRA and 9.6% on the Frankfurt stock exchange. Investor Relations We again intensified our ongoing Investor Relations activities with private investors, institutional investors and analysts in financial year The CEO, CFO and the Investor Relations Team presented the strategic direction of the comdirect group and its business development at various events including the analysts conference, which was met with great interest, and the Cheuvreux German Corporate Conference in Frankfurt/ Main (Q1), roadshows in Amsterdam, Frankfurt/Main, Lugano, Milan (Q2), roadshows in London and Zurich (Q3) as well as at the German Equity Forum in Frankfurt/Main (Q4). In addition, numerous individual meetings were held with investors and analysts. comdirect bank AG is currently regularly valued by 10 research institutes. The financial reporting of comdirect bank met high requirements in terms of timeliness and transparency again in the reporting year. We presented our quarterly figures in conference calls, the recordings of which were made available as on-demand versions on the website along with the presentations. The analysts conference was broadcast live on the internet and is also available online. All financial reports were again published earlier than required under the German Corporate Governance Code. The information provided is supplemented by the monthly publication of the key operating figures: customer, order and custody account numbers, development of key products and deposit and portfolio volumes. Investors were thereby provided with information on these central value drivers just five banking days after the start of each month. Development of share price of comdirect share to (in ) Jan Feb March April May June July Aug Sept Oct Nov Dec SDAX comdirect share DAXsector Financial Services Performance Index Source: Bloomberg; Indices normalised to the comdirect share price as of year-end 2008

68 62 The annual report 2009 is published on 22 March 2010 and is available in printed form and as an interactive online version in German and English. Award-winning Investor Relations Awards and top rankings in competitions confirm the quality of our Investor Relations. At this year s Vision Awards held by the League of American Communications Professionals LLC (LACP), comdirect bank s 2008 annual report won the Platinum Award and ranked first in its peer group. The bank won a bronze medal in the ARC Awards in the most important category, Overall Annual Report. Here comdirect was the only online bank to receive an award and one of only two Western European banks in the medals. In manager magazin s Best Annual Report competition, the comdirect group again improved its ranking and came fourth in the SDAX. In the European banks peer group, comdirect ranked a very good second behind Commerzbank AG. Annual General Meeting The annual general meeting in Hamburg on 6 May 2009 was well attended with around 600 participants. With a presence of 84.4% of the share capital, all items on the agenda met with a very high level of approval. In accordance with the resolution of the annual general meeting, as in the previous year, the distributable profit of comdirect bank AG amounting to 57.9m was distributed in full. This corresponded to a dividend of 0.41 per share. The speeches by the CEO and the Chairman of the Supervisory Board were broadcast live on the comdirect website. Shareholders were also able to exercise their voting rights by granting a proxy electronically ahead of the general meeting. Data and key figures of the share 2009 German securities code no ISIN code DE Stock exchange code COM Reuters: CDBG.DE Bloomberg: COM GR Stock exchange segment SDAX Number of shares issued 141,220,815 no-par-value shares Designated sponsor Commerzbank AG Shareholder structure 80.53% Commerzbank AG 1) 19.47% Free float Key figures 2009 Average daily turnover in units XETRA 62,693 Frankfurt 6,918 Other stock exchanges 2,498 Opening quotation XETRA ( ) 6.18 Highest price XETRA ( ) 2) 7.02 Lowest price XETRA ( ) 2) 4.57 Closing quotation XETRA ( ) 6.61 Market capitalisation ( ) 933.5m Earnings per share ) Indirectly 2) Daily closing quotation 72,109

69 MY PLUS SUPERVISORY BOARD GROUP MANAGEMENT REPORT CONSOLIDATED FINANCIAL STATEMENTS 63 Key figures of comdirect bank share five-year overview Earnings per share 1) Dividend per share ) ) 0.24 Opening quotation Highest price 4) Lowest price 4) Closing quotation Number of shares 141,220, ,220, ,220, ,824, ,761,088 Market capitalisation (last trading day) million , , ,120.5 Performance 5) % TSR 6) % Dividend yield 7) % P/E ratio 8) XETRA trading volume 9) 62, , , , ,394 Frankfurt trading volume 9) 6,918 10,656 28,655 19,113 20,890 1) As of 2008 including the contributions of ebase GmbH 2) Dividend proposal 3) Including special dividend 4) Daily closing quotation 5) Based on the respective closing quotation at year-end 6) Total Shareholder Return: sum of the change in the share price and dividend in relation to the share price as of the end of the previous year 7) Based on the dividend proposal and closing quotation at year-end 8) Prices/earnings ratio based on closing quotation at year-end and earnings per share 9) Average daily turnover in units comdirect share daily turnover 2009 (in 1,000 units) Average Jan Feb March April May June July Aug Sept Oct Nov Dec Other stock exchanges Frankfurt XETRA Source: Bloomberg

70 64 > Personnel report Recruitment and retention management Number of employees of comdirect group as of Recruitment and number of employees The extension of the business model through the acquisition of ebase is also reflected in the number of employees in the comdirect group. At the end of 2009, 1,155 staff members were employed in the comdirect group. Of these, 897 were employed in the B2C business line, i.e. comdirect bank AG and comdirect private finance AG, and 258 in the B2B business line, which is identical in terms of coverage to ebase GmbH. On a full-time basis, the comdirect group employed 1,029.2 staff members (all figures excluding trainees) as of 31 December * business line B2C business line B2B At the end of year, 50 staff members were employed in relation to setting up and expanding new business models in the B2C business line. By the end of 2009, Anlageberatung PLUS, which was launched in November 2009, already employed 16 staff members; 34 experts were on hand to advise customers and potential customers in building finance. The IT team also expanded, which meant that services previously bought-in could now be delivered in-house. A large number of qualified candidates responded to each job advertised. The new employer branding in the job market launched in 2008 and greater use of online formats to advertise vacancies have proven their worth. While numbers in the adviser teams and IT increased, there was a moderate drop in the number of jobs in Customer Services, due to the decline in customer activity on the previous year. The number of employees in the B2B business line was almost on a par with the previous year at 258 (257). The sales team at ebase was strengthened on a selective basis ahead of the organisational and personnel realignment planned for Responsible employer We promote the professional and personal development of our employees as well as the work/life balance, for example by implementing flexible working time models. We also operate an Employee Assistance Programme (EAP): employees and direct members of their family can use this individual telephone advisory service round the clock on an anonymous and therefore confidential basis. The advisory service covers personal and workplace issues as well as questions on life management. * excluding ebase The comfit health initiative was stepped up in the reporting year. Fitness classes and courses on nutrition were still in great demand and the offering is to be continued in Flu immunisations were also available free of charge in autumn to protect against seasonal flu. Organisational development Following the acquisition of ebase, we initiated a joint project aimed at enhancing the efficiency of the group-wide cooperation. Given the fiercely competitive environment, the route to becoming a leading B2B direct bank in Germany necessitates extensive measures to improve the cost/income ratio. A reduction in excess capacities at ebase is unavoidable in this context. Corresponding negotiations with the Works Council commenced at the end of the year. The comdirect group has recognised provisions for restructuring for the required measures, which comprise termination agreements in particular (see page 59).

71 MY PLUS SUPERVISORY BOARD GROUP MANAGEMENT REPORT CONSOLIDATED FINANCIAL STATEMENTS 65 The decision was also taken at the end of the financial year to withdraw from face-to-face local advisory services through comdirect private finance. We will utilise the expertise of the permanent employees on a targeted basis for the further growth of comdirect bank. Executive and team development The various formats for executive and team development continued in financial year 2009 with a focus on the B2C business line. To prepare executives for the growth-related changes, we offered divisional and departmental managers intensive management training covering various different managerial situations. Around one third of executives have meanwhile completed the training. The comfly programme stands for the systematic development of executives and teams at comdirect bank. The focus was on team workshops to improve workflows within and across teams. In autumn 2008, the B2C business line of the comdirect group took part in an extensive employee survey carried out by TNS Infratest. The survey showed very positive scores for the assessment of fair and constructive cooperation. At the same time, the survey provided valuable ideas for the future structuring of continued professional development and management. Following the employee survey, we initiated a division-specific range of measures which were largely implemented in Competence and talent management In financial year 2009, five prospective bankers commenced their training with the comdirect group (B2C business line). A further five successfully completed their training and were offered jobs. Furthermore, we expanded our training offering with a dual study programme. This training, which is provided in cooperation with Nordakademie Elmshorn in Schleswig-Holstein, centres on business informatics. At the end of 2009, the number of trainees totalled 27, as in the previous year. Under the comdirect graduates training programme, we take on university graduates and prepare them for specialist functions in various departments in a year-long programme. All of the participants in the 2008 programme were taken on and the next programme is scheduled for Staff development meetings were introduced as a new management tool at comdirect bank aimed at providing targeted and needs-based training and development. In the appraisal, concrete training measures are defined for specialists and executives based on the business need as well as their individual expertise. We continued the comahead training programme in Customer Services. The key elements of comahead comprise communications, specialist and technology training, predominantly by in-house speakers. This training is supplemented by individual development measures. In total, Customer Services invested around 29 thousand working hours in continued professional development. In the comdirect academy lecture series, external experts talked about various topics in the direct banking market and general themes. For example, we looked at value-driven management and appropriate economic routes out of the financial market crisis. Efficiency and performance management No adjustments to comdirect bank s compensation system were carried out in the reporting year. The salary bands defined under the competence model ensure that compensation is commensurate with the respective position and also offer scope for performance-related differentiation. At the 2009 year-end, a total of 60 comdirect bank employees (previous year: 71) participated in the Long Term Incentive Programme (LTIP) (see note (28) on page 106). In 2009, the performance shares issued in 2006 fell due for payment following expiry of a three-year waiting period. As a result of the relative TSR outperformance, a total of thousand was paid to the specialist and executive employees. Project HR 2013 was also launched and centres partly on projects to optimise internal processes as well as expanding HR activities and making them more transparent.

72 66 > Risk report Risk-oriented overall bank management The overall aim of the comdirect group is to generate a sustainable attractive return on equity with a controlled level of risk at all times. Consequently, we do not assess risks on an isolated basis but as an integral part of overall bank management. In every market and corporate phase, the aim is to secure an optimum risk/return ratio taking account of comdirect bank s risk-taking capability as well as regulatory requirements. The risk strategy is derived from the comdirect group s business strategy and determined by the Board of Managing Directors of comdirect bank AG. This strategy specifies the extent to which the bank is prepared to take on risk in order to utilise opportunities. Separate risk strategies for all material sub-risks are defined in the overall risk strategy. The comdirect group pursues fundamentally low-risk business models, which are based on generating net commission income and net interest income in brokerage, banking and advice. Limits are set for risks which can be quantified and compliance with these limits is monitored on a continual basis. Risk management, controlling and reporting Our risk management and controlling system forms the basis for implementation of the risk strategies. The system enables us to identify risks at an early stage and to assess them under various assumptions and scenarios and carefully manage them. We are therefore in a position to take measures immediately to counter risks in the event of any unwanted developments. The procedures with which we measure, aggregate and manage risks are enhanced continually on a best practice basis. Here we are closely integrated into the risk management systems of Commerzbank. The Board of Managing Directors of comdirect bank is responsible for the risk management and controlling system of the comdirect group. The Board specifies the permissible total level of risk and its allocation across the individual risk types and business divisions. At comdirect bank, the CFO is responsible for monitoring the risk strategy and its implementation. The task of risk management in the comdirect group is to identify, measure, assess and manage as well as monitor and communicate all risks in the respective risk fields. The management is carried out partly on a centralised basis, for market and liquidity risks for instance, and partly on a decentralised basis, as in the case of operational risks. The Risk Monitoring department is responsible for risk controlling. It monitors, evaluates and aggregates risks for the bank as a whole. In addition, the department implements regulatory requirements and monitors compliance with these requirements. Comprehensive and up-to-date risk reporting forms an essential part of the risk management and controlling system. The Board of Managing Directors receives regular risk status reports. Major risk indicators are included in the overall management of the comdirect group. Regular risk status reports, among other reports, provide information on the current development of major risk fields and are therefore integral to our early risk warning and monitoring system. With the aid of the risk radar included in the status reports, we identify developments requiring countermeasures at an early stage. Internal Audit regularly checks the functionality and suitability of risk management activities pursuant to the minimum requirements for risk management (MaRisk). Inclusion in the Commerzbank Group The comdirect group is included in the risk management processes of the Commerzbank Group to identify, measure, assess and manage as well as monitor and communicate risks. Against this backdrop, the bank makes use of the waiver regulation under Section 2a of the German Banking Act (KWG). As a subordinate institution of the Commerzbank Group, it is exempt from applying the regulations of Section 10 of the German Banking Act (KWG) (Reporting of own funds to the Federal Financial Supervisory Authority) and Section 13 of the German Banking Act (KWG) (Notification of major loans of more than 10% of the liable capital to Deutsche Bundesbank). As a result of this integration, comdirect bank meets the requirements in the three pillars of Basel II as follows: The first pillar of Basel II relates to the approaches for measuring credit default, market and operational risk, which are used to calculate the capital requirements of a bank. For internal management purposes as well as for the Commerzbank Group s risk management, we determine the overall risk position of comdirect, largely on the basis of advanced approaches. Credit default risks are mostly assessed using the Advanced Internal Ratings Based Approach (AIRB). With regard to operational risks, comdirect bank uses the Advanced Measurement Approach (AMA).

73 MY PLUS SUPERVISORY BOARD GROUP MANAGEMENT REPORT CONSOLIDATED FINANCIAL STATEMENTS 67 The minimum requirements for risk management for banks and financial services institutions (MaRisk), the second pillar of Basel II, are also complied with throughout the comdirect group. These relate to the implementation of internal procedures, which are to be checked by the regulatory authorities and are used to assess the risk situation and appropriate equity levels, which are based on the respective risk profile of the comdirect group. The third pillar of Basel II relates to the disclosure of risks pursuant to the detailed regulations under the Solvency Regulation (SolvV). Here the parent company Commerzbank AG meets the requirements for compliance for the Commerzbank Group as a whole. Adjustments during the reporting year The Federal Financial Supervisory Authority (BaFin) clarified and extended the MaRisk regulations with effect from 14 August The amendment to be implemented by the end of 2009 tightened in particular the regulatory requirements for managing liquidity risks, designing and implementing stress tests and taking adequate account of risk concentrations. Furthermore, a risk strategy is to be developed for the whole corporate group. In this regard, the risk-taking capability is no longer to be viewed separately for each financial institution but for the corporate group as a whole. The comdirect group initiated all the measures required to implement the amendment of the MaRisk regulations. The risk management and controlling systems of the subsidiary ebase were adjusted in line with the existing processes and systems of the comdirect group in the reporting year. ebase complies with all legal provisions and group requirements of Commerzbank in full as a separate institution. The concept for determining provisions for possible loan losses was further developed in the reporting year in line with industry stan dards. Credit risk is now estimated on the basis of the relevant Basel II parameters. Risk fields of the comdirect group A market risk describes the potential loss on positions in the bank s own portfolio caused by future market price fluctuations. A distinction is made between general changes in market prices and a specific market risk relating to individual financial instruments. With regard to risk types, we distinguish between interest rate, credit spread, share price and currency risks. The main market risks for the comdirect group are the interest rate risk and the credit spread risk in the banking book. The interest rate risk arises, in particular, from maturity transformations, that is the mismatching of fixed rates on assets and liabilities. The credit spread risk results from changes in risk premiums on bonds against a low risk reference interest rates. Underlying transactions essentially comprise bonds and promissory notes as well as money market deposits with other financial institutions, which are used for the investment of customer deposits. Interest rate swaps and forward rate agreements are concluded if required for the purposes of hedging and general interest book management; as of 31 December 2009, the comdirect group had no financial derivatives. The credit default risk describes the risk of a financial loss which arises when a borrower is unable to pay or to pay on time the contractually agreed consideration. Primarily this includes counterparty and issuer risks arising from transactions in the money and capital markets, as well as credit risks in retail business. Liquidity risk in the narrower sense is understood as the risk that the bank will be unable to meet or to meet on time its current and future payment obligations. The wider definition of liquidity risk also encompasses refinancing risk, that is the risk that the liquidity will not be sufficient if required or that it can only be acquired in the money and capital markets at terms that are significantly less favourable than expected as well as market liquidity risk. The latter describes the risk of being unable to close out securities positions to the desired extent or only at a loss as a result of inadequate market depth or market disturbances. The liquidity risk is currently a material risk, as some positions can still only be converted to liquidity to a limited extent because of the current financial market crisis. Nevertheless, the liquidity risk is not included when calculating the risk-taking capability as it cannot be limited through risk cover potential. It is taken adequately into account in the risk management and controlling processes of the comdirect group. We classify risks in line with the German Accounting Standard DRS 5-10 and distinguish between market risk, credit default risk, liquidity risk and operational risk. In addition there is business risk, which is also included in the risk-taking capability calculation as a key risk.

74 68 Operational risks are understood as possible losses resulting from the use of operating processes and systems that are inappropriate or susceptible to failure as well as human error and external events such as natural disasters or terrorist attacks. Often such incidents bring with them other secondary risks, especially reputation risks, which describe the risk of the public or customers losing confidence in the bank. Furthermore, operational risks comprise the legal risks resulting from contractual agreements or a change to legal parameters. Personnel risks are also included in operational risks. These essentially comprise the possible loss of personnel in key positions, who play a major role in the success of the bank or its subsidiaries. Business risk encompasses possible losses from negative deviations from planning which can result, for example, from changes in customer behaviour and competitive situation or incorrect planning. Risk measurement concepts To measure the risk situation we use both the expected loss and the unexpected loss in various market scenarios. The expected loss describes the loss that can be expected within a year based on empirical values, for example past losses. We calculate this figure for credit risks and operational risks. We determine the unexpected loss on a regular basis and aggregate this to form the overall risk position; this includes market risk, credit default risk and operational risk as well as business risk. The overall risk position is measured uniformly using the economic risk capital, that is the amount of equity that has to be maintained to cover unexpected losses from positions involving risk at a given probability within a year. This calculation also includes risk categories which do not require equity backing under banking regulations, but which from any economic viewpoint represent material risk potential (market price risks and business risks). The overall risk position is matched by the risk cover assets. These comprise the (forecast) pre-tax result, open reserves (capi tal reserve and retained earnings) and the revaluation reserve. For reasons of prudence, the subscribed capital is not included. The risk-taking capability is guaranteed when utilisation of the risk cover assets by the overall risk position of the bank stands at less than 100%. Countermeasures are initiated as soon as the utilisation level reaches the early warning threshold of 75%. Corresponding early warning thresholds are also defined for each sub-risk. The value-at-risk model indicates the potential loss under predominantly normal market conditions. In order to assess extreme market developments as well, we carry out additional stress tests. Overall risk position in financial year 2009 As of 31 December 2009, the overall risk position of the comdirect group increased to 124.7m (end 2008: 93.0m). Of this, 16.7m is attributable to ebase. Compared with the risk cover assets, the overall risk position was still moderate. The limit utilisation level was non-critical both with respect to the aggregate risk and all individual risks. At the year-end, only 29.1% of the overall limit was utilised. The comdirect group s fundamentally low-risk business models have therefore proven their worth again in the second year of the financial market crisis. As of the reporting date, the risk weighted assets calculated in accordance with the requirements of the Solvency Regulation (SolvV) totalled 499.7m (end 2008: 562.6m). All intragroup receivables in the Commerzbank Group were zero-weighted. Claims on Commerzbank AG and other subsidiaries of the Commerzbank Group are almost fully collateralised via a general assignment agreement; excluded from this are Pfandbriefe which are collateralised by property loans eligible as cover assets. comdirect bank adopts a very conservative approach when calculating the economic risk capital using the value-at-risk (VaR) approach. On the one hand, we in principle use a confidence level of 99.95% with a holding period of one year. On the other, for the aggregation of the sub-risks to form the overall risk position comdirect bank does not take into account any correlations that reduce the risk.

75 MY PLUS SUPERVISORY BOARD GROUP MANAGEMENT REPORT CONSOLIDATED FINANCIAL STATEMENTS 69 Breakdown of economic risk capital 2009 (in million) At the end of the year, the market risk stood at 41.9m (excluding ebase: 41.6m). On a comparable basis, the fall on the previous year s figure ( 44.1m) amounted to 5.7%. This is primarily due to the decrease in market volatility. The operational risk was 22.9% higher than in the previous year ( 29.6m) excluding ebase; the main reason for this was the higher number of loss incidents and a simultaneous rise in the volume of the losses. The rise in the credit default risk to 15.3m (previous year: 5.8m) was essentially attributable to the fact that the new calculation model takes greater account of concentration risks (see page 70). The opposing effect resulting from the decline in trading volume with counterparties outside the Commerzbank Group was significantly overcompensated. The business risk, which at 18.1m was also up on the figure for 2008 ( 13.5m), reflected the inclusion of ebase ( 3.4m) and a change in the calculation model (see page 73). To summarise, the comdirect group has enough of a risk buffer to certainly survive even lengthy weak market phases. From today s perspective, there are no realistic risks in evidence that could threaten the continued existence of the comdirect group. Market risks As of * As of Market risk Credit default risk Operational risk Business risk Economic risk capital/ group risk * excluding ebase Risk management, quantification and reporting All trading transactions of the comdirect group have to comply with the requirements of the market risk strategy. When the Treasury department invests customer deposits in the capital market, we focus on securities with adequate market depth and liquidity. To manage market risks in the financial year, we used interest rate derivatives to a limited extent. At the year-end, the volume of financial derivatives had been reduced to zero (see note (43) on page 115 and note (44) on page 115). We monitor the market risks of our trading transactions especially the interest rate risk in the banking book on a daily basis. A VaR model based on a holding period of one day and a confidence level of 97.5% is used for operative management purposes. The VaR forecast is regularly subjected to backtesting to verify its informative value. To monitor extreme market movements and the extent of losses in the portfolios under worst case scenarios, the VaR calculations are supplemented by stress tests, whereby various possible scenarios such as reversals, parallel shifts and flattening of various market price curves are simulated. In addition to interest rate, credit spread and currency scenarios, daily stress test calculations are also carried out for share price risks in the special funds held by comdirect bank. This method is described in detail in note (61) from page 161. Current risk situation With a confidence level of 97.5% and a holding period of one day, the value-at-risk (VaR) ranged from 5.1m and 6.7m in financial year 2009 and was therefore on the whole higher than in the previous year. At 23.3m (median), the overall stress value was also higher than in financial year 2008 ( 13.5m including ebase). As of 31 December 2009, the comdirect group s VaR stood at 5.1m (previous year: 6.0m including ebase). As a result of the comparatively small investment portfolio, the contribution from ebase ( 0.04m) was less important. As in the previous year, most of the market risk was attributable to credit spread and interest rate risks. Share price and currency risks played only a minor role, although the proportion of shares increased as a result of the inclusion of ebase s Treasury portfolio. The significant rise in the economic capital for market risks compared with the previous year is mainly due to an adjustment in Treasury strategy as a result of the present market environment (see page 58). The reduction of the Treasury portfolio had the opposite effect, as did the fall in credit spread volatilities; these also impacted positively on the stress test results as of the second half of 2009.

