Group 1 - Commerzbank plans to eliminate 3,900 full-time positions by 2028, primarily in Germany, while maintaining a global headcount of 36,700 through increases in selected areas [1] - The bank anticipates restructuring costs of around 700 million euros ($730.7 million) in 2025, targeting a net result of 2.4 billion euros after these charges for the year [2] - Revenue for 2024 is projected to be 11.1 billion euros, an increase from 10.461 billion euros in 2023 [2] Group 2 - Commerzbank reported a 20% increase in net profit to 2.68 billion euros ($2.78 billion) in 2024, exceeding market expectations [4] - The bank plans to repurchase 400 million euros of shares and increase its dividend payout to 0.65 euros per share, up from 0.35 euros per share the previous year [4] - The bank disclosed its "record" annual performance ahead of the scheduled financial results release to comply with German legal requirements [3]

Core Viewpoint - Commerzbank is experiencing a "mild recession" but has reported record annual profits and announced a new share buyback scheme [1] Financial Performance - Commerzbank achieved a 20% increase in net profit to 2.68 billion euros ($2.78 billion) in 2024, exceeding the consensus estimate of $2.47 billion [1] - The bank plans to repurchase 400 million euros of shares and increase its dividend payout to 0.65 euros per share, up from 0.35 euros per share in the previous year [2] Shareholder Actions - Following the quarterly results release, shares in Commerzbank rose by 2.3% [2] - The early release of results aligns with German legal requirements due to significant capital return expectations [3] Market Context - Commerzbank is positioning itself to remain independent amid speculation of a potential tie-up with UniCredit, which has increased its stake to 9.5% directly and 18.5% via derivatives [4]

Group 1: UniCredit's Bid for Commerzbank - UniCredit's bid for Commerzbank has been criticized as "very aggressive, very opaque" by Germany's Finance Minister Jörg Kukies, who emphasized that hostile takeovers in systemic banks are generally unsuccessful [1][4] - UniCredit currently holds a direct 9.5% stake and an 18.5% stake via derivatives in Commerzbank, having built this position since September [1] - The Italian lender is seeking permission from the European Central Bank to increase its stake in Commerzbank to 29.99%, supported by a strong CET1 ratio of 16.1% [2] Group 2: Political and Market Reactions - The German government has shown a cool reception to UniCredit's bid, with outgoing Chancellor Olaf Scholz criticizing hostile takeovers as detrimental to banks [3] - There is concern that domestic political issues and upcoming elections may hinder the German administration's ability to manage the transaction effectively [3] - Kukies stated that the specifics of this case are critical and clarified that Germany is not closed to global investors [4] Group 3: Industry Context and Future Outlook - Commerzbank has expressed a preference to remain independent, with warnings of significant job losses if a merger were to occur [6] - Analysts believe that banking consolidation in Europe, particularly in Germany, is "long overdue," despite a decline in appetite for cross-border mergers since the ABN Amro takeover [7][8] - Both UniCredit and Commerzbank are scheduled to release their fourth-quarter results on February 10 and February 13, respectively [8]

Core Viewpoint - UniCredit has increased its stake in Commerzbank to 28% through derivatives, signaling potential interest in a buyout of the German bank [1][2]. Stake Details - The current ownership structure of UniCredit includes a 9.5% direct stake and approximately 18.5% through derivative instruments, up from a previous 21% holding [2]. Strategic Intent - UniCredit believes there is substantial value in Commerzbank that needs to be realized, emphasizing the importance of a strong banking sector for Germany's economic development [3]. - The bank's position remains an investment at this time and does not affect its €10 billion ($10.49 billion) offer for Banco BPM [3]. Regulatory Aspects - UniCredit has applied to the European Central Bank for permission to acquire up to 29.9% of Commerzbank [2]. Government Stance - The German government has opposed UniCredit's interest in Commerzbank, holding a 12% stake after reducing its position in September [5]. - The political landscape in Germany is currently unstable, with upcoming elections following a no-confidence vote against Chancellor Olaf Scholz [5]. Potential Synergies - A merger with Commerzbank could create synergies in capital markets, advisory services, payments, and trade finance activities [6]. Market Reaction - Following the news, UniCredit shares rose by 1.1%, while Commerzbank stock increased by 3.1% [7].

