REG-Commerzbank Aktiengesellschaft Commerzbank with strong quarterly result – Growth in net commission income continues
Yesterday 06:15
============
Commerzbank Aktiengesellschaft (CZB)
Commerzbank with strong quarterly result – Growth in net commission income
continues
09-May-2025 / 07:04 CET/CEST
The issuer is solely responsible for the content of this announcement.
══════════════════════════════════════════════════════════════════════════
• Operating result increased by 13% to record of €1.2bn – net result
with €834m at highest level since 2011
• Revenues increased by 12% to €3.1bn – net commission income grew by 6%
to €1bn
• Cost-income ratio reduced by 2 percentage points to 56% – below target
of 57% for full year
• €40m restructuring expenses booked in Q1 for an early partial
retirement programme
• Moderate risk result of minus €123m – loan book robust with
non-performing exposure ratio of 1.0%
• Double-digit return on tangible equity (Net RoTE) of 11.1% achieved
• CET 1 ratio of 15.1% demonstrates high potential for capital return –
application for next share buyback targeted for beginning of third
quarter
• Outlook for full year 2025 confirmed – CET 1 ratio of at least 14.5%
expected
Commerzbank started the new financial year with great momentum. The net
result increased by 12% to €834m in the first three months. This is the
best start of the year as well as the best quarterly result since the
first quarter of 2011. The operating result reached a new record with an
increase of 13% to €1.2bn. Revenues climbed by 12% to €3.1bn. The
cost-income ratio decreased to 56%, below the target of 57% for the full
year. Despite the economically challenging environment, the risk result
remained at a moderate level of minus €123m. The return on tangible equity
was double-digit at 11.1% in the first quarter.
In March, the Bank successfully completed its share buyback of €400m.
Together with the share buyback of €600m implemented between November 2024
and January 2025, Commerzbank bought a total of €1bn of its own shares as
part of the capital return for the financial year 2024. In addition to the
share buybacks, the Bank proposes to pay a dividend of €0.65 per share
(2023: €0.35 per share), which will be decided at the Annual General
Meeting on 15 May 2025. This results in a dividend payment of €733m. In
total, the capital return to shareholders for the financial year 2024 will
amount to €1.73bn. The Bank plans to apply for its next share buyback to
the European Central Bank (ECB) and the German Finance Agency at the
beginning of the third quarter.
“We achieved the highest quarterly profit since 2011, demonstrating that
we can grow even in economically challenging times,” said CEO Bettina
Orlopp. “We are progressing with the implementation of our strategy
‘Momentum’. We plan to return more capital to our shareholders in the
coming years.”
Commerzbank also made significant progress in transformation as part of
its strategy “Momentum”. In particular, several AI applications were
launched. In the Commerzbank banking app, users can now receive support
from an avatar for their banking transactions. The new virtual assistant
Ava helps with service requests, account management, and answers questions
about Commerzbank products. Commerzbank is one of the first banks to
introduce a customer application that combines generative artificial
intelligence (AI) and avatar technology.
In the Corporate Client segment, the Bank has successfully continued its
digitalisation strategy for capital markets platforms as AI-based
technologies are increasingly playing a significant role in pricing and
advisory services. At the beginning of the year, the Bank has further
developed the platform for corporate and institutional clients. It has
been well received with more and more corporate clients using the
self-service onboarding for our online trading platform FX Live Trader, as
well as the option to process deposits online via electronic platforms.
Commerzbank employees are also benefiting from advances in AI. More than
30,000 employees in Germany and abroad can access the chatbot “cobaGPT”
which was introduced in early March. The tool makes daily work easier and
more efficient.
Moreover, at the end of March 2025, Commerzbank introduced a new
self-developed AI-based tool called “Fraud AI”. The tool aims at
automatically detecting fraudulent activities and responding promptly.
“Fraud AI” helps to reduce losses and enhances effectiveness through
automated fraud alerts. Additionally, the tool contributes to meeting
regulatory requirements and is pioneering in real-time fraud detection and
prevention.