76 70 Market risks (in million) As of As of Year high Year low Median 2009 Median 2008 start of year end of year Total VaR 97.5%, 1 day holding period* Stress test overall result * Model see note (61) on pages 128 to 131. Credit default risks Risk management, quantification and reporting Credit default risks at the comdirect group primarily exist in the form of counterparty and issuer risks as a result of trading transactions. In addition, retail lending involves credit default risks. Treasury acts as the front office for counterparty and issuer risks and Customer Services fulfils this function for retail lending. In accordance with MaRisk, other tasks are to be carried out by departments other than front office departments. The back office tasks are carried out by the Credit Risk Management department for retail banking. The Finance department is responsible for the settlement of transactions. The function of risk controlling is the responsibility of the Risk Monitoring department. Trading transactions in Treasury are conducted within the limits approved by the Board of Managing Directors of comdirect bank AG as well as the Group-wide requirements of Commerzbank. These limits are defined for both counterparties and issuers as well as the underlying transactions. In the capital market, in principle, comdirect bank only takes direct positions in the investment grade segment, i.e. with an external rating of BBB- (Standard & Poor s) or Baa3 (Moody s) or better. When assessing the credit rating, comdirect bank uses both the internal ratings of Commerzbank AG in accordance with the AIRB approach as well as those of the external rating agencies. The comdirect group maintains an early warning system for the credit default risks associated with the overdraft facility and loans to purchase securities. The necessary adjustments or cancellations of credit lines are carried out immediately. Credit default risks are quantified by calculating the credit value-at-risk (CVaR) for trading transactions (excluding intragroup receivables) and retail lending on a monthly basis. In the current year, we adopted a new procedure for calculating the CVaR, which takes additional parameters into account. These include model parameters that provide information on concentration risks. The method is described in detail in note (61) from page 128. Single loan loss provisions are recognised separately for each product type for customers in the significant lending business, where a Basel II default criterion applies for these customers. Portfolio loan loss provisions are recognised for all other customers with claims and/or existing credit lines. The level is primarily influenced by the level of claims and open lines taking account of conversion factors, the level of the expected probability of default, In comdirect bank s retail lending in the B2C business line, a distinction is made between loans to purchase securities which fall due on demand and the overdraft facility on the comdirect current account. Loans to purchase securities are secured by pledged securities. Potential losses may arise if the price of the pledged securities falls as a result of the general market development or specific market risks of individual securities and this is no longer sufficient to secure the claims on customers. The decision to provide the loan is made with the aid of scoring models. the consideration of collateral and the recovery rate. Called in claims, which we hand over to collection agencies for recovery, are written down in the amount of the loss incurred. Current risk situation At the end of 2009, the total CVaR amounted to 15.3m. The rise is mainly due to the increased consideration given to concentration risks. This more than offset the opposing effect from the reduction in credit exposure to counterparties outside the Commerzbank Group. The average rating of the trading portfolio amounted to A2 (Moody s) and was therefore unchanged on the previous year. Both in terms of the internal and the external rat

77 MY PLUS SUPERVISORY BOARD GROUP MANAGEMENT REPORT CONSOLIDATED FINANCIAL STATEMENTS 71 Utilisation of loans to purchase securities and overdraft facilities (in million) J F M A M J J A S O N D Loans to purchase securities Overdraft facilities ings, the portfolio remained exclusively within the investment grade range, which is an improvement on the previous year, when according to the internal rating almost 5% of the total portfolio was outside the defined minimum requirements. No portfolio adjustments were required as a result of rating downgrades. At the end of 2009, only 35% of the banking book portfolio (end 2008: around 57%) was still invested short term in the money market. The share of capital market investments rose accordingly, with a focus on floating rate notes, straight bonds and promissory notes. Of the capital market investments, 0.49bn (previous year: 0.45bn) was attributable to five special funds which were invested almost exclusively in fixed-income securities (see note (75) on page 147). As in the previous year, over 90% of the portfolio was attributable to German counterparties with the rest fully accounted for by European issuing countries, and in particular eurozone countries. Country risks therefore played a minor role. In retail lending in the B2C business line, the average total use of loans to purchase securities was down on the previous year. At the 2009 year-end, the credit facility for loans to purchase securities dropped to 2.65bn (previous year: 2.73bn). In actual fact, utilisation of the credit facility is restricted through the specific collateral value of the respective securities portfolios. As a result of price rises in the equity markets, the collateral value increased during the year from 653m to 781m; at the end of the reporting year, equities accounted for around two thirds of the collateral portfolio. Following the price surge, as of the second quarter, the number and volume of overdrafts were significantly down on the figures for The credit volume was also down on 2008 levels as of the third quarter. As a result the number of default action processes declined considerably during the year and in the fourth quarter, around 50% fewer action processes had to be initiated than in the same period in On average during the reporting year, the utilisation rate of the securities credit facility provided by the bank stood at 21% (previous year: 23%); as of the reporting date, the volume of loans to purchase securities stood at 147m (previous year: 165m). In contrast, greater use was made of overdrafts than in 2008, mainly as a result of strong growth in current accounts. However, given the increased number of accounts, the rise in the number of overdrafts was disproportionately low. The total overdraft facilities granted increased during the year from 428m to 474m. The volume of overdrafts utilised stood at 24.7m (previous year: 25.3m) at the end of the year. In total, receivables in retail lending amounted to 178.9m (previous year: 198.6m) as of 31 December Loan loss provisions had been recognised for receivables amounting to 3.6m (previous year: 5.2m). In contrast to the previous year ( 0.5m), there was no need to recognise single loan loss provisions. At the end of the reporting year, portfolio loan loss provisions amounted to 3.6m. Allocations in the amount of 2.4m were offset against reversals of 3.8m and consumption of 0.2m, resulting in a decline in provisions for possible loan losses from 5.2m to a total of 3.6m (see note (31) on page 110 and note (42) on page 115). Liquidity risks Risk management, quantification and reporting At comdirect bank, Treasury is responsible for managing liquidity. In order to cover a possible removal of liquidity by customers, the bank maintains a sufficient volume of funds due at call as well as liquid securities, which can be used as collateral to obtain liquidity. Moreover, it can take up direct funds via the ECB. To limit the liquidity risk we are also guided by the requirements of the Liquidity Regulation as well as internal management indicators.

78 72 In addition to the required regulatory indicators, the liquidity risk is also managed using a limit system based on the available net liquidity concept. The future funding requirement is calculated using the available liquidity in the future supplemented by the expected liquidity impact of business policy and customer conduct oriented decisions. The available net liquidity is determined and monitored for both a basic scenario taking account of normal market conditions as well as for stress scenarios. Current risk situation Despite outflows in its deposit business, the comdirect group s liquidity situation was again comfortable in financial year The accumulated available net liquidity remained above the defined minimum values throughout the year. The comdirect group also showed an equally high level of surplus liquidity in the stress scenario. Nonetheless, as a result of the ongoing significant market liquidity risks, caused by comparatively high bid/ask spreads in the capital market portfolio, the liquidity risk is still to be viewed as a material risk for the comdirect group. In the basic scenario the net liquidity calculated using this method amounted to 2,325m at the end of 2009 and 2,804m on average for the year. In the stress scenario the net liquidity amounted to 894m at the end of 2009 and 541m on average for the year In the reporting year, the regulatory liquidity indicator stood on average at 5.48 and was considerably higher than the minimum value of 1 required by the regulatory authoritiesat all times. The liquidity indicator is calculated through a comparison of shortterm cash and cash equivalents and payment obligations with a maturity of up to one year. Operational risks Risk management, quantification and reporting Operational risks vary in line with the underlying business activities and are generally function-dependent. They are therefore managed on a decentralised basis. The regular self assessments are one instrument used to measure operational risk. All operational risks are continually monitored and loss incidents have to be notified immediately. The risks are valued and aggregated centrally by Risk Controlling to form the VaR indicator for operational risks. Apart from the physical infrastructure (especially hardware), the system architecture (for example multi-tier server structure and software) is of special importance for the comdirect group. In general, both have built-in redundancy or are of a modular construction in order to guarantee a constantly high level of availability for all the required systems or components. As part of business contingency planning for IT, external providers and their business contingency plans are also taken into consideration. In this connection, comdirect bank has formulated requirements with regard to availability and used them to check the business contingency measures of key service providers. Organisational and technical measures serve to prevent or limit loss for all areas of operational risk. Organisational instructions, staff training, IT project and quality management as well as business continuity management should all be mentioned in this context. These risk mitigation measures are documented in the risk manual of comdirect bank. The accounting-related internal control system is shown in the group management report on pages 34 to 35. Personnel risks are countered by implementing suitable measures to strengthen employee loyalty and provide professional development programmes (see personnel report on pages 64 to 65). The Legal & Compliance department at comdirect bank is responsible for preparing the company in advance of any legal changes. The department follows relevant developments carefully and if necessary, identifies any impact these may have, as well as promptly informing the divisions concerned. comdirect bank AG s source of information include the bank s membership of the Association of German Banks (Bundesverband deutscher Banken e.v.) through its general circulars and the membership of the working group for direct banks, reports in trade magazines as well as its cooperation with the Group Legal department of Commerzbank AG Possible liability risks in financial advisory services are minimised through the documentation of advisory meetings and contractual regulations. Insurance was also used as an additional method for minimising damages. Furthermore, the insurability of risks is regularly reviewed and rated economically.

79 MY PLUS SUPERVISORY BOARD GROUP MANAGEMENT REPORT CONSOLIDATED FINANCIAL STATEMENTS 73 Current risk situation On the basis of the OpVaR, the operational risk increased in financial year 2009 to 49.3m. Of this, 12.9m is attributable to ebase. Compared to the previous year, the expected loss rose slightly to 0.96m as of 31 December 2009 excluding ebase compared to the previous year ( 0.76m). In the B2C business line, the number of loss incidents as well as the loss volume increased compared with the previous year. Credit card misuse increased in particular. To curb this risk, comdirect is switching to credit cards with an EMV chip and as of summer 2010 is planning to use the Verified by Visa additional authentication service. There were no material personnel or legal risks. The imminent withdrawal from face-to-face local advisory services through comdirect private finance may harbour potential legal risks. Current risk situation Switching to the NOP system increased the volatility of the VaR and in part accounts for the rise in the VaR from 13.5m at the end of 2008 to 18.1m. The general planning uncertainty in the current interest rate and capital market environment also contributed to this increase. ebase accounts for 3.4m of the VaR, which shows that the current high level of market uncertainty is adequately taken into account. The systems and technical processes used by comdirect were again very stable. On average for the year, system availability stood at 99.9%, which is an improvement on the previous year (99.7%). At ebase, the operational risk stems primarily from differences in fund prices. These arise partly as a result of the time delay on executing fund orders. Business risks Risk management, quantification and reporting To manage business risks we primarily assess aspects of corporate planning, the intensity of competition, product development and as material influences on the core business of the com direct group the number of trades as well as interest rates. Since financial year 2009 we have been using the net operating profit (NOP) to assess the planning variances. The VaR of the business risk is determined using a model which illustrates the variances between planned and generated NOP. Strategic decisions regarding the further development of the business model are made on the basis of extensive analysis by the Board of Managing Directors with approval of the Supervisory Board.

80 74 > Opportunity report Overall bank strategy and opportunity management In addition to risks, we also regularly monitor opportunities as part of the overall strategy of the comdirect group. As part of this strategy, the Board of Managing Directors of comdirect bank AG decides the extent to which the bank is willing to take risks in order to leverage opportunities for growth or profit. Information on market and product opportunities is primarily gained through regular and in-depth analysis of political, legal and regulatory framework parameters, the economic environment and competitive situation in the German banking market, especially in the direct banking sector and systematic analysis of customer behaviour and customer satisfaction on the one hand through regular customer surveys and customer satisfaction studies via independent market research organisations, and on the other through the continual evaluation of customer feedback provided to Customer Services or in forum discussions. In addition, the development of the central non-financial performance indicators included in overall bank management can provide insight into the future structure of the market and product offensive. Further scope for value added potential is provided by efficiency improvements. The comdirect group invests in the ongoing modernisation of its technical systems and in a more efficient and flexible infrastructure. Here we work in line with international best practice. In addition, there are the individual initiatives suggested by employees taking part in the continual improvement process and as part of the company suggestion scheme. On the whole, through the methods and processes in place, comdirect bank is in a position to identify opportunities at an early stage and to assess and consistently exploit such opportunities. Categorisation of opportunities We continue to distinguish between three types of opportunity. Opportunities offered by developments in framework parameters describe value added potential stemming from favourable market developments, amendments to legislation as well as industry and customer behaviour trends. Strategic opportunities arise from the targeted use of company resources and from implementing overriding strategies, such as the new complus growth programme or the acquisition of ebase. Performance opportunities are closely linked to the business activities of the comdirect group. These include efficiency improvements as well as value added potential within the customer-bank relationship. Current opportunities The financial market crisis is not yet completely over and new market irritations which could adversely affect the securities markets cannot be ruled out. We expect investors will continue to focus predominantly on safety-oriented investments. This trend will be supported by new regulatory requirements that increase the level of complexity in the advisory process. Nevertheless, the market situation also offers opportunities; at the end of 2009 we assess these to be similar to those of a year ago. In the B2C business line these opportunities relate in particular to a further rise in the number of internet users in general and users of direct banking products and services in particular, the increased use of the internet by retail banking customers for deposit business and securities investments, growing importance of new advisory models, which like Anlageberatung PLUS combine a transparent selection of straightforward investment products with commission-free, and therefore independent, advice, favourable market conditions for example though a high level of volatility in share prices or sustained price rises a reversal of the trend in the money market so that a further rise in EURIBOR makes it possible to generate an attractive interest margin.

81 MY PLUS SUPERVISORY BOARD GROUP MANAGEMENT REPORT CONSOLIDATED FINANCIAL STATEMENTS 75 In the B2B business line, the market offers opportunities for example from expansion of the product range to include deposit products, centralisation of funds procurement at insurance companies, the continuing trend towards fund-backed old-age provisioning as well as taking over custody account management services from investment companies. However, these developments cannot be fully forecast and can only be partly influenced by the comdirect group. The strategic opportunities for the comdirect group are fundamentally based on the implementation of the dual brand strategy with its defined central focal areas (see page 24). the enhanced flexibility and performance of our IT infrastructure in order to extend our technology lead over our competitors, the creation of technology synergies between comdirect and ebase and the joint further development of the effective bank platform, the focus on direct bank-type advisory models and the resulting withdrawal from face-to-face local advisory services through comdirect private finance, measures to focus more closely on sales, improve efficiency and ensure an attractive cost/income ratio at ebase. On the whole, with its multi-dimensional business model and positioning as a leading direct bank for demanding private investors and institutional partners, the comdirect group is well positioned for the coming financial years. Various areas of opportunity were identified for the further development of the business model and market launch of new product and service concepts in the B2C business line. These are described in detail in the explanations to the comdirect group strategy (see page 31). The strategic opportunities for ebase include amongst others systematically increasing the customer base through a stronger focus on sales as well as enhancing its range of products and services with banking products and its extended offering of partner-specific services (see page 32). Performance opportunities relate in particular to the further increase in customer satisfaction through attractive products and high quality customer services, the urther development of the website aimed at providing even more individual customer contact and greater process inter activity, the continued automation of previously manual processes to make our offering even easier to use as well as to improve efficiency in Customer Services and reduce costs as a result,

82 76 > Outlook In 2009, the comdirect group has established a good starting position for the financial years ahead. Through the complus programme, the course is set for qualitative and quantitative growth in direct business with modern investors. The programme runs until 2013 and through this we will continue our development to become a main bank for more and more customers. Through the acquisition of ebase we have also extended our business model, and our range of products and services is now available to institutional partners and their end customers. Consequently, we are cultivating a bigger and more attractive overall market and can comprehensively exploit the potential of the bank in the interests of our shareholders. Forward-looking statements We forecast future developments in the economy based on assumptions that are most likely from today s perspective. However, the bank s planning and all statements regarding future development are of course associated with great uncertainty, especially in the current market situation. The actual development of the market environment or the bank can vary considerably from the assumed trends. Future overall bank strategy As part of the dual brand strategy for our B2C business (comdirect) and B2B activities (ebase), from today s perspective there are four focal areas for financial year 2010 and beyond: The first is to vigorously continue development to become a main bank through an attractive range of products and ser vices as well as further improved accessibility of Customer Services; this is underlined with the launch of the Anlageberatung PLUS amongst other things. We will continue to work on developing additional direct bank-type ad visory models. Secondly, the comdirect group will expand its market leadership in online securities business and gain market share in banking. In brokerage, particular emphasis is placed on enhancing services with new functionalities. In banking, the attractive combination with the Tagesgeld PLUS account, our current account with satisfaction guarantee will remain a key growth driver. Thirdly, the earnings and cost synergies already identified are to be leveraged through the cooperation between comdirect and ebase. A particular focus will be increasing the efficiency of the B2B Sales department as well as expanding the range of products and services offered by ebase. By intensively cultivating the market in the main customer segments, ebase will become the leading B2B direct bank in the German market with regards to the level of assets under custody placed by third parties in investment funds. The fourth focus centres on optimising the IT architecture further to realise efficiency advantages and to improve access for customers to the offering of the comdirect group. Expected economic framework parameters According to estimates by international organisations and economic research institutions, the acute phase of the financial market and economic crisis is over. After the significant slump in 2009, the global economy is set to be back on course for growth. The World Bank expects expansion of 2.7%, while the International Monetary Fund is more optimistic with a forecast of 3.9%. Growth is expected to be buoyed above all by emerging markets and the US market which is stronger again. However, the situation is still deemed to be fragile. Scaling back the government economic programmes represents a major challenge including in view of the massive increase in national debt as does returning to a neutral monetary policy. Other adverse factors are higher credit costs coupled with restricted credit availability and weak international capital flows. In its annual economic report for 2010, the federal government in Germany assumes growth of 1.4% and a rise in the average number of unemployed of 320 thousand to 3.77 million. Against this backdrop, development in consumer spending is likely to be muted. In the equity markets, the anticipated economic upturn is already largely factored in and prices are therefore only expected to rise slightly in A survey of 37 German and foreign banks by the financial newspaper Handelsblatt produced a forecast for the DAX of an average of 6,340 points, a rise of nearly 6% on the level at the end of Should expectations of weak price gains be confirmed, a phase of relatively low volatility in the equity markets can be assumed.

83 MY PLUS SUPERVISORY BOARD GROUP MANAGEMENT REPORT CONSOLIDATED FINANCIAL STATEMENTS 77 For the bond markets, the banks are expecting moderate rises in yield and corresponding price falls. The money market was still affected by the intervention measures of the central banks at the start of EURIBOR edged down again slightly across all maturities in the first few weeks of the year. However, the central banks are expected to withdraw surplus liquidity from the financial system over the course of the year. In conjunction with the recovery in the economy and growing expectations of an increase in the key lending rate, this may push up money market rates. This would make short-term financial investments via call money accounts more attractive again. The competitive environment in our B2B activities is likely to be dominated by consolidation again in Financial service providers continue to face the challenge of reviewing their business models and adjusting to the changing conditions. Changing regulatory requirements, fiercer competition and changes in customer behaviour call for new answers for B2B partners. Investment companies also exploit savings potential by outsourcing their custody account services. This opens up opportunities for ebase as ot develops into a leading B2B direct bank. Expected business situation In the coming financial years, the comdirect group aims to increase the number of customers and assets under custody. By the end of 2013, the number of customers should rise to 3 million and assets under custody to 50bn. In the B2C business line, we will consistently continue the complus programme in all fields of competence. In brokerage a wide range of product initiatives is planned for the primary target group of active securities traders. These plans include additional functions for OTC trading (LiveTrading). The product spectrum for securities savers and fund investors will be further developed. The focus here is on expanding our ETF business as well as simplifying the charging model for investment funds. In future we intend to offer even more funds with no, or a significantly reduced, front-end load. Moreover, we are enabling private investors to access funds for the first time that were previously only open to institutional investors because of the high minimum investment amounts. Through these product initiatives, we aim to positively influence the number of trades and portfolio volume in brokerage; however, no notable support in the form of impetus from the market is expected. In banking, we launched the ten-year time deposit account that pays an attractive rate of interest at the start of The number of accounts and the deposit volume has met our expectations in the first few weeks of the year. However, due to the interest rate environment remaining unfavourable, we expect a further decline in the deposit volume at least in the first half of In advice we are concentrating on expanding our new advisory models. We intend to attract both new and existing customers to our Anlageberatung PLUS. With regard to our building finance service, Baufinanzierung PLUS, one of our aims is to close any gaps in the offering, especially with regard to higher loan-tovalue ratios, in order to improve our presence among attractive target groups. Once interest rates start to rise, we expect new business to pick up. As a result of the focus on direct bank-type advice, we are planning to withdraw completely from local advisory services through the offices of comdirect private finance by the middle of the year. This will not affect locations in which we offer advisory services as part of Baufinanzierung PLUS. In the B2B business line, ebase will cultivate its main customer segments more intensively as a result of the increase in personnel already underway in the Sales department and consequently extend its customer base going forward. This will be accompanied by expansion of the product spectrum, with a focus on B2B-type banking solutions. In this way, we aim to provide optimal support for our B2B partners. The stronger sales focus at ebase is already set to generate an increase in the number of custody accounts and customer assets in financial year Through this new strategic focus on marketing and sales, ebase will focus more strongly on market development and sales partner support.

84 78 Expected earnings The comdirect group has satisfied all of the corporate and strategic requirements to further increase the operating result in financial year However, success is dependent on market requirements also being met, such as a recovery in order activity and rising market interest rates. In view of the mixed forecasts from market experts, assumptions regarding the future development of the interest rate and trading environment are associated with great uncertainty. The target set also requires continued cost discipline in all divisions of the bank. Our budget for spending on growth for the implementation of complus and a stronger focus on sales at ebase is set to be on a par with Due to the strong influence that changes on money and capital markets has on the earnings situation, as in previous years we will announce our profit target for the comdirect group in 2010 until publication of our half-year report Personnel The number of employees is scheduled to increase slightly in customer-oriented areas. The main reasons for this are the expansion of our advisory services in B2C as well as the strengthening of Sales at ebase in B2B. Conversely, there will also be a decline in personnel as a result of the unavoidable reduction in the number of jobs in Customer Services at ebase. Negotiations with the Works Council on the corresponding settlement of differences of interest/redundancy scheme are underway. Risk position There are currently no foreseeable developments or events that could materially change the risk position of the comdirect group compared to the situation outlined in financial year We also intend to continue our profitable growth course beyond Once complus has been concluded to schedule and the B2B strategy has been implemented, pre-tax profit is set to stand at between 150m and 170m in Expected financial situation and assets The comdirect group will continue its conservative and risk-aware Treasury policy in financial year 2010 and beyond. Despite the adverse market environment, the deposit volume is set to show a slight increase year-on-year. We will also continue to carry out most of the matching money and capital market investments via Commerzbank. The investment volume should remain low again in the current financial year. Legal corporate structure As a result of the planned complete withdrawal from the offices of comdirect private finance, there may be changes in the legal corporate structure of the comdirect group.

85 MY PLUS SUPERVISORY BOARD GROUP MANAGEMENT REPORT CONSOLIDATED FINANCIAL STATEMENTS 79 > Supplementary report No major events or developments of special significance have occurred since the 2009 reporting date.

86 80 > Corporate Governance statement Declaration of Compliance with the German Corporate Governance Code in accordance with Section 161 of the German Stock Corporation Act (AktG) The Board of Managing Directors and the Supervisory Board of comdirect bank declare that the recommendations of the Government Commission for the German Corporate Governance Code published by the Federal Ministry of Justice in the official section of the electronic Federal Gazette have been and are still observed with the exception of the following recommendation. This refers to the German Corporate Governance Code in the version dated 6 June 2008 for the period from 19 March 2009 (date of publication of last Declaration of Compliance) until 4 August 2009 (day preceding publication of the new version of the Code). With regard to the Corporate Governance practice of comdirect bank since 5 August 2009 (date of publication of the new version of the Code), the Declaration refers to the recommendations in the German Corporate Governance Code in the version dated 18 June 2009: Until the Act on the Appropriateness of Management Board Compensation (VorstAG) came into force, matters pertaining to the compensation of the Board of Managing Directors were referred to the Presiding Committee for independent decisions and implementation by the Supervisory Board of comdirect bank. To this extent, the Supervisory Board deviated from Section of the Code in the version dated 6 June 2008, which recommends that at the proposal of the committee dealing with contracts for the Board of Managing Directors, the full Supervisory Board should resolve and regularly review the compensation system for the Board of Managing Directors including the main contract elements. Following the entry into force of the Act on the Appropriateness of Management Board Compensation (VorstAG) and announcement of the current version of the Code on 5 August 2009, the full Supervisory Board now determines the overall compensation of the individual members of the Board of Managing Directors and resolves and regularly reviews the compensation system for the Board of Managing Directors at the proposal of the Presiding Committee. According to Section of the Code, the Supervisory Board should form a Nomination Committee, which is composed solely of representatives of the shareholders and suggests suitable candidates to the Supervisory Board for its election proposals to the annual general meeting. The Supervisory Board of comdirect bank comprises a total of six members, four of whom are shareholder representatives. Forming an additional committee from its membership would in our opinion be an excessive structuring of the Board. In addition, there are no apparent reasons as to why the full Supervisory Board should not itself be able to achieve the improved transparency of the selection procedure intended by the Government Commission through the introduction of Nomination Committees. comdirect bank AG Quickborn, 8 March 2010 The Board of Managing Directors The Supervisory Board Information relating to Corporate Governance practices Management and control at comdirect bank are geared to generally accepted high standards and comply with the respective valid legal framework parameters as well as the requirements of the German Corporate Governance Code (GCGC), unless expressly excluded in the Declaration of Compliance. The recommendations and suggestions in the current version of the GCGC are implemented with only a few exceptions. With the support of the Corporate Governance Officer, the Board of Managing Directors and Supervisory Board closely monitor developments in the ongoing Corporate Governance debate and systematically refine the standards in place at comdirect bank. The guiding principles of our responsible company management are cooperation based on trust between the Board of Managing Directors, which manages the company, and the Supervisory Board, which advises and monitors the Board of Managing Directors and exercises its control function efficiently and independently, focus on company interests at all times, responsible and effective risk management, compliance with and monitoring of legal requirements and supervisory regulations as well as, timely and transparent communication both internally and outside the company.

