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Foreword of the CEO

Dr. Thorsten Reitmeyer

Dr. Thorsten Reitmeyer

Dear Shareholders,

Attractive products, excellent service and high levels of security – these are the features that made us “Deutschlands Beste Bank” in 2011. We were honoured with this award by our satisfied customers, but had our shareholders been surveyed instead, comdirect would probably still have been a contender for the title. This is because in the midst of the euro currency crisis, unsettled markets and turbulent prices, we have stayed the course with our robust business model and achieved a balanced increase in value, profitability and growth.

Our performance indicators at the year-end demonstrate just how balanced this development is: strong growth in the number of customers with a rise of almost 15% to an all-time high of 2.6m. Record earnings of around €340m, with a substantial increase in net interest and net commission income. Our ongoing strict cost discipline that is reflected in the disproportionately lower rise in administrative expenses. Together, these produce a record pre-tax profit of €108m, which outstrips the previous year’s figure by a good third – thanks also to interest payments on a tax refund. The tax refund itself amounting to some €37m is shown in the after-tax profit. It relates to appeal proceedings dating back several years in respect of the tax treatment of foreign activities that had been discontinued at the time.

The consolidated net profit of around €112m means we are in position to propose a distribution of 56 cents per share and at the same time strengthen equity with a view to further growth. The balance between short-term growth in profit and long-term increase in value is therefore evident in our distribution policy as well.

Being the best bank for customers and shareholders above all means continually improving our good performance. Our example here is our “Germany’s performance broker” campaign under which we launched our offering for trading in CFDs. Traders benefit from our powerful trading platform as well as excellent quotations from market maker Commerzbank. Through a series of wide-ranging initiatives we have strengthened our leadership in online securities business for modern investors, which is the core of our business model. And the volume of net investments from our customers of €2.7bn speaks for itself: traders and investors trust the comdirect group, especially in challenging market situations.

Such trust has to be continually earned and this is equally true in banking. Here we have made our current account even more convenient and secure. The sustained popularity of our current account and Tagesgeld PLUS account shows that with comprehensive products, simple navigation and friendly Customer Services, we are increasingly convincing branch bank customers to switch to comdirect. Our advisory offering, especially Baufinanzierung PLUS, proves at the same time that we also provide convincing and highly transparent answers to complex questions. We intend to build on these strengths and break down any remaining reservations regarding the direct bank model – a central theme in this annual report.

We live up to our claim to be a full service bank for modern investors in our business via institutional partners as well. Through ebase, they are able to offer their end customers all the key services for financial asset accumulation: funds, ETFs, call money and fixed-term deposits and in future, an online-type account featuring extended payment transaction functions. Consequently, major companies in very different sectors can offer seamlessly integrated banking services with individual terms and conditions without having to be a bank themselves. Strong growth in customers and assets through new renowned partners in the target segments shows that our subsidiary ebase is on the right path.

In both business lines, comdirect (B2C) and ebase (B2B), we will continue to manage our growth on a value and risk-oriented basis in the future as well. A particular focus in this respect is our Treasury portfolio. We actively reduced risks here in 2011; at the year-end only around €70m, or 0.6% of the balance sheet total, was attributable to counterparties in the “PIIGS” countries within the eurozone. By the end of March 2012, the figure will drop to less than €20m as a result of maturities. Although we monitor developments in our industry very closely, this does not prevent us from giving our customers and partners our full attention. Inspiring them with our performance, expertise and level of service is our aim.

For our shareholders, we intend to add value through growth even in turbulent times. With our flexible cost base, we have successfully achieved this in a wide range of market situations, and the entire comdirect team is dedicated to ensuring that this continues. A safe investment in all market phases – and the best bank for customers, shareholders and employees: that remains our claim.

Sincerely yours

Signature Dr. Thorsten Reitmeyer
Dr. Thorsten Reitmeyer