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Commerzbank posts strongest performance in 15 years
(Sharecast News) - German banking giant Commerzbank reported its strongest financial performance in 15 years on Thursday, buoyed by a significant increase in net profit driven by high interest rates. For the 2023 financial year, the bank announced a 55% surge in net profit, topping market expectations to reach €2.2bn, up from €1.4bn in the prior year.
Despite a slight dip of over 16% in fourth-quarter net profit compared to the same period in 2022, the reported figure of €395m still exceeded consensus estimates.
A key contributing factor to the bank's stellar performance was the notable increase in net interest income, which rose by 30% for the entirety of 2023 and by 8.5% in the fourth quarter alone.
Looking ahead, the bank said there were potential challenges in the continuing economic slowdown, but said it was confident in surpassing the prior year's net profit levels.
The reported financial success followed a significant overhaul in Commerzbank's operations, including cost reduction measures.
The bank managed to reduce costs to €6.4bn in 2023, down from €6.5bn in the prior year.
Analysts at Deutsche Bank described the results as a "solid set" on Thursday, according to CNBC.
They reiterated their 'buy' rating on the stock, and said that while pre-provision profit slightly missed expectations, net profit exceeded consensus estimates by 9%.
Reporting by Josh White for Sharecast.com.
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