German lender Commerzbank saw its net profit after tax triple compared to last year thanks to its strategic roadmap.
Commerzbank, the prominent German financial institution, reported impressive results for the third quarter of 2023 with a net profit after tax that reached €684 million.
It more than tripled compared to last year’s amount of €195 million.
The lender’s Q3 revenue meanwhile soared to €2.8 billion compared to €1.9 billion in 2022.
Commerzbank attributed these results to robust customer business and continued benefits from interest rates.
"With our refined strategy, we are strengthening our position as a decisive player in the German banking market,” said Manfred Knof, Commerzbank’s CEO, in a statement, highlighting their efforts to increase revenue base, improve the cost-income ratio and boost profitability.
The bank will need to align with the evolving financial landscape and is planning to do so by focusing on digital banking solutions and opportunities in sustainable finance.
“With ‘Strategy 2024’ we have successfully implemented difficult but necessary restructuring measures,” Knof added. “We have established a new business model and brought Commerzbank back on track for success.”
The restructuring measures involve closing 340 branches and cutting 10,000 jobs by 2024.
€3.4 billion profits in the 2027 crosshairs
The bank aspires to increase net profit to €3.4 billion by 2027 and expects the return on tangible equity - a financial metric that measures a company's profitability - to surpass 11%.
Commerzbank plans to return more capital to its shareholders with a pay-out ratio well above 50% for 2025 to 2027, according to its statement.
Commerzbank is the most popular bank among Germany’s Mittelstand (mid-sized companies) and operates in more than 40 countries. It has a strong presence in Europe and is growing its business in Asia and the Americas.