Commerzbank triples profit

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Commerzbank lettering on a branch in Dresden

Photo: Robert Michael / dpa

Commerzbank sees itself strengthened: Interest income from corporate customer business has more than tripled the money house's profit in the past year.

The bottom line was a profit of 1.4 billion euros in 2022.

In the previous year it was 430 million euros, said Germany's second largest private bank.

Experts had roughly expected this development - and predicted a profit of 1.35 billion euros.

The operating result was 2.1 billion euros after 1.18 billion euros in the previous year.

Bank boss Manfred Knof thus exceeded his goal of increasing consolidated profit to over one billion euros.

"This shows that our strategy is working and that we have managed to turn the tide," explained Knof.

Commerzbank is "back again."

Knof thus indirectly refers to the long years of lean development of the money house.

Since the financial crisis of 2008, the group had only paid out part of the profit as a dividend to shareholders in two years, namely in 2015 and 2018. Now there should be a dividend for shareholders again, namely 20 cents per share.

In addition, the Management Board also intends to return money to shareholders through a share buyback program.

In total, 30 percent of the profit is to be distributed, and the quota is to rise to 50 percent in 2023.

However, the share buyback still has to be approved by the European Central Bank (ECB) as the supervisory authority and by the Federal Finance Agency.

Broadside against European Central Bank

This holds a share in the bank for the German state.

In the course of the financial crisis, the federal government got involved in Commerzbank with a billion-dollar stake in order to stabilize the money house, which was in crisis at the time.

To date, the German state is the largest shareholder in Commerzbank.

In the past year, however, Finance Minister Christian Lindner had already flirted with selling the stake.

In 2021, the institute, which had been partially nationalized since the financial crisis, returned to the black after a corporate restructuring and had earned 430 million euros on balance.

The turnaround in interest rates in the euro zone provided additional momentum in recent months.

Regardless of the state participation, the chief economist at Commerzbank is making headlines with criticism of another state institution.

The European Central Bank (ECB) is heating up inflation through the massive purchase of government bonds instead of slowing it down further, the newspaper "Bild" quotes Commerzbank chief economist Jörg Krämer according to the preliminary report.

»The ECB brakes and accelerates at the same time.

In doing so, it is watering down its anti-inflationary policy.« While the central bank is raising the key interest rate, it is pushing interest rates down again through bond purchases.

Krämer is therefore calling for a purchase freeze: "The ECB should not buy any more bonds." "From March to June alone, the ECB could buy bonds for an estimated 80 billion euros."

beb/Reuters