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Commerzbank; Credit Metrics Better, Some Respite For German Assets

FINANCIALS

Commerzbank (CBK GY) 4Q23 results were a little better than consensus with credit metrics all better, good news considering recent newsflow around German assets. Perhaps some respite for DePfa (PBB GY) and related credit assets.


  • Revenues are up 2% y/y, around 3% below consensus but on lower trading income. Costs were broadly flat (2% weaker than expected) and credit losses were 13% higher but slightly better than expected. That revenue miss meant operating profit missed, too but missing on trading income isn’t usually viewed that negatively.
  • Key credit metrics: loan losses were 23bp of loans, up 5bp q/q but still a very low levels and non-performers were strong; 20bp lower at 0.8%. CET1 was 10bp higher q/q at 14.7% and total capital was 19.3% (+10bp), all a little better than expected.
  • The outlook statement is relatively positive (especially when there’s a slide entitled “German economy expected to stay weak”), also; revenue guidance (+4% y/y) is in line with consensus, credit losses are set to be lower than the 4Q23 run-rate and less than expected. In line with the buyback announced on 9-Jan, CET1 will glide towards 14%.

Conf call is 0800 London time at https://www.webcast-eqs.com/login/commerzbank-2023-q4

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