The No. 2 German bank is now aiming for a turnover of 9.1 billion euros in 2024, thanks to better revenue expected from its customers and from its Polish subsidiary mBank.
Germany’s second-largest bank Commerzbank on Tuesday raised its financial targets for 2024 after returning to profit last year and notwithstanding heightened volatility linked to the war in Ukraine.
The establishment is now targeting a turnover of 9.1 billion euros (9.3 billion francs) in 2024, thanks to better revenue expected from its customers and from its Polish subsidiary mBank, according to a press release published. during its investor day.
This is an increase of 600 million euros compared to the value communicated at the beginning of 2021 when the strategic plan for 2024 was announced.
This strategy focused on the shift to digital ultimately aims to reduce 10,000 full-time jobs and achieve a return of 7% on capital invested.
The mBank subsidiary should benefit from the rise in interest rates in Poland, explains the group.
The bank chaired by Manfred Knof, on the other hand, did not take into account changes in interest rates by the European Central Bank (ECB), likely to provide it with “substantial revenue”, according to the press release.
However, this prospect of a rate hike in the euro zone is receding with the war in Ukraine and its potential consequences on the economies, while the ECB will meet next week to reassess the direction of its monetary policy.
Commerzbank’s exposure to Russia and Ukraine is “restricted”, the bank says.
In particular, it holds a portfolio of 1.3 billion euros in Russia, or 0.4% of its overall net exposure.
While the Russian offensive intensifies every day in Ukraine, Commerzbank adds that it did not take into account in its calculations the “effects of the volatile situation” generated by this conflict.
Commerzbank’s operating profit should reach 3 billion euros in 2024, against 2.7 billion expected previously and 1.2 billion posted in 2021.
Dividend payments and share buyback programs are planned in a total volume “between 3 and 5 billion euros” until the title of the 2024 financial year.
“We want to enable attractive returns to our shareholders and distribute capital reliably,” commented Manfred Knof.
On the stock market, Commerzbank shares fell more than 6% at midday, continuing the significant losses of recent days with the start of the war in Ukraine.