FRANKFURT (AFP) – Commerzbank, Germany’s second-biggest lender, said on Thursday the group had booked a profit in 2021 despite significant transformation costs as it seeks to trim its business.
The bank made a net profit of EUR430 million under the guidance of new Chief Executive Officer (CEO) Manfred Knof, who took the reins in January last year after the group recorded a whopping EUR2.9-billion loss in 2020, its first since 2009.
“In the first year of the transformation, we have delivered on our promises,” Knof said in a statement, adding that the bank would seek to pay a dividend to shareholders again from 2022.
The 2021 result came despite two billion euros in one-off costs, a fact which showed “the profit potential of our bank”, Chief Financial Officer Bettina Orlopp said in a statement.
The group’s 2021 operating profit stood at EUR1.2 billion, reversing the loss of EUR233 million registered the year before.
The bank significantly reduced its risk provisions, which cover potential losses, to EUR570 million from EUR1.8 billion in 2020, the first year of the coronavirus pandemic.
In 2021, Commerzbank sank EUR1.08 billion into its transformation, including covering the cost of employees who left the lender.
The group’s restructuring programme includes plans to reduce the workforce from nearly 40,000 at the end of 2020 to 32,000 by the end of 2024.
Commerzbank also closed 240 branches last year, leaving it with about 550 locations, with the aim to bring the number down further to 450 by the end of 2022.
The closures and the bank’s decision to charge negative interest rates on big deposits, meant Commerzbank lost 230,000 retail clients over the course of the year, though the figure was “less than we originally expected”, Orlopp said in a call.
The German government still holds a stake of around 15 per cent in Commerzbank which it bailed out during the 2008-2009 financial crisis.
Finance Minister Christian Lindner told the German daily Handelsblatt on Monday that the state would not remain a shareholder in Commerzbank “in the long run”.
CEO Knof did not speculate on the subject in the call but said that “the former and the new federal government support our programme”.