Back in February, Commerzbank announced that ongoing digitalisation and
increased use of international locations will be accompanied by further
job reductions primarily in Germany. The negotiations on job reductions
are progressing well. The Bank has already agreed with the employee
representative committees on the details of implementing an early partial
retirement programme, which it will offer this year. For this purpose,
around €40m restructuring expenses were booked in the first quarter.
Currently, the Bank is negotiating with the employee representative
committees on a framework settlement of interests and a framework social
plan. Based on the framework arrangements, the details of the job
reductions will be discussed and separately regulated. The Bank expects to
conclude the framework arrangements in the second quarter. The same
applies to the employee share programme, which aims to allow employees to
participate more in the Bank’s success. The Bank is also making good
progress at the international locations and subsidiaries, and is planning
the next implementation steps, taking into account local conditions.
Net commission income of €1bn in the first quarter
Commerzbank increased its revenues in the first three months of this year
by 12% to €3,072m (Q1 2024: €2,747m). Net interest income held steady in a
declining interest rate environment at €2,071m (Q1 2024: €2,126m). The
pace of growth in net commission income remained high. Supported by a
strong securities business, net commission income rose by more than 6% to
€1,012m (Q1 2024: €951m).
Costs rose in the first quarter, as expected, to €1,722m (Q1 2024:
€1,588m), mainly due to a rise in administrative expenses to €1,618m
(Q1 2024: €1,496m). Key drivers included investments in business growth
and foreign currency effects at mBank, alongside increased personnel
expenses. The impact came mainly from general salary increases and a
higher accrual for equity-based variable compensation. The increase in
costs was partially offset by savings realised through ongoing shoring
activities. The Bank’s compulsory contributions rose to €104m (Q1 2024:
€91m) due to higher contributions from mBank to the Polish Resolution Fund
and restarting contributions to the deposit guarantee scheme, following
the suspension of the contribution obligation in 2024. The Bank further
reduced its cost-income ratio to 56% (Q1 2024: 58%), which is below the
target of 57% for the full year.
The risk result amounted to minus €123m in the first quarter (Q1 2024:
minus €76m). In the challenging economic environment, the loan book
remained very robust with a non-performing exposure (NPE) ratio of 1.0%.
The top-level adjustment (TLA) was reduced by €45m in the first quarter
due to reassessments and now stands at €182m (Q4 2024: €228m). This amount
remains available to cover expected secondary effects from geopolitical
crises and uncertainties.
Subsequently, Commerzbank improved its operating result in the first three
months of the year by 13% to a record level of €1,227m (Q1 2024: €1,084m).
Net result after taxes and minority interests also saw a significant
increase, rising by 12% to €834m (Q1 2024: €747m). This is the best start
of the year and the highest quarterly result since the beginning of 2011
(Q1 2011: €985m).
The common equity tier 1 (CET 1) ratio increased compared to the same
quarter of the previous year to 15.1% as of 31 March 2025
(31 December 2024: 15.1%; 31 March 2024: 14.9%). This high value again
demonstrates Commerzbank’s significant potential for capital return to its
shareholders. The current buffer to the regulatory minimum requirement
(MDA threshold) of around 10.2% remains very comfortable at 486 basis
points. The return on tangible equity (Net RoTE) improved to 11.1% in the
seasonally strong first quarter (Q1 2024: 10.5%). For the full year, the
Bank aims to achieve a Net RoTE of around 9.6% before restructuring
expenses.
“The double-digit return on equity in the first quarter demonstrates the
significant progress that Commerzbank has made,” said CFO Carsten Schmitt.
“We are on track to reach our full-year target of around 9.6%. At the same
time, we are reducing our dependency on net interest income. We confirm
our outlook for 2025.”
