German Commerzbank net profit sevenfold in 2018

2019-02-15 08:42

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The German Commerzbank achieved net profit of 865 million euros (974.52 million U.S. dollars) in 2018, nearly sevenfold the 128 million euros in 2017, preliminary figures published by the bank on Thursday show.

Chairman of the bank's managing directors board Martin Zielke attributed the significant increase to the successful implementation of the "Commerzbank 4.0" strategy, which aims to reshape the bank into an institution with higher profitability and enhanced competitiveness.

"Our Strategy is right and is working. We are growing in terms of customers, lending volume and underlying revenues. We are making progress and this shows in our ability to pay a dividend," added Zielke.

Commerzbank's board of managing directors had proposed a dividend of 20 cents per share for financial year 2018. This would be the first dividend since 2015 and the second overall, since the German government rescued the Bank during the global financial crisis in 2009.

Meanwhile, adjusted revenues by the Germany's second largest bank, increased by 5 percent from 8.2 billion euros to 8.6 billion euros. The company was also able to achieve its target of 1 million new customers since 2016 and would thus be "on course" to reach its target of 2 million new customers by the end of 2020.

Administrative costs of Commerzbank rose slightly from 6.83 billion euros in 2017 to 6.88 billion euros in 2018. According to the company, this was mainly due to investments in "digitization and technology" as well as rising expenses for regulations and compulsory levies. The company would be "on the right track" to reach its cost target of 6.5 billion euros by 2020, chief financial officer Stephan Engels reaffirmed.

A possible merger of Commerzbank with Deutsche Bank, Germany's largest bank, is currently subject of a heated debate in Germany. Olaf Scholz, Germany's finance minister, is regarded as a proponent of such a merger in order to create a "strong German bank".

Commerzbank's is expecting its cost target to be below 6.8 billion euros for the year 2019. Earnings are targeted to grow by 3 percent annually, while Commerzbank is planning to "maintain the dividend for financial year 2019 at a level comparable to that intended for 2018".
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