Good morning, ladies and gentlemen, and welcome to the Commerzbank AG Conference Call. Please note that this call is being transmitted as well as recorded by audio webcast and will subsequently be made available for replay on the Internet. At this time, all participants have been placed on a listen-only mode. And the floor will be open for questions following Manfred Knof’s and Bettina Orlopp’s presentation. Let me now turn the floor over to our CEO, Manfred Knof.

Good morning, everyone, and welcome to our earnings call for the first quarter of this year. Q1 was my first quarter as CEO of Commerzbank and we presented our Strategy 2024 in February. Today I'm looking forward to giving you the first update on the transformation of the bank. Bettina will then walk you through the financials before both of us are happy to answer your questions. We will maintain this setup also in the future earnings calls. Now let's start with our presentation on page 2. We had a very good first quarter. We delivered strong results and successfully started the transformation of Commerzbank. On P&L, we reached a strong operational result of €538 million. It is driven by very good revenues, well-ahead of our internal plans and provides us with some tailwinds going forward. Regarding capital, we could increase our CET1 ratio by 20 basis points to 13.4%, despite the booking of further restructuring costs. This is a very solid foundation of the transformation of the bank. And we have reached the first important milestones in the execution of our Strategy 2024. Before we take a closer look at the strategic milestones, I would like to highlight that the good start into this year allows us to lift our full year guidance. On slide 3, we have put down the major strategic milestones we have already reached along the four cornerstones of our strategy. Let me start at the customer side and highlight a major achievement in our Corporate Clients division. This week we signed a cooperation agreement with Oddo BHF regarding our equity brokerage business. In future, Oddo will provide us with equity sales and trading as well as equity research services that we will offer to our clients. This enables us to reduce costs and complexity in our own infrastructure without compromising on client service. On digitalization, I would like to highlight our joint investment with Deutsche Börse in 360X, a provider for blockchain based marketplaces and ecosystems for digital asset classes. The assets will be made investable and tradable via tokenization and fractionalization. First asset classes will be art and real estate. I'm convinced that there is a clear potential to actively shape such digital asset ecosystems of the future. By offering investors innovative investment opportunities in new asset classes, we will create added value for the financial sector for our clients and for Commerzbank. With regards to sustainability, we have developed a clear strategy to become a net-zero bank. This is a strong commitment and I will get back to the topic in a minute. On profitability, the signed framework agreement with the employee representatives marks probably the most important milestones for this quarter to ensure the proper execution of our cost reduction program. This leads me to slide 4 and the progress in the implementation of our redundancy program. From the overall targeted FTE reduction of 10,000, around 1,900 FTEs are already secured by individually signed contracts with employees. On top of that, we have agreed with the Works Council on a voluntary redundancy program. From July this year, we will offer eligible employees attractive termination agreements with an exit latest at the end of this year. The targeted reduction of 1,700 FTEs significantly contributes to our planned cost reductions in 2022. And finally, as I have promised, we have signed a framework agreement with the employee representatives. With these agreements, we have fixed the major terms and conditions for the whole redundancy program. Though, we still need to finalize the details of the segments and functions affected, the execution of Strategy 2024 is now explicitly agreed with the Works Council. This is really a key achievement and significantly reduces any potential execution risks. To ensure the timely and reliable progress of the redundancy program, we have also enhanced applicable instruments for which we will book another €225 million bringing the full restructuring costs for the program to slightly above €2 billion. So as of today, we are completely on track to achieve our targeted cost reduction. Now let me move on with sustainability. Our sustainability strategy is a very important building block of our Strategy 2024. Our recent survey in the German Mittelstand tells us that 80% of the company's perceived sustainability is decisive for the future, but only one-third has a concrete sustainability strategy. In other words, sustainability is key for all businesses and a lot needs to be done to get there. This also holds true for Commerzbank and we have taken the first major steps into this direction. Our commitments are strong. After joining the TCFD last September, we have also joined the Net-Zero Banking Alliance of the United Nations Environment Programme. We aim to reduce the CO2 balance of our entire lending and investment portfolio to net zero by 2050 the latest. This requires close collaboration with our clients in the German Mittelstand to jointly develop strategic path to reduce greenhouse gas emission. Firstly, the focus is on CO2 intensive sectors and we will regularly report on our progress in accordance with the UN guidelines. The second target in supporting the client transformation is to increase our volume of sustainable products from around €100 billion today to €300 billion by 2025. Main drivers of the strong increase are DCM issuance for our corporate clients, asset management products for corporate as well as for private clients, but also green mortgages for retail customers. The third target that we have set is to ensure net zero emissions from our own banking operations by 2040. This means leading by example, which is exemplified by our commitment to compensate remaining carbon emissions with own projects like reforestation rather than buying certificates. To summarize, sustainability is key for future success of corporate and financial institutions and we are making bold moves into this direction. Let me close my overview on the first strategic transformation steps with a view on our key performance indicators. We have put together the most relevant KPI developments on slide 6, and you will find the full table of all 12 KPIs in the appendix of this presentation. In Corporate Clients, we have made good progress to prepare the retreat from three international locations in 2021. On top, the recently initiated sales process of our Hungarian subsidiary shows significant interest in the market and is currently progressing well. And also on RWA efficiency, we have seen first improvements with clients in the low-yielding bucket being reduced from 34% to 33%. In PSBC, we have increased our loan and securities volumes in Germany by 6% in the first quarter. With €307 billion, we are already close to our year-end target of €310 billion. And the digital adoption of our clients comes faster than expected. With 68% active digital banking users we have already exceeded our 2021 targets of 67%. Regarding branch closures in PSBC, the preparation for the announced 200 closures in Q4 this year is well on track. And also the initiative in operations are progressing according to plan. The number of applications in the cloud has further increased to 33%. As the projects are running at full steam, we expect a strong step up in Q4 towards a ratio of 50% decentralized applications on cloud technology. Furthermore, our IT capacity in near shoring locations has increased to 15%. This includes the successful ramp up of Sofia an attractive location that offers a lot of talent. Ladies and gentlemen, the first quarter demonstrates that our strategic transformation has kicked off well and is on track. Let me now hand over to Bettina who will provide you with a more granular look into the financials of the first quarter.

