EQS-News: Commerzbank with strong quarterly result – Growth in net commission income continues

• Operating result increased by 13% to record of €1.2bn – net result with €834m at highest level since 2011
• Revenues increased by 12% to €3.1bn – net commission income grew by 6% to €1bn
• Cost-income ratio reduced by 2 percentage points to 56% – below target of 57% for full year
• €40m restructuring expenses booked in Q1 for an early partial retirement programme
• Moderate risk result of minus €123m – loan book robust with non-performing exposure ratio of 1.0%
• Double-digit return on tangible equity (Net RoTE) of 11.1% achieved
• CET 1 ratio of 15.1% demonstrates high potential for capital return – application for next share buyback targeted for beginning of third quarter
• Outlook for full year 2025 confirmed – CET 1 ratio of at least 14.5% expected

Commerzbank started the new financial year with great momentum. The net result increased by 12% to €834m in the first three months. This is the best start of the year as well as the best quarterly result since the first quarter of 2011. The operating result reached a new record with an increase of 13% to €1.2bn. Revenues climbed by 12% to €3.1bn. The cost-income ratio decreased to 56%, below the target of 57% for the full year. Despite the economically challenging environment, the risk result remained at a moderate level of minus €123m. The return on tangible equity was double-digit at 11.1% in the first quarter.

In March, the Bank successfully completed its share buyback of €400m. Together with the share buyback of €600m implemented between November 2024 and January 2025, Commerzbank bought a total of €1bn of its own shares as part of the capital return for the financial year 2024. In addition to the share buybacks, the Bank proposes to pay a dividend of €0.65 per share (2023: €0.35 per share), which will be decided at the Annual General Meeting on 15 May 2025. This results in a dividend payment of €733m. In total, the capital return to shareholders for the financial year 2024 will amount to €1.73bn. The Bank plans to apply for its next share buyback to the European Central Bank (ECB) and the German Finance Agency at the beginning of the third quarter.

“We achieved the highest quarterly profit since 2011, demonstrating that we can grow even in economically challenging times,” said CEO Bettina Orlopp. “We are progressing with the implementation of our strategy ‘Momentum’. We plan to return more capital to our shareholders in the coming years.”

Commerzbank also made significant progress in transformation as part of its strategy “Momentum”. In particular, several AI applications were launched. In the Commerzbank banking app, users can now receive support from an avatar for their banking transactions. The new virtual assistant Ava helps with service requests, account management, and answers questions about Commerzbank products. Commerzbank is one of the first banks to introduce a customer application that combines generative artificial intelligence (AI) and avatar technology.

In the Corporate Client segment, the Bank has successfully continued its digitalisation strategy for capital markets platforms as AI-based technologies are increasingly playing a significant role in pricing and advisory services. At the beginning of the year, the Bank has further developed the platform for corporate and institutional clients. It has been well received with more and more corporate clients using the self-service onboarding for our online trading platform FX Live Trader, as well as the option to process deposits online via electronic platforms.

Commerzbank employees are also benefiting from advances in AI. More than 30,000 employees in Germany and abroad can access the chatbot “cobaGPT” which was introduced in early March. The tool makes daily work easier and more efficient.

Moreover, at the end of March 2025, Commerzbank introduced a new self-developed AI-based tool called “Fraud AI”. The tool aims at automatically detecting fraudulent activities and responding promptly. “Fraud AI” helps to reduce losses and enhances effectiveness through automated fraud alerts. Additionally, the tool contributes to meeting regulatory requirements and is pioneering in real-time fraud detection and prevention.

Back in February, Commerzbank announced that ongoing digitalisation and increased use of international locations will be accompanied by further job reductions primarily in Germany. The negotiations on job reductions are progressing well. The Bank has already agreed with the employee representative committees on the details of implementing an early partial retirement programme, which it will offer this year. For this purpose, around €40m restructuring expenses were booked in the first quarter. Currently, the Bank is negotiating with the employee representative committees on a framework settlement of interests and a framework social plan. Based on the framework arrangements, the details of the job reductions will be discussed and separately regulated. The Bank expects to conclude the framework arrangements in the second quarter. The same applies to the employee share programme, which aims to allow employees to participate more in the Bank’s success. The Bank is also making good progress at the international locations and subsidiaries, and is planning the next implementation steps, taking into account local conditions.

Net commission income of €1bn in the first quarter

Commerzbank increased its revenues in the first three months of this year by 12% to €3,072m (Q1 2024: €2,747m). Net interest income held steady in a declining interest rate environment at €2,071m (Q1 2024: €2,126m). The pace of growth in net commission income remained high. Supported by a strong securities business, net commission income rose by more than 6% to €1,012m (Q1 2024: €951m).

