Germany’s second largest bank by assets and Tier 1 capital, Commerzbank, has gone through a lot in the past few years, from the acquisition of Dresdner Bank in 2008 to continuous asset reductions thereafter, and from the Lehman and eurozone crises to its resulting €18.2bn bailout by the German government. But with the first of its 2016 strategy targets achieved, the signs point to a stronger and more profitable business emerging within the next few years.
Commerzbank's 2016 strategy, launched in 2012, aims to create post-tax return on equity of more than 10% for the core bank, compared with 9.5% in 2013. And despite a challenging macroeconomic environment, the bank expects an increase in operating profit in 2014 from 2013’s €725m. According to analysis conducted by Vara Research, Commerzbank is set for 2014 profits of €970m and further growth in the coming years.