87 MY PLUS SUPERVISORY BOARD GROUP MANAGEMENT REPORT CONSOLIDATED FINANCIAL STATEMENTS 81 These principles are anchored in all areas of the bank and determine the framework parameters for strategic decisions and business policy. comdirect bank is committed to regular, open and timely communication with institutional investors and analysts, private shareholders, employees and other stakeholders. We notify the public, and thus shareholders, about the financial and earnings situation of the bank four times a year; we publish other company news via press and/or ad hoc releases. This ensures that all shareholders are treated equally. The Board of Managing Directors reports on the annual and quarterly results at press and analyst conferences. Up-to-date information is also available to the public on our website. Information regarding directors dealings and voting right notifications as well as all mandatory disclosures under company law are also published. The annual consolidated financial statements and interim financial reports are prepared by the Board of Managing Directors at the end of the first three, six and nine months of a financial year in accordance with International Accounting Standards (IAS) and International Financial Reporting Standards (IFRS) respectively, which were approved and published by the International Accounting Standards Board (IASB), and their interpretation by the Standing Interpretations Committee (SIC) and International Financial Reporting Interpretations Committee (IFRIC). The individual financial statements of comdirect bank, which determine the dividend payment, are prepared in accordance with the provisions of the German Commercial Code (HGB). Since the half-year report in 2009, interim reports have been subject to an audit review. In addition, comdirect bank publishes the key figures for its operating business on a monthly basis, making it a pioneer in the financial industry. The risk-taking capability concept and effective risk management, controlling and reporting systems ensure that risks are dealt with responsibly. Details of the internal control system (IKS) relating to the accounting process are given on pages 34 to 35. The sustainability, effectiveness and independence of the Compliance-Funktion at comdirect bank (Compliance Office) as well as the responsibilities, rights and obligations of this office are regulated in the Compliance policy. The role of the Compliance Officer is assumed by the head of Legal Services/Compliance; the Compliance Officer is also the Money Laundering and Corporate Governance Officer at comdirect bank. The responsibilities of the Compliance Office include amongst others the prevention of money laundering, insider trading and market manipulation as well as fraud and corruption. In addition, the Office ensures compliance with obligations under securities trading law and data protection legislation. The Compliance Officer reports to the Board of Managing Directors and the Supervisory Board at least once a year and is also the contact for the regulatory authorities and other public agencies. The ordinary annual general meeting is held once a year. The annual general meeting is the third executive body of the company and decides in particular on the appropriation of distributable profit, the formal approval of the actions of the Board of Managing Directors and the Supervisory Board and amendments to the Articles of Association, elects the shareholders representatives in the Supervisory Board and the auditors. It is also the key event for the dialogue between shareholders and the Board of Managing Directors and Supervisory Board. By providing comprehensive information in advance of the annual general meeting as well as different methods for voting, we ensure that shareholders are able to exercise their rights in full. For example, we offer shareholders the option of exercising their voting right through a representative nominated by comdirect bank; shareholders can issue the necessary proxy and instructions in writing or via the internet (proxy voting). The key information and details regarding the annual general meeting are published on our website at The annual general meeting is broadcast on the internet. Procedures of the Board of Managing Directors and the Supervisory Board Dual system of leadership In accordance with legal requirements, comdirect bank has a dual system of leadership. This assigns the management of the company to the Board of Managing Directors and the monitoring of the company to the Supervisory Board. The two bodies are strictly separate from one another in terms of their membership and powers. Management by the Board of Managing Directors The Board of Managing Directors is responsible for managing the company. In doing so, it is bound by the interests of the company and committed to increasing the sustainable value of the company. The Board develops the strategic focus of the company, agrees it with the Supervisory Board and ensures its implementation. The Board of Managing Directors manages the

88 82 business activities of the company in line with the provisions of the law, the Articles of Association, its Rules of Procedure and the respective contracts of employment. The Board works with the other bodies of the company and the employee representatives in a cooperation based on trust in the interests of the company. The Board of Managing Directors currently comprises four members (see note (72) on page 142). They jointly bear responsibility for the overall management of the company. The members of the Board of Managing Directors work cooperatively together and keep each other informed of important measures and issues in their divisions on an ongoing basis. The Rules of Procedure of the Board of Managing Directors determine the structuring of the Board s activities. In detail this relates to the allocation of duties which stipulates the business divisions for which the respective member of the Board of Managing Directors is responsible, the decisions to be taken by the full Board of Managing Directors, the particular duties of the CEO, transactions requiring the approval of the Supervisory Board, regular, timely and comprehensive information for the Supervisory Board and rules relating to meetings and resolutions. Monitoring and advisory function of the Supervisory Board The Supervisory Board works in close partnership with the Board of Managing Directors of comdirect bank; it monitors the Board of Managing Directors and provides regular advice on all major issues relating to the management of the company. The Supervisory Board comprehensively carries out all the duties incumbent upon it under the legal framework conditions, the bank s Articles of Association and the GCGC. The Supervisory Board reviews the efficiency of its activities on a regular basis, at least every two years. In line with the Articles of Association, the Supervisory Board comprises six members. Four members are elected by the shareholders at the annual general meeting and two members by the employees in accordance with the One Third Participation Act (DrittelbG) (until 10 June 2004 in accordance with the Works Constitution Act (BetrVG) 1952). The Members of the Supervisory Board and the seats they hold on other supervisory boards and comparable governing bodies are shown in note (72) and note (73) on pages 142 to 143. The Rules of Procedure for the Supervisory Board comply with all the requirements of the GCGC, including with regard to the required specialist expertise of the members, limitation of the number of seats on supervisory boards of other listed companies as well as the waiting period for former members of the Board of Managing Directors. Other regulations refer to the election and duties of the Chairman of the Supervisory Board and his Deputy, the convening of meetings, the adoption of resolutions during meetings or via alternative decision-making procedures the confidentiality obligation and duty of disclosure in the event of conflicts of interest. Supervisory Board committees To improve the efficiency of the Supervisory Board s activities and to deal with complex matters, under the terms of the Rules of Procedure, the Supervisory Board refers some issues to committees formed from its members for a decision or preparation of resolutions. At present these are the Presiding Committee and the Audit Committee. Both committees comprise the Chairman of the Supervisory Board, his Deputy and one further member of the Supervisory Board. The Presiding Committee essentially monitors compliance with the Rules of Procedure for the Board of Managing Directors and prepares decisions for the full Supervisory Board regarding the appointment and removal of members of the Board of Managing Directors as well as the compensation system. During the reporting year, the Committee comprised Dr. Achim Kassow (Chairman), Mr Klaus Müller-Gebel and Ms Angelika Kierstein. The Audit Committee is concerned in particular with accounting, risk management and Compliance. The Committee s tasks include the preliminary examination of the annual and consolidated financial statements, the dependency report and the independence of the auditors for the annual and consolidated financial statements. In addition, it regularly looks at the risk position and risk management system of the bank and receives

89 MY PLUS SUPERVISORY BOARD GROUP MANAGEMENT REPORT CONSOLIDATED FINANCIAL STATEMENTS 83 the report of the Compliance Officer. The Chairman of the Audit Committee, Mr Martin Zielke, has particular expertise and experience in the application of accounting principles and internal control procedures. The other members of the Committee are Dr. Achim Kassow and Mr Klaus Müller-Gebel. The duties and powers of the Presiding Committee are regulated in the Supervisory Board s Rules of Procedure. The Audit Committee has separate Rules of Procedure. Cooperation between the Board of Managing Directors and the Supervisory Board The Board of Managing Directors informs the Supervisory Board of all matters relating to planning, business development, the risk position and risk management that are relevant to the bank on a regular, timely and comprehensive basis. The Board of Managing Directors reports quarterly on the implementation of budget planning for the financial year and explains and gives reasons for any variances in business activities relative to such projections and targets. Certain transactions, such as the acquisition and disposal of companies, offices or real estate, material changes to the structure of the company or business strategy and the formulation of employee participation models, require the prior approval of the Supervisory Board or corresponding committee. All the documentation relevant to decisions, particularly the annual financial statements, consolidated financial statements and audit report, are provided to the members of the Supervisory Board in good time ahead of the respective meeting. Corporate Governance report for financial year 2009 Joint report by the Supervisory Board and Board of Managing Directors of comdirect bank pursuant to Section 3.10 of the German Corporate Governance Code. Explanations to the new version of the Code A series of changes were made to the GCGC with effect from 18 June 2009, most of which are based on the Act on the Appropriateness of Management Board Compensation (VorstAG), which entered into force in August Section 3.8 of the GCGC now includes quantitative requirements relating to the deductible for members of the Board of Managing Directors under a D&O insurance policy. This must amount to a minimum of 10% of the loss; the maximum limit must be at least one and a half times the fixed annual compensation. A corresponding deductible should be agreed upon for the Supervisory Board. According to Section 3.10, the Corporate Governance report is now part of the Corporate Governance statement. In accordance with Section 4.2.2, the full Supervisory Board determines the total compensation of the individual members of the Board of Managing Directors. Moreover, the compensation system for the Board of Managing Directors should be resolved and regularly reviewed by the full Supervisory Board. The criteria determining the appropriateness of the overall compensation include the tasks of the individual member of the Board of Managing Directors, his personal performance and the economic position of the company. Furthermore, the Code recommends that if the services of an external compensation expert are used, the independence of such expert must be ensured. In accordance with Section 4.2.3, the compensation structure must be oriented to sustainable growth of the company; variable compensation components should in general be based on a multi-year assessment, take account of positive and negative developments and must not encourage the taking of unreasonable risks. Section now stipulates the statutory regulations governing disclosure of the compensation of each individual member of the Board of Managing Directors. Other new requirements under the GCGC relate to the Supervisory Board, which must respect diversity with regard to the composition of the Board of Managing Directors as well as when proposing candidates for election to the Supervisory Board. Members of the Board of Managing Directors may not become members of the Supervisory Board within two years after the end of their appointment unless they are appointed on a propossal by shareholders holding more than 25% of the voting rights in the company. In the latter case, appointment to the chairmanship of the Supervisory Board shall be an exception to be justified to the annual general meeting. The Code also suggests that the Chairman of the Audit Committee should be independent and not a former member of the Board of Managing Directors of the company whose appointment ended less than two years ago. comdirect bank currently complies with all the recommendations and suggestions that have been incorporated into the new version of the GCGC of 18 June 2009.

90 84 Further information on the German Corporate Governance Code In addition to the Declaration of Compliance, each year the Board of Managing Directors and the Supervisory Board provide details each year of compliance with the suggestions of the GCGC. We also comply with the suggestions with only a few exceptions. The deviations arise where implementation of the corresponding suggestions does not appear reasonable in comdirect bank s specific situation or where the additional benefit to shareholders appears doubtful. The GCGC suggests in Section 3.6 that in supervisory boards with codetermination, representatives of the shareholders and of the employees should prepare the supervisory board meetings separately. As in-depth exchanges take place in the Supervisory Board of comdirect bank, we consider such preparations to be unnecessary. Meetings will only be prepared separately when required. Contrary to the suggestion in Section clause 5 of the GCGC, profit-oriented compensation of the Supervisory Board does not contain a component that relates to the long-term success of the company, but is tied to the possible payment of a dividend. We consider the differing calculation basis for performance-related components for the compensation of the Board of Managing Directors and the Supervisory Board to be appropriate. The current Declaration of Compliance adopted on 8 March 2010 at the accounts meeting of the Supervisory Board and the Corporate Governance and compensation report for financial year 2009 are available on the company website at de/ir. Previous versions of the above documents as well as the Articles of Association and the full German Corporate Governance Code can also be viewed here. In addition, the website includes information on the latest changes to our Corporate Governance standards. Information relating to Compliance Management Current legislative processes are carefully observed and are regularly analysed with regards to the requirements for implementation at comdirect bank. Recognised requirements for implementation or optimisation in Compliance Management are immediately met. The implementation of the German Money Laundering Act (Geldwäschebekämpfungsergänzungsgesetz), which came into force in August 2008, was completed on schedule in May Two laws implementing the EU Payment Services Directive came into force at the end of October These harmonise regulatory and civil law in payment transactions throughout Europe; the requirements were implemented at comdirect bank. The law regulating implementation of the civil law section of the EU Payment Services Directive also includes the regulations on implementing the EU Consumer Credit Directive in German law and regulations on the amended provisions relating to the right of revocation and return. These regulations will be implemented at comdirect bank by June 2010 in line with statutory requirements. The Accounting Law Reform Act (BilMoG) and the act regarding the implementation of the Shareholders Rights Directive (ARUG), most of which has been in force since 1 September 2009, were also implemented in the reporting year. This includes requirements relating to the convening of the annual general meeting, publications in respect of the annual general meeting on the website, sending of shareholder notices, participation via electronic media, casting of votes and assignment of voting rights as well as publication of voting results. In addition, the amendment of the Data Protection Act came into force in financial year 2009; the resultant requirements were implemented. At the same time, we are already preparing for implementation of the two further amendments to data protection legislation scheduled for April and June Directors dealings No notifiable acquisition or disposal transactions were carried out by Board members or executives in special positions at comdirect bank in financial year Compensation of the Board of Managing Directors and Supervisory Board Explanations regarding the structure of the compensation system and compensation of the Board members as part of the Corporate Governance report. Compensation of the Board of Managing Directors The compensation of the Board of Managing Directors of comdirect bank is specified by the Supervisory Board. The overall compensation comprises the following components: a non-performance related fixed compensation, a variable compensation component linked to the profit of the company and personal performance and a component with long-term incentive effect and risk elements. Furthermore, the members of the Board of Managing Directors receive a company pension in respect of their activities for comdirect bank. All compensation components are appropriate both individually and as a whole.

91 MY PLUS SUPERVISORY BOARD GROUP MANAGEMENT REPORT CONSOLIDATED FINANCIAL STATEMENTS 85 In view of the legal changes adopted under the Act on the Appropriateness of Management Board Compensation (VorstAG), it is planned that the compensation system for the Board of Managing Directors will be amended for The non-performance related fixed compensation comprises an annual fixed salary plus benefits. Without prejudice to the possibility of a review by the Presiding Committee of the Supervisory Board and the full Supervisory Board, the annual fixed salary for members of the Board of Managing Directors is set for the entire term of their respective contract of employment and is paid in twelve monthly instalments. The salary is based on the duties of the individual member of the Board of Managing Directors and the current economic position and future prospects of the bank, as well as on the level of compensation paid in peer companies. In addition to the fixed salary, the members of the Board of Managing Directors receive fringe benefits in the form of payments in kind which essentially comprise the use of a company car as well as the payment of expense allowances and insurance premiums and the taxes and social security contributions attributable to these. The actual amount varies according to the individual situation of the respective member of the Board of Managing Directors. Moreover, the Commerzbank Group maintains a D&O policy with deductible for the Managing Directors and Supervisory Board members. The insurance premium for the Managing Directors and the Supervisory Board members of comdirect bank amounted to 52 thousand in the reporting year and was paid by the company. No loans or advance payments were granted in the reporting year. The variable component (bonus) is based on the business performance of the company and the attainment of individual targets in the previous financial year. The respective indicators used to assess the performance-related components are agreed between the Board of Managing Directors and the Supervisory Board. The determining factors essentially comprise both profit criteria and the attainment of defined growth criteria. At the end of the financial year, the Supervisory Board examines the extent to which the targets have been achieved and sets the level for the performance-related component. The component with long-term incentive effect and risk elements in financial year 2009 is based on the Long Term Incentive Programme (LTIP), the model replacing the stock option programme (see note (27) on page 106). As beneficiaries under the LTIP, members of the Board of Managing Directors of comdirect bank have received an allocation of virtual, non-tradable shares (performance shares) in yearly tranches since These comprise the conditional right to a conditional cash payout after a three-year waiting period. The amount of cash payment per performance share depends on the one hand, on the extent to which the original performance targets were achieved and on the other, on the share price at the end of the waiting period. The performance targets defined when the programme was set up are based on the development of the total shareholder return (TSR), a key figure which, in addition to share price performance, also takes account of the dividends paid during the waiting period. The number of performance shares to be paid out depends in equal measure on the TSR outperformance targets compared to the DAXsector Financial Services Performance Index and the absolute increase in TSR for comdirect bank shares. The hurdles for both performance targets are high. With regard to TSR outperformance (subset A), the performance shares are only valuable if comdirect bank shares have performed at least as well as the comparative index over the three-year waiting period. If the comdirect bank share price including dividends paid has increased in absolute terms in the same period (subset B) by at least 25% compared to the price on issue, this subset also becomes valuable. The total payout from the LTIP is capped. Should the performance targets set at the start of the plan not be achieved, the performance shares lapse at the end of the waiting period. Both subsets comply with the requirements of the Act on the Appropriateness of Management Board Compensation (VorstAG) and the GCGC, which stipulates that the compensation structure must be oriented to sustainable development of the company and the individual components be based on a multi-year assessment. The terms and conditions for allocating performance shares, the exercise hurdles and time parameters are listed in the notes starting on page 106. The volume of the LTI component, the LTI target value, for each member of the Board of Managing Directors generally amounts to 25% of the individual fixed salary. The individual number of performance shares is calculated by dividing the LTI target value and fair value of a performance share as of the date of issue. This fair value is determined by an outside expert using an option valuation model prior to setting up each tranche. There is a comprehensive overview of the components with long-term incentive effect in the Notes on page 106.

92 86 thousand Annual income Performance shares Overall Pensions granted in financial compen- year sation Non- Value of Bonus Number Value at Pensions Claims variable benefits time of obligation as of issue (DBO) under IFRS as of Michael Mandel , p.a. (from 4 March 2008) , p.a. Alexander Boldyreff , (from 1 July 2009) Dr. Christian Diekmann , (from 1 May 2009) Carsten Strauß , (from 4 March 2008) , Torsten Daenert (until 30 April 2009) Total , , , , In view of Mr Daenert s move within the Commerzbank Group on 1 May 2009, he is entitled to a special payment for 2009 in the amount of 60 thousand in respect of bonuses; this is shown in the table on page 86 as a bonus payment. As part of the LTI programme, he also received a payment of 14 thousand from shares, which he acquired in his former role as divisional manager. Pension claims were transferred to Commerzbank. LTI claims remain in force. Dr. Diekmann and Mr Boldyreff were appointed members of the Board of Managing Directors for a term of three years each with effect from 1 May 2009 and 1 July 2009 respectively. The overall compensation paid for activities during financial year 2009 for the active members of the Board of Managing Directors amounted to 1,723 thousand (previous year: 1,604 thousand). The figure for the previous year includes contributions from members of the Board of Managing Directors who departed in financial year Details on the composition of the overall compensation as well as the pensions of the members of the Board of Managing Directors are shown on an individual basis in the table above. For their work at comdirect bank, the members of the Board of Managing Directors receive a pension entitlement. Mr Mandel will receive ongoing pension payments with the occurrence of the event giving rise to benefits, while Dr. Diekmann, Mr Boldyreff and Mr Strauß will be eligible for a claim to a capital payment. The company has recognised pension provisions for these future claims on the basis of the International Financial Reporting Standards (IFRS), the level of which depends on the number of service years, the pensionable salary and the current calculatory interest rate. These are calculated according to the projected unit-credit method on the basis of actuarial opinions by an independent actuary (see note (21) from page 104). In the reporting year, pension obligations under IFRS amounted to 222 thousand (previous year 174 thousand). If comdirect bank prematurely terminates the appointment to the Board of a member of the Board of Managing Directors, the respective contract of employment is in principle continued until the end of the original term of office. The fixed compensation of the member of the Board of Managing Directors released from office is paid for the remaining term of the contract of employment in full for the members of the Board of Managing Directors Mr Mandel and Mr Strauß. For Dr. Diekmann and Mr Boldyreff, payments would be in the amount of 50% of the fixed compensation for a maximum of 24 months. There is no en

93 MY PLUS SUPERVISORY BOARD GROUP MANAGEMENT REPORT CONSOLIDATED FINANCIAL STATEMENTS 87 titlement to further remuneration where the termination takes place for good cause. There may be a settlement in the event of premature termination of employment resulting from an individually agreed rescission agreement. In the past financial year, no member of the Board of Managing Directors has received payments or corresponding obligations from a third party in relation to their activities as a member of the Board of Managing Directors. The second tranche under the LTI programme became due in As a result of the absolute and relative performance of comdirect bank shares, a payment was made to Mr Strauß in the amount of 11 thousand. The shares were allocated to him in his capacity as divisional manager. The 6,500 stock options held by Mr Strauß, which were also allocated to him in his capacity as divisional manager in 2004, lapsed in the reporting year. Members carrying out board functions at subsidiaries only received expense. The overall compensation for former members of the Board of Managing Directors amounted to 263 thousand (previous year: 193 thousand) in the financial year. In 2009 the payment made to former members of the Board of Managing Directors under the LTI programme amounted to 64 thousand. In 2010 further payments under the LTI plan could become due from the remaining tranches to former members of the Board of Managing Directors. The total of 45,000 options held by former Members of the Board of Managing Directors from the last tranche of the 2004 stock option programme of comdirect bank lapsed in the reporting year without value. As of 31 December 2009, the pension obligations to former members of the Board of Managing Directors pursuant to IFRS totalled 3,230 thousand (previous year: 2,987 thousand). Compensation of the Supervisory Board The compensation of the Supervisory Board is stipulated in the Articles of Association. In addition to reimbursement of expenses at the end of the financial year, the individual members of the Supervisory Board receive a fixed compensation of 10,000, with the Chairman of the Supervisory Board receiving triple that amount and his Deputy one and a half times that amount. If a member of the Supervisory Board is also a member of a Supervisory Board committee, then the member will additionally receive a quarter of the relevant fixed compensation and the Committee Chairman will receive a further quarter. A member of the Supervisory Board may receive a maximum of two and a half times the fixed compensation, i.e. a maximum of 25,000. The maximum for the Chairman of the Supervisory Board is 75,000 and 37,500 for his Deputy. In line with the GCGC, the members of the Supervisory Board also receive a variable compensation payment. This component is dependent on the dividend distributed to shareholders. No variable component is paid for a dividend of up to 4% of the share capital, which equates to 0.04 per share. The Supervisory Board as a whole receives 1,500 for each half a percentage point that the dividend paid exceeds this basic return on the share capital of 4%. For financial year 2009, a dividend of 0.41 per share, or 41% of the share capital, will be proposed to the annual general meeting. If approved by the annual general meeting, the variable compensation component paid to the Supervisory Board will amount to 130 thousand. Pursuant to a resolution by the Supervisory Board, this sum will be divided among the members of the Supervisory Board, irrespective of their position, in accordance with the ratio for non-variable compensation, regardeless of activities on any committees. The compensation paid to individual members of the Supervisory Board, including the reimbursement of VAT payable on Supervisory Board compensation, is shown in the following table. thousand Non-variable Variable Remuneration for Total components components committee activities Dr. Achim Kassow Klaus Müller-Gebel Frank Annuscheit Thorben Gruschka (from 6 May 2009) Angelika Kierstein Mitja Sack (until 6 May 2009) Martin Zielke (from 9 May 2008)

94 88 > Details in accordance with Section 315 (4) of the German Commercial Code (HGB) As of the end of the financial year, the subscribed capital of the company amounts to 141,220, It is divided into 141,220,815 no-par value shares. The rights and obligations associated with these ordinary shares arise in particular from Sections 12, 53a ff, 118 ff, 186 of the German Stock Corporation Act (AktG). The shares are bearer shares. There are no known restrictions relating to voting rights or the transfer of shares. Commerzbank Inlandsbanken Holding GmbH, Frankfurt/Main, which is a wholly-owned subsidiary of Commerzbank AG, Frankfurt/Main, in turn holds 80.53% of the capital of comdirect bank AG. There are no other direct or indirect shareholdings which exceed 10% of the voting rights. There are no shareholders with special rights conferring controlling powers. In particular, there are no rights to appoint members of the Supervisory Board pursuant to Section 101 (2) of the German Stock Corporation Act (AktG). In accordance with the further details of the resolution adopted by the annual general meeting on 6 May 2009, the company is authorised to acquire its own shares pursuant to Section 71 (1) Nos. 7 and 8 of the German Stock Corporation Act (AktG). The company has not made any use of this authorisation. New shares may be issued, particularly as part of the authorisations pursuant to Article 4 (3 5) of the Articles of Association (Authorised capital and conditional capital I and conditional capital 2008). To date the company has only used conditional capital I in accordance with Article 4 (4) of the Articles of Association to redeem subscription rights under the 2000 stock option programme. There are no material agreements between comdirect bank AG and third parties which would come into effect, change or end in the event of a change of control as a result of a takeover bid. comdirect bank AG has not concluded any compensation agreements with members of the Board of Managing Directors or employees in the event of a takeover bid. Where employees of comdirect bank AG hold interests in the capital of the company, they exercise their controlling rights through their voting rights directly. The members of the Board of Managing Directors are appointed and removed by the Supervisory Board in line with the provisions of Section 84 of the German Stock Corporation Act (AktG) and Article 6 (2) of the Articles of Association. If the Board of Managing Directors is missing a required member and the Supervisory Board has not made an appointment accordingly, one is appointed in urgent cases by the court in line with Section 85 of the German Stock Corporation Act (AktG). Any change to the Articles of Association requires a resolution by the annual general meeting in line with Section 179 (1) of the German Stock Corporation Act (AktG). Unless a greater majority is required by law, a simple majority of the capital represented is sufficient (Article 20 clause 2 of the Articles of Association). The authority to amend the version of the Articles of Association has been assigned to the Supervisory Board according to Article 8 (2) of the Articles of Association in compliance with Section 179 (1) clause 2 of the German Stock Corporation Act (AktG).

