by Tom Sims and Marta Orosz
FRANKFURT (Reuters) – Commerzbank on Thursday reported net profit up 12% in the fourth quarter as higher interest rates helped the restructuring German bank post profits for a second consecutive year.
The banking group said it expects its net interest income for 2023 to be “well above” that of 2022 despite “another year complicated by a difficult environment”.
In order to reduce its costs and support its profits, Commerzbank has embarked on a major restructuring which has resulted in thousands of job cuts and the closure of hundreds of branches.
The bank is a candidate to return to Germany’s flagship Dax index after exiting in 2018.
On the Frankfurt Stock Exchange, Commerzbank shares rose more than 7% in the morning.
The net profit of 472 million euros achieved in the fourth quarter of last year is higher than that of 421 million achieved a year earlier. It is also well above the average analyst forecast of 350 million, according to a consensus provided by the bank.
For the whole of 2022, Commerzbank generated a net profit of 1.435 billion euros, against 430 million a year earlier and a consensus around 1.359 million.
“Our restructuring is a success. Commerzbank is back,” said CEO Manfred Knof.
However, the bank remains penalized by a domestic market held back by inflation and the economic slowdown, and the difficulties of its subsidiary in Poland. But like its counterparts in Europe, it is benefiting from the context of rising interest rates.
Commerzbank thus forecasts net interest income “well beyond” in 2023 from that of 6.5 billion euros achieved last year, “with obvious potential for additional upside”.
Commerzbank, which finances a large part of the German SMEs which constitute the backbone of the country’s economy, serves as a de facto barometer of activity.
Germany’s second-largest bank is still partly government-owned after a bailout more than a decade ago.
(Report Tom Sims and Marta Orosz; Blandine Hénault for the , edited by Kate Entringer)
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