Research, Charts & Company Announcements
Research Tree provides access to ongoing research coverage, media content and regulatory news on COMMERZBANK AG. We currently have 7 research reports from 1 professional analysts.
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Q3 loss as warned due to restructuring 4.0
04 Nov 16
The pre-tax result was a loss of €255m for Q3 16 versus a profit of €401m for Q3 15. Net interest income was down by 13% to €1.14bn for Q3 16 compared to Q3 15. Loan loss provisions increased by 88% to €275m in Q3 16. Commission income declined by 4% to €777m in Q3 16. Trading income increased by 25% to €367m for Q3 16 compared to Q3 15. Total revenues declined by 5% to €2.2bn in Q3 16 compared to Q3 15. Administrative expenses were down by 1.6% to €1.73bn in the same period. Impairments on goodwill were €627m and restructuring charges €57m in Q3 16. Despite the pre-tax loss there were tax expenses of €14m in Q3 16 as impairments on GW are not tax deductable. The net result after minorities was therefore a loss of €288m for Q3 16 versus a profit of €235m for Q3 15. The Basel 3 fully phased-in core Tier 1 ratio was 11.8% at end September 2016 versus 12.0% at year-end 2015.
29 Sep 16
In response to current market rumours, management confirms that it has presented Commerzbank’s draft strategic and financial objectives until 2020 to the Supervisory Board for consideration. The Board of Managing Directors will decide tomorrow on the strategic objectives after discussions with the Supervisory Board. The objectives presented are as follows: • By the end of 2020, Commerzbank will have sustainably increased its profitability. As part of the “Commerzbank 4.0” strategy, it will concentrate on its core businesses, digitalise 80% of relevant processes, and thereby achieve significant efficiency gains. Its business will be focused on two customer segments, “Private and Small Business Customers” and “Corporate Clients”. • In the context of the decision of the new strategy, goodwill and intangible assets of both Corporates & Markets and Mittelstandsbank will be subjected to an impairment test. This means that most probably around €700m would be written off in Q3 16. Loan loss provisions will be considerably higher than in the first two quarters due to ongoing weakness in the shipping markets. Despite the goodwill write-offs, Commerzbank is expecting a small net profit for 2016 as a whole. • Commerzbank is aiming for a net return on tangible equity (RoTE) of at least 6% by the end of 2020. Should the interest rate environment improve, a net return on tangible equity of at least 8% will be achievable. • The Common Equity Tier 1 (CET 1) ratio, after full application of Basel 3, is expected to stay at around 12% and will be above 12% in 2018, taking into account currently foreseeable regulatory developments. For 2020, the bank expects a ratio of above 13%. • The new focus on the core business will lead to staff reductions amounting to around net 7,300 full-time positions (9,600 gross). To cover its restructuring costs in the region of €1.1bn, Commerzbank will cease dividend payments for the time being and will retain its full earnings.
Pressure on CET1
26 Jul 16
Commerzbank released some preliminary Q2 16 figures. Net profit decreased by 32% to €209m for Q2 16 compared to Q2 15. Operating profit was down by 18% to €342m in the same period. The Common Equity Tier 1 ratio (CET 1) under full application of Basel 3 stood at 11.5% at the end of June 2016 (end of March 2016: 12.0%; end of June 2015: 10.5%) based on preliminary figures. The change in the CET1 ratio mainly results from the following non-operating valuation and methodology effects regarding Commerzbank: • Higher risk-weighted assets (RWA) in particular for operational risks due to the consideration of new external events factored in by external databases representing industrywide damage claims of banks. • Higher pension liabilities due to lower discount factors (reduced from 2% to 1.7%) as well as higher capital deductions from revaluation reserves, in particular driven by higher credit spreads for Italian sovereign debt. Commerzbank is due to publish its final figures for Q2 16 on 2 August 2016.
Weaker Q1 results due to trading weakness
03 May 16
The pre-tax result declined by 56% to €273m for Q1 16 versus Q1 15. Net interest income was down by 9% to €1.33bn for Q1 16 compared to Q1 15. Loan loss provisions decreased by 6% to €148m in Q1 16. Commission income was down by 9% to €821m in Q1 16. Trading income fell by 98% to €13m for Q1 16 compared to Q1 15. Total revenues declined by 17% to €2.3bn in Q1 16 compared to Q1 15. Administrative expenses were down by 2.4% to €1.9bn in the same period. The tax ratio was 31.5% for Q1 16 compared to 35% for Q1 15. The net profit after minorities declined by 56% to €163m for Q1 16 versus Q1 15. The Basel 3 fully phased-in core Tier 1 ratio was unchanged at 12.0% at end March 2016 versus year-end 2015.
