In the first half of the year, Commerzbank achieved a record operating profit of €2,4 billion, surpassing expectations. The management also raised its guidance for the full year. The net profit is now expected to reach around €2,5 billion, which is €100 million more than previously forecasted, as the bank announced on Wednesday.

The bank also reaffirmed its plans for a high payout ratio to shareholders.

Revenues in the first half of the year grew by over 12 percent to €6,09 billion. The net profit was burdened by transformation costs and ongoing job cuts. After these deductions, the bank earned €1.30 billion, marking a 0,9 percent increase compared to the same period last year. Without transformation costs, net profit would have reached €1,7 billion, an increase of 29 percent.

Transformation Making Progress

«We achieved the best operating result in the history of Commerzbank in the first half of the year and are making rapid progress with our transformation,» said CEO Bettina Orlopp. «With ‘Momentum,’ we are creating more value for our shareholders, customers, and employees.»

Bettina Orlopp. (Image: Commerzbank)

The corporate client business has improved, and successes have also been achieved in the retail client segment with the dual-brand strategy (Commerzbank/Comdirect).

Fee and commission income continued its strong growth, driven by a robust securities, syndicated loans, and foreign exchange business, increasing by 8,3 percent year-on-year to €2,02 billion. Net interest income, however, declined by 1,7 percent to €4,13 billion.

Takeover Advances Meet with Little Approval

For almost a year now, Germany's second-largest bank has been resisting takeover plans from Unicredit under CEO Andrea Orcel. The Italian bank acquired a stake from the German government and has expanded its shareholding through further purchases and derivatives to just below the 30 percent threshold.

Commerzbank’s management rejects these plans and has announced ongoing cost-cutting and reorganization programs, as well as significant shareholder distributions, to strengthen its own position. Going forward, 100 percent of net profit is to be distributed to shareholders, after deducting restructuring costs and bond coupon payments.

Unicredit’s expansion plans into Germany are also facing opposition within German politics. Back in 2005, Munich-based HypoVereinsbank was taken over by the Milanese bank.

Commerzbank's share price has risen from around €12 to €31,50 within a year, an increase of approximately 160 percent.