On an underlying basis, Commerzbank said revenues in its private and small business segment held steady last year.

Commerzbank – Germany’s second-largest bank – yesterday announced a 50 per cent surge in net profit for 2023, standing at €2.2 billion ($2.36 billion). 

The results came out about a month after Deutsche Bank CEO Christian Sewing reportedly appeared to quash recent – and unconfirmed – reports that Deutsche was talking to Commerzbank about a merger. The banks had been in merger talks in 2019, but they came to an end.

The net profit figure is the best one for 15 years, Commerzbank, which is headquartered in Frankfurt, said in a statement. The lender provides services including private banking. Commerzbank said its private and small-business customer (PSBC) segment in Germany delivered revenues of €4.139 billion, down from €4.318 billion a year before, affected by some one-off effects. When these effects are excluded, revenues were stable.

Commerzbank said it benefited from strong customer business and persistently high interest rates. Net interest income climbed to €8.4 billion. Net commission income contributed around €3.4 billion to the bank’s revenues. 

The Common Equity Tier 1 ratio – a standard measure of a bank’s capital “shock absorber” – rose to 14.7 per cent, above the regulatory minimum requirement.

The bank said its “overall annual result” enables it to return capital to its shareholders. Overall, Commerzbank plans a pay-out ratio of 50 per cent of net profit after deduction of AT1 coupon payments. 

A share buy-back programme with a volume of up to €600 million is under way. In addition, the bank intends to distribute a dividend of around 35 cents per share, subject to the approval at the annual general meeting.

“We delivered on the key objectives of our ‘Strategy 2024’ ahead of schedule and in some areas we even exceeded them. On this basis, we will achieve a further increase in net profit for the current year,” CEO Manfred Knof said. 

Russia’s exposure declined, Commerzbank said. 

Net exposure to Russia fell to €344 million at the end of 2023, down from €744 million a year earlier, and from €1.86 billion in February 2022 – the same month that Russia invaded Ukraine. Like its European peers, Commerzbank has been cutting Russia exposures after the EU and other powers imposed sanctions on Moscow in late February/early March 2022.