Costs rose in the first quarter, as expected, to €1,722m (Q1 2024: €1,588m), mainly due to a rise in administrative expenses to €1,618m (Q1 2024: €1,496m). Key drivers included investments in business growth and foreign currency effects at mBank, alongside increased personnel expenses. The impact came mainly from general salary increases and a higher accrual for equity-based variable compensation. The increase in costs was partially offset by savings realised through ongoing shoring activities. The Bank’s compulsory contributions rose to €104m (Q1 2024: €91m) due to higher contributions from mBank to the Polish Resolution Fund and restarting contributions to the deposit guarantee scheme, following the suspension of the contribution obligation in 2024. The Bank further reduced its cost-income ratio to 56% (Q1 2024: 58%), which is below the target of 57% for the full year.

The risk result amounted to minus €123m in the first quarter (Q1 2024: minus €76m). In the challenging economic environment, the loan book remained very robust with a non-performing exposure (NPE) ratio of 1.0%. The top-level adjustment (TLA) was reduced by €45m in the first quarter due to reassessments and now stands at €182m (Q4 2024: €228m). This amount remains available to cover expected secondary effects from geopolitical crises and uncertainties.

Subsequently, Commerzbank improved its operating result in the first three months of the year by 13% to a record level of €1,227m (Q1 2024: €1,084m). Net result after taxes and minority interests also saw a significant increase, rising by 12% to €834m (Q1 2024: €747m). This is the best start of the year and the highest quarterly result since the beginning of 2011 (Q1 2011: €985m).

The common equity tier 1 (CET 1) ratio increased compared to the same quarter of the previous year to 15.1% as of 31 March 2025 (31 December 2024: 15.1%; 31 March 2024: 14.9%). This high value again demonstrates Commerzbank’s significant potential for capital return to its shareholders. The current buffer to the regulatory minimum requirement (MDA threshold) of around 10.2% remains very comfortable at 486 basis points. The return on tangible equity (Net RoTE) improved to 11.1% in the seasonally strong first quarter (Q1 2024: 10.5%). For the full year, the Bank aims to achieve a Net RoTE of around 9.6% before restructuring expenses.

“The double-digit return on equity in the first quarter demonstrates the significant progress that Commerzbank has made,” said CFO Carsten Schmitt. “We are on track to reach our full-year target of around 9.6%. At the same time, we are reducing our dependency on net interest income. We confirm our outlook for 2025.”

Segment development: provisions for FX loans at mBank decreased

The Corporate Clients segment started the new year well, generating revenues of €1,229m in the first quarter (Q1 2024: €1,307m). While net interest income decreased to €591m (Q1 2024: €627m) due to lower interest rates, as expected, net commission income remained at the high level of the previous year’s first quarter at €350m (Q1 2024: €354m). The foreign exchange business performed well. Additionally, in the first quarter, the integration of the “Structured Solutions and Investments” (SSI) area from Treasury into the Corporate Clients segment was completed. The loan volume of the Corporate Clients segment increased to €104bn in the first quarter (Q1 2024: €96bn). When compared to the previous quarter, it remained stable (Q4 2024: €104bn), with loan volumes rising in the Mittelstand and Institutionals while declining in International Corporates due to FX effects. Overall, the operating result amounted to €592m. While this was below the exceptionally strong result of the previous year’s first quarter (Q1 2024: €720m), it still marked an above-average start to the year compared to previous years.

In the business with private and small-business customers in Germany revenues remained stable despite lower interest rates, amounting to €1.168m (Q1 2024: €1.166m). Net commission income increased by 11% to €545m (Q1 2024: €489m). This double-digit growth was primarily driven by a strong securities business. Especially comdirect customers traded actively amid market fluctuations. The increase in net commission income was able to nearly offset the decline in net interest income, which fell to €598m (Q1 2024: €660m) due to lower interest rates. With an operating result of €425m, Private and Small-Business Customers (PSBC) Germany maintained its strong result of the previous year’s first quarter (Q1 2024: €423m).

The business volume of PBSC Germany continued to grow at the beginning of the year. Deposits averaged €170bn for the quarter (Q1 2024: €166bn). The loan volume was stable at €125bn on quarterly average (Q1 2024: €125bn), of which the mortgage loan volume contributed the majority at €96bn (Q1 2024: €95bn). New business in mortgage loans continued to increase in the first quarter due to rising demand compared to the previous year, with particularly strong interest in green mortgages. By the end of the quarter, the securities volume stood at €243bn (Q1 2024: €230bn).

mBank continued its dynamic growth in customer business at the start of the year. The Polish subsidiary increased its revenues in the first quarter by more than 50% to €536m (Q1 2024: €341m). Net interest income rose, supported by the persistently high interest rates in Poland, to €600m (Q1 2024: €583m). Net commission income also increased by 8%, to €125m (Q1 2024: €115m). Provisions for legal risks related to foreign currency loans halved compared to the previous year’s first quarter, now standing at €158m (Q1 2024: €318m). Overall, the operating result for mBank more than doubled to €204m (Q1 2024: €82m).