95 MY PLUS SUPERVISORY BOARD GROUP MANAGEMENT REPORT CONSOLIDATED FINANCIAL STATEMENTS 89 > Explanations of the Board of Managing Directors on details in accordance with Section 315 (4) of the German Commercial Code (HGB) The details in the group management report of the comdirect group in accordance with Sections 315 (4) of the German Commercial Code (HGB), should provide third parties potentially interested in a takeover of comdirect bank AG with the information on the company relevant for a takeover. This refers to the following information: Composition of the subscribed capital; Restrictions affecting the transfer of shares; Direct or indirect holdings exceeding 10% of the voting rights; Holders of shares with special rights, which grant controlling powers; Type of voting rights control if employees participate in the capital and do not exercise their controlling rights directly; Legal regulations and provisions in the Articles of Association on the appointment and removal of members of the Board of Managing Directors and amendment of the Articles of Association; Powers of the Board of Managing Directors, especially regarding the issue or buyback of shares; Material agreements which would come into effect in the event of a change of control as a result of a takeover bid; Compensation agreements concluded with members of the Board of Managing Directors or employees in the event of a takeover bid. Composition of the subscribed capital As of the end of the financial year, the subscribed capital of the company amounts to 141,220, It is divided into 141,220,815 no-par value shares. The rights and obligations associated with these ordinary shares arise in particular from Sections 12, 53a ff, 118 ff, 186 of the German Stock Corporation Act (AktG). The shares are bearer shares. Direct or indirect holdings above 10% of the voting rights Commerzbank Inlandsbanken Holding GmbH, Frankfurt/Main, which is a wholly-owned subsidiary of Commerzbank AG, Frankfurt/Main, in turn holds 80.53% of the capital of comdirect bank AG. There are no other direct or indirect shareholdings which exceed 10% of the voting rights. Appointment and removal of members of the Board of Managing Directors/amendments to the Articles of Association The members of the Board of Managing Directors are appointed and removed by the Supervisory Board in line with the provisions of Section 84 of the German Stock Corporation Act (AktG) and Article 6 (2) of the Articles of Association. If the Board of Managing Directors is missing a required member and the Supervisory Board has not made an appointment accordingly, one is appointed in urgent cases by the court in line with Section 85 of the German Stock Corporation Act (AktG). Any change to the Articles of Association requires a resolution by the annual general meeting in line with Section 179 (1) of the German Stock Corporation Act (AktG). Unless a greater majority is required by law, a simple majority of the capital represented is sufficient (Article 20 clause 2 of the Articles of Association). The authority to amend the version of the Articles of Association has been assigned to the Supervisory Board according to Article 8 (2) of the Articles of Association in compliance with Section 179 (1) clause 2 of the German Stock Corporation Act (AktG). Furthermore, the Supervisory Board is authorised to redraft the text of Article 4 of the Articles of Association (Share capital and shares) in accordance with the respective exercise of subscription rights and in accordance with the respective utilisation of conditional capital. Powers of Board of Managing Directors to issue or buyback shares In accordance with the further details of the resolution adopted by the annual general meeting on 6 May 2009, the company is authorised to acquire its own shares pursuant to Section 71 (1) Nos. 7 and 8 of the German Stock Corporation Act (AktG). The company has not made any use of this authorisation. New shares may be issued, particularly as part of the authorisations pursuant to Article 4 (3 5) of the Articles of Association (Authorised capital and conditional capital I and conditional capital 2008). To date the company has only used conditional capital I in accordance with Article 4 (4) of the Articles of Association to redeem subscription rights under the 2000 stock option programme. Other information required under Section 315 (4) of the German Commercial Code (HGB) relates to circumstances which do not apply to comdirect bank AG.

96 90 > Declaration of the Board of Managing Directors on Section 312 of the German Stock Corporation Act (AktG) As a result of the integration of comdirect bank AG including its subsidiaries in the Commerzbank Group, the Board of Managing Directors is obliged to prepare a dependency report in accordance with Section 312 of the German Stock Corporation Act (AktG). Under the circumstances known to us at the date on which the company concluded legal transactions and carried out or omitted measures, comdirect bank AG received adequate consideration for each such transaction and suffered no disadvantage from measures either being carried out or not carried out. No measures which must be reported were carried out or not carried out.

97 MY PLUS SUPERVISORY BOARD GROUP MANAGEMENT REPORT CONSOLIDATED FINANCIAL STATEMENTS 91 > Consolidated financial statements Income statement 94 Statement of comprehensive income 94 Balance sheet 95 Statement of changes in equity 96 Cash flow statement 97 Notes 98 Basis of accounting principles 98 Accounting and measurement methods 98 (1) Basic principles 98 (2) IAS/IFRS and SIC/IFRIC rules applied for the first time and to be applied in the future 99 (3) Consolidated companies 99 (4) Principles of consolidation 99 (5) Acquisition and first-time consolidation of ebase GmbH 100 (6) Hedge Accounting 100 (7) Cash reserve 100 (8) Claims 100 (9) Currency translation 101 (10) Provisions for possible loan losses 101 (11) Positive fair values from derivative hedging instruments 101 (12) Trading assets 101 (13) Financial investments 101 (14) Intangible assets 102 (15) Fixed assets 103 (16) Leases 103 (17) Liabilities 103 (18) Negative fair values from derivative hedging instruments 103 (19) Trading liabilities 103 (20) Provisions 103 (21) Provisions for pensions and similar obligations 104 (22) Income taxes 105 (23) Conditional and authorised capital 105 (24) Earnings 105 (25) Appropriation of profits 106 (26) Earnings per share 106 (27) Stock option programme 106 (28) Performance share plan 106 (29) Related party disclosures 107

98 92 Notes to the income statement 110 (30) Net interest income before provisions 110 (31) Provisions for possible loan losses 110 (32) Net commission income 110 (33) Result from hedge accounting 111 (34) Trading result 111 (35) Result from financial investments 111 (36) Administrative expenses 111 (37) Other operating result 112 (38) Taxes on income 113 Notes to the balance sheet 114 (39) Cash reserve 114 (40) Claims on banks 114 (41) Claims on customers 114 (42) Provisions for possible loan losses 115 (43) Positive fair values from derivative hedging instruments 115 (44) Trading assets 115 (45) Financial investments 116 (46) Intangible assets 116 (47) Fixed assets 116 (48) Schedule of assets 117 (49) Income tax assets 118 (50) Other assets 118 (51) Liabilities to banks 119 (52) Liabilities to customers 119 (53) Negative fair values from derivative hedging instruments 119 (54) Provisions 120 (55) Income tax liabilities 123 (56) Other liabilities 124 (57) Equity 124 Additional information 126 (58) Equity management 126 (59) Maturities, by remaining lifetime 127 (60) Claims on/liabilities to affiliated companies 128 (61) Risk reporting on financial instruments 128 (62) Fair Value of financial instruments 132 (63) Fair Value hierarchy 132 (64) Net result from financial instruments 133 (65) Average number of employees during the reporting period 134 (66) Income statement of comdirect bank group according to IAS/IFRS year-to-year comparison 135

99 MY PLUS SUPERVISORY BOARD GROUP MANAGEMENT REPORT CONSOLIDATED FINANCIAL STATEMENTS 93 (67) Income statement of comdirect bank group according to IAS/IFRS on a quarterly comparison 136 (68) Segment reporting by business line 138 (69) Other liabilities 141 (70) Fees for auditors 141 (71) Corporate Governance Code 141 (72) The company s Boards 142 (73) Seats on Supervisory Boards and other executive bodies 142 (74) Remuneration and loans to Board members 144 (75) Holdings 147 Declaration of the Board of Managing Directors 148 Auditor s report 149 Glossary 150 Six-year overview of comdirect bank group 154 Financial calendar Contacts 156

100 94 > Income statement Income statement of comdirect bank group according to IAS/IFRS 1.1. to thousand Notes Interest income 265, ,303 Interest expenses 157, ,898 Net interest income before provisions (30) 108, ,405 Provisions for possible loan losses (10) (31) 1,299 1,172 Net interest income after provisions 109, ,233 Commission income 248, ,475 Commission expenses 99, ,441 Net commission income (32) 148, ,034 Result from hedge accounting (6) (33) Trading result (34) Result from financial investments (35) 20,850 19,294 Administrative expenses (36) 198, ,774 Other operating result (37) 3,421 5,148 Operating result 84,938 82,754 Restructuring expenses 8,945 0 Pre-tax profit/profit from ordinary activities 75,993 82,754 Taxes on income (22) (38) 19,369 21,916 Net profit 56,624 60,838 Allocation to reserves Transfer from reserves 1,277 0 Consolidated profit (25) 57,901 60,341 Earnings per share 1.1. to Basic earnings per share Net profit thousand 56,624 60,838 Average number of ordinary shares Shares 141,220, ,220,815 Basic earnings per share Diluted earnings per share Net profit thousand 56,624 60,838 Adjustment to the number of ordinary shares issued due to outstanding option rights Shares 0 121,846 Weighted average shares outstanding Shares 141,220, ,342,661 Diluted earnings per share > Statement of comprehensive income Statement of comprehensive income 1.1. to thousand Net profit 56,624 60,838 Changes in the revaluation reserve 61,621 2,867 Comprehensive income/loss for the reporting period 118,245 57,971 Net profit and comprehensive income/loss for the reporting period are attributable in full to the shareholders of comdirect bank AG.

101 MY PLUS SUPERVISORY BOARD GROUP MANAGEMENT REPORT CONSOLIDATED FINANCIAL STATEMENTS 95 > Balance sheet Balance sheet of comdirect bank group according to IAS/IFRS Assets thousand Notes as of as of as of Cash reserve (7) (39) 282, , ,416 Claims on banks (8) (40) 4,761,021 6,623,848 4,851,326 Claims on customers (8) (41) 206, , ,159 Provisions for possible loan losses (10) (42) 2,160 5,170 4,622 Positive fair values from derivative hedging instruments (6) (11) (43) 0 0 1,847 Trading assets (12) (44) 0 8,723 13,036 Financial investments (13) (45) 4,478,973 4,031,547 2,970,684 Intangible assets (14) (46) (48) 30,241 28,871 25,886 Fixed assets (15) (47) (48) 17,553 19,021 15,953 Current income tax assets (22) (49) 3,774 2,951 3,304 Deferred income tax assets (22) (49) 0 0 5,178 Other assets (50) 6,803 10,891 13,782 Total assets 9,785,231 11,157,884 8,311,949 Liabilities and equity thousand Notes as of as of as of Liabilities to banks (51) ,766 15,971 Liabilities to customers (17) (52) 9,124,792 10,505,811 7,707,914 Negative fair values from derivative hedging instruments (16) (18) (53) Provisions (20) (21) (54) 49,567 33,542 32,696 Current income tax liabilities (22) (55) 14,772 4,185 6,820 Deferred income tax liabilities (22) (55) 18,898 5,888 0 Other liabilities (56) 42,919 80,236 69,547 Equity (57) 533, , ,271 Subscribed capital 141, , ,221 Capital reserve 223, , ,296 Retained earnings 59,350 60,627 60,135 Revaluation reserves 51,592 10,029 7,162 Consolidated profit 57,901 60,341 60,781 Total liabilities and equity 9,785,231 11,157,884 8,311,949

102 96 > Statement of changes in equity thousand Subscribed Capital Retained Revaluation Consoli- Total capital reserve earnings reserve 1) dated profit Equity as of , ,196 56,815 7,944 57, ,189 Impact of retroactive adjustments 0 6,900 3, , Equity as of (adjusted) 141, ,296 60,135 7,162 60, ,271 Net profit from 1.1. to ,838 60,838 Changes in revaluation reserve pursuant to IAS 39 2,867 2,867 Total consolidated profit ,867 60,838 57,971 Profit distributions 60,781 60,781 Issue of new shares Allocation to reserves/transfer from reserves Other 5 5 Equity as of / (adjusted) 141, ,296 60,627 10,029 60, ,456 Net profit from 1.1. to ,624 56,624 Changes in revaluation reserve pursuant to IAS 39 61,621 61,621 Total consolidated profit ,621 56, ,245 Profit distributions 60,341 60,341 Allocation to reserves/transfer from reserves 1,277 1,277 0 Equity as of , ,296 59,350 51,592 57, ,360 1) Pursuant to IAS 39 In financial year 2009, dividend payments totalling 57,901 thousand were distributed to shareholders of comdirect bank AG. This equates to a payment af 0.41 per share. As a former shareholder of ebase GmbH Commerz Asset Management Holding GmbH received a distribution of 2,440 thousand. In financial year 2009, comdirect bank did not make use of either the existing authorisations of the annual general meeting to purchase own shares for the purpose of securities trading pursuant to Section 71 (1) No. 7 German Stock Corporation Act (AktG) or of the resolutions of the annual general meeting authorising the purchase of own shares pursuant to Section 71 (1) No. 8 German Stock Corporation Act (AktG) for purposes other than securities trading. No options were exercised under our stock option programme in the financial year and therefore no new shares of comdirect bank AG were issued. A total of 720,815 no-par value bearer shares of comdirect bank AG with a calculated nominal value of 1 per share were issued under the stock option programme in previous years.

103 MY PLUS SUPERVISORY BOARD GROUP MANAGEMENT REPORT CONSOLIDATED FINANCIAL STATEMENTS 97 > Cash flow statement thousand 1.1. to Net profit 56,624 60,838 Non-cash items and transfer to cash flow from operating activities contained in net profit Depreciation, loan loss provisions, additions to assets, change in provisions and net changes due to hedge accounting and trading 38,571 27,234 Result from the sale of assets 26,893 12,088 Other adjustments 74, ,224 Sub-total 6,017 33,064 Changes in assets and liabilities from operating activities after adjustment for non-cash items Claims on banks 1,828,184 1,781,761 on customers 21,589 17,802 Positive/negative fair values from derivative hedging instruments and trading assets 9,463 13,459 Securities 347,239 1,071,254 Other assets from operating activities 3,116 1,313 Liabilities to banks 51,843 36,795 to customers 1,359,043 2,783,006 Other liabilities and equity from operating activities 34,065 10,704 Interest and dividends received 303, ,220 Interest paid 179, ,048 Income tax payments 17,866 11,627 Cash flow from operating activities 170,869 90,511 Cash inflows from the disposal of fixed assets and intangible assets Cash outflows for the acquisition of fixed assets and intangible assets 12,563 18,500 Cash flow from investment activities 12,446 18,500 Payment from company acquisition 24,900 0 Dividend payments 60,341 60,781 Cash flow from financing activities 85,241 60,781 Cash and cash equivalents as of the end of the previous year 209, ,416 Cash flow from operating activities 170,869 90,511 Cash flow from investment activities 12,446 18,500 Cash flow from financing activities 85,241 60,781 Cash and cash equivalents as of the end of the period 282, ,646 Cash and cash equivalents correspond to the balance sheet item cash reserve and include cash on hand and balances held at central banks.

104 98 > Notes Basis of accounting principles The consolidated financial statements of comdirect bank as of 31 December 2009 were prepared in accordance with Section 315a (1) of the German Commercial Code (HGB) and Regulation (EC) 1606/2002 (IAS Regulation) of the European Parliament and of the Council of 19 July 2002 as well as further regulations on the adoption of certain international accounting standards in accordance with the International Accounting Standards (IAS) and International Financial Reporting Standards (IFRS), which were approved and published by the International Accounting Standards Board (IASB). Furthermore, the additional standards to be applied under Section 315a (1) of the German Commercial Code (HGB) were observed. The sub-group of comdirect bank Aktiengesellschaft, Pascalkehre 15, D Quickborn, Germany is included in the consolidated financial statements of our ultimate parent company, Commerzbank AG, Frankfurt/Main. The consolidated financial statements of Commerzbank AG as of 31 December 2008 were published in the online Federal Gazette on 20 April 2009 (supplemented on 11 August 2009). In addition to the consolidated balance sheet, the consolidated income statement and the consolidated statement of comprehensive income, the consolidated financial statements include the statement of changes in equity, the cash flow statement and the notes. The group management report, including the risk report in accordance with Section 315 of the German Commercial Code (HGB), forms part of our present annual report. The consolidated financial statements were approved for publication by the Board of Managing Directors on 19 February Accounting and measurement methods (1) Basic principles The consolidated financial statements are based on the going concern principle. Income and expenses are recognised on a pro-rata basis; they are shown for the period to which they may be assigned in economic terms. An asset is recognised in the balance sheet if it is probable that there will be future economic benefits for the company and if the cost of acquisition or manufacture or another value can be reliably measured. A liability is reco gnised in the balance sheet if it is probable that fulfilment of the current obligation will result in a direct outflow of resources with economic benefits and the amount to be paid can be reliably measured. In principle, assets and liabilities are shown at (amortised) cost of acquisition or manufacture (assets) and the issue amount or amount to be paid (liabilities) respectively. Financial instruments are accounted for and measured using IAS 39 and the different classification and measurement principles specified by this regulation. Derivative hedging instruments are subject to the provisions of hedge accounting. Where estimates and assessments are necessary in accounting for assets and liabilities, these are based on past experience and other factors such as forecasts and, from today s viewpoint, the probable expectations and forecasts of future events. Uncertainties pertaining to estimates relate in particular to determining the provisions for possible loan losses, the fair value of financial instruments, pension obligations and provisions for restructuring. All the units included in the consolidation prepared their financial statements as of 31 December 2009.

105 MY PLUS SUPERVISORY BOARD GROUP MANAGEMENT REPORT CONSOLIDATED FINANCIAL STATEMENTS 99 (2) IAS/IFRS and SIC/IFRIC rules applied for the first time and to be applied in the future In the consolidated financial statements of comdirect bank, all the standards and interpretations to be compulsorily applied in the EU in financial year 2009 were taken into account. As a result of the first-time application of the revised IAS 1 Presentation of financial statements, the reporting includes a statement of comprehensive income, which in addition to the figures in the income statement also takes Other Cmprehensive Income components into account. Application of IFRS 8 Operating segments was also compulsory for the first time in For the impact on the consolidated financial statements of comdirect bank please see note (68). IAS/IFRS to be applied in future: Standard Title Date of application IAS 24 (revised) Related party disclosures 1 January 2011 IAS 27 (supplements) Consolidated and separate financial statements in accordance with IFRS 1 January 2010 IAS 32 (supplement) Classification of rights issues 1 January 2011 IAS 39 (supplement) Financial instruments: recognition and measurement eligible hedged items 1 January 2010 IFRS 2 (supplements) Group cash-settled share-based payment 1 January 2010 IFRS 3 (revised) Business combinations 1 January 2010 IFRS 9 Financial instruments 1 January 2013 Various Improvements to IFRS (April 2009) 1 January 2010 IFRIC 17 Distributions of non-cash assets to owners 1 January 2010 With publication of IFRS 9 Financial instruments, the IASB has completed the first stage of the three-phase project to abolish and replace IAS 39. Accordingly the current categorisation of financial instruments under IAS 39 is being replaced with a system comprising only two classification categories, fair value and amortised cost. At present, comdirect bank s financial investments are assigned to the available-for-sale category and measured at fair value on an income-neutral basis. IFRS 9 could result in future changes in the categorisation and measurement of financial investments at comdirect bank. (3) Consolidated companies Apart from the parent company, comdirect bank AG, Quickborn, the consolidated companies consist of ebase GmbH, Haar near Munich, comdirect private finance AG, Quickborn and five special funds, special purpose entities (SPE) in accordance with IAS 27 in conjunction with SIC-12. One subsidiary of minor importance for the overview of earnings situation, financial situation and assets of the group was not consolidated but accounted for as a holding under financial investments. comdirect bank AG holds 100% of the shares in the consolidated group units. (4) Principles of consolidation In the consolidation of the capital accounts, the historical cost of the holding in the subsidiary is set off against the proportion of the subsidiary s equity as part of group equity as of the date of acquisition. Intra-group expenses and income, as well as claims and liabilities, are eliminated as part of the debt and income consolidation. Holdings in subsidiaries that are not included in the consolidation due to their minor importance are shown at historical cost under the financial investment portfolio.

106 100 (5) Acquisition and first-time consolidation of ebase GmbH The agreement to acquire 100% of the voting rights in ebase GmbH signed on 8 April 2009, came into force on 4 May 2009 following the approval of the Federal Financial Supervisory Authority (BaFin) and payment of the purchase price amounting to 24.9m. With registered offices in Haar near Munich, ebase GmbH is a full-service platform offering professional custody account services for asset managers, financial intermediaries, investment companies and insurance companies. These services also include solutions for occupational pensions and the management of working hours accounts for companies. The vendor of ebase GmbH, Commerz Asset Management Holding GmbH, is a wholly-owned subsidiary of Commerzbank AG. This therefore constitutes a transaction between related parties under common control. This transaction is expressly excluded from the scope of IFRS 3. The first-time consolidation of ebase in the consolidated financial statements of comdirect bank is therefore carried out in accordance with predecessor accounting based on the provisions of US GAAP, especially SFAS 141(R). The book values of the assets and liabilities of the amalgamated entities are retained under this process. The date of first-time consolidation is 1 January The contribution of ebase GmbH to the profit for the period of the comdirect bank group is shown in the presentation of the B2B business segment. The difference arising on first-time consolidation of ebase GmbH, which is to be recognised under equity of comdirect bank group, amounts to 6.9m and is shown as a reduction in the capital reserve. As of the date of first-time consolidation, the book values of the assets and liabilities of ebase under IFRS are as follows: claims on banks 26m, claims on customers 26m, financial investments 23m, intangible assets 8m, other assets 7m, liabilities to banks 2m, liabilities to customers 40m, provisions 15m, other liabilities 9m. Predecessor accounting also requires that the comparative figures for earlier periods are adjusted as if ebase GmbH had already belonged to the comdirect bank group at the start of the earliest period shown. For this reason, the figures for the previous years and previous quarters in all elements of the financial statements have been adjusted to include the contributions of ebase GmbH. (6) Hedge Accounting The rules under IAS 39 on hedge accounting apply to derivatives demonstrably used to hedge risks arising from non-trading transactions. At comdirect bank AG, fair value hedges were used exclusively to hedge the fair value risk of individual securities using interest rate swaps (fair value hedge). The application of the hedge accounting rules is contingent on the comprehensive documentation of the hedging relationship and evidence of the effectiveness of the hedge. The fair values determined are reported in the balance sheet as positive fair values from derivative hedging instruments or negative fair values from derivative hedging instruments. The changes in fair value of the hedges and underlying transactions resulting from the hedged risk are recognised in the income statement under result from hedge accounting. In an effective hedge, the changes in value of an underlying transaction and the hedge recorded in the income statement will largely offset one another. (7) Cash reserve The reserve is reported at nominal value. (8) Claims All claims of the comdirect bank group on banks and customers are measured at amortised cost. On the balance sheet, the loan loss provisions are openly deducted and reported separately as provisions for possible loan losses.

107 MY PLUS SUPERVISORY BOARD GROUP MANAGEMENT REPORT CONSOLIDATED FINANCIAL STATEMENTS 101 (9) Currency translation Monetary assets and liabilities carried in the balance sheet which are held in foreign currency are translated at the spot rate on the balance sheet date (reporting date rate). Income and expenses are translated at exchange rates as of the time of transaction. (10) Provisions for possible loan losses The system used to determine provisions for possible loan losses at comdirect bank was refined in the financial year and now corresponds more closely to the method used in the Commerzbank Group. We provide for the particular credit default risks in lending by forming single and portfolio loan loss provisions. For reasons of materiality, we look here exclusively at retail lending, with loans comprising exposure of more than 1m seen as significant. Single loan loss provisions are formed to cover the existing credit-standing risks relating to these exposures. Loan loss provisions have to be formed for a loan if it is probable on the basis of observable criteria that not all the interest payments and capital repayments can be made as agreed. The level of the loan loss provision corresponds to the difference between the book value of the loan less the present value of the expected future cash flow. In addition, we cover credit risks by means of portfolio loan loss provisions. The level of the portfolio loan loss provisions is determined using parameters derived from Basel II. The total amount for the provision for possible loan losses, insofar as it relates to claims in the balance sheet, is shown in the balance sheet separately from the respective asset items. The provisions for possible loan losses for off-balance sheet business (loan commitments) are shown as provisions for lending risks. If defaults are expected on claims other than in the retail lending business, the provision for possible loan losses reduces the respective claims directly. Uncertainties pertaining to estimates arise with regard to the use of Basel II parameters. The parameters are derived from empirical values for corresponding receivables and can therefore be subject to fluctuations due to changes in framework conditions, such as developments in the macroeconomy or labour market data. This higher probabilities of default per exposure in particular can lead to an increase in provisions for possible loan losses for both utilised and unutilised loan commitments. Higher conversion factors regarding open lines of credit would only lead to an increase in the provisions for lending risks. Unrecoverable amounts are written down utilising any existing loan loss provisions. Income on written-down receivables is recognised in the income statement under provisions for possible loan losses. (11) Positive fair values from derivative hedging instruments Derivative financial instruments used for hedging purposes, which qualify for hedge accounting and show a positive fair value are reported under this item. The instruments are measured at fair value in accordance with the net present value method. The measurement results determined for fair value hedges under hedge accounting are recognised in the income statement under result from hedge accounting. (12) Trading assets Derivative financial instruments that are not used as hedging instruments as part of hedge accounting and show a positive fair value are reported as trading assets. The instruments are measured at fair value. The changes in fair value as well as interest income and expenses are recorded in the income statement under the trading result. (13) Financial investments Purchases and sales of financial assets are shown in the balance sheet in accordance with the trade date accounting method. Under financial investments, we report all the securities which we have assigned solely to the available-for-sale category as well as holdings in non-consolidated subsidiaries.

