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CZB Commerzbank Ord

6.7025
0.00 (0.00%)
Last Updated: 00:00:00
Delayed by 15 minutes
Share Name Share Symbol Market Type Share ISIN Share Description
Commerzbank Ord LSE:CZB London Ordinary Share DE000CBK1001 ORD NPV
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  0.00 0.00% 6.7025 6.60 6.805 0.00 00:00:00
Industry Sector Turnover Profit EPS - Basic PE Ratio Market Cap
0 0 N/A 0

Commerzbank: 9M operating profit of EUR1 billion and net result of EUR751 million (742957)

08/11/2018 6:05am

UK Regulatory


Dow Jones received a payment from EQS/DGAP to publish this press release.

 
 
 Commerzbank Aktiengesellschaft (CZB) 
Commerzbank: 9M operating profit of EUR1 billion and net result of EUR751 
million 
 
08-Nov-2018 / 07:05 CET/CEST 
Dissemination of a Regulatory Announcement, transmitted by EQS Group. 
The issuer is solely responsible for the content of this announcement. 
 
*- Operating profit of EUR331m for third quarter (Q3 2017: EUR623m) and of 
EUR1,020m after nine months (9M 2017: EUR1,128m); exceptional revenue items 
of EUR37m in the first nine months (9M 2017: EUR617m)* 
 
*- Underlying revenues higher at EUR6.69bn in the first nine months (9M 
2017: EUR6.34bn)* 
 
*- Common Equity Tier 1 ratio of 13.2% (end of June 2018: 13.0%) * 
 
*- More than 900,000 net new customers in German private and small business 
banking since October 2016 - on track for target of 1 million by end of 
2018* 
 
*- Dividend accrual of 15 cents per share for first nine months of 2018* 
 
*- EBA stress test confirms Commerzbank's good risk profile* 
 
Commerzbank recorded continued growth in the first nine months of 2018 and 
increased its underlying revenues. In the Private and Small Business 
Customers segment, it gained around 117,000 net new customers in Germany in 
the third quarter. With a good 900,000 net new customers since October 2016, 
it is on track to achieve its target of one million net new customers by the 
end of 2018. The Corporate Clients segment is still ahead of its 2018 
targets for new customers and volume of lending. Group revenues after 
adjustment for non-recurring items rose in the first nine months to EUR6,690 
million (9M 2017: EUR6,338 million). In the third quarter the Bank increased 
its underlying revenues by nearly 9% year-on-year to EUR2,175 million (Q3 
2017: EUR2,003 million). The Bank made further progress with the 
implementation of its strategy. In the third quarter, the migration of small 
business customers from the Corporate Clients segment to the Private and 
Small Business Customers segment was completed and the new relationship 
model for corporate clients established, among other things. 
 
*Group revenues *stood at EUR6,727 million in the first nine months (9M 
2017: EUR6,955 million). Last year's figure had been bolstered by 
non-recurring items amounting to EUR617 million in the first nine months. In 
2018, exceptional revenues in the first nine months stood at just EUR37 
million. Overall, higher revenues from customer business helped to largely 
offset the difference year-on-year. In the third quarter, revenues amounted 
to EUR2,193 million (Q3 2017: EUR2,505 million). 
 
*Operating expenses* totalled EUR5,412 million in the first nine months (9M 
2017: EUR5,297 million). The year-on-year increase was mainly due to 
investments in strategy implementation and further growth. Operating 
expenses for the third quarter stood at EUR1,728 million (Q3 2017: EUR1,714 
million). Costs were therefore in line with expectations for 2018, as was 
the *risk result*. It stood at minus EUR295 million in the first nine months 
and minus EUR134 million in the third quarter. This reflects the Bank's 
portfolio quality and the benign credit environment. The non-performing loan 
(NPL) ratio remained very low, at 0.9%. 
 
The *operating profit* for the first nine months came to EUR1,020 million 
(9M 2017: EUR1,128 million). It benefited from higher underlying revenues, a 
lower risk result and a positive contribution from the Asset and Capital 
Recovery segment. In the third quarter, the operating profit came in at 
EUR331 million (Q3 2017: EUR623 million). The year-on-year decline is 
attributable mainly to exceptional revenues of EUR502 million in the third 
quarter of 2017, including from real estate sales. 
 
After deduction of taxes of EUR187 million and minority interests of EUR81 
million, Commerzbank posted a *net result* of EUR751 million for the first 
nine months of 2018 (9M 2017: EUR53 million; impacted by restructuring 
expenses of around EUR800 million). The net result for the third quarter 
came in at EUR218 million (Q3 2017: EUR467 million). 
 
'We increased our underlying revenues and steadily gain new customers. This 
shows that we have the right strategy: We grow in a highly competitive 
market. Our improved setup has also been confirmed by the European stress 
test. However, the environment remains challenging and although we have made 
a lot of progress, we still have some work to do', said Martin Zielke, 
Chairman of the Board of Managing Directors of Commerzbank.' Chief Financial 
Officer Stephan Engels added: 'We have significantly improved the quality of 
our earnings compared to last year. Our capital ratio and our leverage ratio 
are stable on a good level. Our outlook for the full year remains 
unchanged.' 
 
