Bank Performance Analysis Presentation: German System vs. Benelux System through two of their most representative banks

1. BANK PERFORMANCE ANALYSIS
GERMAN VS BENELUX SYSTEM
INTERNATIONAL BANKING REPORT
AUTHORED BY: LUCA RICCI PACIFICI

2. Lower Assets but better Capital
-After last ten years events
European banks
Built a solid capital position
Worked on balance sheets
-From December 2011
•CET1 is doubled
•TIER1 and the Total Capital positive
trend
•Total assets contraction

3. Challenge is on
PROFITABILITY
The ROE of EU-28 banks shows a positive trend,
slightly went close to 6%
•Low interest rates policy
•Digitalization
•Global competition0.00%
2.00%
4.00%
6.00%
8.00%
10.00%
12.00%
14.00%
16.00%
2006 2008 2010 2012 2014 2016 2018
ROE EU-28

4. Three-Pillars System
Private banks Public banks Cooperative banks

5. The largest German Bank
Main services:
Retail Banking
Corporate Banking
Investment Banking
Financial Advisory
Asset and Wealth Management
One of the biggest in Europe, total assets with 1,348 bln €
Commerbank Deutsche
Bank
Others
Domestic Market Share
Commerbank Deutsche Bank Others
Large presence in Europe and in the world, in 2017 21,48%

6. 2° largest Bank in Germany
Principal services:
Retail Banking
Private Banking and Wealth Management
Corporate Banking
Investment Banking
More than 50 countries, 462 bln € of total assets
Commerbank
Deutsche Bank
Others
Domestic Market Share
Commerbank Deutsche Bank OthersIts domestic market share in 2017 was 6.59%

7. •BELGIUM
The volume of loans offered to the non-financial
companies touched his highest level in 2017
•NETHERLANDS
The total amount of offered loans is decreased
•LUXEMBOURG
Luxemburg has the highest GDP pro-capite in
the world
second biggest investment funds center in the
world after USA with about 4,187 Euro billions
of assets

8. Largest bank in Netherland
Principal services:
Retail Banking
Private Banking
Commercial Banking
Insurance
 846 bln € of total asset
 the 4th bank in Belgium with 10.26% of market share
 ING Group expanded its international business through
several acquisition, expanding its business overseas
Dutch multinational banking and financial services based in Amsterdam

9. Largest bank in Belgium
Business in six countries:
Belgium
Bulgaria
Czech Republic
Hungary
Ireland
Slovakia
 256 bln € of total assets
 is the 1st largest bank in Belgium with a market share of
22.72% of domestic market
Belgian universal multi-channel bank

10. Deutsche Bank is the largest but is decreasing
-
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
1,600,000
1,800,000
2015 2016 2017 2018
Total Assets in € mln
DEUTSCHE BANK COMMERZBANK ING Group KBC Group
Total Asset in € mln
2015 2016 2017 2018
DEUTSCHE BANK 1.629.130 1.590.546 1.474.732 1.348.137 -17,25%
COMMERZBANK 532.641 480.450 452.493 462.369 -13,19%
ING Group 1.005.233 845.081 846.216 887.030 -11,76%
KBC Group 252.356 275.200 292.342 283.808 12,46%

11. ING and KBC are improving NIM
Net interest margin in € mln
2015 2016 2017 2018
DEUTSCHE BANK 15.611 14.707 12.378 13.192 -15,50%
COMMERZBANK 5.779 5.077 4.201 4.748 -17,84%
ING Group 12.561 13.241 13.714 13.916 10,79%
KBC Group 4.311 4.258 4.121 4.543 5,38%
-
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
2015 2016 2017 2018
Net Interest Margin in € mln
DEUTSCHE BANK COMMERZBANK ING Group KBC Group

12. Benelux banks have better NOI
(8,000)
(6,000)
(4,000)
(2,000)
-
2,000
4,000
6,000
8,000
2015 2016 2017 2018
Net Operating Income in € mln
DEUTSCHE BANK COMMERZBANK ING Group KBC Group
Net operating income in € mln
2015 2016 2017 2018
DEUTSCHE BANK
-
5.412 572 1.753 1.855 -
COMMERZBANK 1.999 879 11 805 -59,73%
ING Group 6.113 4.647 6.922 6.188 1,23%
KBC Group 2.129 2.360 2.612 3.070 44,20%

