The CEO Manfred Knof and his deputy, CFO Bettina Orlopp, here at the Annual General Meeting in 2021
Image: Commerzbank
The credit institution was startled with the scenario of a recession. Then it would miss its targets. But even in the worst calculated case, there is good news for Commerzbank.
Soten times the gap between the outlook and the retrospective is so striking as it was for Commerzbank in this half-year. The bank has had the best second quarter since 2011: a loss a year ago, the main reason for which was the last costs for the restructuring that finally started in 2021, has turned into a surprisingly high profit because interest rates are finally rising and earnings are bubbling with it, especially in the Polish subsidiary M-Bank.
In front of Commerzbank, however, are the worst scenario: a gas stop, a recession, more loan defaults. And for the M-Bank in the third quarter a loss because of a new law that favors borrowers at the expense of the bank. Commerzbank’s board of directors deserve credit for how openly they assess the risks.
Gained in resilience
In a recession, the costs of bad loans, including existing reserves, could amount to a maximum of 2 billion euros this year. Then Commerzbank would miss the annual targets it had set itself, above all a net profit of more than 1 billion euros.
But even in a recession, it would probably still turn a small profit in 2022. In view of the history of the bank, this is not a matter of course, but rather a step forward that would impressively demonstrate the success of the restructuring.