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Group 1: Deutsche Bank's Position - Deutsche Bank is reportedly benefiting from uncertainty surrounding a potential takeover of Commerzbank, with customers increasingly turning to Deutsche Bank for funding [1][2] - The head of Deutsche Bank's German/European corporate banking division noted that clients are proactively seeking to secure liquidity amid the merger discussions [2] - Over the past 18 months, Deutsche Bank has also gained customers due to the merger of UBS Group and Credit Suisse [2][3] Group 2: Commerzbank and UniCredit - Commerzbank is reportedly a target for a potential merger with Italy's UniCredit, which had previously purchased a stake in Commerzbank [2][3] - UniCredit's CEO expressed enthusiasm for a combination with Commerzbank but has since moderated his stance following a deal with Banco BPM [3][4] - Despite the merger talks, UniCredit's CEO stated that Commerzbank will remain an important investment [4] Group 3: Digital Lending Landscape - There is a disconnect between how financial institutions perceive their digital lending capabilities and how consumers view these offerings [4][5] - Research indicates that while many financial institutions rate their digital lending processes as good or excellent, only 25% can fulfill same-day processing of loans from application to disbursement [6] - Approximately 36% of financial institutions rely on their digital platforms for more than half of their lending activity [6]

Financial Data and Key Metrics Changes - The net result for the first nine months reached EUR1.9 billion, translating into a return on tangible equity (RoTE) of 8.8%, on track to meet the target of at least 8% for 2024 [6][56] - The CET1 ratio has been increased to 14.8%, with expectations to reach 15% by year-end 2024 [7][51] - The cost/income ratio for Q3 was reported at 58%, with a target of 60% for the full year [21][39] Business Line Data and Key Metrics Changes - Fee income increased by 7.6% year-on-year, driven by growth in transaction banking, lending, and FX trading [25][26] - Corporate Clients reported strong performance in trade finance and syndication, maintaining a cost/income ratio of 44% [46] - PSBC Germany's revenues remained stable, with growth in the securities business offsetting lower net interest income [47] Market Data and Key Metrics Changes - The forecast for risk-weighted assets (RWA) at year-end 2024 is EUR174 billion, down from EUR177 billion previously expected [10] - The company anticipates a total RWA relief of EUR10 billion by 2027 compared to earlier planning [11] Company Strategy and Development Direction - The execution of Strategy 2027 remains a priority, with a focus on capital optimization and cost efficiency [4][20] - A new strategy is being developed, with a presentation scheduled for February 2025 [5][20] - The company aims to grow revenues, particularly in net commission income, by expanding offerings for ultra-high net-worth individuals [14][15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving revenue targets of EUR10.9 billion for 2024, with an improved outlook for net interest income [55] - The economic environment is expected to remain challenging, with GDP growth projected at only 0.2% for 2025 [81] - Management noted that while default rates are expected to normalize, corporate clients have shown resilience [65][81] Other Important Information - A share buyback of EUR600 million is set to commence, with an additional buyback of up to EUR400 million planned [7][53] - The company is committed to a capital return policy targeting at least 70% of profits [54] Q&A Session Summary Question: Net interest income trajectory into 2025 - Management indicated a gradual adjustment of core money offerings and emphasized the importance of considering NII and fair value together [61] Question: Climate risk provisions - Management explained the decision to book collective provisions for climate risk early, aligning with regulatory expectations [61] Question: Mark-to-market of assets and liabilities - Management stated that updates on the mark-to-market will be disclosed at year-end [63] Question: NII guidance if rates fall below 2% - Management confirmed that the sensitivity analysis provided covers the expected range for next year [64] Question: Customer relations amid capital management - Management reassured that client relationships remain unchanged and emphasized support for clients [69] Question: RWA efficiency and capital distribution - Management discussed the gradual approach to capital return and the potential for increased capital distribution in the future [70] Question: Provisioning and methodology changes - Management indicated no immediate changes in provisioning methodology are expected, but future regulatory updates cannot be ruled out [80] Question: Growth in core businesses amid economic challenges - Management expressed confidence in growth despite economic headwinds, particularly in the Mittelstand segment [81] Question: NII expectations for Q4 - Management projected a slight decrease in NII for Q4 due to time effects and market conditions [84] Question: CET1 ratio target and capital return - Management clarified that the CET1 ratio target remains at 13.5%, with a forecasted ratio of 15% by year-end 2024 [85]

The logo of German bank Commerzbank seen on a branch office near the Commerzbank Tower in Frankfurt. Daniel Roland | Afp | Getty Images Two months since UniCredit played its opening move to woo German lender Commerzbank, the lenders flaunted their financial strength as one of Europe's largest banking mergers still hangs in balance. Both banks reported third-quarter results on Wednesday, with UniCredit posting an 8% year-on-year hike in net profit to 2.5 billion euros ($2.25 billion), compared with a Reuters ...

A man shelters from the rain under an umbrella as he walks past the Euro currency sign in front of the former European Central Bank (ECB) building in Frankfurt am Main, western Germany. Kirill Kudryavtsev | Afp | Getty Images European banking's latest takeover battle is widely regarded as a potential turning point for the region — particularly the bloc's incomplete banking union. Italy's UniCredit has ratcheted up the pressure on Frankfurt-based Commerzbank in recent weeks as it seeks to become the biggest ...