According to Manfred Knof, CEO of Commerzbank, a “mild recession” is on the agenda.
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Germany Commerzbank said Wednesday that third-quarter net profit more than tripled, better than expected and helped by higher interest rates, as it presented a strategy update.
Net profit of 684 million euros ($730.72 million) in the quarter, compared with a profit of 195 million euros a year earlier. Analysts on average had expected a profit of 611 million euros, according to a consensus forecast published by Commerzbank.
Like many banks, Commerzbank benefits from an increase in interest rates and the resulting income. Net interest income rose by 34% to 2.2 billion euros, better than expectations for 2.1 billion euros.
Commerzbank, one of Germany’s best-known banks and partly government-owned after a bailout more than a decade ago, has spent much of the past three years undergoing a major overhaul, slashing its workforce and branch network to boost profits to recover.
On Wednesday, management presented a strategy update, saying it would reduce its cost-to-income ratio to 55% by 2027 and target net profit of around 3.4 billion euros that year.
These compare with a ratio of 60% so far this year and a profit forecast of 2.2 billion euros for the full year.
“With our refined strategy we are strengthening our position as a decisive player in the German banking market,” said CEO Manfred Knof.