Following a 13-year-long period of distress. - Commerzbank regains strength unexpectedly.
For over a decade, Frankfurter Bank has been recovering from a tough financial crisis: between January and March (1st quarter), the bank made a pre-tax profit of 1.1 billion euros, with a final net profit of 747 million euros, a 29% increase.
Commerzbank experienced its most successful quarter in the last 13 years, and their top executives are confident that they're on the path to achieving record profits. The CEO of Commerzbank, Manfred Knof (58), declared, "We've begun the year with an impressive wave of momentum. The remarkable success in Q1 has renewed our determination to boost our overall profits in 2024."
The main driving force behind these impressive results? Soaring interest rates, which have enabled the bank to make substantial returns on the loans issued to customers.
With interest rates on the rise, the Management Board is starting to believe that the challenging times marked by heavy losses might be finally coming to an end. During the 2008/09 financial crisis, Commerzbank experienced a near-bankruptcy situation and required a 16-billion-euro bailout from the government to survive. This marked a first in post-war German history where a private bank required a state-led rescue.
Ever since, the federal government has held the position of the bank's primary shareholder. The ongoing debates within the "traffic light" government address the potential for gradually selling off their shareholding. However, for the federal government to break even, Commerzbank's shares would need to cost around 25 euros, while current prices are at around 15 euros.
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Source: symclub.org