Thank you, Manfred and also good morning from my side. I will walk you through the financial results of the quarter before we move into Q&A. Before going into the presentation, I would like to briefly mention that we have changed the format of our disclosure. As already established by most German companies, we will publish shortened interim financial information in Q1 and Q3. And as per H1, we will continue to provide the full interim report. We will certainly continue to maintain the information provided in the quarterly presentation including the appendix. Now, let's start with the overview on slide 8 and 9. As Manfred already stated, we had a very good start in the year, exceeding financial targets we have set ourselves for the quarter. The operating result improved to €538 million, more than covering the restructuring charges of €465 million. The good result is based on three pillars; strong revenue growth of 35% year-on-year, costs fully in line with target, and low risk result of €149 million. We could also further strengthen our capital ratio to 13.4% and have a comfortable buffer of 380 basis points above MDA. Let's briefly look at slide 10 and the positive contribution from the TLTRO in the quarter before moving to group P&L on slide 11. We have fulfilled the requirements of the ECB TLTRO III program and have accordingly booked a benefit of €126 million for Q1. We have classified this as an exceptional revenue item in Others and Consolidation to provide full transparency. In Q2, we will book some further €40 million from TLTRO III, in line with accounting standards. Slide 11 shows the overall group P&L with revenues by line items excluding exceptional revenue. The fair value result reflects the very good trading quarter and valuation gains. The key driver of the customer business was the commission income which grew strongly, while the interest income declined quarter-on-quarter. Before I go into some details on NCI and NII, I would like to briefly discuss the tax results. As guided with the Q4 2020 results, we expect a positive contribution from tax this year. Q1 taxes have been driven by the capitalization of DTA on tax losses carried forward. On slide 12 we show the development of net commission income. PSBC including mBank has strongly increased commission income by 11% year-on-year. This has been driven by the strong securities business in Germany, both from high trading volumes and increased securities and custody. As market volatility is reducing, we expect this to come down somewhat but the trend seems to be clear. Germans increasingly invest into securities to avoid negative rates on their savings. Corporate Clients benefited from the strong capital markets business in the first quarter with NCI up 4% year-on-year. For the next quarters, we expect NCI to return to around the level seen in previous quarter. This leads us to NII on slide 13 where we show the underlying interest income excluding TLTRO benefits of €126 million. As expected we have seen a slight decrease quarter-on-quarter. While the lending business in PSBC has performed well the ongoing drag from deposits still weighs on NII. As outlined in our strategy we are optimizing the loan book in Corporate Clients to increase capital efficiency and this results in lower volumes and correspondingly lower NII. For the rest of the year, we expect the underlying NII excluding the TLTRO benefit to remain roughly at the level of the first quarter. Let's carry on with costs on slide 14. We managed our costs in line with our full year target. And we already invested around €100 million of the planned €600 million we have earmarked for our digital transformation in 2021. While operating expenses were reduced by €34 million by our cost initiatives, compulsory contributions again increased by €36 million. This has been driven by increased contributions to the German deposit guarantee scheme following the closure of greenfield bank and the increased European bank levy. Let me move on to the implementation of our strategy and the associated restructuring costs on slide 15. As already communicated, we have booked €465 million in Q1, €447 million of which are related to headcount reductions. They cover the voluntary programs in Germany as well as reductions in management posts and positions outside of Germany. As Manfred said, we have agreed with the workers' council on framework agreements that cover the remaining headcount reductions required to reach our 2024 targets. The additional restructuring charges of around €225 million for further enhancement of the redundancy with instruments are well invested as they increase the reliability of execution. We plan to book the full remaining headcount reduction-related restructuring costs of around €550 million in Q2. Further, occupancy-related charges of around €130 million will need to be spread over the next quarters according to accounting standards. Let's move to slide 16 and the risk result. The third lockdown had only a very limited impact in the first quarter. With €149 million the risk result is the lowest since the start of the pandemic and reflects the resilience of our customers with largely stable ratings and a relatively low number of defaults in the quarter. In Germany, the remaining waivers of bankruptcy law have expired at the end of April. You will have to see if this has any significant impact. While we see default rates already increasing, we have not yet seen material effects on our portfolio. With the increasing vaccination rates, consumer activity should improve as the lockdown has eased supporting growth in the economy and correspondingly our customers. Nevertheless, an impact of increased defaults later in the year is currently still expected. Therefore, we have been cautious and kept our top level adjustment largely unchanged at €495 million leaving it available to cover a potential impact. We will again review the TLA in the next quarter. Now let's carry on with the operating segments and let me start with Private and Small-Business Customers on the next two slides. As mentioned, we have seen a strong increase in securities volumes by €15 billion in the quarter. These were not only driven by higher market prices, but also €5 billion net new money invested in securities and more than €2 billion thereof resulted from our introduction of deposit pricing. Loan volumes also increased strongly. In particular, the mortgage business has performed exceptionally well with the highest volume of new mortgages ever. Given the high savings rate in the pandemic, the overall market for consumer finance has shrunk in the last quarter. We have however managed to keep the consumer finance book stable and do not expect a significant change in customer behavior in the near-term. In the deposits business, we have made good progress in the quarter. The offer of attractive securities products helped to avoid a further increase in overall deposit volumes. In parallel, we have increased the volume of price deposits from €7 billion to €10 billion. So far we have signed agreements for deposits above €100,000. While we expect further progress throughout the year, deposit pricing will not be enough to fully compensate for the