Pre-provision trends appear intact, improving All indications are that Commerzbank should have decent pre-provision trends in 1Q22. Management comments throughout the quarter indicate continued growth in net interest income and commission income, continued progress with restructuring and cost reduction, limited CHF mortgage provisions in Poland, and general satisfaction with performance. Rate rise expectations have increased, but obviously with other risks now too Forward interest rates wobbled after the Russian invasion of Ukraine but since then have risen to new highs, which presents substantial upside to NII as the bank has guided. For now though the market is viewing this as counterbalanced by increased economic risks in Europe and in Germany in particular, including the possibility of recession and the potential implications that would have for revenue levels and for credit quality, as well as inflationary pressures on costs. The bank is likely to consider precautionary credit provisions The stated guidance is for a FY22 risk result below EUR 0.7bn, after 0.6bn/1.7bn/0.6bn in 2019-21, and there has been no update to this post Russia/Ukraine. There is likely to be some limited provisioning (EUR 100-200m?) on direct Russia exposures (EUR 1.3bn), but these are small numbers. The real debate is about the outlook for Germany, on which very little has actually happened yet in terms of observable credit quality, but the bank might consider a ''top-level adjustment'' precautionary provision as it did with the pandemic (EUR 500m, still sitting in reserve). We keep our Outperform rating We make minor adjustments to our estimates here. We already have an extra 0.6bn of loan loss provisions in our FY22 estimates (1.3bn vs the guided 0.7bn). We keep our price target and our Outperform rating, with very large upside from the RoTE and NII outlooks, but (for now) up against the rather binary risks that the market is debating round the macro.