Segment development: provisions for FX loans at mBank decreased
The Corporate Clients segment started the new year well, generating
revenues of €1,229m in the first quarter (Q1 2024: €1,307m). While net
interest income decreased to €591m (Q1 2024: €627m) due to lower interest
rates, as expected, net commission income remained at the high level of
the previous year’s first quarter at €350m (Q1 2024: €354m). The foreign
exchange business performed well. Additionally, in the first quarter, the
integration of the “Structured Solutions and Investments” (SSI) area from
Treasury into the Corporate Clients segment was completed. The loan volume
of the Corporate Clients segment increased to €104bn in the first quarter
(Q1 2024: €96bn). When compared to the previous quarter, it remained
stable (Q4 2024: €104bn), with loan volumes rising in the Mittelstand and
Institutionals while declining in International Corporates due to FX
effects. Overall, the operating result amounted to €592m. While this was
below the exceptionally strong result of the previous year’s first quarter
(Q1 2024: €720m), it still marked an above-average start to the year
compared to previous years.
In the business with private and small-business customers in Germany
revenues remained stable despite lower interest rates, amounting to
€1.168m (Q1 2024: €1.166m). Net commission income increased by 11% to
€545m (Q1 2024: €489m). This double-digit growth was primarily driven by a
strong securities business. Especially comdirect customers traded actively
amid market fluctuations. The increase in net commission income was able
to nearly offset the decline in net interest income, which fell to €598m
(Q1 2024: €660m) due to lower interest rates. With an operating result of
€425m, Private and Small-Business Customers (PSBC) Germany maintained its
strong result of the previous year’s first quarter (Q1 2024: €423m).
The business volume of PBSC Germany continued to grow at the beginning of
the year. Deposits averaged €170bn for the quarter (Q1 2024: €166bn). The
loan volume was stable at €125bn on quarterly average (Q1 2024: €125bn),
of which the mortgage loan volume contributed the majority at €96bn
(Q1 2024: €95bn). New business in mortgage loans continued to increase in
the first quarter due to rising demand compared to the previous year, with
particularly strong interest in green mortgages. By the end of the
quarter, the securities volume stood at €243bn (Q1 2024: €230bn).
mBank continued its dynamic growth in customer business at the start of
the year. The Polish subsidiary increased its revenues in the first
quarter by more than 50% to €536m (Q1 2024: €341m). Net interest income
rose, supported by the persistently high interest rates in Poland, to
€600m (Q1 2024: €583m). Net commission income also increased by 8%, to
€125m (Q1 2024: €115m). Provisions for legal risks related to foreign
currency loans halved compared to the previous year’s first quarter, now
standing at €158m (Q1 2024: €318m). Overall, the operating result for
mBank more than doubled to €204m (Q1 2024: €82m).
Strong outlook for full year 2025 confirmed – higher CET 1 ratio expected
Commerzbank continues to aim for a higher net result of around €2.8bn for
the full year, before restructuring expenses. After restructuring
expenses, it expects a result of around €2.4bn. The outlook remains
subject to the development of burdens related to Russia and foreign
currency loans at mBank. The Bank anticipates a net interest income of
around €7.8bn, along with a related positive fair value adjustment of
approximately €0.3bn. In total, Commerzbank expects a contribution of
around €8.1bn to revenues. It plans for a growth of around 7% in net
commission income and confirms its cost-income ratio target of around 57%.
Despite the challenging economic environment, it expects the risk result
to remain at around minus €850m, assuming usage of TLA. Commerzbank
anticipates a CET 1 ratio of at least 14.5% by year-end after the planned
capital return and restructuring expenses. In February of this year, the
Bank had expected more than 14%.
The Bank confirms its plans for capital return: for the financial year
2025, it aims to return 100% of net income before restructuring expenses
and after deduction of AT1 coupon payments to its shareholders. In the
coming years, it aims for a continuous increase in capital return. For the
years 2026 to 2028, Commerzbank intends to maintain a payout ratio of 100%
after the deduction of AT1 coupon payments, depending on the successful
implementation of the strategy, the macroeconomic environment, and the
approval of ECB and German Finance Agency for respective share buybacks.