effects from the interest rate environment on deposit-related income. Overall, we expect the contribution from deposit agreements to be up to €50 million in 2021. We are also changing the pricing of bank accounts. Where we still offer a basic account with conditions and services for which we do not charge a monthly fee, we aim to charge customers that wish to use more services or do not fulfill the conditions early in the second half of the year. As you will have read, the German Federal Court has declared the current mechanism used by German banks to adjust pricing as invalid. We'll have to evaluate the final verdict when it will be published. Notwithstanding, the ruling we continue with the implementation of the planned price changes for Commerzbank customers and are working on adjusted processes that take the ruling into account. For comdirect customers, the price change was due to take effect on May 1st. This has been postponed following the ruling and we are also working on a suitable process for these accounts. On the topic of court rulings, there has been an encouraging ruling by the European Court of Justice related to Swiss franc mortgages in Poland. A ruling by the Polish Supreme Court on May seven also was constructive. A further ruling scheduled for May 11th has been postponed. The Polish Supreme Court requested additional opinions from institutions like the KNF, the National Bank of Poland and relevant Ombudsmen before taking a decision. No new date for a resolution has been set so far. Looking at underlying revenues in PSBC on page 18. These were up 1% year-on-year driven by the strong performance of the securities business with the private customers in Germany. This and the lower risk result have led to the strong increase in the operating result to €250 million. mBank has also performed well with underlying revenue slightly up year-on-year. Given that there were no significant changes to the outlook for Swiss franc mortgages in Q1, reserves were increased by €14 million to reflect slight changes in expectations. Potential further burdens from the Swiss franc mortgages obviously depend on the legal developments in Poland. Now let's move to Corporate Clients on the next two slides. In Corporate Clients, we have intensified our active portfolio and RWA efficiency management. This has led to an overall reduction in volumes and an increase of the average RWA efficiency to 4.7%, helped by the overall good revenues in the quarter. At the same time, we have maintained volumes with European customers that qualify for the TLTRO benefit. In the next quarters, we will continue with our RWA efficiency management. But this is clearly our priority. We will consider the environment for future TLTRO benefits in that context when appropriate. In the deposits business, we have cut our focus on disciplined pricing and have further increased the volume of priced deposits. The majority of deposits is priced and we expect to see the contribution from pricing to increase from around €150 million in 2020 to close to €200 million this year. Revenues from customer business have overall been slightly lower by around 1% year-on-year. Stronger capital markets business could not fully compensate for lower revenues from commercial banking. This is reflected in the customer segments. International corporates benefited from a better bond and syndication business, while Mittelstand and institutionals showed slightly lower revenues due to lower volumes in lending and trade finance. With overall higher reported revenues, a significantly improved risk result and lower costs Corporate Clients reached an operating result of €98 million. Let's move to slide 11 [ph] and the development of Others and Consolidation, before looking at the overall risk-weighted assets. The operating result of €190 million in Others and Consolidation includes the €126 million benefit from the TLTRO, as well as strong improvement in the fair value result, reflecting the very favorable market environment in this quarter. Compared to the first quarter of last year, the fair value result also improved due to the reduction of foreign currency refinancing transactions that negatively contributed to fair value. These were used to maintain central bank balances in foreign currencies that have contributed to interest income and have been closed respectively. Based on the strong Q1 results, we now expect the operating result of Others and Consolidation to be around zero for the full year and this is before the TLTRO benefits but could be influenced by changes in valuations in the course of the year. Let's move to slide 22 and the risk-weighted assets. Quarter-on-quarter RWAs were overall stable with a small increase in credit risk RWAs offset by reductions in operational risk RWA. In the next quarter, we expect an increase of up to €3 billion to €5 billion in RWA from again higher operational risk charges as well as regulatory-driven increase in credit risk RWA from TRIM and adjustment of models. While RWAs were stable in the quarter, regulatory capital increased. This was mainly due to accounting gains from our pension funds, driven by higher discount rates for pension liability. The CET1 ratio increased to 13.4% and provides us with a comfortable buffer of 380 basis points to MDA. Due to the expected RWA increases mentioned earlier and the implementation of our transformation program and resulting upfront burdens, we expect to see a reduction of the CET1 ratio in the next quarter Now let me wrap up the quarter with some key messages and conclude with our improved outlook for 2021. First, we had a very successful quarter, posting a net result of €133 million, despite booking €465 million of restructuring charges. Second, we have seen a very low number of defaults in our portfolio in the quarter and have kept our top level adjustment largely unchanged at €495 million to cover anticipated effects from the corona pandemic. Third, our cost management is delivering as planned. Fourth, we are on track in our strategy implementation. To implement the corresponding headcount reductions, we have concluded the framework agreements with the workers' representatives and now have all the required tools in place. And fifth, our CET1 ratio remains strong. With a buffer of 380 basis points above MDA, we are solidly above our medium-term target range of 200 to 250 basis points. Now let me conclude with the improved objectives and expectations for 2021, based on the premise, that there will be no extraordinary burden from Swiss franc mortgages in the course of the year. Given the strong Q1 results, revenues should slightly exceed the 2020 figure. With further progress of the transformation, we target a cost base of around €6.5 billion. Given the uncertainty of the further development of the pandemic, we continue to anticipate a risk result in a range of minus €0.8 billion to €1.2 billion. Based on current observations, a risk result at or below €1 billion is likely. Based on the Q1 result, we expect a CET1 ratio of at least 12.5%. And most importantly, we expect a positive operating result. Thank you very much for your attention. And now Manfred and I are very happy to take your questions. Thank you.

