Commerzbank reports strongest operating performance ever
By Josh White
Date: Wednesday 06 Aug 2025
(Sharecast News) - Commerzbank reported its strongest operating performance on record for the first half of 2025 on Wednesday, prompting the German lender to raise its full-year profit targets.
The bank posted a 23% year-on-year rise in operating profit to €2.4bn, with second-quarter earnings up 34% to €1.2bn.
Revenue increased 13% to €6.1bn over the half, driven by strong growth in commission income, while net profit for the period held steady at €1.3bn despite €534m in restructuring costs.
Net commission income climbed 8% to €2bn in the first half, while net interest income remained broadly stable at €4.1bn despite lower benchmark interest rates.
The bank's cost-income ratio improved to 56%, better than its full-year target of 57%, and its non-performing exposure ratio remained low at 1.1%.
On the back of the results, Commerzbank raised its full-year net profit guidance to €2.9bn before restructuring expenses, up from €2.8bn, and to €2.5bn after restructuring costs, up from €2.4bn.
The bank also upgraded its net interest income forecast to €8bn, with an additional €300m from fair value adjustments.
CEO Bettina Orlopp highlighted the bank's progress under its 'Momentum' transformation strategy, which included staff reductions, digital investments, and a focus on capital returns.
"We achieved the best operating result in the history of Commerzbank and are progressing fast with our transformation," she said, confirming that the bank had applied to regulators for a €1bn share buyback based on half-year results.
The bank said it remained committed to returning 100% of its net profit before restructuring costs to shareholders, via a mix of dividends and buybacks, subject to regulatory approval.
Commerzbank's CET1 ratio stood at 14.6% at the end of June, comfortably above regulatory requirements.
Segment results showed strong customer activity.
The Private and Small-Business Customers division saw revenues rise 5% in the second quarter to €1.13bn, supported by a 9% increase in commission income.
Corporate Clients reported increased loan demand, with average loan volumes rising to €107bn in the second quarter, although overall revenues in the segment declined slightly year-on-year due to lower fair value gains.
Meanwhile, Polish subsidiary mBank more than doubled its operating profit to €300m in the quarter, aided by a sharp reduction in legal provisions tied to foreign currency loans.
Commerzbank was also contending with a 20.2% stake acquired by Italy's UniCredit, which had pushed for a merger.
Orlopp criticised the holding as "not ideal," stressing UniCredit is a direct competitor in the German market.
"Our expectation is clearly that they act as an investor and nothing else," she told analysts, reaffirming the bank's focus on an independent strategy.
Despite ongoing restructuring, including planned job cuts of 3,900 positions, Commerzbank was banking on continued revenue growth and operational efficiency to strengthen its position and fend off merger pressure.
The bank said it expected to finalise staff reduction agreements by autumn, and had introduced an employee share scheme to align staff with its performance goals.
At 1338 EDT (1238 BST), shares in Commerzbank were down 0.1% in Frankfurt at €31.37.
Reporting by Josh White for Sharecast.com.
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