Commerzbank has announced a remarkable achievement in 2024, reporting a net profit of 2.68 billion euros (approximately $2.78 billion), marking a substantial 20% increase from the previous year. This figure significantly outstrips the consensus estimate of $2.47 billion, as noted by Reuters. The bank's robust performance is underscored by a return on tangible equity rising to 9.2%, up from 7.7% in 2023, surpassing its target of at least 8%.
The announcement of these results led to a positive market response, with Commerzbank's shares closing the day 1.7% higher. In addition to the impressive profit figures, the bank has proposed increasing its dividend payout to 0.65 euros per share, a notable rise from 0.35 euros per share in the previous year. While the net income for 2024 slightly decreased to 8.33 billion euros from 8.37 billion euros in 2023, Commerzbank attributed this year's success to favorable foreign exchange valuation effects experienced in the fourth quarter.
Commerzbank's CEO, Bettina Orlopp, emphasized the bank's commitment to its shareholders, stating, "We have exceeded our capital return promise to our shareholders." Orlopp outlined that effective cost management and strategic growth initiatives were crucial factors driving the profit increase. She further expressed confidence in the bank's future, adding, "Thanks to increasing profitability and new growth initiatives, we will further enhance capital return in the coming years. Commerzbank is and remains an attractive investment."
As the financial landscape remains competitive, Commerzbank finds itself in a challenging position with UniCredit, Italy's second-largest lender, holding a direct stake of 9.5% and an additional 18.5% stake through derivatives in Commerzbank. UniCredit recently launched a takeover bid for Banco BPM, raising questions about its future intentions regarding Commerzbank.
The German government has criticized UniCredit's bid as "very aggressive" and "very opaque," indicating potential regulatory concerns about its implications for the banking sector. In light of these developments, Commerzbank is scheduled to deliver its annual strategy update and outlook on February 13, which may provide more insights into its plans moving forward.
Leave a Reply