By dpa correspondents I Thursday, February 16, 2023
FRANKFURT – Germany’s Commerzbank reported its highest net profit in more than 10 years in 2022 and said it expects a “strong business performance” this year.
The Frankfurt-headquartered bank said on Thursday that net profit more than tripled to €1.4 billion ($1.5 billion), despite one-off charges of some €1 billion in Poland related to its subsidiary mBank.
In 2021, Commerzbank returned to the black after a corporate restructuring and earned €430 million. Higher interest rates in the eurozone in recent months have helped to boost the balance sheet.
“Our turnaround is a success. Commerzbank is back,” said the chairman of the board of managing directors Manfred Knof in the result’s statement.
The last time Commerzbank reported a higher profit was in 2007, when it was just over €1.9 billion. In 2010, the amount was just below the 2022 figure. In the past decade or so the bank has had to deal with numerous crises and corporate restructuring measures.
The German state saved Commerzbank from collapse during the 2008-09 financial crisis and is still the largest single shareholder at 15.6%. A failed merger attempt with Deutsche Bank and personnel disputes caused turmoil in the ensuing years.
Knof, who took office at the beginning of 2021, tightened the lender’s austerity course. The bank cut thousands of jobs and significantly reduced its dense branch network.
After two profitable years in a row, Commerzbank is aiming to return to being listed on Germany’s DAX 40 index of blue-chip stocks.
On Friday evening, Deutsche Börse will announce who will move up to the group of 40 companies on the index following the delisting of chemical group Linde. Commerzbank’s fourth-quarter consolidated profit grew 12.1% to €472 million ($505.1 million) from last year’s €421 million.
Pre-tax profit stood at €488 million, which is significantly higher than the prior year’s €115 million.
For the final three-month period of the year, the company reported total revenue growth of 12.7% to €2.36 billion, compared to €2.10 billion in the same period in the prior year. Net interest income climbed 50.7% to €1.96 billion from €1.30 billion last year.
Moving forward, for the fiscal year 2023, Commerzbank expects a net result well above 2022 and targets a pay-out ratio of 50% of the consolidated profit.
The lender also anticipates a further increase in net interest income to well above €6.5 billion with clear additional upside potential. Net commission income is expected to remain stable.
Meanwhile, the company is aiming for a further reduction in total costs to €6.3 billion.