Frankfurt's DAX-listed Commerzbank AG (OTC:CRZBY) has reported a significant increase in its Q3 net profit after tax and minority interests, reaching 684 million euros. This marks a considerable surge from the previous year's Q3 result of 195 million euros. The bank's operating result also saw an impressive increase, quadrupling to 1.16 billion euros, primarily driven by robust customer business and favorable interest rates.
The bank's revenues rose by 46%, reaching 2.755 billion euros. This growth was largely attributed to an increase in net interest income, which climbed to 2.166 billion euros. For fiscal year 2023, Commerzbank (ETR:CBKG) expects a net profit of approximately 2.2 billion euros and revenues nearing 10.6 billion euros, exceeding the results from the previous year.
Today, supported by its largest shareholder—the German state—Commerzbank is set to release its Q3 figures and outline its future strategy. This follows a period of substantial growth for the bank, which posted nearly 1.15 billion euros in H1 2023—a stark contrast to last year's Q3 profit. Analysts expect this positive surplus trend to continue.
Under CEO Manfred Knof's leadership, Commerzbank achieved a net profit of about 1.4 billion euros in 2022, marking its highest since 2007. As part of its future strategy announced in September, the bank aims to increase earnings and augment dividend payments.
In line with this strategy, Commerzbank confirmed plans to distribute 50% of the current year's net result after AT1 coupon payments via a dividend and a share buy-back of up to 600 million euros, planned before the Annual General Meeting in 2024.
The bank's long-term plan includes expanding its revenue base through consistent customer orientation and profitability increase. It aims to achieve a net profit of 3.4 billion euros by 2027. Additionally, the return on tangible equity (RoTE) is projected to exceed 11%, as per the latest earnings news.
InvestingPro Insights
In accordance with InvestingPro's real-time data, Commerzbank AG (CBKG) has a market cap of 13,756.67M USD and a P/E ratio of 8.02. The revenue for the last twelve months as of Q2 2023 was 9,845.05M USD, indicating a steady growth of 6.04%.
Two InvestingPro Tips that could be vital for investors and readers are: CBKG is trading at a low Price / Book multiple and is also trading at a low P/E ratio relative to near-term earnings growth. These insights suggest the company may be undervalued, making it a potentially attractive investment.
For more detailed insights and additional tips, consider exploring the InvestingPro platform, which currently offers seven more tips for CBKG.
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