Thank you. [Operator Instructions] And the first question for today comes from Izabel Dobreva calling from Morgan Stanley. Over to you.

Hello. Hello. Good morning everybody. Thank you very much for the presentation and for taking my questions. And congratulations on the progress so far in this quarter's results. I had three questions. Firstly, I wanted to start with net interest income. I think you mentioned earlier on the call you would see Q1 as a run-rate. I wanted to make sure that, I heard that correctly, that the Q1 number clean of TLTRO is a run-rate for the rest of the year? And also related to that, I wanted to ask you, if you could give us an update on your guidance regarding modeled deposit pressures. I think in the past you have given us a €300 million all-in headwind. How has that changed so far this year, given the steepening of the yield curves? And how much would you expect to take this year? Then, I had a question on deposit repricing. If you could comment a little bit on, how you see the recent court ruling, having any impact on your initiatives and ultimately what the impact of this will be. And then finally, I wanted to ask you about the Swiss franc loan case situation, which as I understand has been postponed again in terms of the decision. I know the details are not known yet, but I wanted to ask you, what is your preferred approach, when it comes to provisioning the risk here? Would Commerzbank prefer to take an upfront provision and bulk, most of the exposure this year next, or would you prefer to take an approach of letting the cases kind of go through the court and taking those provisions more slowly? Thank you.

