Commerzbank (OTCPK:CRZB.F) Conference Transcript

Summary of Commerzbank Conference Call Company Overview - Company: Commerzbank - CFO: Carsten Key Points Strategic Focus - Commerzbank is fully focused and unified in its strategy, which was announced at the beginning of the year, targeting growth and transformation by 2028 [2][3] Economic Outlook - The bank anticipates a 1.2% GDP growth in Germany for the next year, with 0.8% of this growth expected to be fueled by the government stimulus package [4][5] Net Interest Income (NII) - Guidance for NII has been increased to EUR 8.4 billion for 2026, up from an initial target of EUR 7.7 billion at the start of the year [6][9] - The bank expects EUR 8.2 billion for the current year, indicating a stable and upward trajectory for NII [9][11] Lending Growth - Corporate lending has shown strong growth at 13% year-on-year, while mortgage growth is recovering from a depressed market [14][16] - The bank expects continued strong loan growth, particularly in the corporate segment, as stimulus packages take effect [17][19] Deposit Growth - Commerzbank has successfully attracted deposits, collecting EUR 8 billion through promotional offers [26] - The bank is guiding for a 43% beta in Q4, with an average of around 40% for the year [28] Asset Quality - The bank maintains a stable credit book with no significant concerns, expecting a risk guidance of 25 basis points by 2028 [52][54] Capital Management - Commerzbank's capital ratio is strong at 14.7%, with a target of 100% payout ratio by 2028 [56][57] Fee Income - The bank is targeting a 7% annual growth in commission income, already running at 7% this year [38][41] Structural Hedge - The structural hedge is currently at EUR 147 billion, with potential to increase based on deposit growth [35] Competition and Market Dynamics - The bank acknowledges a competitive environment for deposits but has a strong depositor base and effective channels for attracting funds [62][63] Future Outlook - Commerzbank is optimistic about the impact of government stimulus on economic activity and its own business growth, particularly in lending and fee income [44][54] Additional Insights - The bank is transforming its branch setup, reducing the number of branches significantly while focusing on advisory services [50] - There is a growing trend in Germany for retail deposit collection to be price-led, but Commerzbank has managed to maintain a relatively high level of customer retention even after promotional rates expire [62][63]