Despite a slump in earnings in the third quarter, Commerzbank is on course for a profit of more than one billion euros for the year as a whole. The increased interest rates make the CEO Manfred Knof, who took office as a reorganizer in 2021, more positive for the coming years. In the first nine months, the institute already earned a total of 963 million euros, despite the high burden in Poland, which was more than experts had expected.
“We have made great progress in implementing our “Strategy 2024″ and are well on the way to achieving our goals,” said Knof. This means that Commerzbank has become more resilient in a difficult environment. Thanks to higher interest rates and improved customer business, income should increase more than expected in the coming years. The institute’s income is expected to increase to ten billion euros by 2024 – almost a billion more than previously planned. However, the majority of the additional income is likely to be spent on higher costs.
The management expects further costs of 6.4 billion euros for this year. By 2024, however, they should only fall to 6 billion euros instead of 5.4 billion due to inflation. Nevertheless, the operating profit should then climb to around 3.2 billion euros – and thus be around 200 million higher than previously planned.
CFO Orlopp: Commerzbank “on the home straight”
This year, CFO Bettina Orlopp sees Commerzbank “on the home stretch” with a profit of more than one billion euros. “We continue to have our sights firmly set on paying a dividend.” Net interest income is expected to rise to more than six billion euros in 2022. According to the information, the risk provision for impaired loans should be around 700 million euros.
In the third quarter, however, the already known burdens related to the controversial Swiss franc loans at the Polish subsidiary mBank sapped the income and profit of the MDax group. In addition, there were the statutory interest and repayment deferrals in the country. At Commerzbank, the two items accounted for almost 750 million euros.
As a result, income – i.e. the entire income of the Commerzbank Group – fell by around six percent to almost 1.9 billion euros. “Without the aforementioned special charges in Poland, the previous year’s figure would have been exceeded by more than a quarter,” wrote the institute.
With 84 million euros, the Frankfurt money house set aside almost four times as much money for impending loan defaults as in the same period last year. The bottom line is that Commerzbank earned 195 million euros, almost half as much as a year earlier.
The head of the group, Knof, who took office at the beginning of 2021, had radically changed course with an austerity course. The institute sees itself on schedule with the reduction of around 10,000 gross full-time positions. The loss of around 8,350 jobs, especially in Germany, is therefore largely regulated. A further 1,100 full-time positions are to be cut in the coming quarters, primarily abroad.
In Germany, Commerzbank is harder on the cost brakes in the branches. Instead of 450 locations, the board recently relied on a good 400 branches nationwide. Before the pandemic began, the institute had a comparatively dense network of branches with around 1,000 locations in Germany.
