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Commerzbank has reported its biggest quarterly profit for more than a decade, in a boost for the German bank as it attempts to remain independent amid takeover interest from Italy’s UniCredit.
Germany’s second-largest lender said on Friday that net profit rose 12 per cent year on year to €834mn in the first quarter, significantly ahead of analysts’ expectations of €698mn.
Total revenues climbed 12 per cent to €3.1bn, driven by stronger than expected interest and commission income. Loan loss provisions came in at just €123mn, well below the €162mn forecast by analysts, who had anticipated stronger increases after the economic turbulences following the US’s tariff announcements.
“We achieved the highest quarterly profit since 2011, demonstrating that we can grow even in economically challenging times,” said chief executive Bettina Orlopp, who took over in October.
The results come as Commerzbank seeks to strengthen its case for remaining independent following pressure from UniCredit. The Italian lender has amassed a 28 per cent stake in Commerzbank, including through derivatives, and last month received clearance from both Germany’s antitrust authority and the European Central Bank to increase its direct shareholding to just under 30 per cent.
Commerzbank shares had risen more than 3 per cent by midday on Friday in Frankfurt, nearing their highest level in a year. The increase extended a rally of more than 70 per cent in the past year amid mounting investor optimism over the lender’s prospects and continued takeover speculation.
Orlopp in February outlined a standalone strategy aimed at fending off UniCredit’s advances, including plans to cut 3,900 jobs and boost profitability by two-thirds by 2028 compared with 2024 levels.
Commerzbank reported a return on tangible equity of 11.1 per cent for the first quarter, up 0.6 percentage points from a year earlier. The lender said it was targeting a core equity tier 1 ratio — a key measure of capital strength — of 14.5 per cent, up from a previous goal of 14 per cent.
It said it would also seek approval for another share buyback, as Orlopp reiterated plans to return 100 per cent of net income to shareholders this year.
On Friday, management said talks with labour representatives over job reductions were “progressing well”, after unions called for a demonstration in favour of the bank’s independence ahead of its annual general meeting next week.
Orlopp said that, depending on the progress of negotiations, the bank planned to book the bulk of its expected €700mn in restructuring charges in the second quarter, having already accounted for €40mn in the first three months of the year.
Commerzbank staff and management have voiced strong resistance to a deal with UniCredit. The German government, which still holds a 12 per cent stake following the bank’s bailout during the financial crisis, has yet to endorse any deal.
UniCredit has indicated that it would seek approval from Berlin before pursuing a formal takeover. Its separate bid for Italian peer Banco BPM has stalled amid new conditions imposed by Rome.
