Commerzbank improves operating profit as it implements new strategy

Commerzbank Aktiengesellschaft posted its numbers for the third quarter of 2016 on Friday, with operating profit of €429m improving from €351m in the second quarter.

The Frankfurt-based bank said its CET 1 capital ratio increased to 11.8% as of end of September, from 11.5% at the .end of June and 10.8% at the end of September last year, with a leverage ratio of 4.5%

It reported higher loan loss provisions of €610m in the first nine months, compared with €584m in the first nine months of last year, with a non-performing loan ratio still low at 1.7%.

Operating expenses were down slightly at €5.33bn in the first nine months, from €5.41bn in the same period of 2015, which the board said more than compensated for the new Polish banking tax.

It said its new strategy and structure will result in “balanced profit contributions” from the two operating segments - Private and Small Business Customers, and Corporate Clients.

Commerzbank posted a goodwill write-off of €627m, resulting in net profit of €96m in the first nine months, compared to €891m a year ago, and a net loss of €288m for the third quarter, swinging from a €235m profit in the same period of 2015.

“Commerzbank has a strong market position in corporate banking,” said chairman Martin Zielke.

“We have seen further growth in retail banking and at our Polish subsidiary mBank.”

Zielke said the results were good prerequisites for the implementation of the board’s ‘Commerzbank 4.0’ strategy, which will enable it to sustainably increase profitability.

“We are pursuing our growth targets ambitiously, consistently, and forcefully.”