The *Common Equity Tier 1 ratio *(CET 1) stood at 13.2% at the end of 
September, versus 13.0% at the end of June 2018. This includes earnings for 
the first nine months, factoring in a dividend accrual of 15 cents per 
share. *Risk-weighted assets* (RWA) amounted to EUR178 billion at the end of 
September, versus EUR176 billion at the end of June 2018. This rise, 
resulting partly from increased lending in the core segments, was more than 
offset by capital build-up. The *leverage ratio* stood at 4.5%. *Total 
assets* came to EUR493 billion (end of June 2018: EUR488 billion). The 
Bank's achievements in risk reduction and improved balance sheet quality 
contributed to a significantly improved result in this year's European 
Banking Authority stress test. 
 
*Development of the segments* 
 
The *Private and Small Business Customers* segment benefited from the 
continued growth in customers and Assets under Control, and increased its 
revenues after adjustment for non-recurring items by 7.8% year-on-year in 
the first nine months to EUR3,663 million. Underlying revenues were also up 
year-on-year for the third quarter, at EUR1,228 million (Q3 2017: EUR1,125 
million). Assets under Control in Germany went up in all product categories, 
to stand at EUR392 billion at the end of the third quarter. The volume of 
mortgage lending grew by 10% year-on-year, reaching around EUR74 billion in 
September. 
 
The segment's operating expenses stood at EUR2,893 million (9M 2017: 
EUR2,794 million). The year-on-year increase was due to higher regulatory 
costs and investments in growth. The risk result came to minus EUR184 
million. The operating profit stood at EUR564 million for the first nine 
months (9M 2017: EUR712 million, including non-recurring items of EUR238 
million). Operating profit for the third quarter stood at EUR188 million (Q3 
2017: EUR380 million). In the previous year, non-recurring effects from the 
sale of the Concardis holdings and termination of the consumer finance joint 
venture with BNP Paribas had contributed to the segment's profit. 
 
In the *Corporate Clients* segment, continued high margin pressure and 
competition impacted earnings. The Financial Institutions division returned 
to a stable profit contribution this year, following its realignment. 
Revenues from business with SMEs, large corporates and international 
companies were affected - despite some successful growth initiatives - by 
margin pressure, low interest rates and weak demand for hedging products. 
The result of the Equity Markets & Commodities division was driven by lower 
demand for structured products. 
 
The Corporate Clients segment generated revenues of EUR2,836 million in the 
first nine months (9M 2017: EUR3,015 million), including EUR918 million in 
the third quarter (Q3 2017: EUR967 million). Operating expenses amounted to 
EUR2,189 million (9M 2017: EUR2,148 million). The risk result, which had 
benefited from releases in the first half of the year, normalised and stood 
at minus EUR124 million after nine months (Q3: minus EUR62 million). The 
operating profit came to EUR523 million for the first nine months (9M 2017: 
EUR743m) and to EUR169 million for the third quarter (Q3 2017: EUR237 
million). 
 
The *Asset & Capital Recovery* (ACR) segment recorded an operating profit of 
EUR90 million for the first nine months (9M 2017: minus EUR210 million, Q3 
2018: EUR14 million). This result reflects both the reduced size of the 
segment's run-down portfolio and the revaluation of the Ship Finance 
portfolio following the introduction of IFRS 9. Revenues amounted to EUR135 
million (9M 2017: EUR146 million). The revenue figure for the third quarter 
was EUR28 million. Operating expenses were further reduced, coming in at 
EUR60 million for the first nine months (9M 2017: EUR79 million). The risk 
result came out at EUR15 million. The Bank's Ship Finance portfolio was run 
down further and stood at a volume of EUR1.1 billion at the end of the third 
quarter (Q3 2017: EUR4.2 billion). 
 
*Outlook* 
 
The outlook remains unchanged. In 2018, the Bank will focus on further 
growth and the implementation of its Commerzbank 4.0 strategy. Higher 
underlying revenues are expected at Group level with the Private and Small 
Business Customers segment exceeding and the Corporate Clients segment being 
below the 2017 figures. Driven by investments and compulsory contributions, 
costs are expected to be at around EUR7.1 billion. The risk result under 
IFRS 9 should be below EUR500 million, provided the global trade conflicts 
do not escalate significantly and there are no unforeseeable larger credit 
events. The Bank is aiming to resume dividend payments of 20 cents per share 
for financial year 2018. 
 
