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A “mild recession” is on the cards, according to Commerzbank CEO Manfred Knof.
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Germany’s Commerzbank said on Wednesday that net profit more than tripled in the third quarter, 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 had on average expected profit of 611 million euros, according to a consensus forecast published by Commerzbank.
Like many banks, Commerzbank is benefiting from a rise in interest rates and the income that generates. Net interest income rose 34% to 2.2 billion euros, better than expectations for 2.1 billion euros.
Commerzbank, one of Germany’s best known banks and partially held by the government after a bailout more than a decade ago, spent much of the past three years in a major overhaul, slashing its workforce and branch network to restore profits.
On Wednesday, management presented a strategy update, saying it would reduce its cost-to-income ratio to 55% by 2027 and aim for a net profit of around 3.4 billion euros in that year.
Those compare with a ratio of 60% so far this year and expectations for profit 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,” Chief Executive Officer Manfred Knof said.
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