Okay. Thank you, Izabel. So I will take the questions. So, yes you heard it correctly, we take Q1 as a run-rate but, excludes, clearly the TLTRO effect. On the headwind to deposits that's largely unchanged from our standpoint, probably slightly better but we have to see how it develops over the next quarter. On deposit pricing -- I mean, on the deposit pricing, the difference to other price model introduction is that, we anyhow had to have a bilateral agreement in place, with respect to the deposit pricing. And that's what we did in the past. And what we would do in the future. The only difference, are new customers who basically entered the bank after last year, because there we basically put in the deposit pricing already in the whole account opening contract. And in Europe, so it's no impact basically on that. And the last question on Swiss franc loans. I mean it clearly depends on, how the developments are and the ruling. I mean the last two rulings were pretty promising. So we feel pretty much nicely covered with the current provisioning. We now have provisioned around I think €326 million. That covers cases we have already seen, but also covers potential new cases incoming. If you talked and I did that yesterday night with the management team of mBank, they are based on all the rulings now rather optimistic, that you will even see a little decrease in cases coming in. We will see whether this is true or not. And besides that, I mean, we will always book if we have the feeling that cases are increasing, situation is changing. And if there is a decision and we get a better feeling on the magnitude, we will be clearly -- follow then probably -- the policy everybody else will follow and book whatever is necessary to be booked. But in the moment, we feel comfortable with what we have done so far.

Okay. Thank you. Moving on the next question then, we now go to Benjamin Goy he's calling from Deutsche Bank. Over to you.

Yes. Hi. Good morning. Two questions from my side please. First on fee income and then second on your FTE reduction initiatives, on the fee income strong performance in the quarter, but I was just wondering whether you can quantify a bit the impact between, transactions and the boost from higher custody volumes. So I think it was up €50 million roughly in PSBC year-on-year and also €100 million even versus 2019, Q1. So just to understand what is say the abnormal growth rates given high transactions and high trading activities? And then, secondly on, the FTE reduction. First to understand this, 1,900 FTEs that are already signed, are these part of the earlier plan, or is it already part of 2024 kind of what you have achieved in the last two, three months? And related to that, how should we see the early retirement? I think they are up to seven years, early retirement possible. Instead of first half, will they still be on the payroll meaning, impacting the P&L and then thereafter you have the cost benefit, or how could that -- how could it look like this program? Thank you.

Let me start with the FTE reductions. You asked for the 1,900. 830 of the 1,900 are coming from the project in spring 2020 100 from the Spin [ph] program 2020 recording to branch closures and additional 940 from this year's program, ATZ program. So another 500 will then come this year from the usual fluctuations. Bettina you want to add on the cost effect?

Yeah. Sure. And your question, so it's part of the 10,000. So the 1,900 clearly plays into the reduction of the 10,000. And you need to differentiate the different early retirement programs. We have the part-time retirement program, which we already have offered twice. It's the one where you have an active and a passive phase. When the colleagues are still in the bank working during the active phase, they're part of the P&L. In the moment where they switch to the passive phase they also leave basically the P&L. And on the early retirement program, the program, which we have newly introduced with a seven-year maximum duration that is something whenever the colleague is resigning and then leaving then the colleague is moved off the P&L. Regarding your first question, regarding fee income this is largely due to transactions. That's very much driven by increased transactions and a smaller part is due to volume-driven increase.

Understood. Thank you.

Thank you. Moving on now to the next question. We are going to Jeremy Sigee who's calling from Exane BNP Paribas. Over to you.

Thank you. Good morning. Three questions please. Two of them are a follow-up on the previous ones. Firstly, net interest income. I just wanted to go back onto that in the moving parts. If I understand correctly, you're saying there's an extra €50 million deposit pricing benefit in PSBC and another €50 million in Corporate Clients. But those are going to be more than offset by further margin pressure. I just wanted to understood that correctly. Second question is on -- again following up the headcount cuts. So are you saying that the remaining 6,400 cuts to get to the 10,000 those will all be agreed this year? And then my last question, I just wondered, if there's any further observations on the revenue impact of branch closures from what you've done so far? Thank you.

With regard to the branch closures, we do not see anything so far yet. So we have a very successful buildup and ramp-up of the clients with the comdirect. But with regard to the branch closures, so far we have no impact what we're seeing. But usually it takes time and we need to wait. And you asked for the rest of the 6,400, whether we will all close them this year. So the 2,000 – yeah, it's also part of the fluctuation and the rest will be partially signed. So it's a mixture of signing this year and a mixture of fluctuation. The program is running from 2000 to 2024. So not all of them will resign this year.

But they're all agreed even if they're not signed.

Pardon, can you just repeat that?

Sorry. They may not all be signed, but all of the 6,400 -- all of the 10,000 will be agreed in principle in the course of this year. Is that correct?

Yes. Yes.

And they are actually -- I mean we have the frame contracts now agreed with the worker’s council and that includes basically also the magnitude of our downsizing. So the 10,000 are agreed between the bank and the worker’s council representatives. And what we now do is agreeing on the details and the split between the different functions. And then we basically go in the process under 2024 and doing the signing of agreements with the individuals. Regarding your NII question, you've got it right. So on the private client side, we see revenue stemming from deposit pricing of around €50 million. We have seen €15 million last year approximately. So it's an increase of around €35 million. And on the Corporate Clients side, it is from €150 million to €200 million, so additional €50 million. The drag is specifically I have to say on the private client side. And there we basically see that the €50 million cannot compensate from the drag, which we see from the net interest rate environment.

