Yahoo Finance

• Net Return on Tangible Equity: 9.2% for 2024.

• Capital Return to Shareholders: EUR1.7 billion in 2024.

• Cost/Income Ratio: 59% in 2024, better than the target of 60%.

• Net Result: Increased by 20% to almost EUR2.7 billion in 2024.

• CET1 Ratio: 15.1% at the end of 2024.

• Net Interest Income (NII): EUR8.3 billion in 2024.

• Net Commission Income (NCI): Increased by 7% year on year.

• Corporate Clients Revenue Growth: 5% increase in 2024.

• Private and Small Business Customers Revenue Growth: Driven by 7% higher fee income.

• mBank Revenue Growth: 10% growth in both NII and NCI.

• Share Buyback Program: EUR600 million completed, with approval for an additional EUR400 million.

• Dividend Proposal: EUR0.65 per share.

• 2025 NII Guidance: EUR7.7 billion to EUR7.9 billion.

• 2025 Cost/Income Ratio Target: 57%.

• 2025 Risk Result Expectation: Around EUR850 million.

• 2025 Net Result Target: EUR2.4 billion, excluding restructuring charges.

• 2025 CET1 Ratio Target: At least 14%.

• Warning! GuruFocus has detected 4 Warning Sign with CRZBF.

Release Date: February 13, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Commerzbank AG (CRZBF) delivered a strong financial outperformance in 2024 with a net return on tangible equity of 9.2%, exceeding their target of at least 8%.

• The bank returned EUR1.7 billion more capital to shareholders than planned, demonstrating a commitment to shareholder value.

• Commerzbank AG achieved a cost/income ratio of 59%, better than their target of 60%, due to strong revenue growth and effective cost management.

• The Corporate Clients segment increased revenues by 5%, driven by substantial growth in fee, lending, and rates businesses.

• The bank's CET1 ratio stood at 15.1% at the end of 2024, providing a solid buffer above regulatory requirements and positioning them well for future growth.

Negative Points

• Commerzbank AG faced a pretax burden of EUR1 billion from legal provisions for FX mortgages in Poland, impacting their net result.

• The bank anticipates a risk result of around EUR850 million in 2025, reflecting a challenging economic environment.

• There are planned restructuring charges of EUR700 million pretax for headcount reduction as part of their momentum strategy.

• The bank's net interest income remained stable despite challenges posed by increased deposit betas and lower rates towards the end of the year.

• Commerzbank AG's mBank subsidiary in Poland faces ongoing risks from FX mortgages, although provisions are expected to decrease in 2025.

Q & A Highlights

Q: Can you clarify the payout above 100% in 2025 and whether it requires special approval from the ECB? Also, what level of wage inflation are you expecting in 2025? A: The payout above 100% in 2025 is part of our capital return policy, aligned with our Supervisory Board and acknowledged by the ECB, which agreed that restructuring costs fall under this one-off rule. Regarding wage inflation, there was a 5% increase in 2024, and for 2025, we expect a 4% increase for pay scale workers and a 5% increase for non-pay scale workers.