Commerzbank earned almost twice as much in the first quarter as it did a year ago. The development was driven in particular by a significant decline in loan loss provisions.
Archibald Preuschat
Editor in the economy
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On the earnings side, Germany's second-largest commercial bank recorded a year-on-year decline, not least due to higher provisions for legal risks at its Polish subsidiary M-Bank.
The bottom line is that Commerzbank earned €580 million in the first quarter, compared to €2022 million in the first quarter of 298. At EUR 875 million, the bank earned 61 million euros, <> percent more than in the same period of the previous year.
More room for manoeuvre in net interest income
Earnings were driven by net interest income, which rose by 39 percent to 1.95 billion. Here, Commerzbank is also confident of doing more for the year as a whole and now expects net interest income of 7 billion euros, half a billion euros more than before.
"We started the year with a lot of momentum and are thus seamlessly building on the strong previous year," said Commerzbank CEO Manfred Knof in a statement. In the morning, he will explain the figures in more detail together with his CFO Bettina Orlopp.
M-Bank litigation
Nevertheless, Commerzbank's first-quarter results are characterised by two opposing effects. At 2.67 billion euros, total revenues were 4.5 percent lower than a year earlier. "This reflects renewed burdens from M-Bank's Swiss franc loans as well as the elimination of the special conditions from the ECB's Targeted Longer-Term Refinancing Operations (TLTRO) program," Commerzbank said.
At EUR 68 million, however, the burden of loan loss provisions was also significantly lower than in the same period of the previous year, when it amounted to EUR 464 million. "The high quality of our loan book and our conservative risk management have proven their worth. We benefit from the fact that we have significantly improved our profitability," Orlopp is quoted as saying in the quarterly report.
In the meantime, Commerzbank has also received the green light from the European Central Bank for its dividend policy. For example, the bank's first share buyback program of EUR 122 million will supplement a distribution of EUR 0.20 per share, the amount of which will be proposed to the Annual General Meeting at the end of the month. Commerzbank intends to distribute 30 percent of last year's consolidated net income attributable to shareholders.