Okay. Very helpful. Thank you.

Next up we have Stuart Graham who's calling from Autonomous Research. Over to you.

Hello. Thank you for taking my questions. I had two, I think they're both probably for Mr. Knof. First, can you describe how the strategy SteerCo works in practice? Specifically what are the inputs to the meetings? What management information do you get ahead of time? And what are the outputs? How do you monitor follow-up action? That was the first question. And then, the second question was, can you remind us how many of the top management positions you've changed since you joined Commerzbank? For example, how many of the top 100 managers have you replaced? Thank you.

Okay. Stuart with regard to the Board, we have changed one on the Board minus one. I think Bettina, you need to help me. We have been roughly 45, and we are now -- I think we have 15, new -- around 15 new members on the Board of Management Board minus one. And for the Board minus two, this is what we're going to announce and what we're going to select in the next quarter. So, all jobs will be new and open for everybody. So everybody has to apply for the job. And there will be a process for the Board minus two level. You asked about the strategy and the SteerCo. So, this is basically a two-fold system. On the one hand, I have a Strategy Department and Transformation Department under my supervision and Holger Schulte is running this. And he has weekly meetings and calls with regarding the timely execution of the initiative. So, he is in talks with responsible managers and we will then report on a biweekly basis to the Board of Management of the progress of initiatives and whether something is popping up, which is delayed or has -- where there are regular changes and so on. So, weekly Holger is doing that. Then biweekly, he is coming to the Board if some of the initiatives are popping up, and that what we have also new introduced. Bettina and myself have now quarterly performance meetings with the Board minus one business representatives and Board minus two. So, we will see all relevant business managers at least quarterly on their business performance with regard to P&L cost revenues profitability, but also with regards to the implementation of the transaction initiatives. And separately, we have QBRs, where the Board of Management is on a quarterly basis evaluating the progress of the digitization initiatives. So, we're looking at the application and the end products for customers, but also we are reviewing the progress of the digital initiatives of the delivery organization. And we will report quarterly to the Supervisory Board on the progress of the initiatives and in the risk committees on whatever appearing risks of the transformation.

Could I just ask a follow-up there? When you joined you said you were happy enough with the management information. Is that still the case? Kind of three months on you're still happy with the management information you've got to run this bank with?

We will dig always deeper in that. So, also on the pricing, Bettina can explain you more on what we're doing on the pricing. Yes, I'm happy what we can do. So, we are -- but we have now further information on the project, on the initiatives and I want to have it on a quantitative basis, but also on a qualitative approach. So I want to know when projects are running off track ahead of all the financial figures are then in the system. So this is very important to me to have -- yes, to steering and correction measures. The one where we need further work is on the pricing of each product. And Bettina, you can explain on what you're doing there.

Yes. I mean, we have – Stuart, we have the normal financial steering in place, but what we wish to do and that's probably different also to previous program is really track down every single cost reduction we have promised out there and have -- back that up with the different initiatives and track down how things are developing on the cost side on the revenue side but also on the FTE side. So, basically every 10,000 are tracked by us very diligently down to the single function. And what we also do is basically, we are currently improving our group steering by introducing customer and product profitability to a more detailed level than we probably have seen beforehand.

Thank you very much for taking my questions.

Thank you. Next up, we have Johannes Thormann who's calling from HSBC. Over to you.

Good morning, everybody. Johannes Thormann, HSBC. Two follow-up questions, and one general one, please. First of all, on -- sorry to be numbers crunching but could you provide more details on the net commission income as you have done before to get a better clarity what has been the driver? And could you probably revert the decision not to disclose the different top lines of the net commission income? Secondly, could you update us on the current number of court cases at mBank and what are the monthly inflows at mBank, so we can also see how this is progressing relatively to the market? And last but not least, just in terms of the revenue bridge you gave with the new strategy to get to €5.4 billion net interest income, I'm a bit struggling to see how you reached that from the current level of call it €4.7 billion, €4.8 billion end of the year if we take your current run rate plus TLTRO effects. And then we see a total negative other income of €500 million where we have seen a good trading and then other income this quarter. So please elaborate what is driving those changes. Thank you.