108 102 As of the balance sheet date, all bonds, other fixed-income securities, equities and other variable-yield securities (investment fund units) not held for trading purposes were assigned to the available-for-sale category. comdirect bank has not used any of the relaxation options rules issued under IAS 39 and IFRS 7 regarding the reclassification of financial instruments from fair value measurement to amortised cost. These financial instruments are accounted for and measured at fair value. In principle, prices and quotations traded in active markets are used for this. If there is no active market, instruments from the same issuer or comparable issuer in the same industry with comparable residual maturities are used. The spreads determined from this papers are used with the aid of the discounted cash flow method as the basis for the measurement taking appropriate yield curves into account. The measurement results are posted in the revaluation reserve with an income-neutral effect and taking deferred taxes into account. Realised gains and losses only affect the income statement when securities are sold or subject to impairment. Debt instruments are subject to an impairment test using quantitative or qualitative trigger events. Qualitative indications of impairment include arrears or default on interest and capital payments on the part of a counterparty. Quantitative trigger events include significant price falls as well as rating changes. Should these trigger events apply, impairments are carried out if payment defaults are to be expected. Equity instruments are also subject to an impairment test using quantitative or qualitative trigger events. An impairment is carried out for these instruments if there is a qualitative trigger event, such as considerable financial difficulties on the part of the issuer, or if a quantitative event applies. Quantitative trigger events exist if the fair value falls significantly or longer-term below the historical cost. With regard to debt instruments, reversals of impairment losses are posted in the revaluation reserve with an income-neutral effect in subsequent periods if the trigger event still applies. Where the trigger events no longer apply, reversals of impairment losses are recognised in the income statement; impairments recognised in the income statement in previous periods are charged off against the revaluation reserve with an impact on income. For equity instruments, reversals of impairments are consistently posted in the revaluation reserve with an incomeneutral effect. Where there is an effective hedging relationship between securities and a derivative financial instrument, the proportion of the change in the fair value attributable to the hedged risk is reported in the income statement under result from hedge accounting. All the interest income generated by securities of the available-for-sale category is shown in the income statement under interest income. (14) Intangible assets Under intangible assets we include internally generated software, purchased software and acquired customer relationships (customer base). Internally generated software is recognised if all provisions of IAS 38 are met. Recognition is made at production cost. Recognition of sundry intangible assets is made at historical cost. In principle, internally generated software and purchased individual software is amortised using the straight-line method and according to schedule against earnings over a period of five years; standard software over three years. Customer relationships are amortised using the straightline method and according to schedule over a period of 10 years. Both the useful life and the amortisation method are reviewed for significant changes each year at the end of the reporting period. In addition they are checked annually for signs of impairment within the meaning of IAS 36 which would necessitate impairments that are recognised in the income statement.

109 MY PLUS SUPERVISORY BOARD GROUP MANAGEMENT REPORT CONSOLIDATED FINANCIAL STATEMENTS 103 (15) Fixed assets The item fixed assets shows land and buildings as well as office furniture and equipment. All the fixed assets are capitalised at historical cost. Office furniture and equipment are depreciated using the straightline method and according to schedule to reflect their probable useful economic lives. In determining the useful life, their likely physical wear and tear, their technical obsolescence as well as legal and contractual restrictions are taken into account. All fixed assets, with the exception of land and buildings, are depreciated over a period of 3 to 20 years. Gains and losses arising from the sale of fixed assets are shown in the income statement under other operating result. Both the useful life and the amortisation method are reviewed for significant changes each year at the end of the reporting period. In addition, they are checked annually for signs of impairment within the meaning of IAS 36 which would necessitate impairments that are recognised in the income statement. (16) Leases In accounting for leases, a distinction is made between operating leases and finance leases. A lease is classified as a finance lease if it substantially transfers all of the risks and rewards pertaining to ownership to the lessee. The accounting for the leased items is then carried out by the lessee. In contrast, where the risks and rewards pertaining to ownership are not substantially transferred to the lessee, the lease constitutes an operating lease. In such cases, the accounting for the leased item is carried out by the lessor. Essentially, the bank appears as a lessee in operating leases (bank building and offices, office furniture and equipment). (17) Liabilities Financial liabilities, with the exception of those that result from derivatives, are shown at amortised historical cost. Where there is a material difference between the nominal value and fair value at the time of recognition, the amount is carried at fair value. The difference between this and the nominal value is recognised in net interest income in accordance with the effective interest rate method. (18) Negative fair values from derivative hedging instruments Derivative financial instruments used for hedging purposes and which qualify for hedge accounting and show a negative fair value are reported under this item. The instruments are measured at fair value in accordance with the net present value method. The measurement results determined for fair value hedges under hedge accounting are recognised in the income statement under result from hedge accounting. (19) Trading liabilities Derivative financial instruments that are not used as hedging instruments as part of hedge accounting and show a negative fair value are reported as trading liabilities. The instruments are measured at fair value. The changes in fair value are recorded in the income statement under the trading result. (20) Provisions A provision must be shown if on the balance sheet date, as the result of an event in the past, a current legal or factual obligation has arisen, an outflow of resources to meet this obligation is likely and it is possible to make a reliable estimate of the amount of this obligation. Accordingly we make provisions for liabilities of uncertain amount to third parties and anticipated losses arising from pending transactions in the amount of the claims expected.

110 104 The amount recognised as a provision represents the best possible estimate of the expense required to meet the current obligation as at the reporting date. The estimate takes account of risks and uncertainties, but this may mean that a provision is not utilised in the amount shown in subsequent periods. Provisions are recognised at their net present value if the effect of discounting is material. The provisions include items which result from restructuring of the business divisions and serve to cover settlement claims of employees or obligations arising from the termination of other contractual relationships. Here, uncertainties pertaining to estimates can refer to the assumptions made regarding the date of the end of contracts and the underlying average amounts of the contractual sums or claims. The different types of provisions are allocated via various items in the income statement. Provisions in the lending business are charged to the provision for possible loan losses and the provisions for restructuring to restructuring expenses. Other provisions are in principle charged to administrative expenses. (21) Provisions for pensions and similar obligations The company pension for the employees of the comdirect bank group is based on various pension schemes. On the one hand, employees acquire a vested right to benefits on the basis of an indirect benefit obligation for which a defined premium is paid to Versicherungsverein des Bankgewerbes a.g. (BVV), Berlin. The level of the pension benefit is determined by the premiums paid and the resultant accumulated investment income (defined contribution plan). The accounting regulations pursuant to IAS 19 for a defined contribution plan are applied to this indirect pension plan i.e. the regular premium payments to BVV are recorded as an expense in the financial year and no provision is therefore formed. On the other hand, the employees acquire vested rights to benefits on the basis of a direct benefit obligation, whereby the level of benefit is fixed and depends on factors such as age, remuneration and length of service (defined benefit plan). The accounting regulations pursuant to IAS 19 for a defined benefit plan are applied to this direct pension plan and provisions are formed accordingly. The obligations similar to those for a pension include deferred compensation. These refer to an offer to the employees whereby they give up a portion of their gross salary for pension benefits later on. Provisions are also formed for individual part-time working arrangements for older employees. For defined benefit plans, the pension obligations and similar commitments are calculated annually by an independent actuary in accordance with the projected unit credit method. In addition to biometric assumptions and the current calculatory interest rate, this calculation is based on the expected future rates of increase for salaries and pensions. The trustee required for a bilateral trust was established by Commerzbank AG in the form of the Commerzbank Pension-Trust e.v. In this regard, the companies in the comdirect bank group insure old-age pension obligations by means of a contractual trust agreement. The assets transferred to Commerzbank Pension-Trust e.v. (plan assets) are to be set off against the pension provisions, as the corresponding requirements of IAS 19 are met. The pension expenses relating to the defined benefit old-age pension obligations to be recognised in the income statement comprise the service cost and the interest cost. The net income expected from the trust assets reduces the pension expenses. Further information on the pension obligations granted is provided in note (54) and note (74).

111 MY PLUS SUPERVISORY BOARD GROUP MANAGEMENT REPORT CONSOLIDATED FINANCIAL STATEMENTS 105 If the parameters taken into account in the calculation of the pension obligations and plan assets deviate from the original expectations, this generates an actuarial gain or loss which has to be recorded in accordance with the corridor method. Pursuant to this method, only the actuarial gains or losses that exceed 10% of the pension obligations or plan assets are recognised in the pension expenses. The allocation of these previously unrecorded actuarial gains or losses outside this corridor takes place over three years. (22) Income taxes Current income tax assets and liabilities are calculated by applying the valid tax rates at which a refund from or a payment to the relevant tax authorities is expected. Temporary differences are the result of the discrepancy between assigned value in accordance with IAS/IFRS and the valid tax regulations, measured using the German income tax rate which can be expected to apply for the period in which they are realised. Deferred income tax assets are shown in the balance sheet only if taxable profits are likely to occur in the same tax unit in the future. Income tax assets and liabilities are formed and carried such that depending on the treatment of the underlying item they are recognised either under taxes on income in the income statement or they are set off against the relevant equity items with no effect on the income statement. Current and deferred income tax assets and liabilities are netted against one another where they exist towards the same tax authority and the right of set-off can actually be enforced vis à vis the tax authority. (23) Conditional and authorised capital The Board of Managing Directors of comdirect bank AG is authorised until 5 May 2014, with the consent of the Supervisory Board, to increase the share capital of the company by issuing new shares against cash or non-cash contributions on one or more occasions yet up to a maximum amount of 70.0m (authorised capital 2009). The shareholders are in principle to be granted a subscription right; the statutory subscription right can also be granted through the new shares being underwritten by a bank or a bank consortium with the obligation of offering them for subscription to the shareholders of comdirect bank AG. In addition, since the resolution adopted on 11 May 2000 and entered into the commercial register on 31 May 2000, conditional capital of originally 3.6m was created in order to service up to 3,600,000 subscription rights as part of the bank s stock option programme (conditional capital I). As of 31 December 2009, conditional capital I amounted to 2,879,185. Through the resolution adopted on 9 May 2008 and its entry into the commercial register on 3 July 2008, an additional conditional capital of 30.0m was created (conditional capital 2008). The conditional capital 2008 increase will only be effected to the extent that holders and/or creditors of convertible bonds or convertible profit-sharing certificates or of warrants from bonds with warrants or profit-sharing certificates with warrants may exercise their option or conversion rights or fulfil their conversion obligations. The Board of Managing Directors is authorised to issue, with the approval of the Supervisory Board, bearer bonds with convertible bonds or bonds with warrants or profit-sharing certificates as mentioned above on one or more occasions, up to a maximum amount of 300.0m with or without a fixed maturity. This authorisation is limited until 8 May (24) Earnings In principle, earnings are accounted for at fair value of the consideration. Interest income, with the exception of that from derivatives in the held-for-trading category, is recognised using the effective interest rate method. Commission income is recognised in principle if the underlying service was provided. For charges relating to specific periods (e.g. custody charges, account charges), the fees are deferred on the reporting date.

112 106 (25) Appropriation of profits The basis for the appropriation of profits is the national legislation, especially the German Commercial Code (HGB) and the Stock Corporation Act (AktG). For financial year 2009, comdirect bank AG reported a distributable profit according to the German Commercial Code (HGB) of 57,900, The Board of Managing Directors and the Supervisory Board of comdirect bank AG will propose to the annual general meeting a dividend payment in the amount of 57.9m, that is 0.41 per no-par value bearer share. (26) Earnings per share Undiluted earnings per share are calculated in accordance with IAS 33 and based on the net profit for the year. Both the undiluted earnings per share and the diluted earnings per share are shown below the income statement. The diluting effects shown in the previous period resulted from a stock option programme launched in July 2000 with a maximum of 3,600,000 subscription rights, of which a total of around 3.1 million subscription rights were issued in five tranches. With the expiry of the last subscription rights under comdirect bank s stock option programme in December 2009, the diluting effects that previously had to be taken into account ceased to apply. (27) Stock option programme The stock option programme as approved by the annual general meeting resolution of 11 May 2000 allowed up to 3,600,000 subscription rights to be issued. Eligible participants were members of the Board of Managing Directors of comdirect bank AG, members of the boards of affiliated companies, as well as executives and selected members of staff of comdirect bank AG and affiliated companies. The subscription rights could be granted at any time up to and including 1 July A total of 3,104,580 subscription rights in five tranches were issued. Of these subscription rights issued, a total of 2,383,765 have expired; 361,917 of these expired in financial year 2009 (2008: 411,856). As a result of the expiry of the last tranche of the stock option programme in December 2009, there were no subscription rights outstanding at the end of the financial year. No subscriptions rights were exercised in financial year Since the stock option programme was established, a total of 720,815 new bearer shares with a calculated share in the share capital of comdirect bank AG of 1 each have been issued. (28) Performance share plan A new long-term incentive programme (LTIP) was issued for the employees of comdirect bank AG in 2005 for the first time as a component with a long-term incentive effect and risk elements. As the beneficiaries of this LTIP, the members of the Board of Managing Directors and selected managers and executives will receive a conditional allocation of virtual, non-fungible shares (performance shares) in yearly tranches. The shares encompass the conditional right to a cash payment at the end of the three-year waiting period. The level of the cash payment depends on achieving performance targets which are set at the beginning of the planning period and the current share price at the end of the waiting period. The performance targets set at the beginning of the planning period are based on total shareholder return (TSR), an indicator which takes both share price performance and the dividends paid during the waiting period into account. The number of performance shares falling due for payment depends equally on the TSR outperformance targets against the Prime Financial Services Performance Index and the absolute rise in TSR of the comdirect bank share.

113 MY PLUS SUPERVISORY BOARD GROUP MANAGEMENT REPORT CONSOLIDATED FINANCIAL STATEMENTS 107 However, for both performance targets there are set hurdles that must be overcome before the performance shares become valuable and due for payment. With regard to TSR outperformance (subset A), the share price of comdirect bank AG during the three-year waiting period must be at least as good as the reference index. If the comdirect share price including dividends paid has increased in absolute terms over the same period (subset B) by at least 25% compared to the price on issue, this subset also becomes valuable. The total payout from the performance share plan is capped. Should the performance targets set at the beginning of the planning period not be met, the performance shares lapse at the end of the waiting period. Both subsets comply with the requirements of the Corporate Governance Code. The volume of the LTI component, the LTI target value of each eligible beneficiary, amounts to a percentage of the individual basic salary. The individual number of performance shares is derived by dividing the LTI target value and the fair value of a performance share at the time of issue. The fair value of a performance share is determined using an option measurement model before each tranche is set up. The Supervisory Board s Presiding Committee or the Board of Managing Directors decides on the allocation of performance shares. The value of the performance shares as of the reporting date is determined by an external expert. The model used is based on the arbitrage-free valuation according to Black/Scholes. A numerical solution option is necessary because of the complexity of the option programme and the procedure used is the three-dimensional binomial model. (29) Related party disclosures Relations with affiliated companies The parent company of comdirect bank AG is Commerzbank Inlandsbanken Holding GmbH. The ultimate parent company is Commerzbank AG. comdirect bank AG uses services provided by Commerzbank AG through a general agreement effective as of 1 January 1999, as well as through service level agreements on this basis. On 6 August 2007, a master agreement was concluded with Commerzbank AG which supersedes the existing general agreement. The individual contracts concluded under the general agreement remain in place until expiry of their respective term. New individual contracts will be concluded based on the master agreement. On the basis of the general agreement and the master agreement, the following services were agreed upon and used during financial year 2009: Trading and processing services Payments and cash dispenser service Printing services IT services Risk management Handling of financial instruments in own trading and credit services Compliance Internal audit Use of Intelligence Commerzbank (ICOM) securities trading system Project services, e.g. final withholding tax Other services In total, the expenses for the above services amounted to 21.1m in the financial year.

114 108 Outside of the general agreement, there are also further business relations with Commerzbank AG: Through its connection to Commerzbank, comdirect bank offers its customers new issues and a range of certificates for subscription. These sales are remunerated in line with the commission for the banking syndicate or issuing institution. In addition, comdirect bank receives pro rata commission for carrying out capital measures. In total, comdirect bank received commission of 0.2m in relation to the above in financial year In joint campaigns with Commerzbank, comdirect bank offered its customers the opportunity to buy and sell Commerzbank warrants and certificates OTC for a limited period of time, whereby comdirect bank waived the commission payable by the customer on all transactions with a defined maximum volume. In return, comdirect bank received a total of 2.1m from Commerzbank to compensate for the loss of order commission. comdirect bank AG is party to an agreement of Commerzbank AG with Brown Brothers Harriman, enabling customers of comdirect bank to trade on US stock exchanges. comdirect bank currently offers its customers approximately 10,000 funds from more than 150 investment companies, including investment companies of the Commerzbank Group. In financial year 2009, comdirect bank received sales and sales follow-up commission at prevailing market rates from the investment companies of the Commerzbank Group. For placement activities for the benefit of European Bank for Fundservices GmbH (ebase), Commerzbank AG received sales and ongoing sales follow-up commission amounting to 15.3m. As part of its processing and management services for custody accounts, ebase procures support services from Commerzbank AG. In financial year 2009, Commerzbank received payment of 1.1m for these services. On 22 March 2000, comdirect bank AG concluded an agreement with Commerzbank AG. Among other things, the agreement relates to support for PR activities, compliance with stock exchange and other obligations resulting from admission to the stock exchange and advice on the holding of the public annual general meeting of shareholders. On 15 March 2005, comdirect bank AG concluded an agreement with Commerzbank AG concerning the cash receiving office and depository service for the shares of comdirect bank. As part of its money and capital market transactions, comdirect bank invests money with Commerzbank AG and its affiliated companies. As of the reporting date, the nominal value of such transactions amounted to 4,466m. In financial year 2009, comdirect bank achieved total interest income from these transactions with Commerzbank of 101.7m and of 7.3m with its affiliated companies. A general agreement has been agreed between comdirect bank AG and Commerzbank AG for these money and capital market transactions. As of the reporting date, the portfolio included bonds and notes from affiliated companies amounting to 2,783m. Interest income on this item amounted to 76.9m for the full financial year. On 16 May 2000, a general agreement on securities lending was concluded with Commerzbank, whereby comdirect bank can lend securities to Commerzbank. During the reporting year, income of 2.4m was generated on the average portfolio of lent securities amounting to 1,408.0m. In conjunction with the general agreement, comdirect bank has concluded with Commerzbank an assignment agreement for a portfolio of loans to customers. The assignment of receivables to comdirect bank by Commerzbank is carried out to secure all existing, future and also conditional claims which accrue to comdirect bank against Commerzbank and/or its group companies under the loan agreement or other loans. Commerzbank received payment of 2.3m under this assignment agreement.

115 MY PLUS SUPERVISORY BOARD GROUP MANAGEMENT REPORT CONSOLIDATED FINANCIAL STATEMENTS 109 Commerz Direktservice GmbH, whose sole shareholder is Commerzbank, provides call centre services for the purposes of gaining and supporting customers and promoting sales, primarily for customers of and on behalf of Commerzbank. Commerz Direktservice GmbH does not have its own customer base. comdirect bank AG has service agreements with Commerz Direktservice GmbH in the field of operating customer business and provision of operating resources. In financial year 2009, comdirect bank received payment of 3.5m for these services. comdirect bank AG and its affiliated companies have insured old-age pension obligations by means of an allocation to trust assets with Commerzbank Pension-Trust e.v. As of 31 December 2009 the market value of trust assets administered in the trust totalled 4.0m (2008: 4.1m). In 2008, a framework lease agreement was concluded with Commerz Real Leasingservice GmbH & Co. KG (formerly Hansa Automobil GmbH & Co. KG) for vehicles, as well as a framework agreement for the supply of fuel. In 2009, 0.2m was paid for the services provided by Commerz Real. With an agreement dated 9 January 2003, comdirect bank AG acquired a holding in WST-Broker GmbH, Frankfurt/ Main. WST-Broker GmbH routes customer orders to execution on the trading floors on behalf of comdirect bank AG. comdirect bank acquired European Bank for Fundservices GmbH (ebase) from Commerz Asset Management Holding GmbH with retrospective effect as of 1 January All conditions precedent for the transaction were met as of 4 May A purchase price of 24.9m was paid for the acquisition of the ebase shares. The Board of Managing Directors reports separately on the scope and appropriateness of the intra-group services of comdirect bank AG with financial affiliated companies as part of its dependency report (Section 312 German Stock Corporation Act (AktG)). Other related party disclosures In the financial year, there were financial relations with related natural persons (members of the Board of Managing Directors and the Supervisory Board and members of their immediate family), including in the form of comdirect bank product use as part of the normal product and service offering. All products and services were carried out at normal third party terms and conditions and are of secondary importance for the company. The related parties did not accrue any unjustified advantage from their position with comdirect bank, nor did comdirect bank suffer any financial losses. In addition to the financial relations as part of the product and service offering of comdirect bank, related parties received compensation on the basis of their position as members of the boards (see note (74)). There were no other financial relations with related natural persons in the financial year.

116 110 Notes to the income statement (30) Net interest income before provisions thousand Change in % Interest income from fixed-income securities held in the available-for-sale portfolio 131, , Interest income from credit and money market transactions 132, , Balance of interest from derivative hedging instruments 0 1, Interest income 264, , Interest expenses for deposits 157, , Interest expenses from finance leases Other interest expenses 12 0 Interest expenses 157, , Operating income from investments, shares and other variable-yield securities 1,805 2, Total 108, , Interest income and interest expenses for financial instruments measured in accordance with IAS 39 At fair value through profit or loss sub-category: held for trading, are reported under trading result (see note (34) Trading result). (31) Provisions for possible loan losses The provisions of the comdirect bank group break down as follows: thousand Change in % Allocation to provisions 2,438 2, Write-back of provisions 3,846 2, Direct write-downs 835 1, Income received on written-down claims Total 1,299 1, (32) Net commission income thousand Change in % Securities transactions 139, , Payment transactions 5,547 5, Other commission 3,524 9, Total 148, ,

117 MY PLUS SUPERVISORY BOARD GROUP MANAGEMENT REPORT CONSOLIDATED FINANCIAL STATEMENTS 111 (33) Result from hedge accounting The results shown from underlying and hedging transactions only include measurement effects from effective fair value hedges. thousand Change in % Results from hedging instruments 0 1, Results from hedged unterlying transactions 0 1, Total comdirect bank reports these in line with the hedge accounting regulations under IAS 39. The individual bonds (underlying transactions) in the balance sheet line item financial investments are hedged against fluctuations in fair value due to changes in market rates using interest rate swaps. No hedges were in place in the financial year. (34) Trading result thousand Change in % Result from interest rate related transactions Trading result All financial instruments in the trading portfolio are measured at fair value. The trading result includes all interest income and interest expenses for financial instruments measured in accordance with IAS 39 in the category At fair value through profit or loss sub-category: held for trading. (35) Result from financial investments The disposal proceeds and gains and losses from impairments and recoveries in the available-for-sale securities portfolio and holdings in subsidiaries which have not been consolidated are shown in the result from financial investments. thousand Change in % Disposal gains 31,036 1,782 1,641.6 Disposal losses 4,260 13, Recoveries 7 0 Impairment 5,933 7, Total 20,850 19, (36) Administrative expenses The comdirect bank group s administrative expenses consist of personnel expenses, other administrative expenses and depreciation of office furniture and equipment as well as on intangible assets. Personnel expenses thousand Change in % Wages and salaries 52,814 49, Compulsory social security contributions 8,651 8, Expenses for pensions and other employee benefits 876 1, Total 62,341 58, The item wages and salaries includes share-based payments (IFRS 2) totalling 1,067 thousand (2008: 304 thousand).

118 112 Breakdown of expenses for pensions and other employee benefits thousand Change in % Company pension scheme 857 1, Contributions to Versicherungsverein des Bankgewerbes a.g. (BVV) Total 876 1, Other administrative expenses thousand Change in % Marketing expenses 41,441 80, Communication expenses 7,022 8, Consulting expenses 11,702 14, Expenses for external services 25,435 30, Sundry administrative expenses 38,601 38, Total 124, , Sundry administrative expenses includes rental and lease payments for business premises as well as contributions to the Deposit Protection Fund of 15,729 thousand. Depreciation of office furniture and equipment and intangible assets thousand Change in % Office furniture and equipment 4,633 3, Intangible assets 7,743 8, Total 12,376 12, (37) Other operating result thousand Change in % Other operating expenses 16,812 10, Expenses for services rendered 3,208 0 Goodwill payments and price differences in securities transactions 1,142 1, Non-income-related taxes including interest from previous years 4, ,177.3 Losses on the disposal of fixed assets Loan loss provisions and write-downs outside retail lending 3,111 4, Sundry expense items 4,607 3, Other operating income 20,243 15, Income from writing-back of provisions and accruals 5,206 5, Income from service level agreements 6,963 2, Income from recoverable input taxes 973 1, Sundry income items 7,101 4, Total 3,431 5,

119 MY PLUS SUPERVISORY BOARD GROUP MANAGEMENT REPORT CONSOLIDATED FINANCIAL STATEMENTS 113 (38) Taxes on income thousand Current taxes on income in the financial year 21,613 21,801 Current taxes on income from previous years 978 1,463 Deferred taxes 1,266 1,578 Total 19,369 21,916 Reconciliation of taxes on income thousand Profit from ordinary activities of comdirect bank AG and ebase GmbH 75,993 82,754 multiplied by the respective income tax rate for the company = Calculated income tax paid in financial year 19,780 21,600 Effect of tax-free income from financial investments Effect of losses from financial investments; not tax deductible 0 1,645 Effect of taxes from previous years recognised in the financial year 114 1,264 Other effects Total 19,369 21,916 The income tax rate selected as a basis for the reconciliation is composed of the corporation income tax rate of 15.0% applicable in Germany, plus a solidarity surcharge of 5.5% and a rate for trade earnings tax of 10.15% for comdirect bank AG (Quickborn location) and 12.25% for ebase GmbH (Haar location). As in the previous year, this produces an income tax rate of around 25.98% for comdirect bank AG and around 28.08% for ebase GmbH.

