Commerzbank (ETR:CBKG) Aktiengesellschaft has set forth an ambitious strategic plan for 2027, aiming to enhance its revenue base through selective expansion of customer business, digital banking, asset management, and sustainable finance. Today, the bank revealed its intention to reduce its cost-income ratio to 55% by 2027, with a net profit goal of around €3.4 billion ($3.9 billion). The bank also plans an attractive capital return for shareholders, with a share buy-back of up to €600 million ($688 million) applied for approval by the European Central Bank (ECB) and Finance Agency.
This announcement comes on the back of robust financial results for the first nine months of 2023. The bank nearly doubled its net profit to €1.8 billion from €963 million in 2022. Third quarter revenue significantly increased to €2.8 billion, driven by strong customer business and continued tailwind from interest rates.
The bank's strategy until 2027 is based on three pillars: growth, excellence, and responsibility. It aims to support customers with relevant products and solutions and improve the customer experience. The bank will focus on simplifying digital processes to increase efficiency and reduce the cost-income ratio. Sustainability remains a key component of its strategy.
In the Private and Small-Business Customer segment (PSBC), Commerzbank plans to expand its range of optimised and digital banking solutions for its almost 11 million customers with a holistic approach under its two brands, Commerzbank and comdirect. The bank sees opportunities in Asset and Wealth Management, where activities will be expanded through its newly founded asset management company Yellowfin.
As the leading German Mittelstandsbank, Commerzbank will continue to closely support its corporate clients. It plans to strengthen transaction banking by investing in new systems and technologies. In international business, the bank serves clients worldwide with a business relationship to Germany, Austria, or Switzerland or with selected future-oriented industries.
In Q3 2023, the bank increased its revenues by 46% to €2.755 billion due to a rise in net interest income of more than one third to €2.166 billion. Despite inflationary pressure, costs increased only slightly in the third quarter to €1.549 billion. The risk result was at a low level of minus €91 million despite the challenging economic environment.
The Common Equity Tier 1 ratio (CET 1 ratio) increased to 14.6% as of September 30, 2023. Return on tangible equity (RoTE) improved significantly in the first nine months of the year to 8.6%. Its Polish subsidiary mBank S.A., an innovative digital bank, serves approximately 5.7 million private and corporate customers, predominantly in Poland, as well as in the Czech Republic and Slovakia. mBank contributed €89 million to the Bank’s operating result in the third quarter thanks to its continued very strong customer business and was able to more than offset the additional provision of €234 million for its Swiss franc portfolio.
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