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1. Company Snapshot

1.a. Company Description

Commerzbank AG provides banking and capital market services to private and small business customers, multinational groups, financial service providers, and institutional clients worldwide.It operates through two segments, Private and Small-Business Customers, and Corporate Clients.The company offers accounts, commercial payments, payment enabling, clearing and custody, and other services; trade services, including documentary collection, letters of credit, guarantees, trade facilitation, supply chain financing, buyer's credit, and forfaiting services; and bilateral loans, club deals, Schuldschein instruments, syndicated loans, bonds, private placements, other debt instruments, and Islamic financing services.


It also provides money market, and commodities and precious metals products; interest, currency, and liquidity management services, as well as wealth management services.The company operates approximately 790 branches.Commerzbank AG was founded in 1870 and is headquartered in Frankfurt am Main, Germany.

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1.b. Last Insights on CBK

Commerzbank's recent performance has been driven by robust financial results, with record revenue growth and strategic AI advancements. The company's Q3 2025 earnings call highlighted its strong capital position, despite challenges in the German market. Additionally, Commerzbank's digital transformation strategy and potential merger rumors within the European banking sector have fueled investor interest. The stock has also been upgraded to a Zacks Rank #2 (Buy), reflecting growing optimism about its earnings prospects. Furthermore, the company's increased guidance for interest income has positively impacted its outlook.

1.c. Company Highlights

2. Commerzbank's Q3 Earnings: A Strong Performance

Commerzbank's financial performance after 9 months showed an 11% revenue growth, with a return on tangible equity of 10%. The bank's earnings per share (EPS) came in at 0.591, beating analyst estimates of 0.582. The net result was lower due to a one-off tax effect, but the operating result increased by 18% compared to Q3 last year. The bank's cost-income ratio of 56% was in line with its efficiency goals.

Publication Date: Nov -07

📋 Highlights
  • 9-Month Operating Result: Achieved record EUR 8.2 billion net interest income outlook, up from EUR 8 billion.
  • Revenue & RoTE: 11% revenue growth (9-months) with 10% return on tangible equity.
  • Cost Efficiency: Cost-income ratio maintained at 56%, aligning with 2025 efficiency targets.
  • Q3 Operating Result: Surged 18% YoY, driven by stable net interest income despite ECB rate cuts.
  • CET1 Ratio: Rose to 14.7% (Q3), up 18 bps from Q2, exceeding 14.5% guidance.

Revenue Growth Drivers

The bank's revenue growth was driven by increased expectations for net interest income, with a 7% increase in revenues compared to last year. Net interest income was nearly on the same level as in Q3 last year, despite significantly lower ECB rates. Corporate Clients generated good revenues in the generally slower summer quarter, and Lending had a big increase in fee income linked to loan origination. The bank raised its NII outlook from EUR 8 billion to around EUR 8.2 billion for the year.

Loan Growth and Capital Position

Commerzbank's loan growth was 13% year-on-year, driven by demand from the public sector, green infrastructure, and demand outside of Germany. The bank's CET1 ratio of 14.7% was 18 basis points higher than in Q2 and in line with the target. The bank expects to pay more than 100% of its earnings in dividends this year, excluding restructuring costs from its payout ratio.

Valuation and Outlook

With a Price-to-Tangible Book Value (P/TBV) of approximately 1.08, the market is pricing in a relatively stable outlook for Commerzbank. The bank's Net Interest Margin (NIM) is expected to remain strong, and the Dividend Yield is around 2.01%. Analysts estimate revenue growth at 7.9% for next year. As the bank continues to deliver on its targets, its capital position and dividend policy are likely to remain in focus for investors.

3. NewsRoom

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Dollar Could Fall if Next Fed Chair Fails to Combat Inflation Risks

Dec -02

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Commerzbank (XTRA:CBK): Assessing Valuation Following a Year of Dramatic Share Price Gains

Nov -29

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Commerzbank (CRZBY) Upgraded to Buy: Here's Why

Nov -28

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Brent Crude Oil Price Stabilizes on Extended Russia-Ukraine Peace Talks, Commerzbank Says

Nov -28

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No Chance of A Rate Cut in Australia After Another Upside Inflation Surprise, Says Commerzbank

Nov -26

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FNZ considers sale of FNZ Bank Deutschland- report

Nov -26

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European Natural Gas Prices Hit New Yearly Low Amid Relaxed Supply Situation, Commerzbank Says

Nov -26

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Big Tech’s AI Debt Wave Is Threatening to Swamp Credit Markets

Nov -24

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.51%)

6. Segments

Private and Small Business Customers

Expected Growth: 4.5%

Commerzbank AG's retail banking services and products targeting individuals and small businesses will drive growth, fueled by increasing demand for digital banking, rising SMEs, and a growing need for financial inclusion.

Corporate Clients

Expected Growth: 4.5%

Commerzbank's Corporate Clients segment is expected to grow driven by increasing demand for tailored financial solutions among large corporations, financial institutions, and multinational companies, as well as the bank's strong reputation and expertise in providing bespoke services.

Others

Expected Growth: 5.1%

Driven by increasing demand for digital payment solutions, growth in e-commerce, and strategic partnerships, the 'Others' segment from Commerzbank AG is poised for steady growth.

Consolidation

Expected Growth: 4.5%

Consolidation from Commerzbank AG drives growth through enhanced risk management, improved capital allocation, and increased transparency, leading to increased operational efficiency and competitiveness.

7. Detailed Products

Corporate Banking

Commerzbank's Corporate Banking segment provides a range of financial services to large and multinational corporations, including cash management, trade finance, and risk management solutions.

Private and Small-Business Customers

This segment offers a range of banking services to private individuals and small businesses, including current accounts, credit cards, loans, and investment products.

Mittelstandsbank

This segment provides specialized banking services to medium-sized businesses in Germany, including financing, cash management, and risk management solutions.

Central and Eastern Europe

This segment provides banking services to corporate and private clients in Central and Eastern Europe, including Poland, Czech Republic, and Hungary.

Markets and Commodities

This segment provides a range of investment products and services, including equities, fixed income, currencies, and commodities.

8. Commerzbank AG's Porter Forces

Forces Ranking

Threat Of Substitutes

Commerzbank AG faces moderate threat from substitutes due to the presence of alternative financial institutions and digital payment systems.

Bargaining Power Of Customers

Commerzbank AG's customers have high bargaining power due to the availability of multiple banking options and the ease of switching banks.

Bargaining Power Of Suppliers

Commerzbank AG has a strong bargaining power over its suppliers due to its large scale of operations and negotiating power.

Threat Of New Entrants

The threat of new entrants is low for Commerzbank AG due to the high barriers to entry in the banking industry, including regulatory hurdles and capital requirements.

Intensity Of Rivalry

The intensity of rivalry in the banking industry is high, with many established players competing for market share and customers.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 77.07%
Debt Cost 3.95%
Equity Weight 22.93%
Equity Cost 9.69%
WACC 5.26%
Leverage 336.19%

11. Quality Control: Commerzbank AG passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Yield: 4.4

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Commerzbank

A-Score: 5.4/10

Value: 7.0

Growth: 4.4

Quality: 5.1

Yield: 2.5

Momentum: 10.0

Volatility: 3.3

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

34.07$

Current Price

34.07$

Potential

-0.00%

Expected Cash-Flows