In the first nine months as a whole, Commerzbank earned about €1.8 billion euros, almost twice as much as a year earlier.
Commerzbank is now targeting net profits in 2023 as a whole of around €2.2 billion ($2.4 billion). By 2027, chief executive Manfred Knof said that the firm aims to raise annual net profits to €3.4 billion.
In 2022, the bank, whose largest shareholder is the German state, generated around €1.4 billion in income, which at the time was the highest figure since the global financial crisis hit in 2007.
Knof said on Wednesday that increased net commission income should contribute to Commerzbank’s rising profit forecasts.
He said the bank plans to invest an average of €530 million annually over the next few years in digitalisation and new technologies.
Net interest income, which has risen sharply recently, is expected to increase to more than €8.1 billion in the current year, but is only likely to grow moderately in the medium term, according to the latest management estimates.
Like other banks, the bank is now benefiting from the significant rise in interest rates. After years of interest rates near zero, the European Central Bank (ECB) has been sharply increasing rates in hopes of combating inflation.
Commerzbank has been on a cost-cutting course in recent years, with thousands of jobs cut and the number of branches in Germany reduced from 1,000 to 400. Bank leaders said on Wednesday that the cost-cutting would continue for the time being.
“The transformation work of recent years is increasingly paying off. In addition to the interest rate environment, we are benefiting from a low risk result and continued cost discipline,” summarised chief financial officer Bettina Orlopp.
The fact that the bank has already earned more through the first nine months of 2023 than all of last year is “a strong basis for significantly increasing our dividend as planned,” she said.
At the end of September, Commerzbank announced plans to return a total of €3 billion to shareholders through a combination of dividends and share buybacks.
Profits in 2022, although strong, were harmed by more than €1 billion in losses at Polish subsidiary mBank from loans issued in Swiss francs.
By the end of September of the current year, booked losses at mBank in 2023 totalled €754 million.
