Germany's second-largest bank, Commerzbank, posted a significant loss in Q4 2019. While the weight of its restructuring has weighed on its performance, the company is reassuring that its equity ratio is increasing. Explanations.
Solutions tailored to business needs
Present in almost 50 countries, including France, Commerzbank offers solutions tailored to the needs of businesses: a current account, cash management, trade finance and electronic banking services. Customers have access to corporate finance advisory services, investment solutions and financial risk management (foreign exchange, interest rates, commodities).
Commerzbank also caters to retail investors, offering a comprehensive range of leveraged, yield and indexed products on over 250 underlyings (equities, indices, currencies, interest rates, energy, etc.). A toll-free number is available, along with technical tools, videos and educational webinars to help them better understand the various products.
Negative interest rates: Commerzbank details its new roadmap
While the European Central Bank (ECB) has kept interest rates very low for several months, the German bank has unveiled its new roadmap. The group aims to eliminate the nearly one million inactive accounts that are costing it more and more. These are mainly accounts acquired during the takeover of Dresdner Bank in 2008.
Commerzbank CEO Martin Zielke has set himself the target of lowering his cost base by 600 million by 2023. To achieve this, the bank plans to replace undesirable customers with more profitable ones. While the bank has no plans to tax deposits of less than 100,000 euros, it has announced that prices and commissions for high-volume deposits will be reviewed.
Like all players in the banking sector, Commerzbank is under pressure. Its restructuring plan calls for the elimination of 200 bank branches, leaving a total of 800. The bank, which had 40,400 full-time employees last December, aims to reduce this figure to 39,000 by 2020.
Commerzbank remains optimistic about achieving its targets
Despite its heavy loss in Q4 2019, Germany's second-largest bank remains optimistic. Indeed, while the Group posted a lower annual profit of €644 million, revenues rose slightly to €8.64 billion, compared with €8.57 billion a year earlier. The banking institution expects stable sales for the current financial year.
Commerzbank's optimism stems from the fact that its business is based on retail and SME customers. According to Martin Zielke, these have been growing faster than expected.