NII is ahead again, guidance raised again, looks conservative again Commerzbank continues to grow net interest income (+5% QoQ underlying), and is again raising full-year guidance (+8%). As before the updated guidance still looks conservative (EUR 7.0-7.3bn versus 7.8bn 1Q run-rate), with volumes and reinvestment yields offsetting deposit beta. Deposits continue to grow, albeit with mix shifts Deposit volumes are up 2% QoQ, with growth in corporate clients and Poland more than offsetting 3% shrinkage in German retail banking. The mix is shifting too, with retail deposits moving from 70/30 sight/term to 66/34 during the quarter, after relative stability over the previous year. Credit quality remains very benign, with buffers in place as well The latest loan loss provision charge is low (10bp in 1Q after 68/22/33bp in 2020-22), with stable IFRS-9 metrics across stages 1-3. The top-level adjustment buffer remains intact (EUR 0.5bn or 20bps), and the full-year guidance of 900m (33bp) looks likely to be bettered. Capital is strong, buybacks beginning Stronger earnings are helping capital ratios (14.2% CET1 vs 10.0% MDA). The first round of share buybacks has just received ECB approval and should be implemented forthwith. Further larger buybacks should follow, most likely at year-end. We make minor estimate changes, maintain our Outperform rating We update our model, increasing FY23 estimates but with only very minor impacts on 2024-25. The valuation is around half what the profits should justify. As the bank demonstrates its lower risk profile and a sustainably higher earnings level, it should attract greater ownership and re-rate.