Strongly increased profit as expected but still a too low profit level
12 Feb 16
Preliminary pre-tax profit increased from €628m for FY2014 to €1.9bn for FY2015. Net interest income and trading income rose by 5% to €6.3bn for FY2015 compared to FY2014. Loan loss provisions declined by 39% to €696m in 2015. Revenues before loan loss provisions increased by 11% to €9.76bn for 2015 compared to 2014. Operating expenses were up by 3% to €7.16bn in the same period. Other result was a loss of €15m for 2015 compared to €577m for 2014. The tax ratio was 41% for 2014 and 34% for 2015. The net profit after minorities attributable to common shares was €1.06bn for 2015 compared to €266m in 2014. The Basel III fully-applied Core Tier 1 ratio was 12.0% at end December 2015 compared to 9.3% at year-end 2014 regarding Commerzbank. The RoE was 3.8% for FY2015. Management plans to propose a dividend of €0.20 per share for FY2015.
Q3 results in line on a low basis and new CEO needed
02 Nov 15
The pre-tax result rose by 17% to €401m for Q3 15 versus Q3 14. Net interest income was down by 12% to €1.31n for Q3 15 compared to Q3 14. Loan loss provisions decreased by 57% to €146m in Q3 15. Commission income rose by 1.4% to €810m in Q3 15. Trading income more than doubled to €191m for Q3 15 compared to €79m for Q3 14 and a loss of €189m for Q2 15. Total revenues declined by 6% to €2.3bn in Q3 15 compared to Q3 14. Administrative expenses rose by 2.3% to €1.76bn in the same period. The tax ratio was 41% for Q3 15 compared to 27% for Q3 14. The net profit after minorities decreased therefore by 8% to €207m for Q3 15 versus Q3 14. The Basel 3 fully phased-in core Tier 1 ratio was 10.8% at end September 2015 versus 9.3% at year-end 2014. Commerzbank is planning for a first dividend payment of €0.2 per share for FY2015 after eight years with no dividend. Commerzbank announced that the CEO, Martin Blessing, had informed the Supervisory Board that he will fulfill his contract, which runs until the end of October 2016, but he will not accept the offer to extend his term.
VPC Speciality Lending Investments PLC – sticking to your knitting pays dividends
05 Dec 16
A 25% discount on a dividend paying vehicle suggests either (a) lack of belief in the NAV, (b) lack of belief in the dividend, (c) concerns over future delivery, (d) a shareholder’s base not normally exposure to “closed end structures” or (e) some combination of (a) to (d). We had a first meeting with the management team and London representative of VPC Speciality Lending to try to better understand why the share price had fallen quite so much.
Mobilising the strategy
08 Dec 16
PCF has reported a good set of FY16 figures this morning. Pro forma 12 month adjusted pre-tax profit increased 38% YoY to £4.0m (FY15: £2.9m), 5% ahead of our estimate of £3.8m. Fully diluted return on equity remained broadly stable YoY at 13% but beat our forecast of 12.6%, driven by good loan book growth, up 14% YoY to £122m. Given the strength of the results the board has reinstated a dividend of 0.1p per share. Following Tuesday’s announcement of the approval of a banking licence, we believe that the group now has the capacity to accelerate its growth prospects. While the shares trade at 12.0x earnings and 2.0x reported book value, we do not believe this valuation captures the growth potential of the business.
Small Cap Breakfast
07 Dec 16
Creo Medical group—Schedule 1 update.. £20m raise. Expected market cap £61.2m, admission expected 9 December. ECSC—Schedule 1 from provider of cyber security services. Raising £5m. Vendor sale £0.8m. Target date 14 Dec. Expected market cap £15m. RM Secured Direct Lending - The secured direct lending fund intends to float on the Main Market on 15 December raising up to £100m
Better Capital – A tale of two funds
05 Dec 16
Our gut feel on the results is that BCAP’s Gardner disposal feels viable (albeit as a late Q1 transaction). Post Gardner, the exit profile for BCAP’s portfolio is slanted towards the years 2018/19 and not earlier; we view the market’s current pricing as cautious (14% disc to our estimate of FV). In contrast, BC12’s more consumer facing portfolio remains a work in progress and may well offer further disappointment before turning a corner; the market valuation (51% discount to NAV) is cautious but probably fair given the difficulties.
Panmure Morning Note 07-12-2016
07 Dec 16
PCF today announces that it has succeeded in achieving once its major strategic goals by being granted a UK banking licence. In line with prior guidance, the company aims to begin taking deposits in summer 2017 and will initially focus on lending to its core markets in consumer motor finance and SME asset finance. As well as supporting growth in the loan book, the banking licence will both diversify and reduce the cost of its funding base. More details are expected as part of the FY16 results tomorrow.
Meeting near-term headwinds
06 Dec 16
In its trading update IFG reported that performance has been in line with management expectations. The cooling effect of market uncertainty on growth in James Hay and financial advice client numbers, together with the impact of low interest rates, remain a near-term head wind for revenues. Even so, with Saunderson House continuing to increase profits, IFG expects to match 2015 earnings. The long-term growth opportunity presented by an ageing population and pension freedoms remains in place and to address this IFG is continuing investment to enhance its service and increase operational gearing.