Frankfurt — Germany’s Commerzbank said on Wednesday that net profit more than tripled in the third quarter, better than expected and helped by higher interest rates, as it presented a strategy update.
Net profit of €684m in the quarter compared with a profit of €195m a year earlier. Analysts had on average expected profit of €611m, according to a consensus forecast published by Commerzbank.
Like many banks, Commerzbank is benefiting from a rise in interest rates and the income that generates. Net interest income — helped by the European Central Bank’s interest rate spree — rose 34% to €2.2bn, up from €1.4bn last year. The central bank has increased rates 10 times since July 2022.
It raised its guidance for 2023. It now expects net profit of €2.2bn for 2023
Commerzbank, one of Germany’s best known banks and partially held by the government after a bailout more than a decade ago, spent much of the past three years in a major overhaul, slashing its workforce and branch network to restore profits.
On Wednesday, management presented a strategy update, saying it would reduce its cost-to-income ratio to 55% by 2027 and aim for a net profit of about €3.4bn in that year. Those compare with a ratio of 60% so far this year and expectations for profit of €2.2bn for the full year.
It raised its guidance for 2023. It now expects net profit of €2.2bn for 2023.
“With our refined strategy, we are strengthening our position as a decisive player in the German banking market,” CEO Manfred Knof said.
Reuters
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