Commerzbank wants to gain ground in light of Unicredit’s advances. It is offering its investors a promising outlook. Initial talks with the Italian bank are imminent.
A higher return and more money for shareholders: Shortly before a first meeting with the Italian Unicredit, Commerzbank is setting itself more ambitious goals. The return on equity is to rise to more than 12 percent by 2027, which is higher than previously planned, the Dax group announced in Frankfurt. In addition, Commerzbank wants to distribute more money to shareholders and increase earnings.
A first meeting with representatives of Unicredit is planned for this Friday, as future CEO Bettina Orlopp said at an industry conference in London. In view of the Italian bank’s takeover advances, Commerzbank is under pressure to offer its shareholders an attractive perspective.
The institute has considerable growth and value-added potential, said Supervisory Board Chairman Jens Weidmann. The bank is expanding its independent position as a strong pillar in the German banking market and a reliable partner of the domestic economy. Orlopp emphasized the bank’s role in the German economy. “SMEs are our DNA,” she said. It is important to understand these customers.
Ambitious targets
The increased targets that Commerzbank formulated after its most recent strategy meeting are ambitious: Commerzbank has so far targeted a return on equity of 11.5 percent for 2027 and eight percent for the current year.
Profit before interest payments for equity-like bonds is also expected to climb to 3.6 billion euros in 2027. That would be half more than the institute expects this year. In 2023, Commerzbank achieved a record profit of 2.2 billion euros, but benefited from rising interest rates. With key interest rates falling, the outlook for the entire banking industry is darkening.
For the years 2025 to 2027, Commerzbank is also aiming for payout ratios of more than 90 percent. This means that the bank intends to pay out more than nine tenths of its profits as dividends or invest them in share buybacks. The bank recently announced that it intends to spend significantly more than half of its profits on this.
Commerzbank wants to increase earnings significantly
In addition, Commerzbank wants to tap into additional earnings potential, for example with corporate customers, in asset management and at the Polish subsidiary mBank, said Orlopp, who will take over as CEO of Commerzbank at the end of the month.
The group is forecasting earnings of 13.3 billion euros for 2027, and the bank is expecting 10.9 billion euros for this year. At the same time, the bank is remaining cost-conscious and is clearly pursuing the goal of growing and investing. The bank is refraining from takeovers that entail intensive integration work, says Orlopp.
Unicredit took advantage of the federal government’s partial exit and bought a large stake in Commerzbank. The Italians recently secured 21 percent of the shares – including financial instruments. This would make them the largest shareholder ahead of the federal government, which holds around 12 percent of Commerzbank. Unicredit also applied for permission to increase its stake to up to 29.9 percent. This makes a takeover offer for Germany’s second-largest private bank more likely.
Source: Stern