Financial figures at a glance
Q1 2025 Q1 2025
in €m Q1 2025 Q1 2024 vs Q1 Q4 2024 vs Q4 FY 2024
2024 2024
(in %) (in %)
Net interest income 2,071 2,126 – 2.6 2,080 – 0.4 8,331
Net commission income 1,012 951 + 6.4 976 + 3.7 3,762
Net fair value result^1 14 – 84 47 – 71.4 – 170
Other income – 24 – 246 + 90.4 – 148 + 83.9 – 817
Total revenues 3,072 2,747 + 11.8 2,956 + 4.0 11,106
Revenues excl. 3,125 2,719 + 14.9 2,874 + 8.7 11,160
exceptional items
Risk result – 123 – 76 – 63.4 – 214 + 42.3 – 743
Operating expenses 1,618 1,496 +8.2 1,693 – 4.4 6,244
Compulsory contributions 104 91 + 14.1 53 + 98.0 283
Operating result 1,227 1,084 + 13.2 996 + 23.2 3,837
Restructuring expenses 40 1 3
Pre-tax result 1,187 1,083 + 9.5 996 + 19.1 3,833
Taxes 306 322 – 5.1 181 + 68.7 989
Minorities 46 14 64 – 28.1 168
Consolidated result^2 834 747 + 11.7 750 + 11.2 2,677
Cost-income ratio in
operating business excl. 52.7 54.5 57.3 56.2
compulsory contributions
(%)
Cost-income ratio in
operating business incl. 56.1 57.8 59.1 58.8
compulsory contributions
(%)
Operating RoTE (%) 14.9 14.1 12.5 12.3
Net RoTE (%) 11.1 10.5 10.1 9.2
Net RoE (%) 10.6 10.1 9.7 8.8
CET 1 ratio (%) 15.1 14.9 15.1 15.1
Leverage ratio 4.6 4.6 4.8 4.8
Total assets (€bn) 574 552 555 55
^1 Net income from financial assets and liabilities measured at fair value
through profit and loss.
^2 Net result attributable to Commerzbank shareholders and investors in
additional equity components.
The events of the day at a glance:
• 9.00 a.m. CEST: 1 Online conference call for analysts on the Q1 2025
results with Bettina Orlopp and Carsten Schmitt (“listen-only”, in
English)
• 10.30 a.m. CEST: 2 Online conference call for journalists on the Q1
2025 business figures with Bettina Orlopp and Carsten Schmitt (please
register approximately 15 minutes prior to the start)
The documents relating to the Q1 2025 business results will be available
online on our 3 website from around 7.00 a.m. CEST. Press photos of
Bettina Orlopp and Carsten Schmitt are available in our 4 media centre.
The CVs of the members of the Board of Managing Directors are also
accessible on 5 our website.
Press contact
Svea Junge +49 69 9353-45691
Kathrin Jones +49 69 9353-45687
Investors’ contact
Ansgar Herkert +49 69 9353-47706
Ute Sandner +49 69 9353-47708
About Commerzbank
With its two business segments – Corporate Clients and Private and
Small-Business Customers –, Commerzbank, as a full-service bank, offers a
comprehensive portfolio of financial services. It is the leading bank for
the German Mittelstand and a strong partner for around 24,000 corporate
client groups. Commerzbank transacts approximately 30% of Germany’s
foreign trade financing. The Bank is present internationally in more than
40 countries in the corporate clients’ business – wherever its Mittelstand
clients, large corporates, and institutional clients need it. In addition,
Commerzbank supports its international clients with a business
relationship to Germany, Austria, or Switzerland and companies operating
in selected future-oriented industries. With more than €400 bn assets
under management, Commerzbank is also one of the leading banks for private
and small-business customers in Germany. Under the brand Commerzbank, it
offers a wide range of products and services with an omni-channel
approach: online and mobile, via phone or video in the remote advisory
centre, and personally in its around 400 branches. Under the brand
comdirect, it offers all core services as a digital primary bank 24/7 and,
as a performance broker, solutions for saving, investing, and securities
trading. Its Polish subsidiary mBank S.A. is an innovative digital bank
that serves approximately 5.8 million private and corporate customers,
predominantly in Poland, as well as in the Czech Republic and Slovakia.
