Commerzbank Set to Turn 4th Quarter Earnings – Earnings Snapshot
By Cristina Roca
Commerzbank AG is expected to release its fourth quarter results on Thursday. Here’s what you need to know:
NET PROFIT FORECAST: The German lender is expected to reach a quarterly net profit of 81 million euros ($91.6 million), compared to a net loss of 2.7 billion euros a year earlier, according to a consensus estimate compiled by the company.
REVENUE FORECAST: Commerzbank’s revenue is estimated at 1.82 billion euros for the quarter, compared to 2.05 billion euros a year earlier.
WHAT TO WATCH:
-TURN A CORNER: The bank said it expects a profit for 2021, compared to a net loss of 2.87 billion euros in 2020. It has also made provisions on a portfolio of Polish loans, a move that could bring it closer to drawing a line under the legacy issue and could even make a recovery in capital returns possible sooner than expected, UBS analysts say. The bank will host an Investor Day on March 1 and will likely save some updates for the next month, but we’ll always be on the lookout for any color the bank provides on its transformation progress and next steps.
– NET INTEREST INCOME: Net interest income – the difference between what lenders earn on loans and paying deposits – is expected to be 1.24 billion euros for the fourth quarter, according to a consensus established by the company, against 1.15 billion euros. one year earlier. However, Commerzbank could surprise by beating consensus views on the metric, Deutsche Bank analysts said, predicting a significant pick-up in momentum. “This is important because net interest income has significantly dampened the group’s revenues and profitability,” they said.
-FAVORABLE INTEREST RATES: The bank should benefit significantly from rising interest rates, according to Deutsche Bank. Investors will likely be on the lookout for additional details on the expected benefits of any interest rate hikes by central banks.
Write to Cristina Roca at [email protected]