Frankfurt / Main (dpa) – Commerzbank is heading into the red in the year of the Crown crisis and wants to further toughen its austerity course.
A “stable client business and a solid capital base” are “a good basis … for the bank’s realignment,” CFO Bettina Orlopp said Thursday when she presented interim third quarter results. “We have created the conditions for greater savings.” However, the decision on the future direction will only be made in the first months of 2021 after the change of boss.
In the third quarter of 2020, the bottom line was less than 69 million euros on the books of the Frankfurt-based MDax group. A year earlier, the bank had reported a profit of 297 million euros. During the first nine months, the loss amounted to 162 million euros, after a profit of 681 million euros in the same period of the previous year.
For 2020 as a whole, the Board of Directors continues to expect losses. Among other things, the significantly higher provision for potential loan defaults as a result of the Corona crisis and the costs of the corporate restructuring burden, also in the third quarter. For the year as a whole, the bank continues to expect provisions for bad debts of between € 1.3 billion and € 1.5 billion. Analysts assume that Commerzbank will only become profitable again in 2022.
In the private client business, the bank expects largely stable income in the current year. In contrast, “stronger corona effects are expected” in the corporate customer segment. In the third quarter, revenue, that is, the bank’s total revenue, was around € 2 billion, almost € 150 million below the previous year’s figure. Commerzbank explained this, among other things, with a provision for legal risks in the Polish subsidiary mBank.
At Commerzbank, whose largest shareholder has been the German state since it was bailed out with billions in taxes in the 2009 financial crisis, discussions of additional savings have been going on for months. In view of advancing digitization, drastic cuts are expected in the comparatively dense branch network and more job cuts.
The bank failed to reopen 200 branches that were temporarily closed due to the corona pandemic, and thus closed every fifth of its branches. In addition, there have been job cuts since fall 2019. At the end of September, the institute had 39,600 full-time positions, about 750 fewer than a year earlier. The closure of branches and the offer of partial retirement of employees have meant an expense of 201 million euros in the third quarter.
With the integration of its online subsidiary Comdirect, Commerzbank wants to drive the expansion of digital offerings and reduce costs because dual functions are no longer available. At the beginning of this week the merger of the two houses was registered in the commercial register. “With the acquisition of Comdirect we have taken an important step towards being more profitable and even better,” said Commerzbank’s outgoing boss Martin Zielke.
However, before future strategy was tied down, key personal details had to be clarified first: Zielke will leave the institute after harsh criticism from investors at the end of the year, and former Deutsche Bank manager Manfred Knof will be his successor. on January 1, 2021.
“We will discuss the new strategy with the new CEO as soon as he is on board in January and I am confident that we can present the results in the first quarter,” CFO Orlopp said Thursday. “I am sure that we have already done a lot of preparatory work and we are not starting from scratch.”
On the stock market, however, Commerzbank stock was on the losing end again on Thursday due to weak numbers and uncertainties related to the crown. The newspaper lost as much as seven percent in the morning at 3.96 euros and was once again one of the worst results of the MDax. Since the beginning of the year, price losses have totaled almost 30 percent. After all, the stock has been able to rally somewhat in recent months from a record low of just over € 2.80 in March, when the crown crisis ripped through stock exchanges around the world.