120 114 Notes to the balance sheet (39) Cash reserve The cash reserve includes the following items: thousand Change in % Cash on hand Balances held at central banks 282, , ,236 Total 282, , ,416 The minimum reserve requirement to be met at the end of December 2009 totalled 174,618 thousand ( : 209,307 thousand; : 144,197 thousand). (40) Claims on banks thousand Total Due on demand Other claims Change in % German banks 4,731,021 6,593, , ,331 4,052,541 6,177,517 Foreign banks 30,000 30, ,000 30,000 Total 4,761,021 6,623, , ,331 4,082,541 6,207,517 The claims on banks include foreign currency amounts of 60,765 thousand (2008: 55,283 thousand). Claims on banks primarily consist of overnight money and fixed-term deposits of 3,025,663 thousand (2008: 5,991,883 thousand). The retroactive adjustment following the acquisition of ebase GmbH did not result in any material changes in this balance sheet item as of compared to the presentation in the comdirect group s 2008 annual report. (41) Claims on customers thousand Total Due on demand Other claims Change in % Claims on German customers 201, , , ,566 1,067 1,083 Companies and financial institutions 23,581 25, ,581 25, Private customers 178, , , ,129 1,067 1,083 Claims on international customers 4,206 5, ,206 5, Companies and financial institutions Private customers 4,206 5, ,206 5, Total 206, , , ,473 1,067 1,083 Claims on customers include 147,214 thousand (2008: 165,539 thousand) from loans to purchase securities. These claims are secured by securities. The claims to customers include amounts in foreign currency totalling 0.4 thousand (2008: 0.4 thousand).

121 MY PLUS SUPERVISORY BOARD GROUP MANAGEMENT REPORT CONSOLIDATED FINANCIAL STATEMENTS 115 A loan loss provision of 1,787 thousand in respect of a claim outside retail lending was charged to the other operating result. The retroactive adjustment following the acquisition of ebase GmbH did not result in any material changes in this balance sheet item as of compared to the presentation in the comdirect group s 2008 annual report. (42) Provisions for possible loan losses As in the previous year, the total amount of loan loss provisions relates exclusively to claims on customers. thousand Total Single loan loss provision Portfolio loan loss provision Change in % Balance as of 1 January 5,170 4, ,719 4,159 Reclassifications 1, ,319 0 Allowances 1,428 2, ,428 2,139 Deductions 2,668 2, ,668 1,579 of which utilised of which reversals 2, ,481 0 Provisions for possible loan losses as of 31 December 2,160 5, ,160 4,719 The provisions for possible loan losses include loan loss provisions for transactions reported on the balance sheet. Most of the provisions for loan losses refer to banking products. (43) Positive fair values from derivative hedging instruments The table shows derivative financial instruments used for hedging purposes and hedge accounting which show a positive fair value: thousand Change in % Positive fair values from allocated effective fair value hedges 0 0 1,847 As of the reporting date, there are no current hedges. (44) Trading assets Trading assets comprise the positive fair values from derivative financial instruments not used for hedging purposes under hedge accounting. As of the reporting date, no interest rate swaps were in place. (2008: nominal value 300m). thousand Change in % Interest rate related transactions 0 8, ,036

122 116 (45) Financial investments The item financial investments consists of the bonds and other fixed-income securities, equities and other variable-yield securities not held for trading purposes, as well as holdings in subsidiaries not included in the consolidation. The financial instruments shown in the financial investments portfolio are allocated to the category available-forsale and, with the exception of holdings in subsidiaries not included in the consolidation, are valued at fair-value. thousand Change in % Bonds, notes and other fixed-income securities of the available-for-sale portfolio 4,449,026 3,997, ,913,210 Money market instruments 0 72, ,877 issued by other borrowers 0 72, ,877 Bonds and notes 4,449,026 3,925, ,892,333 issued by public sector borrowers 52, , ,739 issued by other borrowers 4,396,760 3,805, ,724,594 Equities and other variable-yield securities of the available-for-sale portfolio 29,920 33, ,447 Holdings in subsidiaries Total 4,478,973 4,031, ,970,684 As part of its securities lending transactions, comdirect bank AG has transferred bonds and notes with a nominal value of 1,700,000 thousand. The book values of the transferred bonds and notes as of the reporting date amounted to 1,709,268 thousand ( : 1,186,705 thousand; : 643,376 thousand). In securities lending transactions, the risks and rewards of the securities loaned remain with the lender of securities. The lender bears the credit and market price risks and is entitled to the current income and other rights accruing from this paper. (46) Intangible assets thousand Change in % Internally generated software 20,072 17, ,361 Software purchased 3,127 3, ,137 Acquired customer relationships 7,042 8, ,388 Total 30,241 28, ,886 Changes in intangible assets are shown in the schedule of assets (Note (48)). (47) Fixed assets thousand Change in % Land and buildings 3,309 3, ,309 Office furniture and equipment 14,244 15, ,644 Total 17,553 19, ,953 Changes in fixed assets are shown in the schedule of assets (Note (48)).

123 MY PLUS SUPERVISORY BOARD GROUP MANAGEMENT REPORT CONSOLIDATED FINANCIAL STATEMENTS 117 (48) Schedule of assets thousand Intangible assets Internally generated software Software purchased Acquired customer relationships Book value as of 1 January 17,032 12,361 3,624 4,137 8,215 9,388 Cost of acquisition/manufacture as of 1 January 79,899 70,342 33,634 32,025 11,591 11,591 Additions 7,932 9,563 1,181 1, Disposals 16, Cost of acquisition/manufacture as of 31 December 70,846 79,899 34,815 33,634 11,592 11,591 Cumulative write-downs as of 1 January 62,867 57,981 30,010 27,888 3,376 2,203 Additions 4,893 4,886 1,677 2,122 1,174 1,173 Disposals 16, Cumulative write-downs as of 31 December 50,775 62,867 31,687 30,010 4,550 3,376 Book value as of 31 December 20,071 17,032 3,128 3,624 7,042 8,215 thousand Fixed assets Land Office furniture and equipment Book value as of 1 January 3,309 3,309 15,712 12,644 Cost of acquisition/manufacture as of 1 January 3,309 3,309 56,273 58,572 Additions 0 0 3,449 7,352 Disposals ,651 Cost of acquisition/manufacture as of 31 December 3,309 3,309 59,181 56,273 Cumulative write-downs as of 1 January ,561 45,928 Additions 0 0 4,632 3,962 Disposals ,329 Cumulative write-downs as of 31 December ,937 40,561 Book value as of 31 December 3,309 3,309 14,244 15,712 thousand Investments Holdings in subsidiaries Book value as of 1 January Cost of acquisition/manufacture as of 1 January 10,500 10, Additions Disposals Cost of acquisition/manufacture as of 31 December 10,500 10, Cumulative write-downs as of 1 January 10,500 10, Additions Disposals Cumulative write-downs as of 31 December 10,500 10, Book value as of 31 December

124 118 (49) Income tax assets thousand Current income tax assets 3,774 2,951 3,304 Deferred income tax assets 0 0 5,178 Total 3,774 2,951 8,482 The deferred income tax assets and liabilities are netted out as they relate to the same tax authorities. In financial year 2009, the netting of deferred income tax assets and liabilities produced a passive income tax liability. A breakdown is given in note (55) income tax liabilities. Of the current income tax assets of 3,774 thousand ( : 2,951 thousand; : 3,304 thousand), 1,394 thousand will probably be realised after the end of 2010 ( : 2,181 thousand after the end of 2009; : 1,438 thousand after the end of 2008). (50) Other assets thousand Change in % Deferred items Claims on advisers/offices of comdirect private finance AG 1,520 1, ,033 Claims on product providers 1,411 3, ,394 Claims on group companies ,134 Receivables from custody accounts 770 1, ,348 Trade receivables , Salary advances Other 1,527 1, ,317 Total 6,803 10, ,782 With the exception of claims on advisers and offices of comdirect private finance AG, we assume an average remaining lifetime for other assets of less than one year. This also applied in the previous year. The movement in loan loss provisions carried out for claims on advisers and offices of comdirect private finance AG was as follows: thousand As of 1 January 5,485 1,107 Additions 1,255 4,626 Reversals Loan loss provisions as of 31 December 6,160 5,485

125 MY PLUS SUPERVISORY BOARD GROUP MANAGEMENT REPORT CONSOLIDATED FINANCIAL STATEMENTS 119 (51) Liabilities to banks thousand Total Change in % German banks , ,971 Total , ,971 Liabilities to banks exclusively comprise liabilities due on demand (see note (59) Maturities, by remaining lifetime ). (52) Liabilities to customers thousand Total Due on demand With agreed maturity or withdrawal notice Change in % Germany 8,922,242 10,304, ,014,271 8,119, ,971 2,185,754 Private customers 8,901,045 10,271, ,995,112 8,087, ,933 2,184,802 Corporate customers and self-employed private individuals 21,197 32, ,159 32,045 2, International 202, , , ,078 27,148 66,845 Private customers 201, , , ,822 27,148 66,845 Corporate customers and self-employed private individuals 1,010 1, ,010 1, Total 9,124,792 10,505, ,189,673 8,253, ,119 2,252,599 Liabilities to customers include foreign currency amounts of 60,752 thousand (2008: 55,216 thousand). Through the Deposit Protection Fund of the Bundesverband deutscher Banken e.v., each customer is insured for deposits of up to 108.3m. In addition, comdirect bank AG is a member of Entschädigungseinrichtung deutscher Banken GmbH. The retroactive adjustment following the acquisition of ebase GmbH did not result in any material changes in this balance sheet item as of compared to the presentation in the comdirect group s 2008 annual report. (53) Negative fair values from derivative hedging instruments Derivative financial instruments used for hedging purposes and covered by hedge accounting and showing a negative fair value are disclosed in this item: thousand Change in % Negative fair values from allocated effective fair value hedges As of the reporting date, no current hedges were in place.

126 120 (54) Provisions thousand Change in % Provisions for pensions and similar commitments 12,945 12, ,025 Other provisions 36,622 21, ,671 Total 49,567 33, ,696 Provisions for pensions and similar commitments comprise pension obligation, deferred compensation and partial retirement contracts (for details see note (21) Provisions for pensions and similar obligations ). Breakdown of pension obligations shown in the balance sheet: thousand Net present value of pension obligations 17,384 13,890 15,043 Market value of plan assets 3,739 3,851 5,261 Unrecognised actuarial gains and losses 687 2,020 1,311 Unrecognised additional service costs Total 12,958 12,059 11,044 Allocation to balance sheet items: thousand Provisions for pensions and similar obligations 12,992 12,089 11,070 Other assets Other assets refer to a surplus in the plan assets compared to the pension obligations of comdirect private finance AG. Breakdown of allocations to provisions for pensions as recognised in the income statement: thousand Current service expenses Interest expenses Expected returns from plan assets Actuarial gains and losses Additional service expenses 0 49 Total allocations 729 1,108 All the types of expenses indicated above are reported under administrative expenses.

127 MY PLUS SUPERVISORY BOARD GROUP MANAGEMENT REPORT CONSOLIDATED FINANCIAL STATEMENTS 121 The expenses for old-age pensions ( 876 thousand, see note (36) Administrative expenses, 2008: 1,354 thousand) differ in particular as a result of the costs for partial retirement contracts of 83 thousand (2008: 227 thousand), for pension insolvency insurances of 45 thousand (2008: 3 thousand) as well as costs for the Versicherungsverein des Bankengewerbes a.g. (BVV) amounting to 19 thousand (2008: 17 thousand). The actual gains on plan assets amounted to 179 thousand (2008: losses of 98 thousand). A return of 6.0% (2008: 5.5% p.a.) was used to calculate the expected return. Changes in the net present value of pension obligations and the fair value of plan assets during the financial year: As a result of employees moving between companies in the comdirect bank group and Commerzbank AG, payments amounting to the net present value of the vested pension claims were transferred to the new employer. thousand Net present value of pension obligations as of 1 January 13,890 15,043 Allocations Current service expenses Contributions from employees from salary sacrifice Interest expenses Migrations Utilised Pension benefits paid Settlement 0 1,224 Actuarial gains and losses 2,304 1,233 Net present value of pension obligations as of 31 December 17,384 13,890 thousand Market value of plan assets as of 1 January 3,851 5,261 Allocation to plan assets Refunds for settlements 113 1,190 Refunds for pension benefits Expected returns from plan assets Actuarial gains and losses Market value of plan assets as of 31 December 3,739 3,851 Almost all the plan assets are invested in investment units.

128 122 Overview of pension obligations and plan assets: thousand Net present value of pension obligations 17,384 13,890 15,043 16,658 Plan assets 3,739 3,851 5,261 1,340 Deficit 13,645 10,039 9,782 15,318 Experience-based adjustments to pension obligations 2,304 1,233 2, Experience-based adjustments to fair value of plan assets The following parameters are included in the actuarial calculations: in % Calculatory interest rate Changes in salaries Changes in pensions Expected interest earned on plan assets Changes in other provisions: thousand as of Utilised Written-back Allocation Reclassification as of Provisions for non-income related taxes 5, , ,506 Provisions for staff 8,333 6,014 1,288 8, ,368 Provisions for contingent losses 2, ,268 Provisions for interest from additional tax claims 2, ,900 Provisions for restructuring , ,945 Other provisions 2, ,795 2,425 1,776 3,635 Total 21,431 6,620 4,083 24,097 1,797 36,622 The provisions for staff mainly relate to provisions for bonuses, which are scheduled to be used in financial year This item also includes provisions for anniversary expenses of 854 thousand (2008: 767 thousand) as well as 794 thousand (2008: 439 thousand) for performance shares. Other provisions include provisions for credit risks amounting to 1,405 thousand. In the previous year, the provisions for possible loan losses were deducted in full from claims on customers. Changes in provisions for contingent losses break down as follows: thousand as of Utilised Written-back Allocation as of Implementation of the com one programme for the future 1, ,250 Sale of comdirect ltd 1, ,000 Other Provisions for contingent losses 2, ,268

129 MY PLUS SUPERVISORY BOARD GROUP MANAGEMENT REPORT CONSOLIDATED FINANCIAL STATEMENTS 123 Within other provisions, we expect an average remaining lifetime of more than one year for the provisions for non-income related taxes, provisions for interest from additional tax claims, provisions for performance shares and the provisions for contingent losses relating to the implementation of the com one programme for the future. The average remaining lifetime for these items was also more than one year in Provisions for restructuring include the following measures: thousand as of Utilised Written-back Allocation as of Dismantling of the office network for comdirect private finance AG ,496 4,496 Measures to improve efficiency and realign the sales of ebase GmbH ,449 4,449 Provisions for restructuring ,945 8,945 We anticipate a remaining lifetime of more than one year for provisions for restructuring. (55) Income tax liabilities Income tax liabilities break down as follows: thousand Current income tax liabilities 14,772 4,185 6,820 Deferred income tax liabilities 18,898 5,888 0 Total 33,670 10,073 6,820 Current income tax liabilities include liabilities for the current and previous financial years. Deferreds income tax assets and liabilities are netted out, since they are due to the same tax authority. In financial year 2009 the netting of deferred income tax assets and liabilities produces a passive income tax liability. thousand Income tax Income tax balance Income tax Income tax balance Income tax Income tax balance assets liabilities assets liabilities assets liabilities Claims on banks Positive fair values from derivative hedging instruments Negative fair values from derivative hedging instruments Trading assets ,617 2, ,418 3, Provisions for possible loan losses , , Financial investments Recognised as income 5, ,551 5,994 1,789 4,205 5, ,226 Not recognised as income 0 22,621 22,621 4,111 12,633 8,522 3,920 2, Intangible assets 0 5,413 5,413 2,046 6,673 4,627 2,338 5,978 3,640 Provisions 2, ,852 2, ,628 2, ,200 Other Total 9,156 28,054 18,898 17,493 23,381 5,888 18,335 13,157 5,178

130 124 Of the income tax liabilities amounting to 33,670 thousand ( : 10,073 thousand; : 6,820 thousand) 25,884 thousand are expected to be due after the end of 2010 ( : 4,416 thousand after the end of 2009; : 4,469 thousand after the end of 2008). As in the previous year, as of the deferred income tax assets and liabilities were measured at the valid German tax rates resulting from the corporate tax reform 2008 resolved on 6 July The applicable income tax rate used to measure the liabilities comprises the corporation tax rate in Germany valid as of 1 January 2008 of 15.0% plus the solidarity surcharge of 5.5% and the trade tax rate of 10.15% for comdirect bank AG (Quickborn location) and 12.25% for ebase GmbH (Haar location). This produces a German income tax rate of around 25.98% for comdirect bank AG and around 28.08% for ebase GmbH. (56) Other liabilities thousand Change in % Deferred items Liabilities from other taxes 13,604 19, ,619 Trade liabilities 20,609 21, ,563 Liabilities to affiliated companies 7,778 37, ,115 Other 928 1, ,161 Total 42,919 80, ,547 Other liabilities do not include any material items with a remaining lifetime of more than 12 months. This was also the case in the previous year. Liabilities to affiliated companies ( and ) include 24,900 thousand for the acquisition of European Bank for Fund Services GmbH (ebase). (57) Equity thousand Change in % Subscribed capital 141, , ,221 Capital reserve 223, , ,296 Retained earnings 59,350 60, ,135 Revaluation reserve 51,592 10, ,162 Consolidated profit 57,901 60, ,781 Equity 533, , ,271

131 MY PLUS SUPERVISORY BOARD GROUP MANAGEMENT REPORT CONSOLIDATED FINANCIAL STATEMENTS 125 Subscribed capital Subscribed capital comprises no-par value shares: Number Number of shares held as of ,220,815 Issue of new shares 0 Number of shares held as of ,220,815 There are no privilees or restrictions related to dividend distribution at comdirect bank AG. All shares issued are fully paid up. Capital reserve The capital reserve shows free reserves as well as the amount exceeding the subscribed capital from the exercise of stock options. Retained earnings Retained earnings show the net profit which has not been distributed. Revaluation reserve Gains or losses on remeasurement of the financial investment portfolio, which is broken down into interestbearing and dividend-based instruments, are shown at fair value in the revaluation reserve, taking into account deferred taxes. Gains and losses only affect the income statement when the asset is sold or impairments or writeups are carried out. The change in the revaluation reserve amounting to 61,621 thousand after tax (2008: 2,867 thousand) comprises the increase in the revaluation reserve before tax of 83,280 thousand (2008: 2,504 thousand), current tax expenses of 7,560 thousand (2008 tax income: 9,126 thousand) and deferred tax expenses of 14,099 thousand (2008: 9,489 thousand).

132 126 Additional information (58) Equity management Through equity management, comdirect bank aims to ensure it has adequate capital resources at all times to ensure the bank has the ability to act, to achieve an appropriate return on equity and meet regulatory requirements. Risk-taking capability calculation The risk-taking capability, i.e. economic capital requirement versus the risk cover assets, is used to limit the overall risk of the bank in conjunction with the capital resources. The overall risk position represents the economic capital requirement for operational risks, busines risks, market risks and credit default risks. The risk cover assets comprise the (planned) pre-tax profit, capital reserve and retained earnings as well as the revaluation reserve. The risktaking capability is ensured as long as the risk cover assets exceed the overall risk position. The economic capital is measured using the value-at-risk approach (VaR) based on a confidence level of 99.95% and a holding period of one year. At the year-end, the overall risk position of comdirect bank amounted to 124.7m (2008: 93.0m). The risk cover assets comprised the following: million Pre-tax profit Revaluation reserve (before tax) General reserves Risk cover assets At the end of the financial year, the utilisation of the risk cover assets amounted to 29.1% (2008: 26.5%). The risk report contains further explanations on the overall risk position. Equity resources in accordance with Section 10, German Banking Act (KWG) comdirect bank AG is an institution registered in Germany and is a subordinate company within an institution group pursuant to Section 10a (1) of the German Banking Act (KWG). In this capacity, comdirect bank AG has exercised the waiver under Section 2a of the German Banking Act (KWG). comdirect bank AG is included in the regulatory report of the Commerzbank Group. The regulatory capital of comdirect bank AG is determined on the basis of the regulations of the German Banking Act (KWG) and is used for internal management, without notification to the regulatory authorities. The main factor is the liable equity in the company financial statements of comdirect bank AG in accordance with the provisions of the German Commercial Code. The liable equity comprises the core capital and supplementary capital. Banking regulatory capital requirements were complied with at all times during the reporting year. At comdirect bank AG, the own funds ratio as of the end of the financial year stood at 45.5% (in accordance with Section 2 (6) of the Solvency Regulation (SolvV) and before application of the transition provisions of Section 339 SolvV; 2008: 49.1%).

133 MY PLUS SUPERVISORY BOARD GROUP MANAGEMENT REPORT CONSOLIDATED FINANCIAL STATEMENTS 127 thousand Subscribed capital 141, ,221 General reserves 220, ,186 Deducted items 1,389 1,752 Core capital 360, ,655 Liable equity 360, ,655 (59) Maturities, by remaining lifetime Remaining lifetimes as of 31 December 2009 thousand Total Due on demand and Up to three Three months One to five years More than five years unlimited in time months to one year Claims on banks 4,761, ,480 2,498, ,250 1,303,500 0 Claims on customers 206, ,132 1, Bonds, notes and other fixed-income securities in the available-for-sale portfolio 4,449, , ,358 3,778,266 95,700 Total 9,416, ,612 2,706, ,608 5,081,766 95,700 Liabilities to banks Liabilities to customers 9,124,792 8,189, ,400 57, ,506 2,179 Total 9,125,715 8,190, ,400 57, ,506 2,179 Remaining lifetimes as of 31 December 2008 thousand Total Due on demand and Up to three Three months One to five years More than five years unlimited in time months to one year Claims on banks 6,623, ,331 5,447, , ,250 0 Claims on customers 227, ,473 1, Bonds, notes and other fixed-income securities in the available-for-sale portfolio 3,997, , ,261 3,352,879 93,084 Total 10,849, ,804 5,603, ,011 3,841,129 93,084 Liabilities to banks 52,766 52, Liabilities to customers 10,505,811 8,253,212 1,351, , ,882 0 Total 10,558,577 8,305,978 1,351, , ,882 0 Remaining lifetimes as of 1 January 2008 thousand Total Due on demand and Up to three Three months One to five years More than five years unlimited in time months to one year Claims on banks 4,851, ,193 3,462, , ,500 0 Claims on customers 217, ,108 1, Bonds, notes and other fixed-income securities in the available-for-sale portfolio 2,913, , ,508 2,183, ,684 Total 7,981, ,301 3,630, ,508 2,436, ,684 Liabilities to banks 15,971 15, Liabilities to customers 7,707,914 5,875,363 1,455, , ,582 0 Total 7,723,885 5,891,334 1,455, , ,582 0 Time remaining to maturity is considered as the period between the balance sheet date and the contractual maturity of the claim or obligation.

134 128 (60) Claims on/liabilities to affiliated companies thousand Change in % Assets Claims on banks 4,655,053 6,412, Trading assets 0 6, Financial investments 2,783,327 1,808, Other assets Total 7,438,507 8,228, Liabilities Liabilities to banks 95 42, Other liabilities 7,676 10, Total 7,771 52, (61) Risk reporting on financial instruments Risk management The risk strategy is determined by the Board of Managing Directors of comdirect bank, which also bears the responsibility for group-wide risk management- and risk controlling system. At comdirect bank, the CFO is responsible for monitoring and implementing the risk strategy. The implementation and monitoring of the risk strategy is carried out through risk managment on the one hand and risk controlling on the other. The task of risk management is to proactively and consciously manage all risks in the relevant divisions. For effective value-oriented overall bank management, risk management is carried out on a decentralised basis in the individual divisions. The task of risk controlling is to identify, evaluate, limit and continually monitor risks and to report to the Board of Managing Directors regularly on the respective risk situation. Credit default risk The credit default risk describes the risk of a financial loss as a result of a borrower being unable to pay or to pay on time the contractually agreed consideration. One of the methods used to monitor credit default risk is the monthly calculation of the CVaR for lending to customers and companies as well as for trading transactions. Credit default risks are therefore part of overall bank management.

135 MY PLUS SUPERVISORY BOARD GROUP MANAGEMENT REPORT CONSOLIDATED FINANCIAL STATEMENTS 129 Maximum credit default risk thousand Max. default risk Assets Max. default risk Cash reserve 282, ,646 Claims on banks 4,761,021 6,623,848 Claims on customers 204, ,386 Positive fair values from derivative hedging instruments 0 0 Trading assets 0 8,723 Financial investments Bonds 4,449,026 3,997,785 Total 9,696,913 11,062,388 The maximum default risk for group companies of Commerzbank amounts to 7,439 thousand (2008: 8,228 thousand). The figures indicated are theoretical default risks in the unlikely event of a simultaneous default in full of all borrowers. Credit quality of financial assets that are neither overdue nor impaired thousand Banks Cash reserve 282, ,646 Claims on banks 4,761,021 6,623,848 Positive fair values from derivative hedging instruments 0 0 Trading assets 0 8,723 Financial investments Bonds 4,431,783 3,976,706 Total 9,475,631 10,818,923 Retail customers Claims on customers 196, ,610 Public sector issuers Financial investments Bonds 17,243 21,079 Corporates Claims on customers 0 0 Total 9,689,595 11,059,612 Overdue, but as yet unimpaired financial assets thousand Claims on customers Age structure 30 to 90 days 769 1, to 179 days days and over Total 1,331 2,255 For financial year 2009, the volume of all overdue claims is reported, i.e. including impaired claims.