Disclaimer
This release contains forward-looking statements. Forward-looking
statements are statements that are not historical facts. In this release,
these statements concern inter alia the expected future business of
Commerzbank, efficiency gains and expected synergies, expected growth
prospects and other opportunities for an increase in value of Commerzbank
as well as expected future financial results, restructuring costs and
other financial developments and information. These forward-looking
statements are based on the management’s current plans, expectations,
estimates and projections. They are subject to a number of assumptions and
involve known and unknown risks, uncertainties and other factors that may
cause actual results and developments to differ materially from any future
results and developments expressed or implied by such forward-looking
statements. Such factors include, amongst others, the conditions in the
financial markets in Germany, in Europe, in the USA and other regions from
which Commerzbank derives a substantial portion of its revenues and in
which Commerzbank holds a substantial portion of its assets, the
development of asset prices and market volatility, especially due to the
ongoing European debt crisis, potential defaults of borrowers or trading
counterparties, the implementation of its strategic initiatives to improve
its business model, the reliability of its risk management policies,
procedures and methods, risks arising as a result of regulatory change and
other risks. Forward-looking statements therefore speak only as of the
date they are made. Commerzbank has no obligation to update or release any
revisions to the forward-looking statements contained in this release to
reflect events or circumstances after the date of this release.
══════════════════════════════════════════════════════════════════════════
Dissemination of a Regulatory Announcement, transmitted by EQS Group.
The issuer is solely responsible for the content of this announcement.
══════════════════════════════════════════════════════════════════════════
ISIN: DE000CBK1001
Category Code: QRF
TIDM: CZB
LEI Code: 851WYGNLUQLFZBSYGB56
Sequence No.: 387191
EQS News ID: 2133664
End of Announcement EQS News Service
══════════════════════════════════════════════════════════════════════════
References
Visible links
1. https://eqs-cockpit.com/cgi-bin/fncls.ssp?fn=redirect&url=e181ee94f0ee1338ffb9561e24b8a2a5&application_id=2133664&site_id=reuters~~~787b94c3-8286-43cc-98b3-26b1dc52d810&application_name=news
2. https://eqs-cockpit.com/cgi-bin/fncls.ssp?fn=redirect&url=d878454daca94632bb409d94771fe5cb&application_id=2133664&site_id=reuters~~~787b94c3-8286-43cc-98b3-26b1dc52d810&application_name=news
3. https://eqs-cockpit.com/cgi-bin/fncls.ssp?fn=redirect&url=53a75065064554365a1271a29bd46766&application_id=2133664&site_id=reuters~~~787b94c3-8286-43cc-98b3-26b1dc52d810&application_name=news
4. https://eqs-cockpit.com/cgi-bin/fncls.ssp?fn=redirect&url=1daece74d74c69d2f29b164151524acc&application_id=2133664&site_id=reuters~~~787b94c3-8286-43cc-98b3-26b1dc52d810&application_name=news
5. https://eqs-cockpit.com/cgi-bin/fncls.ssp?fn=redirect&url=0023d32e24870b66a5c70cfbf54bfa46&application_id=2133664&site_id=reuters~~~787b94c3-8286-43cc-98b3-26b1dc52d810&application_name=news
============Recent news on COMMERZBANK AG
See all newsREG-Commerzbank Aktiengesellschaft Commerzbank with strong quarterly result – Growth in net commission income continues
AnnouncementREG - PIMCO ETFs PLC - Dividend Declaration
AnnouncementREG-Commerzbank AG: Post-stabilisation notice
AnnouncementREG-Commerzbank AG: Post-stabilisation notice
AnnouncementREG-Commerzbank Aktiengesellschaft Invitation to Annual General Meeting of Commerzbank on 15 May 2025
Announcement