So, lots of questions Johannes, I try to take them. So, starting with the NCI for more details. Completely speaking, if we have approximately €50 million increase in net commission income year-on-year then you can assume that 10% or €5 million are volume based and the rest is basically transaction based if that helps, number one. Number two, number of inflow and incoming court cases is approximately around 400 at the moment. And I think we are still searching for the absolute number at the moment, and I come back to that later on. The Other & Consolidation, I think, I understand the question why do we guide now instead of minus €150 million to zero that's basically because we have this excellent first quarter back to fair value result, et cetera. We have the TLTRO for sure as well and we book that in Other & Consolidation. So we assume, I would say, normal quarters now for Q2 to Q4 and that basically brings us if you exclude TLTRO on around zero. And then the step, how do we believe we will manage the NII? I mean, clearly, we want to grow in PSBC specifically and they are specifically mBank as we also have laid out during the Capital Markets Day. And we should not forget that also in mBank or in Poland current interest rates are at a very low level, but economics expects a recovery of this interest rate level already 2022, 2023 latest and that will have a big impact on the NII driving that up. And that is the legal -- there we are, it's around 7,000 court cases, which we currently have within mBank a little bit less than 7,000. And as I said at which rate it's 400, but management team in mBank is pretty bullish since the last ruling that they hopefully will see a decrease. In the summer, we will see whether they're right or not.

Okay. Understood. Thank you.

Thank you. The next question comes from Jochen Schmitt, who's calling from Metzler. Over to you.

Thank you. Good morning. I have one question on your new business in German mortgages, which you have mentioned to have been very strong in Q1. Could you also provide a figure here? That's my question.

I mean, the volume stands at around €88 billion at the moment, and the increase which you have seen in loan volume mainly stems from mortgage business, that's €5 billion up.

And this would also be the new business for Q1, the €5 billion which you have just mentioned because I mean…

Yes.

Yes? Okay. Thank you.

Okay. Are we ready to move on to the next question?

I think so. Thank you.

Okay. Then we'll move on to Nicholas Herman, who's calling from Citigroup. Over to you.

Oh, yes. Good morning. Thank you for the presentation and taking my questions. Three if I may. One a question around the BGH ruling. Secondly, on the outlook. And then thirdly, just more clarification on PSBC repricing. So, on the BGH ruling just a couple of questions around this please. I welcome any thoughts you might have on the recent ruling, but I do have a couple of specific questions around revenue and I guess risks of clawbacks. So, on the revenue point, I guess, in terms of passing negative rates via fees, does it limit your ability to pass on negative rates in the future? And on the fee side, I think, there were some planned fee increases that you've now had to stop. Presumably though this is still -- you don't expect to see much impact on your ability to meet your medium-term targets, because these are mostly volume driven rather than pricing driven, so just to confirm that. And then on the clawback part, I guess, do you see a risk that customers could seek to claim back any prior increases in fees? Again, my assumption is that it's pretty limited on the negative rate side, because you've done that so far on a bilateral basis. But beyond that is there a risk that customers could seek to clawback any fee increases you might have done across accounts payments securities and so on? So that's the first part. On -- in terms of outlook, probably a little picky -- pernickety here, but you've guided to slightly higher revenues. Can I just push you to clarify what you mean by slightly? I mean would you call 8.25%, 8.3% slightly? So it's like 1% or less, or would it be more than that? And I think you also mentioned that it excludes any outsized changes in FX mortgages, but presumably that also excludes any gains or investments that you might recognize -- might potentially recognize. And then the third question -- final question, sorry I realized there are a few here. I was interested in the disclosure you provided on slide 17 of your deposits, where it says that you have repriced €10 billion of your retail deposits. Just trying to think how -- just wondering how to think about this. So I guess in the past you've indicated that that the pool of deposits with more than €200,000 was about €20 billion. So the €10 billion that you've now repriced does that mean that you've only repriced half of them or you've only negotiated half of them or you've any repriced half of them because the other half you were able to they actually then decided to do more securities transactions with you? I just want to understand kind of how to think about that €10 billion and how to think about that? Thank you.

Okay. Thank you. So let me start with the Federal court ruling. So I mean the assumption is right. In the future, the impact is limited. I mean, as I said, we anyhow only planned to introduce the new pricing model for Commerzbank on 1st of July and the teams are working on a new process, which is in compliance with the new ruling. On comdirect plan was 1st of May, but there is also a process in preparation. And on the deposit pricing as I said and you rightfully also pointed out, there are bilateral agreements and they are basically vetted and cannot be argued. Looking back to be very honest it's difficult. We still wait for the verdict to be published and then we carefully will review it. And if there's anything we will definitely share our insights with you next quarter. On the outlook, I feel that you would say something like that or think something like that. I think I got the same question last time when I said slightly below. Now it's slightly above and yes slightly above means probably a high double-digit or a low triple-digit million number. And I mean, it basically includes -- if we would have to book some increase on Swiss francs just because I don't know cases go up or something like that or ruling is changing that will be covered. But if there is a final verdict and the higher impact that is clearly not covered by the outlook. And the CommerzVentures and I assume you're referring to that given that they have given us some nice surprises in the past, yes. As I said, we do not include CommerzVentures in our planning and also in our forecasting. But I'm pretty confident that we will also share some good news on that in the coming months.