*Financial figures at a glance* 
 
               *9M 2018* *9M 2017* *Q3 *  *Q3 *  *Q2 *  *9M/18 
in EURm                            *2018* *2017* *2018*   vs 
                                                         9M/17 
                                                         in %* 
Net interest     3,405     3,091   1,198  1,038  1,162   10.2 
income 
Net commission   2,329     2,404    767    738    765    -3.1 
income 
Net fair value    791       914     166    222    268    -13.5 
result 
Other income      203       546      62    507     26    -62.8 
*Revenues 
before risk      6,727     6,955   2,193  2,505  2,221   -3.3 
result* 
_Revenues 
excl.            6,690     6,338   2,175  2,003  2,203    5.6 
exceptional 
items_ 
Operating        5,412     5,297   1,728  1,714  1,748    2.2 
expenses 
Risk result 
(2017: Loan      -295      -530     -134   -168   -84    44.3 
loss 
provisions) 
*Operating 
profit or        1,020     1,128    331    623    389    -9.6 
loss* 
Impairments of     -         -       -      -      - 
Goodwill 
Restructuring      -        807      -      -      - 
expenses 
*Pre-tax 
profit or        1,020      321     331    623    389      - 
loss* 
Taxes             187       202      89    134     94    -7.0 
*Consolidated 
profit or loss 
attributable      751       53      218    467    272      - 
to Commerzbank 
shareholders* 
Earnings per     0.60      0.04     0.17   0.37   0.22 
share (EUR) 
Cost/income 
ratio in         80.5      76.2     78.8   68.4   78.7 
operating 
business (%) 
Operating RoTE    5.2       5.6     5.0    9.3    5.9 
(%) 
Net RoTE (%)      4.0       0.3     3.5    7.3    4.3 
Net RoE (%)       3.6       0.2     3.1    6.6    3.9 
CET 1 ratio, 
Basel 3 fully    13.2      13.5     13.2   13.5   13.0 
phased in (%) 
Leverage 
Ratio, Basel 3    4.5       4.7     4.5    4.7    4.5 
fully phased 
in (%) 
Total assets      493       490     493    490    488 
(EURbn) 
 
***** 
 
From approximately 7 am onwards you can find broadcast-ready video material 
with statements by Stephan Engels at http://mediathek.commerzbank.de/ [1]. 
 
***** 
 
*Press contact* 
Nils Happich +49 69 136-80529 
Maurice Farrouh +49 69 136-21947 
Erik Nebel +49 69 136-44986 
 
***** 
 
About Commerzbank 
Commerzbank is a leading international commercial bank with branches and 
offices in almost 50 countries. In the two business segments Private and 
Small Business Customers and Corporate Clients, the Bank offers a 
comprehensive portfolio of financial services which is precisely aligned to 
its clients' needs. Commerzbank finances approximately 30% of Germany's 
foreign trade and is the leading finance provider for corporate clients in 
Germany. Due to its in-depth sector know-how in the German economy, the Bank 
is a leading provider of capital market products. Its subsidiaries Comdirect 
in Germany and mBank in Poland are two of the world's most innovative online 
banks. With approximately 1,000 branches, Commerzbank has one of the densest 
branch networks among German private banks. In total, Commerzbank serves 
more than 18 million private and small business customers, as well as more 
than 60,000 corporate clients, multinationals, financial service providers, 
and institutional clients. The Bank, which was founded in 1870, is 
represented at all the world's major stock exchanges. In 2017, it generated 
gross revenues of EUR9.1 billion with approximately 49,300 employees. 
 
***** 
*Disclaimer * 
This release contains forward-looking statements. Forward-looking statements 
are statements that are not historical facts. In this release, these 
statements concern inter alia the expected future business of Commerzbank, 
efficiency gains and expected synergies, expected growth prospects and other 
opportunities for an increase in value of Commerzbank as well as expected 
future financial results, restructuring costs and other financial 
developments and information. These forward-looking statements are based on 
the management's current plans, expectations, estimates and projections. 
They are subject to a number of assumptions and involve known and unknown 
risks, uncertainties and other factors that may cause actual results and 
developments to differ materially from any future results and developments 
expressed or implied by such forward-looking statements. Such factors 
include the conditions in the financial markets in Germany, in Europe, in 
the USA and other regions from which Commerzbank derives a substantial 
portion of its revenues and in which Commerzbank holds a substantial portion 
of its assets, the development of asset prices and market volatility, 
especially due to the ongoing European debt crisis, potential defaults of 
borrowers or trading counterparties, the implementation of its strategic 
initiatives to improve its business model, the reliability of its risk 
management policies, procedures and methods, risks arising as a result of 
regulatory change and other risks. Forward-looking statements therefore 
speak only as of the date they are made. Commerzbank has no obligation to 
update or release any revisions to the forward-looking statements contained 
in this release to reflect events or circumstances after the date of this 
release. 
 
ISIN:          DE000CBK1001 
Category Code: QRT 
TIDM:          CZB 
LEI Code:      851WYGNLUQLFZBSYGB56 
Sequence No.:  6462 
EQS News ID:   742957 
 
End of Announcement EQS News Service 
 
 
1: https://link.cockpit.eqs.com/cgi-bin/fncls.ssp?fn=redirect&url=b9e39396c3a74844c54cf2fcbf6f5173&application_id=742957&site_id=vwd&application_name=news 
 

(END) Dow Jones Newswires

November 08, 2018 01:05 ET (06:05 GMT)

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