136 130 Individually impaired financial assets thousand Claims on customers Volume of claims individually impaired 5, Impairment 1, Book value 4, Due to the revision of the method for calculating provisions for possible loan losses, individually impaired claims appear changed. For 2009 priority is to be given to claims determined as PortLLP impaired. For 2008 priority was given to the individually impaired claims. Only claims with portfolio loan loss provisions were not classed as defaulted in the previous year. In retail business (claims on customers), comdirect bank distinguishes between loans to purchase securities due on demand and overdraft facilities on current accounts. Loans to purchase securities are collateralised by pledged securities. The risk report contains further details on the extent and cause on the credit default risk, on risk management, quantification and reporting as well as information on the current risk situation. Liquidity risk Liquidity risk in the narrower sense is understood as the risk that the bank will be unable to meet or to meet on time its current and future payment obligations. The wider definition of liquidity risk also encompasses refinancing risk, that is the risk that the liquidity will no be sufficient if required or that it can only be acquired in the money and capital markets at terms that are significantly less favourable than expected as well as market liquidity risk. The latter describes the risk of being unable to close out positions to the desired extent or only at a loss as a result of inadequate market depth or market disturbances. Payment claims under financial assets in accordance with contractually agreed maturities thousand Remaining lifetimes as of 31 December 2009 Book value Due on Up to One to five More than demand one year years five years Non-derivative financial instruments Cash reserve 282, , Claims on banks 4,761, ,480 4,115, Claims on customers 206, , Financial investments 4,478, ,544,833 3,087,645 96,143 Total 9,729,020 1,215,346 5,660,385 3,087,645 96,143 Payment obligations under financial liabilities in accordance with contractually agreed maturities thousand Remaining lifetimes as of 31 December 2009 Book value Due on Up to One to five More than demand one year years five years Non-derivative financial liabilities Liabilities to customers 9,124,792 8,189, , ,387 2,753 Liabilities to banks Derivative financial liabilities Negative fair values from derivative hedging instruments Credit obligations 0 2,951, Total 9,125,715 11,141, , ,387 2,753

137 MY PLUS SUPERVISORY BOARD GROUP MANAGEMENT REPORT CONSOLIDATED FINANCIAL STATEMENTS 131 thousand Remaining lifetimes as of 31 December 2008 Book value Due on Up to One to five More than demand one year years five years Non-derivative financial liabilities Liabilities to customers 10,505,811 8,251,115 2,136, ,273 0 Liabilities to banks 52,766 52, Derivative financial liabilities Negative fair values from derivative hedging instruments Credit obligations 0 2,970, Total 10,558,577 11,274,044 2,136, ,273 0 The risk report contains further details on the extent and causes of the liquidity risk, on risk management, -quantification and -reporting and information on the current risk situation. Market risk Market price risks encompass the risk of loss from changes in market parameters (interest rates, credit spreads, exchange rates and share prices). The statistical/mathematical approach of historic simulation to calculate the value-at-risk values is used to quantify and monitor general market price risks (interest rate, currency and share price risks) on a daily basis. The value-atrisk describes the maximum loss under normal market conditions for a specific probability (confidence level) and specific holding period. The underlying statistical parameters are based on an historic monitoring period of the past 255 trading days, a holding period of one day and a confidence level of 97.5%. The key feature of the historic simulation is that it does not use a parametric model for the risk factors. Historic market data and its empirical distribution function is used directly. A portfolio value is obtained for every day of the historic monitoring period. For a monitoring period of 255 days, a confidence level of 97.5% and a holding period of one day, the value-at-risk is the seventh highest daily loss in the historic monitoring period. The variance/covariance approach, also with a confidence level of 97.5% and a holding period of one day, is used to quantify and monitor the specific market price risks (credit spreads). The model parameters are credit spread sensitivities, volatilities and correlations. These are determined by historic market data. The two value-at-risk figures from the general and specific market price risk are combined to form an overall value-at-risk by assuming a correlation of zero between credit spreads and risk factors in the general market price risk. Stress tests are carried out at comdirect bank AG to monitor extreme market movements. The stress figure shows the maximum portfolio loss under worst case conditions. The respective maximum losses in the scenarios for the share price, interest rate and foreign currency risk factors are added together. This aggregate figure is combined with the maximum loss in the credit spread scenarios on the assumption that these are uncorrelated to form the overall stress value. Market risks thousand As of start of year As of end of year Year high Year low Median 2009 Median 2008 Total VaR 97.5% Holding period 1 day 5,999 5,096 6,701 5,096 5,986 1,523 Stress test overall result 23,639 19,398 25,973 19,398 23,292 13,479 The risk report contains further details on the extent and causes of the market risk, on quantification and management and information on the current risk situation.

138 132 (62) Fair Value of financial instruments The table below shows the fair values of balance sheet items compared to their book values. The fair value is the amount for which an asset can be exchanged or a liability settled between knowledgeable, willing partners in an arm s length transaction. Where stock market prices were available, these were used for the measurement of financial instruments. In the event that no market price was available, measurements were carried out using internal measurement models with current market price parameters. In this connection, the net present value method was used in particular. thousand Fair value Book value Loans and receivables Cash reserve 282, , , ,646 Claims on banks 4,777,932 6,630,838 4,761,021 6,623,848 Claims on customers after provisions 204, , , ,386 Total 5,264,798 7,062,870 5,247,887 7,055,880 Available for sale financial assets Financial investments 4,478,973 4,031,547 4,478,973 4,031,547 Total 4,478,973 4,031,547 4,478,973 4,031,547 Liabilities measured at Amortised cost Liabilities to customers 9,136,821 10,508,993 9,124,792 10,505,811 Liabilities to banks , ,766 Total 9,137,744 10,561,759 9,125,715 10,558,577 At fair value through profit or loss: held for trading Trading assets 0 8, ,723 For short-term claims on banks of 3,177,271 thousand (2008: 5,863,848 thousand), short-term claims on customers of 204,039 thousand (2008: 222,386 thousand), short-term liabilities to banks of 923 thousand (2008: 52,766 thousand) and short-term liabilities to customers of 8,583,073 thousand (2008: 9,604,974 thousand), the fair value was equated to the book value for simplification purposes. The retroactive adjustment following the acquisition of ebase GmbH did not result in any material changes in the balance sheet item as of compared to the presentation in the comdirect group s 2008 annual report. (63) Fair Value hierarchy The following table contains the full portfolio of financial instruments that have been valued at fair value. The fair values are also classified into three levels: Level 1: Prices quoted in active markets (not adjusted) for identical assets or liabilities. Level 2: Exemplary prices calculated with the exception of the quoted prices included in Level 1, which can be observed for assets or liabilities either directly (i.e. as prices) or indirectly (i.e. derived from prices). Level 3: Exemplary prices calculated for assets or liabilities, which are not based on observable market data (non-observable input data).

139 MY PLUS SUPERVISORY BOARD GROUP MANAGEMENT REPORT CONSOLIDATED FINANCIAL STATEMENTS 133 thousand Fair Value acc Level 1 Level 2 Level 3 Available for sale financial assets Financial investments 4,478,946 1,969,802 2,509,144 0 Total 4,478,946 1,969,802 2,509,144 0 (64) Net result from financial instruments The following table shows the net result before income tax per financial instrument category within the meaning of IAS 39. thousand Loans and receivables Interest income 132, ,498 Provisions for possible loan losses 1,299 1,172 Net result 133, ,326 Available for sale financial assets Fair value changes (recognised in equity) 104,130 21,798 Valuation results reposted from the revaluation reserve to the income statement 5,926 7,440 Results of sales reposted from the revaluation reserve to the income statement 26,776 11,854 Sub-total: change in revaluation reserve before tax 83,280 2,504 Interest income 131, ,373 Dividends and similar income 1,805 2,815 Results from financial investments 20,850 19,294 Change in hedged fair value from hedging instruments 0 1,243 Net result 237, ,633 Liabilities measured at amortised cost Interest expenses 157, ,898 Net result 157, ,898 At fair value through profit or loss: held for trading Trading result Net result Other: derivative hedging instruments Net interest income 0 1,617 Change in fair value from hedging instruments 0 1,376 Net result 0 241

140 134 (65) Average number of employees during the reporting period Change Total Female Male Total Female Male (Total) in % At comdirect bank AG in the call centre in the back office in other areas At comdirect private finance AG At ebase GmbH Average number of employees during the reporting period 1, , The employee details listed above include full-time and part-time staff. The number of employees does not include the average number of trainees in the group in financial year Change Total Female Male Total Female Male (Total) in % Trainees

141 MY PLUS SUPERVISORY BOARD GROUP MANAGEMENT REPORT CONSOLIDATED FINANCIAL STATEMENTS 135 (66) Income statement of comdirect bank group according to IAS/IFRS year-to-year comparison thousand 1.1. to to to to to Interest income 265, , , ,057 88,603 Interest expenses 157, , ,580 54,324 24,583 Net interest income before provisions 108, , ,164 88,733 64,020 Provisions for possible loan losses 1,299 1,172 1,947 3,377 1,418 Net interest income after provisions 109, , ,217 85,356 62,602 Commission income 248, , , , ,311 Commission expenses 99, ,441 32,871 27,726 17,278 Net commission income 148, , , ,565 99,033 Result from hedge accounting Trading result Result from financial investments 20,850 19,294 9,624 6,327 6,751 Administrative expenses 198, , , , ,330 Personnel expenses 62,341 58,795 39,677 33,069 29,612 Other administrative expenses 124, , ,626 92,828 80,323 Marketing expenses 41,441 80,210 74,268 40,320 33,662 Communication expenses 7,022 8,810 5,277 2,104 1,909 Consulting expenses 11,702 14,019 12,754 10,357 8,507 Expenses for external services 25,435 30,347 22,629 21,323 19,827 Sundry administrative expenses 38,601 38,450 22,698 18,724 16,418 Depreciation of office furniture and equipment and intangible assets 12,376 12,143 10,134 9,729 9,395 Other operating result 3,421 5,148 10,063 5,994 3,764 Operating result 84,938 82,754 90,480 85,600 52,780 Restructuring expenses 8, Pre-tax profit/profit from ordinary activities 75,993 82,754 90,480 85,600 52,780 Taxes on income 19,369 21,916 32,783 28,598 18,593 Net profit 56,624 60,838 57,697 57,002 34,187 The figures for the financial year 2008 were adjusted to take account of the contributions of ebase GmbH. The financial years 2005 to 2007 are presented as reported in the respective annual reports of the comdirect bank group.

142 136 (67) Income statement of comdirect bank group according to IAS/IFRS on a quarterly comparison 2009 thousand Q1 Q2 Q3 Q4 Interest income 93,714 66,520 54,907 50,724 Interest expenses 61,066 38,955 31,855 25,296 Net interest income before provisions 32,648 27,565 23,052 25,428 Provisions for possible loan losses ,349 Net interest income after provisions 32,171 27,590 23,454 26,777 Commission income 57,736 58,842 63,544 68,417 Commission expenses 23,259 22,266 25,471 28,786 Net commission income 34,477 36,576 38,073 39,631 Result from hedge accounting Trading result 683 1,367 1,520 0 Result from financial investments 1,714 7,381 11,337 3,846 Administrative expenses 52,738 48,689 48,710 48,781 Personnel expenses 15,110 14,202 17,270 15,759 Other administrative expenses 34,421 31,205 28,687 29,888 Marketing expenses 12,965 9,822 8,515 10,139 Communication expenses 1,931 1,863 1,081 2,147 Consulting expenses 3,158 3,041 2,909 2,594 Expenses for external services 7,014 6,573 6,143 5,705 Sundry administrative expenses 9,353 9,906 10,039 9,303 Depreciation of office furniture and equipment and intangible assets 3,207 3,282 2,753 3,134 Other operating result 4,897 2, ,926 Operating result 17,776 23,771 24,844 18,547 Restructuring expenses ,945 Pre-tax profit/profit from ordinary activities 17,776 23,771 24,844 9,602 Taxes on income 5,047 5,542 6,294 2,486 Net profit 12,729 18,229 18,550 7,116

143 MY PLUS SUPERVISORY BOARD GROUP MANAGEMENT REPORT CONSOLIDATED FINANCIAL STATEMENTS thousand Q1 Q2 Q3 Q4 Interest income 97, , , ,724 Interest expenses 55,910 74,842 92,881 95,265 Net interest income before provisions 41,788 40,702 42,456 38,459 Provisions for possible loan losses Net interest income after provisions 41,672 40,423 41,495 38,643 Commission income 84,580 71,774 73,288 84,833 Commission expenses 38,008 32,919 32,249 34,265 Net commission income 46,572 38,855 41,039 50,568 Result from hedge accounting Trading result 1,003 4,049 1,313 2,273 Result from financial investments 3,121 3,341 3,738 9,094 Administrative expenses 58,847 62,103 59,500 62,324 Personnel expenses 13,926 14,508 15,257 15,104 Other administrative expenses 41,679 43,908 41,899 44,350 Marketing expenses 19,682 22,556 18,908 19,064 Communication expenses 2,251 2,090 2,073 2,396 Consulting expenses 2,881 3,441 4,287 3,410 Expenses for external services 7,093 7,141 7,692 8,421 Sundry administrative expenses 9,772 8,680 8,939 11,059 Depreciation of office furniture and equipment and intangible assets 3,242 3,687 2,344 2,870 Other operating result 2,029 4,566 1,479 2,926 Operating result 29,199 14,428 21,987 17,140 Restructuring expenses Pre-tax profit/profit from ordinary activities 29,199 14,428 21,987 17,140 Taxes on income 7,653 3,689 6,181 4,393 Net profit 21,546 10,739 15,806 12,747

144 138 (68) Segment reporting by business line 1.1. to thousand B2C B2B comdirect bank group total Interest income 265, ,865 Interest expenses 156, ,172 Net interest income before provisions 108, ,693 Provisions for possible loan losses 1, ,299 Net interest income after provisions 109, ,992 Commission income 133, , ,539 Commission expenses 22,231 77,551 99,782 Net commission income 111,629 37, ,757 Result from hedge accounting Trading result Result from financial investments 21, ,850 Administrative expenses 166,692 32, ,918 Other operating result 2,060 1,361 3,421 Operating result 78,522 6,416 84,938 Restructuring expenses 4,496 4,449 8,945 Pre-tax profit/profit from ordinary activities 74,026 1,967 75,993 Segment investments 9,945 2,618 12,563 Segment depreciation 9,642 2,734 12,376 Cost/income ratio 68.3% 83.4% 70.4% Segment income 444, ,573 of which external income 444, ,573 of which inter-segmental income 0 0 Segment expenses 370, ,606 Segment assets 9,478,005 Segment debt 9,083,404 Following the acquisition of ebase GmbH by comdirect bank AG, the activities of the comdirect bank group were realigned. The management is since then focusing on two business lines: business to customer (B2C) and business to business (B2B). The B2C business line comprises comdirect bank AG and comdirect private finance AG, the B2B business line comprises ebase GmbH. The realignment of the comdirect group was accompanied by a new division of responsibilities for the Board of Managing Directors. Alexander Boldyreff joined the team on the Board of Managing Directors on 1 July 2009 and in future willl be responsible for sales activities in the B2C business line. Dr. Christian Dieckmann is responsible for the B2B business line. Internal reporting was adjusted in line with the new group structure. The segmentation carried out reflects the internal perspective of the comdirect group and corresponds to the management approach. The respective customer groups in particular constitute the main delimitation feature of the business segments.

145 MY PLUS SUPERVISORY BOARD GROUP MANAGEMENT REPORT CONSOLIDATED FINANCIAL STATEMENTS to thousand B2C B2B comdirect bank group total Interest income 481,270 1, ,303 Interest expenses 318, ,898 Net interest income before provisions 162,372 1, ,405 Provisions for possible loan losses 1, ,172 Net interest income after provisions 161,200 1, ,233 Commission income 169, , ,475 Commission expenses 30, , ,441 Net commission income 138,441 38, ,034 Result from hedge accounting Trading result Result from financial investments 18,261 1,033 19,294 Administrative expenses 208,748 34, ,774 Other operating result 4, ,148 Operating result 77,760 4,994 82,754 Restructuring expenses Pre-tax profit/profit from ordinary activities 77,760 4,994 82,754 Segment investments 15,055 3,485 18,540 Segment depreciation 9,574 2,569 12,143 Cost/income ratio 72.6% 87.2% 74.3% Segment income 666, ,079 of which external income 666, ,079 of which inter-segmental income 0 0 Segment expenses 588, ,085 Segment assets 10,868,337 Segment debt 10,465,864 Unlike the presentation selected in the previous year, in line with internal reporting, no offline business line is shown and this is absorbed in the B2C business line. The B2C business line corresponds to the comdirect bank group before the acquisition of ebase GmbH. The previous year s figures for the B2C business segment therefore agree with the figures shown in the external financial reporting of the comdirect bank group in The figures for the B2B business segment were derived from the internal reporting of ebase GmbH and correspond to the contributions of ebase GmbH included in the income statement of the comdirect bank group. In the B2C business line, net interest income is essentially generated by reinvesting customer deposits in the money and capital markets, whereby Commerzbank is a major business partner (see information on related party disclosures, note 29). The interest income from money and capital market transactions in the amount of 136.8m exceeds 10% of the total income for the segments. This was earned almost exclusively in the B2C business line. Net commission income in the B2C segment results predominantly from custody account business with private customers. In addition, commission is generated from payment services and other commission, e.g. from advisory services in comdirect private finance AG. The result from financial investments includes impairments on financial investments amounting to 5,621 thousand.

146 140 Material cash income resulted from deferred interest. Non-cash income totalled 69.5m (2008: 108.9m). Cash expenses mainly stemmed from allocations to provisions, recognition of other liabilities and deferred interest in customer business. Non-cash expenses totalled 53.2m (2008: 76.6m). In the B2B business line, net commission income is generated from securities services for institutional and private customers. Other sources of income, such as deposit business, are not material. Impairments on financial assets of 312 thousand were taken into account. Material non-cash income resulted from deferred commission. Non-cash income totalled 13.7m (2008: 2.8m). Non-cash expenses mainly stemmed from allocations to provisions. Non-cash expenses totalled 9.2m (2008: 3.4m). No services were charged between the business segments shown during the reporting period. No consolidation column is therefore required. The segment income and expenses reported relates to IFRS values and therefore correspond to the values stated in the consolidated income statement. The Treasury volume and credit volume are deemed to be segment assets of the B2C business line. No assets are shown for the B2B business line as these do not form part of internal reporting for management purposes. The Treasury volume of the B2C segment comprises the ECB credit balance, money market transactions, promissory notes and the securities portfolio of comdirect bank AG. Unlike the accounting treatment, for the purposes of internal reporting promissory notes are measured at fair value. Like customer deposits, the Treasury volume declined in the reporting period. The credit volume in the B2C business line comprises lending to customers, particularly on securities credit accounts. B2C segment assets in the amount of 9,478m (2008: 10,868m) differs from the consolidated balance sheet total according to IFRS in the amount of 9,785m (2008: 11,158m) particularly due to the valuation effects on claims in the amount of 15m (2008: 1m), deferred interest and fees in the amount of 50m (2008: 94m) and the contribution of balance sheet items not allocated to the B2C segment assets and consolidation in the amount of 271m (2008: 196m). The customer deposits managed by comdirect bank AG are stated as segment liabilities of the B2C business line. Segment debt in the amount of 9,083m (2008: 10,466m) differs from the liabilities to customers reported in the consolidated balance sheet according to IFRS in the amount of 9,125m (2008: 10,506) due to valuation effects in the amount of 1m (2008: 4m) and the contributions of ebase GmbH and consolidation effects in the total amount of 41m (2008: 36m).

147 MY PLUS SUPERVISORY BOARD GROUP MANAGEMENT REPORT CONSOLIDATED FINANCIAL STATEMENTS 141 (69) Other liabilities thousand Up to one year Up to one year More than one year up More than one year up More than five years More than five years to five years to five years Rental payments 4,904 6,097 13,048 15,677 1, Lease payments Total 5,470 6,850 13,916 16,576 1, The above table contains minimum lease payments under non-cancellable operating leases. (70) Fees for auditors The financial year saw overall expenses of 991 thousand (2008: 813 thousand) for the services rendered by auditors PricewaterhouseCoopers AG Wirtschaftsprüfungsgesellschaft. thousand Change in % Annual audits Other certification services Tax advisory services Other services Total 1, (71) Corporate Governance Code comdirect bank AG has submitted the Declaration of Compliance with the Corporate Governance Code pursuant to Section 161 of the German Stock Corporation Act (AktG) and has made it permanently available to shareholders on its website

148 142 (72) The company s Boards Supervisory Board Dr. Achim Kassow Chairman Member of the Board of Managing Directors of Commerzbank AG, Frankfurt/Main Klaus Müller-Gebel Deputy Chairman Lawyer, Frankfurt/Main Frank Annuscheit Member of the Board of Managing Directors of Commerzbank AG, Frankfurt/Main Thorben Gruschka Deputy Works Council Chairman of comdirect bank AG, Quickborn (from 6 May 2009) Angelika Kierstein Works Council Chairwoman of comdirect bank AG, Department Support Finance, Controlling & Risk Management at comdirect bank AG, Quickborn Mitja Sack Employee in Process Management at comdirect bank AG, Quickborn (until 6 May 2009) Board of Managing Directors Michael Mandel CEO Alexander Boldyreff Member of the Board of Managing Directors (from 1 July 2009) Dr. Christian Diekmann Member of the Board of Managing Directors (from 1 May 2009) Carsten Strauß Member of the Board of Managing Directors Torsten Daenert Member of the Board of Managing Directors (until 30 April 2009) Martin Zielke Divisional Manager Group Finance of Commerzbank AG, Frankfurt/Main (73) Seats on Supervisory Boards and other executive bodies Member of the Supervisory Board of comdirect bank AG Dr. Achim Kassow Seats on statutory Supervisory Boards Generali Deutschland Holding AG, Cologne cominvest Asset Management GmbH, Frankfurt/Main, (until 12 January 2009) Chairman Commerzbank Auslandsbanken Holding AG, Frankfurt/Main, Chairman ThyssenKrupp Steel AG, Duisburg (until 30 September 2009) Seats on comparable supervisory bodies Allianz Global Investors Deutschland GmbH, Munich (from 14 January 2009) BRE Bank SA, Warsaw COMMERZ PARTNER Beratungsgesellschaft für Vorsorge- und Finanzprodukte mbh, Frankfurt/Main (until 1 July 2009) Chairman Commerzbank International S.A., Luxembourg (until 13 March 2009) Chairman Commerzbank (Schweiz) AG, Zurich (until 18 March 2009) President

149 MY PLUS SUPERVISORY BOARD GROUP MANAGEMENT REPORT CONSOLIDATED FINANCIAL STATEMENTS 143 Klaus Müller-Gebel Seats on statutory Supervisory Boards Commerzbank AG, Frankfurt/Main (until 15 May 2009) Deutsche Schiffsbank AG, Bremen/Hamburg Deputy Chairman Eurohypo AG, Eschborn Deputy Chairman Martin Zielke Seats on comparable supervisory bodies BRE Bank SA, Warsaw Commerzbank Auslandsbanken Holding Nova GmbH, Frankfurt/Main Deputy Chairman Members of the Board of Managing Directors of comdirect bank AG Michael Mandel Seats on statutory Supervisory Boards comdirect private finance AG, Quickborn Deputy Chairman Seats on comparable supervisory bodies Commerz Direktservice GmbH, Duisburg (from 24 January 2009) Chairman Commerz Service Gesellschaft für Kundenbetreuung mbh, Quickborn (until 15 September 2009) European Bank for Fund Services GmbH (ebase), Haar Deputy Chairman Dr. Christian Diekmann Seats on statutory Supervisory Boards comdirect private finance AG, Quickborn (from 26 February 2009) Seats on comparable supervisory bodies European Bank for Fund Services GmbH (ebase), Haar (from 30 April 2009) Chairman Carsten Strauß Seats on comparable supervisory bodies Commerz Direktservice GmbH, Duisburg (from 24 January 2009) Commerz Service Gesellschaft für Kundenbetreuung mbh, Quickborn (until 15 September 2009) Chairman European Bank for Fund Services GmbH (ebase), Haar Torsten Daenert Seats on statutory Supervisory Boards comdirect private finance AG, Quickborn (until 26 February 2009) Deputy Chairman Seats on comparable supervisory bodies Commerz Service Gesellschaft für Kundenbetreuung mbh, Quickborn (until 18 February 2009) Dresdner-Cetelem Kreditbank GmbH, Munich (from 3 April 2009) Alexander Boldyreff Seats on statutory Supervisory Boards comdirect private finance AG, Quickborn (from 1 October 2009) Chairman Seats on comparable supervisory bodies European Bank for Fund Services GmbH (ebase), Haar (from 19 November 2009)

150 144 (74) Remuneration and loans to Board members Remuneration for the Board of Managing Directors The remuneration for the Board of Managing Directors of comdirect bank AG is set by the Supervisory Board. In addition to the non-performance-related fixed compensation comprising the annual fixed salary and fringe benefits, the compensation comprises a variable compensation component linked to the performance of the company and personal performance as well as a component with long-term incentive effect and risk elements. In addition, the members of the Board of Managing Directors also receive a company pension for their activities at comdirect bank AG. Taking into account commercial law regulations, compensation for the members of the Board of Managing Directors of 1,723 thousand (2008: 1,604 thousand) was reported in financial year This includes payments due in the short term and the values for the performance shares granted in the financial year. The figures for the previous year include contributions from members of the Board of Managing Directors who left the company in financial year Short-term benefits The members of the Board of Managing Directors of comdirect bank AG received the following remuneration for financial year 2009: thousand Non-variable Value of fringe Variable Total components benefits components 1) Michael Mandel (from 4 March 2008) Alexander Boldyreff (from 1 July 2009) Dr. Christian Diekmann (from 1 May 2009) Carsten Strauß (from 4 March 2008) Torsten Daenert (until 30 April 2009) Total , ,411 1) Payable in the following year subject to adoption of the annual financial statements. In financial year 2009, expenses were recorded in the income statement for the variable components as follows: Mr Mandel 437 thousand, Mr Boldyreff 70 thousand, Dr. Diekmann 135 thousand, Mr Strauß 226 thousand and Mr Daenert 94 thousand. Share-based payment Long Term Incentive Programme The components with long-term incentive effect and risk elements in financial year 2009 are based on the Long Term Incentive Programme (LTIP), the model replacing the stock option programme (see note (28) Performance share plan ). As beneficiaries under the LTIP, members of the Board of Managing Directors began receiving a conditional allocation of virtual, non-tradeable shares (performance shares) in yearly tranches since These comprise the conditional right to a cash payment after a three year waiting period.