13. German banks are making again positive
Profits, Benelux banks are better
(8,000)
(6,000)
(4,000)
(2,000)
-
2,000
4,000
6,000
2015 2016 2017 2018
Net Profit in € mln
DEUTSCHE BANK COMMERZBANK ING Group KBC Group
Net Profit in € mln
2015 2016 2017 2018
DEUTSCHE BANK
-
6.772
-
1.356
-
735 341 -
COMMERZBANK
-1177 382 250 967
-
ING Group
4413 4051 4785 4811
9,02%
KBC Group
2639 2427 2575 2570
-2,61%

14. Main Profitability Ratio
ROE 2015 2016 2017 2018
DEUTSCHE BANK -10,01% -2,09% -1,08% 0,50%
COMMERZBANK 3,87% 1,29% 0,83% 3,29%
ING Group 9,10% 8,04% 9,36% 9,30%
KBC Group 16,69% 13,98% 13,69% 13,09%
Germany 1,72% 2,12% 2,73% -
Belgium 12,24% 11,03% 10,41% -
Luxembourg 5,41% 5,16% 5,64% -
Netherlands 7,55% 7,64% 9,12% -
EU-28 5,57% 5,29% 5,79% -
ROA 2015 2016 2017 2018
DEUTSCHE BANK -0,42% -0,09% -0,05% 0,03%
COMMERZBANK 0,22% 0,08% 0,06% 0,21%
ING Group 0,44% 0,48% 0,57% 0,54%
KBC Group 1,05% 0,88% 0,88% 0,91%
Germany 0,09% 0,11% 0,19% -
Belgium 0,71% 0,64% 0,66% -
Luxembourg 0,70% 0,69% 0,74% -
Netherlands 0,42% 0,43% 0,55% -
EU-28 0,36% 0,38% 0,44% -

15. -15.00%
-10.00%
-5.00%
0.00%
5.00%
10.00%
15.00%
20.00%
DEUTSCHE BANK COMMERZBANK ING Group KBC Group Germany Belgium Luxembourg Netherlands EU-28
Return on Equity
2015 2016 2017 2018

16. -0.60%
-0.40%
-0.20%
0.00%
0.20%
0.40%
0.60%
0.80%
1.00%
1.20%
DEUTSCHE BANK COMMERZBANK ING Group KBC Group Germany Belgium Luxembourg Netherlands EU-28
Return on Asset
2015 2016 2017 2018

17. KBC is the best bank for EPS and DPS
-6
-4
-2
0
2
4
6
8
2015 2016 2017 2018
Earnings per share
DEUTSCHE BANK COMMERZBANK ING Group KBC Group
- €
0.50 €
1.00 €
1.50 €
2.00 €
2.50 €
3.00 €
3.50 €
4.00 €
2015 2016 2017 2018
Dividend per share
DEUTSCHE BANK ING Group KBC Group

18. 0.00% 5.00% 10.00% 15.00% 20.00% 25.00% 30.00%
DEUTSCHE BANK
COMMERZBANK
ING Group
KBC Group
Germany
Belgium
Luxembourg
Netherlands
EU-28
Tier 1 Capital Ratio
2018 2017 2016 2015
0.00% 5.00% 10.00% 15.00% 20.00% 25.00% 30.00%
DEUTSCHE BANK
COMMERZBANK
ING Group
KBC Group
German
Belgium
Luxembourg
Netherlands
EU-28
CET1 ratio
2018 2017 2016 2015
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
35.00%
40.00%
45.00%
DEUTSCHE BANK COMMERZBANK ING Group KBC Group Germany Belgium Luxembourg Netherlands EU-28
RWA fully loaded as a & of Total Asset
2015 2016 2017 2018

19. Conslusion
Deutsche Bank:
•Largest bank in Germany
•Lacks in profitability but is making betterment
Commerzbank:
•2nd bank in Germany, better than DB, close to
German average but far form EU values
•Smaller but more profitable than the big sister
DB
ING Group:
•It offers also insurance services
•Largest bank in Netherlands
•Best on Net Interest Margin and Net Profit
KBC:
•Best bank relatively speaking, smallest in size and
in market
•First of four in many indexes
•Best results for shareholders’