REG-Commerzbank Aktiengesellschaft EBA stress test proves Commerzbank’s high resilience

COMMERZBANK AGAnnouncement

28/07/2023 17:30

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   Commerzbank Aktiengesellschaft (CZB)
   EBA stress test proves Commerzbank’s high resilience

   28-Jul-2023 / 18:16 CET/CEST
   The issuer is solely responsible for the content of this announcement.

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     • CET 1 ratio of 9.5% (2021: 8.2%) in the adverse scenario, despite
       significantly tougher assumptions
     • Stress effect reduced to 464 basis points
     • Chief Risk Officer Marcus Chromik: “Through our ‘Strategy 2024’, we
       have sustainably strengthened the Bank’s profitability and thus
       improved our resilience even further.”

   In this year’s stress test conducted by the European Banking Authority
   (EBA) and the European Central Bank (ECB), Commerzbank has once again
   demonstrated its resilience and has significantly improved its results
   despite further tightened conditions. In the so-called adverse stress test
   scenario, which simulates a severe economic crisis, the Common Equity
   Tier 1 ratio (CET1 ratio) reaches 9.5% at the end of the stress test
   horizon in 2025. In light of further tightened assumptions, for example
   regarding a massive and long economic downturn in Germany and an
   environment of sharply rising interest rates, Commerzbank’s CET1 ratio
   decreased by 464 basis points over the stress period. In the 2021 stress
   test, the CET1 ratio had fallen by 502 basis points to 8.2%.

   “Through our ‘Strategy 2024’, we have sustainably strengthened the Bank’s
   profitability and thus improved our resilience even further. This is now
   also evident in the EBA stress test. Despite massively tightened
   scenarios, we have significantly improved our results this year,” said
   Marcus Chromik, Chief Risk Officer. “Thanks to our very healthy risk
   profile and increased profitability, we are now even better prepared to
   buffer extraordinary burdens and crises to protect our capital base. For
   our customers, this means that they can rely on us even in challenging
   environments. In recent years, we have already demonstrated this during
   times of real stress such as the Covid-19 pandemic and the consequences of
   the Russia-Ukraine war.”

   For Germany, the adverse scenario is based on an exceptionally strong
   recession with high unemployment, sharply rising inflation, and
   significant interest rate hikes, which lead to a cumulative decline in the
   gross domestic product of 6.4% (stress test 2021: -3.9%, stress test 2018:
   -3.3%). In the baseline scenario of this year’s EBA exercise, which is
   based on the economic forecasts of the national central banks in Europe
   and assumes at least slight economic growth for both 2024 and 2025,
   Commerzbank’s CET1 ratio is up to 15.2% in 2025.

   The stress test is based on Commerzbank’s CET1 ratio of 14.1% at the end
   of the financial year on 31 December 2022. By the end of March 2023, it
   had increased to 14.2%.

   The stress test assumed a static balance sheet based on the 2022 financial
   year and therefore did not take account of any current or future business
   strategies and management initiatives. It is also not a forecast of
   Commerzbank’s profits. The results of the stress test feed into the
   Supervisory Review and Evaluation Process (SREP).

   You can find more information on the publication of the EBA on 28 July
   2023  1 here.

    

   Press contact
   Erik Nebel  +49 69 136-44986
   Svea Junge  +49 69 136-28050
   Sonja Habig  +49 69 136-28055

   Investors’ contact
   Ute Sandner  +49 69 136-44061
   Ansgar Herkert  +49 69 136-44083

    

   About Commerzbank

   Commerzbank is the leading bank for the German Mittelstand and a strong
   partner for around 26,000 corporate client groups and almost 11 million
   private and small-business customers in Germany. The Bank’s two Business
   Segments – Private and Small-Business Customers and Corporate Clients –
   offer a comprehensive portfolio of financial services. Commerzbank
   transacts approximately 30 per cent of Germany’s foreign trade and is
   present internationally in almost 40 countries in the corporate clients’
   business. The Bank focusses on the German Mittelstand, large corporates,
   and institutional clients. As part of its international business,
   Commerzbank supports clients with German connectivity and companies
   operating in selected future-oriented industries. In the Private and
   Small-Business Customers segment, the Bank is at the side of its customers
   with its brands Commerzbank and comdirect: online and mobile, in the
   advisory centre, and personally in its branches. Its Polish subsidiary
   mBank S.A. is an innovative digital bank that serves approximately
   5.7 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 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.

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   Dissemination of a Regulatory Announcement, transmitted by EQS Group.
   The issuer is solely responsible for the content of this announcement.

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   ISIN:          DE000CBK1001
   Category Code: MSCU
   TIDM:          CZB
   LEI Code:      851WYGNLUQLFZBSYGB56
   Sequence No.:  261040
   EQS News ID:   1691349


    
   End of Announcement EQS News Service

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