151 MY PLUS SUPERVISORY BOARD GROUP MANAGEMENT REPORT CONSOLIDATED FINANCIAL STATEMENTS 145 In view of Mr Daenert s planned move to Commerzbank AG in December 2008 and the resulting uncertainty regarding the appropriateness of Mr Daenert s participation in the future success of comdirect bank AG, the Presiding Committee of the Supervisory Board resolved to exclude Mr Daenert from the 2008 tranche of the LTIP. Instead of this lost allocation of the 2008 tranche of the LITP, the Presiding Committee of the Supervisory Board decided to grant Mr Daenert a one-off bonus payment in the amount of his LTIP target value of 42 thousand. In the previous year this bonus payment was reported under the item variable components within short-term benefits. With regard to Mr Daenert s move within the Commerzbank Group, claims under the LTIP remain in place. The performance shares granted do not lapse. Further payments under the Long Term Incentive Plan could become due from the remaining tranches in As of the reporting date, the members of the Board of Managing Directors held the following number of performance shares: Value per Share in Euro Michael Mandel Alexander Boldyreff Dr. Christian Diekmann Carsten Strauß Torsten Daenert Total Allocated performance shares Tranche 2007 in units ,983 4,983 Tranche 2008 in units 13, , ,103 Tranche 2009 in units 10,892 9,921 8,436 7, ,428 Total 24,643 9,921 8,436 15,531 4,983 63,514 Value when granted Tranche 2007 in units in 7.10 in thousand Tranche 2008 in units in 4.00 in thousand Tranche 2009 in units in 5.05 in thousand Total Value as of the reporting date Tranche 2007 in units in 5.42 in thousand Tranche 2008 in units in 6.38 in thousand Tranche 2009 in units in 5.07 in thousand Total Recorded as expense in the financial year 2008 Tranche 2007 in units in thousand Tranche 2008 in units in thousand Tranche 2009 in units in thousand Total Recorded as expense in the financial year 2009 Tranche 2007 in units in thousand Tranche 2008 in units in thousand Tranche 2009 in units in thousand Total The realisable compensation from participation in the LTIP my vary considerably from the figures in the table above and in particular may not apply at all as the final amounts for disbursement are not determined until the end of the term (blocking period) of the respective tranches. One tranche under the LTIP became due in The payments to Mr Daenert ( 14 thousand) and Mr Strauß ( 11 thousand) relate to payouts of performance shares they received in financial year 2006 in their capacity as divisional managers of the bank.

152 146 Stock option programme The members of the Board of Managing Directors of comdirect bank AG were eligible under the stock option programme described in note (27) until The stock option programme expired in financial year No stock options were exercised in the financial year. The remaining options have lapsed. Post-employment benefits The members of the Board of Managing Directors receive a pension obligation for their activities at comdirect bank AG. Mr Mandel will receive regular pension payments when he retires and Mr Boldyreff, Dr. Diekmann and Mr Strauß will be eligible for a claim to a capital payment. The company has formed pension provisions under IFRS for these future claims, the amount of which depends on the length of service, pensionable salary and current calculatory interest rate. The valuation is based on actuarial assessments using the projected unit-credit method, which are carried out by an independent actuary. With regard to Mr Daenert s move within the Commerzbank Group, pension obligations in financial year 2009 were transferred to Commerzbank AG. As of the reporting date, the breakdown in pension obligations towards active members of the Board of Managing Directors under IFRS is as follows: thousand Michael Mandel Alexander Dr. Christian Carsten Strauß Torsten Daenert Boldyreff Diekmann Pension obligation under IFRS (DBO) as of 1 January Change in financial year of which transfer due to intra-group change of which service cost recognised in income statement Pension obligation under IFRS (DBO) as of 31 December Regulations governing termination of employment relationship If comdirect bank prematurely terminates the appointment to the Board of a member of the Board of Managing Directors, the respective contract of employment is in principle continued until the end of the original term of office. The fixed compensation of the member of the Board of Managing Directors released from office is paid for the remaining term of the contract of employment for members of the Board of Managing Directors Mr Mandel and Mr Strauß in full. For Dr. Diekmann and Mr Boldyreff, payments are to be made in the amount of 50% of the fixed compensation for a maximum of 24 months. There is no entitlement to further remuneration where the termination takes place for good cause. There may be a settlement in the event of premature termination of employment resulting from an individually agreed rescission agreement. In the past financial year, no member of the Board of Managing Directors has received payments or corresponding obligations from a third party in relation to their activities as a member of the Board of Managing Directors. Information relating to former members of the Board of Managing Directors In financial year 2009, 263 thousand (2008: 193 thousand) was paid to former members of the Board of Managing Directors of comdirect bank AG. In 2009 the payment made to former members of the Board of Managing Directors under the LTI programme amounted to 64 thousand. In 2010 further payment from the remaining tranch of the LTI plan to former members of the Board of Managing Directors are possible. The options held by former members of the Board of Managing Directors from the final tranche of the stock option programme granted in 2004 lapsed in the reporting year without value. The bank provides old-age provision for former members of the Board of Managing Directors or their surviving dependents. As of the balance sheet date, pension obligations under IFRS (defined benefit obligations) for former members of the Board of Managing Directors amounted to 3,230 thousand (2008: 2,987 thousand).

153 MY PLUS SUPERVISORY BOARD GROUP MANAGEMENT REPORT CONSOLIDATED FINANCIAL STATEMENTS 147 Remuneration for the Supervisory Board The remuneration of Supervisory Board members is regulated in Article 16 of our Articles of Association. In addition to the non-variable components, the remuneration comprises a separate component for committee activities and a variable component, which depends on the amount of the dividend to be distributed. Provided that the financial statements of comdirect bank AG are adopted in their present form and that the annual general meeting approves the proposed appropriation of profit, the remuneration of members of the Supervisory Board will total 275 thousand (2008: 276 thousand). The remuneration breakdown by the Supervisory Board members is as follows: thousand Non-variable Variable Remuneration for Total components components committee activities Dr. Achim Kassow Klaus Müller-Gebel Frank Annuscheit Thorben Gruschka (from 6 May 2009) Angelika Kierstein Martin Zielke (from 8 May 2008) Mitja Sack (until 6 May 2009) Neither advance payments nor loans were extended. comdirect bank AG did not take on any contingent liabilities. (75) Holdings Affiliated companies included in the consolidated financial statements: Name Domicile Share of capital held in % Equity in thousand comdirect private finance AG Quickborn, Germany ,040 European Bank for Fund Services GmbH (ebase) Haar near Munich, Germany ,514 SPEs (special funds) included in the consolidated financial statements as per IAS 27/SIC-12: Name Domicile/Registered office of the management company Share of capital held in % Funds volume in thousand CDBS-Cofonds Frankfurt/Main, Germany ,879 CDBS-Cofonds II Frankfurt/Main, Germany ,311 CDBS-Cofonds III Frankfurt/Main, Germany ,071 CDBS-Cofonds IV Frankfurt/Main, Germany ,631 OP-Fonds CDBS V Cologne/Germany ,436 Other affiliated companies not included in the consolidated financial statements: Name Domicile Share of capital held Equity in % in thousand WST-Broker GmbH Frankfurt am Main/Germany

154 148 > Declaration of the Board of Managing Directors To the best of our knowledge, and in accordance with the applicable reporting principles, the consolidated financial statements give a true and fair view of the assets, liabilities, financial position and profit or loss of the group, and the group management report includes a fair review of the development and performance of the business and the position of the group, together with a description of the principal opportunities and risks associated with the expected development of the group. Quickborn, 19 February 2010 The Board of Managing Directors Michael Mandel Alexander Boldyreff Dr. Christian Diekmann Carsten Strauß

155 MY PLUS SUPERVISORY BOARD GROUP MANAGEMENT REPORT CONSOLIDATED FINANCIAL STATEMENTS 149 > Auditor s report We have audited the consolidated financial statements prepared by the comdirect bank Aktiengesellschaft, Quickborn, comprising the balance sheet, the income statement and the statement of comprehensive income, the statement of changes in equity, the cash flow statement and the notes to the consolidated financial statements, together with the group management report for the business year from January 1 to December 31, The preparation of the consolidated financial statements and the group management report in accordance with the IFRSs, as adopted by the EU, and the additional requirements of German commercial law pursuant to (Article) 315a Abs. (paragraph) 1 HGB ( Handelsgesetzbuch : German Commercial Code) is the responsibility of the parent Company s Board of Managing Directors. Our responsibility is to express an opinion on the consolidated financial statements and on the group management report based on our audit. We conducted our audit of the consolidated financial statements in accordance with 317 HGB and German generally accepted standards for the audit of financial statements promulgated by the Institut der Wirtschaftsprüfer (Institute of Public Auditors in Germany) (IDW). Those standards require that we plan and perform the audit such that misstatements materially affecting the presentation of the net assets, financial position and results of operations in the consolidated financial statements in accordance with the applicable financial reporting framework and in the group management report are detected with reasonable assurance. Knowledge of the business activities and the economic and legal environment of the Group and expectations as to possible misstatements are taken into account in the determination of audit procedures. The effectiveness of the accounting-related internal control system and the evidence supporting the disclosures in the consolidated financial statements and the group management report are examined primarily on a test basis within the framework of the audit. The audit includes assessing the annual financial statements of those entities included in consolidation, the determination of the entities to be included in consolidation, the accounting and consolidation principles used and significant estimates made by the Company s Board of Managing Directors, as well as evaluating the overall presentation of the consolidated financial statements and the group management report. We believe that our audit provides a reasonable basis for our opinion. Our audit has not led to any reservations. In our opinion based on the findings of our audit the consolidated financial statements comply with the IFRSs, as adopted by the EU, and the additional requirements of German commercial law pursuant to 315a Abs. 1 HGB and give a true and fair view of the net assets, financial position and results of operations of the Group in accordance with these requirements. The group management report is consistent with the consolidated financial statements and as a whole provides a suitable view of the Group s position and suitably presents the opportunities and risks of future development. Hamburg, 20 February 2010 PricewaterhouseCoopers Aktiengesellschaft Wirtschaftsprüfungsgesellschaft Gero Martens Wirtschaftsprüfer (German Public Auditor) ppa. Uwe Gollum Wirtschaftsprüfer (German Public Auditor) Voluntary translation. It should be noted that only the German Auditor s report which is based on the audit of the German version of the company s annual financial statements, is authorative.

156 150 > Glossary Accounting Law Reform Act (BilMoG) Reform of commercial code accounting law in The aim of the reform is to align German accounting regulations with international accounting standards. Accruals Sub-category of financial liabilities according to IFRS. They are distinguishable from provisions by a significantly higher degree of certainty in terms of amount or time of settlement obligation. Act on the Appropriateness of Management Board Compensation (VorstAG) Amendment of the German Stock Corporation Act in the wake of the financial market crisis. The regulations are intended to provide incentives for sustainable company development, for example by making it easier to cut salaries of management board members if the company s situation deteriorates. Act on the Further Development of Financial Market Stabilisation Amendment of the Financial Market Stabilisation Fund Act. Includes among other things guarantees to special purpose vehicles, the obligation to make a compensation payment and the obligation to compensate for further losses. Act regarding the implementation of the Shareholders Rights Directive (ARUG) Act transposing the Shareholders Rights Directive into national law, which came into force on 1 September The Shareholders Rights Directive is an EU directive relating to the exercise of certain shareholders rights in listed companies, whereby shareholders are to be better informed and exercising their voting rights is to be made easier. Advanced Internal Ratings Based Approach (AIRB) Advanced approach to calculating the minimum capital requirement for credit risk. Advanced Measurement Approach (AMA) Advanced measurement approach for operational risk according to the equity regulations under Basel II. Available-for-sale IAS 39 classification which describes financial instruments available to sell immediately. Available net liquidity concept Instrument used to manage liquidity risk. The available net liquidity is determined and monitored for both a basic scenario taking account of current market conditions as well as stress scenarios. Banking book All balance sheet and off-balance sheet items of a bank that cannot be allocated to the trading book. Basel II Equity guidelines for financial institutions which stipulate how much equity banks require to cover risks, which methods should be used to assess risks and how risks are to be published. The guidelines also define standards to monitor risk management applied by the banking supervisory authority. Bond with warrant Bond issued by a corporation, which contains warrants. These give the holder of the option the right to purchase shares in the company during a certain period at a predetermined price. Certificate Derivative whose performance depends on the price development of the underlying securities and financial products, in particular indices (index certificates) and specially structured stock baskets (basket certificates). Confidence level The probability that a possible loss will not exceed the maximum level defined by the Value-at-risk (VaR). Core capital Sum of subscribed capital and general reserves, less intangible assets of comdirect bank AG in accordance with the German Commercial Code (HGB). At comdirect bank, own funds correspond to the core capital. Cost/income ratio Used to measure cost efficiency, i.e. the relationship between administrative expenses and earnings recorded in a financial year. Counterparty risk Risk that a counterparty, e.g. in securities trading, is unable to fulfil its contractual obligations.

157 151 Credit spread Measure of the premium or discount on a reference interest rate whose level depends on the credit rating and market positioning of the respective debtor. Credit value-at-risk (CVaR) Risk indicator. Unexpected, maximum, anticipated loss from credit default risks, which is determined using the VaR concept (see Value-at-risk). DAXsector Financial Services Price Index One of 18 sector indices which make up Deutsche Börse s Prime Standard. Various financial service providers are listed in the index, including comdirect bank AG. Deferred compensation Deferred remuneration. Under an occupational old age pension, part of an employee s salary is invested to later be converted into pension payments. Deferred taxes Income taxes to be paid or received in the future, which mainly result from the different valuation bases used for the tax balance sheet and the commercial balance sheet. They do not constitute actual tax office claims or liabilities at the time the balance sheet is prepared. Deposit business Management of customer deposits, including in current, call money, fixed-term and time deposit accounts. Earnings are generated by fees as well as, in particular, by the positive interest margin. Deposit protection fund The deposit protection fund of the Association of German Banks fully covers the deposits of every retail bank customer for up to 30% of the definitive liable equity of the respective bank as of the publication date of the last set of financial statements. Economic capital (economic risk capital) The amount that with a high level of certainty covers unexpected losses from risk carrying positions. Not identical to balance sheet or regulatory capital. Eurex Eurex is one of the world s largest futures and options exchanges and at the same time the leading clearing house in Europe. It offers access to the European derivatives market for futures and options. European Interbank Offered Rate (EURIBOR) The interest rate that European banks demand from each other when trading deposits with a fixed term of one week or between one and 12 months. It is the most important reference interest rate for variable rate euro bonds. Exchange Traded Commodities (ETC) Open-ended securities enabling investors to invest in commodities. They are traded on the stock exchange like equities, have an unlimited term and offer a high degree of liquidity. Exchange Traded Funds (ETF) ETFs are traded on the stock exchange and track an index (e.g. share, bond or commodities index). Fairness opinion Report by an independent expert regarding corporate transactions. It contains information on the deal, valuation methods and assumptions as well as financial information for assessing the transaction price and giving a final opinion. Fair Value Price at which assets and liabilities would normally be traded between business partners. The fair value is used in the event that market prices are not used for the assets. Final withholding tax Flat rate 25% tax levied on income from capital investments and private capital gains as of 1 January The final withholding tax applies to interest, dividends, capital gains, income from investment funds and certificates. Flexi II Act Law to improve the framework conditions ensuring flexible work time arrangements. Forward Rate Agreement (FRA) Contractual agreement between two business partners to hedge interest rate risks, whereby the buyer of the FRA invests a notional sum with the seller at a pre-agreed interest rate at the end of the term. Free float The freely tradable shares of a company. The free float includes all shares which are acquired and held by the investing public as opposed to major shareholders. Futures contract Contractual agreement to buy or sell a set amount of a particular commodity at a specific price on a specific future date.

158 152 German Accounting Standards (GAS) Deutscher Rechnungslegungs Standard (DRS) Recommendations (standards) on the application of accounting principles. German Banking Act (KWG) Act introduced to ensure the protection of creditors and the functioning of the banking industry, which contains regulations on banking practices and banking supervision. Hedge accounting Creation of hedging relationships between underlying transactions (e.g. retail lending) and derivative financial instruments used for hedging purposes (e.g. interest rate swaps), in order to minimise the effects of changes in value in the income statement. Home Banking Computer Interface (HBCI) Online banking standard to standardise the interfaces between bank customers and one or more banks. Interest rate swap Contractual agreement between two parties relating to the exchange of differently structured payment flows for a specific period of time. Interest rate swaps can be used to hedge against an increase or decrease in interest rates. This offsets fixed and variable payment flows. International Accounting Standards (IAS)/International Financial Reporting Standards (IFRS) International accounting principles which facilitate international comparison of consolidated financial statements. International Accounting Standards Board (IASB)/ International Financial Reporting Interpretations Committee (IFRIC) The IASB is responsible for approving accounting standards. It is supported by the IFRIC, formerly the Standard Interpretations Committee (SIC). Investment grade Upper ratings category, e.g. at Moody s ratings Aaa to Baa. Issuer risk Describes the risk that a securities issuer becomes insolvent and holders of the securities lose their invested capital. Lifecycle fund Also called a target date fund. This fund allows the investment strategy to be adjusted according to the changed requirements at different stages. For example, at the beginning the capital can be invested in higher risk equity funds, with a greater weighting subsequently given to safer fixed-income and money market funds at a later stage. Markets in Financial Instruments Directive Implementation Act (FRUG) German framework law (Artikelgesetz) dated 2006 which transposes the EU Directive on Markets in Financial Instruments into national law. Minimum Requirements for Risk Management (MaRisk) These include, in particular, setting up a proper business organisation (e.g. function separation of sales and back office) and implementing a system of appropriate internal controls for the trading and lending divisions. Minimum reserve requirement Obligation of an individual financial institution not to use a specific proportion of its short and medium-term deposits (current, fixed-term and savings account deposits) for lending, but to maintain them as noninterest bearing credit balances held at Deutsche Bundesbank. Multi-KAG Funds from different investment companies in one custody account. Multi-tier server structure Multi-layered software infrastructure in which the software components are shared between several systems. One Third Participation Act (DrittelbG) Law governing codetermination by employees on the supervisory board. This stipulates that one third of the supervisory board must constitute employee representatives elected by the entire workforce in a primary election. The regulations of the Act apply to companies with the following legal forms: AG (plc), KGaA (limited partnership), GmbH (limited company), VVaG (mutual insurance company) and commercial cooperatives generally with more than 500 employees. Predecessor accounting Accounting method which may be used when a subsidiary acquires another company within the group which is controlled by the same parent company. The assets and liabilities acquired are to be valued at the consolidated book values of the parent company and the difference between the purchase price and the book value offset against equity. Prime Standard Sub-segment of the Regulated Market with additional admission requirements compared to the General Standard. Prime Standard companies must comply with high international transparency standards.

159 153 Profit and loss transfer agreement Often concluded between a group parent company and its subsidiaries. It obliges the subsidiary to transfer its profit to the parent company and conversely obliges the parent to balance out any losses of the subsidiary. Projected unit credit method Method used to determine pension obligation, which takes account of future rates of increase in salaries and pensions among other factors. Revaluation reserve The market value changes in securities and participations are shown in the revaluation reserve with an income-neutral effect. Risk assets Risk-weighted positions, which have to be backed by equity. At comdirect bank, risk assets are calculated taking account of Section 10c German Banking Act (KWG) (zero weighting of intragroup receivables). Treasury Head office division that manages liquidity and market price risks. Traditionally responsible for liquidity management, refinancing and carrying out transactions in foreign exchange, money market, precious metals as well as issuing notes. Value-at-risk (VaR) The maximum loss of value of a portfolio in line with a specific probability and within a specific holding period. Warrant The owner of a warrant is entitled (but not obliged) to buy (call option) or sell (put option) a certain number of shares or other securities at a stipulated price within a certain period of time. White labelling Sale of a product under a name other than the company s own brand name. Risk cover assets These comprise the maximum available equity which can be used to hedge against unexpected losses. Risk-taking capability Corresponds to the risk cover assets. Sales follow-up commission Annual fee paid by an investment company to the brokers of its funds. Solvency Regulation (SolvV) Regulation governing the capital adequacy of institutions, groups of institutions and financial holding groups which came into force on 1 January Standard Interpretations Committee (SIC) See International Accounting Standards Board (IASB)/International Financial Reporting Interpretations Committee (IFRIC). Stock option programme Issue of non-transferable subscription rights to selected employees, in particular management and executives, which entitle them to purchase the equivalent number of shares in the company within a specified exercise period once specific performance targets (exercise hurdles) have been achieved. Stress test Simulation of impact of crisis situations in the capital market on the risk and earnings position.

160 154 > Six-year overview of comdirect bank group comdirect group as of Change in % 2008 (including ebase) 2008 (excluding Customers number 2,150, ,078,850 1,349,297 Custody accounts number 1,419, ,427, ,806 Executed orders number 14,661, ,682,007 9,231,378 Total assets under custody in million 35, ,933 20,342 of which: portfolio volume in million 26, ,454 9,876 of which: deposit volume in million 9, ,479 10,466 ebase) comdirect business-to-customers (B2C)* business line as of Customers number 1,450, ,349,297 1,349,297 Custody accounts number 719, , ,806 Current accounts number 533, , ,149 Tagesgeld PLUS ( call money plus ) accounts number 960, , ,516 Advisory customers number 54, ,585 46,585 Executed orders number 7,319, ,231,378 9,231,378 Average order activity per custody account number Order volume per executed order in 4, ,304 4,304 Total assets under custody in million 22, ,342 20,342 of which: portfolio volume in million 13, ,876 9,876 of which: deposit volume in million 9, ,466 10,466 Credit volume in million comdirect business-to-business (B2B)* business line as of Customers/Custody accounts number 699, ,553 Executed orders number 7,342, ,450,629 Total assets under custody in million 13, ,591 Earnings ratios Net commission income in thousand 148, , ,441 Net interest income before provisions in thousand 108, , ,372 Administrative expenses in thousand 198, , ,748 Operating result in thousand 84, ,754 77,760 Pre-tax profit in thousand 75, ,754 77,760 Net profit in thousand 56, ,838 57,692 Earnings per share in Dividend per share in ) Balance sheet key figures as of Balance sheet total in million 9, ,158 11,070 Equity in million Equity ratio 3) in % Own funds ratio 4) in % Relative ratios Return on equity before tax 5) in % Cost/income ratio 6) in % Employees figures as of Employees number 1, , Employees full-time basis number 1, , *) B2C: comdirect bank AG and comdirect private finance AG; B2B: ebase GmbH, excluding contributions from branch customers of Commerzbank AG 1) Dividend proposal 2) Including special dividend 3) Equity ratio = Equity (excluding revaluation reserves) / balance sheet total 4) Own funds ratio = own funds for solvency purposes / (risk weighted assets x eligible amounts for operational risks) 5) Return on equity = operating result / average equity (excluding revaluation reserve) in the reporting period 6) Before restructuring costs

161 155 Change 2007 Change 2006 Change 2005 Change 2004 in % in % in % in % ,000, , , , , , , , ,950, ,572, ,689, ,947, , , , , , , , , , , , , ,000, , , , , , , , , , , ,905 > ,414 > , , ,024 > 100 8,240 > 100 2, ,950, ,572, ,689, ,947, , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ) > , , , ,

162 156 > Financial calendar February Press-/Analysts conference in Frankfurt/Main 22 March Annual report April Quarterly report 7 May Annual General Meeting in Hamburg 22 July Half-year report 26 October Nine-month report > Contacts Investor Relations Thore Ludwig Phone +49 (0) 41 06/ Fax +49 (0) 41 06/ [email protected] Tobias Vossberg Phone +49 (0) 41 06/ Fax +49 (0) 41 06/ [email protected] comdirect bank AG Pascalkehre 15 D Quickborn Concept, layout and translation ergo Unternehmenskommunikation, Cologne/Frankfurt a.m./berlin/munich Photography Uwe Martin, Hamburg Press Relations Johannes Friedemann Phone +49 (0) 41 06/ Fax +49 (0) 41 06/ [email protected] You can download our annual and interim reports in German or in English from our website at de/ir under Publications. Our order service also offers the option of inclusion in the distribution list, which means that the reports will be sent to you on publication. You can download our published press releases in German or in English on our website at de/pr. The English translation of the comdirect bank group annual report is provided for convenience only. The German original is definitive.

163 comdirect bank AG Pascalkehre 15 D Quickborn