Commerzbank Aktiengesellschaft
Commerzbank: first year of strategy implementation with positive net result of EUR156m despite restructuring charge
DGAP-News: Commerzbank Aktiengesellschaft / Key word(s): Final Results – Operating profit of EUR1,303m for 2017 (2016: EUR1,399m) and of EUR159m for Q4 2017 (Q4 2016: EUR337m) – Revenues excluding exceptional items rose to EUR8.61bn in 2017 supported by growth (2016: EUR8.57bn) – 502,000 net new customers acquired in German retail banking in 2017 (around 639,000 since October 2016); assets under control up by EUR38bn to EUR376bn – Common Equity Tier 1 ratio at 14.1% (end of September 2017: 13.5%, end of 2016: 12.3%); leverage ratio comfortable at 5.1%, further improvement in very good NPL ratio to 1.3% – ACR Ship Finance portfolio reduced from EUR4.8bn to EUR2.6bn in 2017 – Outlook: Focus on implementation of Commerzbank 4.0 strategy – Aiming to resume dividend payments for financial year 2018
Loan loss provisions stood at EUR781 million in 2017 (2016: EUR900 million). Both of Commerzbank’s operating segments profited from the stability of the German economy, while the run-down segment Asset & Capital Recovery (ACR) benefited from the accelerated reduction of the Ship Finance portfolio. Corporate Clients booked loan loss provisions for a large individual exposure in the fourth quarter. The Bank’s healthy risk profile is reflected in the further reduced, very low non-performing loan (NPL) ratio of 1.3%. Operating expenses were down slightly at EUR7,079 million (2016: EUR7,100 million). Cost management compensated for higher investments in digitalisation and growth, and increased costs for regulatory projects, compliance, deposit guarantee schemes and various banking levies. In particular, personnel expenses decreased as a result of the personnel reductions. Taking into account the restructuring expenses of EUR808 million, the pre-tax profit for financial year 2017 came to EUR495 million (2016: EUR643 million). In the previous year, the pre-tax profit had been adversely affected by an impairment on goodwill and other intangible assets of EUR627 million and restructuring charges of EUR128 million. After deducting taxes of EUR245 million and minority interests of EUR94 million, Commerzbank made a net profit of EUR156 million (2016: EUR279 million). In the fourth quarter 2017 the Bank was able to increase its adjusted revenues both on a quarter-on-quarter and year-on-year basis. The net profit was down year-on-year at EUR90 million (Q4 2016: EUR182 million). Due to lower exceptional revenue items, the operating profit fell to EUR159 million (Q4 2016: EUR337 million), and revenues before loan loss provisions to EUR2,193 million (Q4 2016: EUR2,399 million). After adjustment for exceptional items, Q4 2017 revenues were up on a year-on-year basis at EUR2,253 million (Q4 2016: EUR2,111 million). Loan loss provisions stood at EUR251 million in the fourth quarter (Q4 2016: EUR290 million). They were booked primarily for an individual exposure in the Corporate Clients portfolio and for the Ship Finance portfolio. Operating expenses at EUR1,782 million remained almost stable year-on-year (Q4 2016: EUR1,773 million). “We see the structural change in the German banking sector as an opportunity and intend to be among the winners of this change. That’s why we are radically transforming the Bank. So far we made good progress in 2017: we have advanced the digitalisation of the Bank and have grown strongly. Therefore we aim to resume dividend payments for financial year 2018”, said Martin Zielke, Chairman of the Board of Managing Directors of Commerzbank. “However, it is also clear that we still have some work ahead of us before we can achieve the profitability we are aiming for.” Common Equity Tier 1 ratio up at 14.1% – healthy risk profile “In 2017 we invested in growth, digitalisation and regulation, while keeping our costs stable. Our CET 1 ratio stood at 14.1 percent in the fourth quarter”, commented Stephan Engels, Chief Financial Officer of Commerzbank. “The revaluation of our ship finance portfolio under IFRS 9 will minimise future burdens and has resulted in a CET 1 ratio of around 13.3 percent at the beginning of 2018. This gives us room for further investments in growth and for driving the digitalisation of the Bank forward.” Individual financial statement of Commerzbank AG The operating profit for 2017, at EUR867 million, was down on the previous year (2016: EUR1,078 million). Revenues before loan loss provisions remained stable year-on-year at EUR4,832 million (2016: EUR4,818 million). This was also the case for adjusted revenues before loan loss provisions, which came to EUR4,622 million in 2017 (2016: EUR4,628 million). Loan loss provisions rose by EUR35 million to EUR154 million in 2017 (2016: EUR119 million). Operating expenses went up over the same period to EUR3,811 million (2016: EUR3,621 million), largely as a result of higher investments in digitalisation and regulatory charges. In 2017 mBank saw its revenues before loan loss provisions grow by 4.8% to EUR998 million (2016: EUR952 million). New business volume in consumer loans increased by more than 15% over the same period. mBank has attracted around 292,000 net new customers since the beginning of 2017. At the end of 2017 mBank had a total of approximately 5.4 million retail and corporate customers in Poland, the Czech Republic, and Slovakia. In 2017 mBank’s loan loss provisions rose year-on-year. Operating expenses increased due to higher regulatory burdens. In the fourth quarter of 2017 the operating profit for the Private and Small Business Customers segment totalled EUR149 million (Q4 2016: EUR232 million). Revenues before loan loss provisions amounted to EUR1,190 million (Q4 2016: EUR1,174 million). The Corporate Clients segment progressed well in its strategic realignment, improved its RWA efficiency, reduced costs and achieved strong customer growth. Mittelstand profited from its strong market position with German corporate customers. In the last two years Commerzbank added almost 5,400 new corporate customers – predominantly in the German Mittelstand – thereof 4,100 in 2017. Also loan volumes in Mittelstand and International Corporates increased slightly that year. In 2017 the segment posted an operating profit of EUR809 million (2016: EUR1,289 million). Revenues before loan loss provisions decreased to EUR3,959 million in 2017 (2016: EUR4,232 million), impacted by low market volatility and pricing competition. The revenues of Financial Institutions reflect the streamlined correspondent banking network. In 2017 the segment’s loan loss provisions rose by EUR110 million to EUR295 million (2016: EUR185 million). The increase is mainly due to one individual exposure. The segment reduced its operating expenses to EUR2,885 million (2016: EUR2,973 million) while pursuing strategic investments, thanks to strict cost management, and in particular due to the reduction in personnel expenses. Financial figures at a glance
2017 figures published in this press release are preliminary and unaudited. From approximately 7 am onwards you can find broadcast-ready video material with statements by Martin Zielke and Stephan Engels at http://mediathek.commerzbank.de/. The press conference will be broadcast live on the internet https://www.commerzbank.de/en/hauptnavigation/presse/bilanzpressekonferenz/bpk.html.
***** About Commerzbank *****
08.02.2018 Dissemination of a Corporate News, transmitted by DGAP – a service of EQS Group AG. |
Language: | English |
Company: | Commerzbank Aktiengesellschaft |
Kaiserstraße 16 | |
60311 Frankfurt am Main | |
Germany | |
Phone: | +49 (069) 136 20 |
Fax: | – |
E-mail: | pressestelle@commerzbank.com |
Internet: | www.commerzbank.de |
ISIN: | DE000CBK1001 |
WKN: | CBK100 |
Indices: | DAX, CDAX, HDAX, PRIMEALL |
Listed: | Regulated Market in Berlin, Dusseldorf, Frankfurt (Prime Standard), Hamburg, Hanover, Munich, Stuttgart; Regulated Unofficial Market in Tradegate Exchange; London, SIX |
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