Commerzbank’s jump in profits at the start of the year was even larger. The management sees itself on course for a surplus in the billions for the year as a whole – the shareholders should then also benefit from this.
Commerzbank has further reduced its Russia risks and performed slightly better in the first quarter than initially calculated.
The bottom line was a profit of 298 million euros after 133 million euros a year earlier, as the Frankfurt institute, which is listed in the MDax, announced on Thursday. A good two weeks ago, Commerzbank reported quarterly profits of EUR 284 million based on preliminary figures.
“The good start to the year confirms our expectation that we will achieve a consolidated result of more than one billion euros in 2022,” confirmed CEO Manfred Knof. Earnings – ie total income – rose in the first quarter compared to the same period last year by twelve percent to almost 2.8 billion euros.
The private customer division is booming
An important source of income was the Polish subsidiary mBank, whose planned sale Commerzbank called off some time ago. Accordingly, mBank benefited greatly from the increases in key interest rates in Poland and was able to increase its net interest income by 86 percent compared to the same quarter of the previous year and its net commission income by almost 19 percent. In the German business, meanwhile, revenues increased by 4 percent.
In the private customer division, the operating profit rose surprisingly significantly compared to the same period last year by 60 percent to 403 million. The corporate customer business, on the other hand, was burdened by significantly higher risk provisions and slipped operationally into the red with minus 7 million euros.
According to the information, the bank has reduced its net risk in Russia by a good third to just under 1.2 billion euros at the end of April since the Russian invasion of Ukraine. In mid-March, the institute had put its Russia risk at 1.3 billion euros net. “We will continue to reduce our commitment,” said Knof on Thursday. Commerzbank stopped its new business in Russia after the beginning of the war, but still supports existing German and international customers there.
“We were able to more than absorb the previously foreseeable burdens resulting from the Russia-Ukraine war,” CFO Bettina Orlopp summed up. However, Commerzbank had to set aside significantly more money for possible setbacks in the first quarter, partly because of risks from Russia. At the end of March, loan loss provisions for impending loan defaults were a good three times as high as a year earlier at 464 million. For 2022 as a whole, Commerzbank still expects loan loss provisions to be less than EUR 700 million.
Last year, Commerzbank, whose largest shareholder is the German state with 15.6 percent, returned to profitability. The board of directors promises the shareholders a profit distribution for the current financial year. “We are still determined to pay a dividend for this year,” emphasized CEO Knof.
Source: Stern
Jane Stock is a technology author, who has written for 24 Hours World. She writes about the latest in technology news and trends, and is always on the lookout for new and innovative ways to improve his audience’s experience.
