Commerzbank swung to better than expected fourth-quarter. And that is despite a major haul over their annual net profit. Profit this year will exceed 1 billion euros, Commerzbank said. It added that it would pay a dividend for the year. And also said that share buybacks are possible as early as next year.
Results were partly helped by revenue at its CommerzVentures venture capital funds. This is by commission from its securities trading business and a decrease in provisions set aside to cushion the fallout from the pandemic. The profitable finish to the full year at Germany’s No. 2 bank marks a victory for CEO Manfred Knof. He actually joined to to carry out a 2 billion euro restructuring programme, that involves hundreds of branch closures and 10,000 job cuts. Knof stated that in the first year of the transformation, they have delivered on their promises. This increases their confidence that they will achieve.
Still, Knof has a long way to go, with agreements for 4,000 of the planned job cuts still outstanding. The bank‘s shares were up 4.9%. Commerzbank reported a fourth-quarter net profit of 421 million euros. That beat the 81 million euros expected by analysts. For the full year, the bank swung to a net profit of 430 million euros. A provision made at its Polish mBank subsidiary announced in January was a drag on the fourth quarter.
Analysts had expected the bank to post a profit of about 900 million euros. And this would be its biggest since 2015. According to the bank’s chief financial officer, the prospect of higher interest rate in Europe could give a significant lift to interest income.