On that I presume you're referring to the Marqeta IPO, which I think might happen in Q2, Q3. Is that right?

What -- I didn't understand. I didn't get that.

Were you specifically were talking about Marqeta and the IPO -- upcoming IPO -- potential IPO, or is that something else?

Yes. I mean I'm not commenting a single investment, but I mean you can have a look on our portfolio and then you see what might come in, in the coming months.

Okay.

And last question on the €10 billion, I mean, there's still -- and you see that on page 17, there is clear potential where we still need to reach out to the clients et cetera. I mean -- so we talk about hundreds or more -- thousands of clients we have to talk to and basically get bilateral agreements in place that takes time. So the €10 billion is constantly increasing and we definitely also we come back on that in the next quarter and you will see an increase. So we're still working on it. And number will even probably go higher given that we plan to decrease the €100,000 to €50,000 in the course of the year.

Thanks. That's really helpful. Just one follow-up on the last point, but just on the €10 billion. Again you've had some negotiations on the €20 billion pool of deposits of more than €200,000. Does that basically mean that you're only able to pass on negative rates to 50% of those? Is that how I should think about it?

Well, I mean what happened, what is the consequence normally when we reach out to the clients typically also I mean we started really with the most wealthy ones et cetera. They have different strategies. Some and you see that also in our securities volume move basically deposits away into securities. Some just sign the agreement and some also answer the [indiscernible] take the money and go to another bank. So you have seen all behavior. And therefore I mean now in the moment with €100,000 threshold, I would say we have a potential of €29 billion to reach out to and we take it from there.

Really helpful. Thank you so much.

Thank you. And the last question for today comes from Riccardo Rovere who's calling from Mediobanca. Over to you.

Thanks and good morning to everybody. And I welcome the fact that Mr. Knof is part of this call, which has never been the case for Commerzbank for some reasons over the past decade. A couple of questions for him, if I may. In slide 54 of Strategy 2024, you provide the -- there is a bar for cost for every single year from 2020 to 2024. Now the cost reduction that you plug in Strategy 2024 is made by headcount reduction, branch closure and that should be pretty mechanical, I would say, as long as you achieve the agreement with trade unions. There are some 100 -- a few hundred million of euros related to streamlining here and there; processes, digitization and so on. Is there any reason why Commerzbank should not be able to achieve the cost-cutting that is not related to headcount reduction and branch closing? This is my first question. Second question I have is on the FTEs again. The phasing that you -- once you have struck -- the agreement that you have struck so far with the trade unions is totally and fully compatible with slide 54 with the various bars of that presentation. And then I have a quick wrap-up on RWAs. I'm not sure I got it correctly, but if you can clarify what could be the impact of TRIM IRB models overall in -- for 2021. And if that is going to -- let's say, is going to compensate the RWA efficiency that you had -- that you're having in the Corporate Client division. Thanks.

Yes. Riccardo, thank you. Yes, you got it right. The branch closures and the reduction of the FTEs are fully in plan and you see them in the columns here. But also there's no risk and there's no indication that the effects from digitization and processes will not occur as planned. So far there's no indications and there are hundreds of different initiatives and we plan them on a year-by-year basis. And so far, there’s no risk and there will be also occur as planned, the same branch closures and FTE reductions.

Yes. And on the FTE agreements, it's fully compatible, so no changes there. And on the RWAs we basically expect €3 billion to €5 billion increase. That comes from also volume increases. But clearly also we expect the loss letter for TRIM on FIs. We expect their impact of less than 10 basis points, which brings us to our total impact of TRIM, if you put all the things together, of 55 basis points, which is by the way lower than the average of our German competitors, which is I think around 70, so shows that we have here less burden coming from that. So in total €3 billion to €5 billion. There's also some off-risk RWAs increase included. And yes, that is a pretty good explanation.

Right. Thanks. And if I may, just a quick -- again, a quick follow-up on TLTRO. The €126 million that you booked this quarter, that refers to the sweetener only of the first period. Do I get it right?

Yes.

So you still have to decide whether you're going to have the second bid in the second stage, right? So the project has not changed in that sense.

Yes. The project not changed. So for the first nine months, so we book another €40 million in the second quarter, because then the program basically officially ends, because it runs summer to summer. And then there is the next round. And you might have seen we have also increased slightly our volumes. So it's now €36 billion. And we expect that we will book another around €95 million of benefits in the fourth quarter and then the rest for the second program will follow in 2022.

Yes. Thank you very much for the questions and the discussions. Bettina and myself, we are looking forward to the next session and we hope we can also meet again in person soon. It looks more promising now than a couple of weeks ago. Again, thanks for participating and have a nice day.