Commerzbank: Commerzbank increases profit before takeover by Unicredit - but lowers an important forecast
The institute has slightly missed market expectations and is counting on lower interest income. There are major concerns at the bank that employees will resign and customers will reorient themselves.
Frankfurt – Commerzbank has boosted its profit just before being taken over by Unicredit, a major Italian bank. The German private bank's third-quarter earnings rose by 45 percent to 859 million euros, as the company reported Thursday. However, the Frankfurt institution missed market expectations by a small margin. Analysts had forecast an earnings of 864 million euros on average.
Revenue also fell slightly below estimates, amounting to 3.2 billion euros. The bank reaffirmed its goal of a minimum 3.4 billion euro profit and around 13.2 billion euros in revenue for the year. It, however, lowered the much-cited forecast for interest income from 8.6 to 8.5 billion euros. "The reason for this is increased competition for deposits," the institute explained.
In Germany, banks have been intensely competing for private customer deposits this year like never before, especially due to the launch of JP Morgan's digital bank, Chase. While this is positive for consumers, receiving higher interest rates on their accounts, banks see their interest expenses rising, or they must accept that customers are withdrawing money to compete.
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