After returning to profitability in 2021, Commerzbank gives its shareholders hope for a distribution for the current financial year.
“We want to build on the successful customer business of the past year and increase consolidated profit to more than one billion euros,” announced CEO Manfred Knof in Frankfurt. “We are aiming to pay a dividend for the 2022 financial year.”
Back in the profit zone
Last year, the institute was back in the black – despite an expensive restructuring of the group and additional burdens at the Polish subsidiary mBank. At EUR 430 million, the MDax Group’s net income for the year was significantly better than analysts had expected. In 2020, the institute, whose largest shareholder is the German state, posted the largest loss since the financial crisis of 2009 at around 2.9 billion euros.
With an intensified austerity course, Knof, who started as a reorganizer on January 1, 2021, wants to put Commerzbank back on the road to success in the long term. The Management Board has set itself the goal of reducing the number of full-time positions from around 39,500 originally to 32,000 by the end of 2024. At the beginning of 2022, Commerzbank still had almost 36,700 full-time positions, almost 2,800 fewer than a year earlier.
The bank has already reduced the number of its branches in Germany from 790 to 550; the target is 450 locations. Before the pandemic, Commerzbank still had around 1,000 branches nationwide. Foreign business is also shrinking: last year the bank closed 6 of the 15 locations that are on the cross-off list there.
Lots of potential despite challenges
The fact that the bank achieved an operating profit of almost 1.2 billion euros despite special charges of almost 2 billion euros shows the institute’s profit potential, CFO Bettina Orlopp said. Commerzbank was able to increase income – i.e. total income – by a good three percent compared to the previous year to around 8.46 billion euros.
The institute also benefited from the fact that it had to set aside significantly less money for possible loan defaults than in the first year of the corona pandemic: risk provisions shrank to 570 million euros, which is about a third of the amount set aside in 2020.
However, the return to the profit zone that was believed to be certain almost failed: Provisions in the millions at mBank burdened the fourth quarter. At the end of the year, the Polish subsidiary saved a further 436 million euros. In 2021 as a whole, the burdens added up to 600 million euros.
The background is the dispute over franc loans: in the past, many Poles had taken out loans in the Swiss national currency to finance a property due to low interest rates. But because the Polish national currency, the zloty, lost a lot of value against the Swiss franc as a result, the burden on borrowers increased. Many try to sue for compensation from their bank. (dpa)