Strong outlook for full year 2025 confirmed – higher CET 1 ratio expected

Commerzbank continues to aim for a higher net result of around €2.8bn for the full year, before restructuring expenses. After restructuring expenses, it expects a result of around €2.4bn. The outlook remains subject to the development of burdens related to Russia and foreign currency loans at mBank. The Bank anticipates a net interest income of around €7.8bn, along with a related positive fair value adjustment of approximately €0.3bn. In total, Commerzbank expects a contribution of around €8.1bn to revenues. It plans for a growth of around 7% in net commission income and confirms its cost-income ratio target of around 57%. Despite the challenging economic environment, it expects the risk result to remain at around minus €850m, assuming usage of TLA. Commerzbank anticipates a CET 1 ratio of at least 14.5% by year-end after the planned capital return and restructuring expenses. In February of this year, the Bank had expected more than 14%.

The Bank confirms its plans for capital return: for the financial year 2025, it aims to return 100% of net income before restructuring expenses and after deduction of AT1 coupon payments to its shareholders. In the coming years, it aims for a continuous increase in capital return. For the years 2026 to 2028, Commerzbank intends to maintain a payout ratio of 100% after the deduction of AT1 coupon payments, depending on the successful implementation of the strategy, the macroeconomic environment, and the approval of ECB and German Finance Agency for respective share buybacks.
 

Financial figures at a glance

The events of the day at a glance:

• 9.00 a.m. CEST: Online conference call for analysts on the Q1 2025 results with Bettina Orlopp and Carsten Schmitt (“listen-only”, in English)
• 10.30 a.m. CEST: Online conference call for journalists on the Q1 2025 business figures with Bettina Orlopp and Carsten Schmitt (please register approximately 15 minutes prior to the start)

The documents relating to the Q1 2025 business results will be available online on our website from around 7.00 a.m. CEST. Press photos of Bettina Orlopp and Carsten Schmitt are available in our media centre. The CVs of the members of the Board of Managing Directors are also accessible on our website.

Press contact
Svea Junge  +49 69 9353-45691
Kathrin Jones  +49 69 9353-45687

Investors’ contact
Ansgar Herkert  +49 69 9353-47706
Ute Sandner  +49 69 9353-47708

About Commerzbank
With its two business segments – Corporate Clients and Private and Small-Business Customers –, Commerzbank, as a full-service bank, offers a comprehensive portfolio of financial services. It is the leading bank for the German Mittelstand and a strong partner for around 24,000 corporate client groups. Commerzbank transacts approximately 30% of Germany’s foreign trade financing. The Bank is present internationally in more than 40 countries in the corporate clients’ business – wherever its Mittelstand clients, large corporates, and institutional clients need it. In addition, Commerzbank supports its international clients with a business relationship to Germany, Austria, or Switzerland and companies operating in selected future-oriented industries. With more than €400 bn assets under management, Commerzbank is also one of the leading banks for private and small-business customers in Germany. Under the brand Commerzbank, it offers a wide range of products and services with an omni-channel approach: online and mobile, via phone or video in the remote advisory centre, and personally in its around 400 branches. Under the brand comdirect, it offers all core services as a digital primary bank 24/7 and, as a performance broker, solutions for saving, investing, and securities trading. Its Polish subsidiary mBank S.A. is an innovative digital bank that serves approximately 5.8 million private and corporate customers, predominantly in Poland, as well as in the Czech Republic and Slovakia.

Disclaimer
This release contains forward-looking statements. Forward-looking statements are statements that are not historical facts. In this release, these statements concern inter alia the expected future business of Commerzbank, efficiency gains and expected synergies, expected growth prospects and other opportunities for an increase in value of Commerzbank as well as expected future financial results, restructuring costs and other financial developments and information. These forward-looking statements are based on the management’s current plans, expectations, estimates and projections. They are subject to a number of assumptions and involve known and unknown risks, uncertainties and other factors that may cause actual results and developments to differ materially from any future results and developments expressed or implied by such forward-looking statements. Such factors include, amongst others, the conditions in the financial markets in Germany, in Europe, in the USA and other regions from which Commerzbank derives a substantial portion of its revenues and in which Commerzbank holds a substantial portion of its assets, the development of asset prices and market volatility, especially due to the ongoing European debt crisis, potential defaults of borrowers or trading counterparties, the implementation of its strategic initiatives to improve its business model, the reliability of its risk management policies, procedures and methods, risks arising as a result of regulatory change and other risks. Forward-looking statements therefore speak only as of the date they are made. Commerzbank has no obligation to update or release any revisions to the forward-looking statements contained in this release to reflect events or circumstances after the date of this release.