Overall, Commerzbank delivered strong figures yesterday and there were also expected share buybacks. But one point worried investors so much that it sent the stock down. If there is no counter-move today, there is a risk of further loss.
Commerzbank delivered a net profit for the second quarter. At 538 million euros, the market forecast was almost achieved (539 million euros). Net interest income fell two percent to 2.08 billion euros compared to the same quarter of the previous year. However, this exactly met the average analyst forecast.
However, there was a big movement in one important key figure: we are talking about the risk provisions, which are created for writing on loans and for possible deficiencies. Compared to the first quarter, it increased by 161 percent to 199 million euros. Analysts expected only 161 million euros.
The risk provisions are so important because they have so far remained at a low level at Commerzbank despite the downward trends in the German economy. However, it is not certain whether there will be a reversal of movement. It is said that there has been a change in the calculation method, which cost 110 million euros. Commerzbank also discusses a number of individual issues.
However, as much of the high level adjustment reserve (TLA) was released as in three years. The TLA pot is a general value adjustment created during the pandemic to absorb additional risks that cannot be represented using models considered in supply risk. After disbursing 87 million euros, you still have 319 million euros.
However, the forecast for risk costs for the full year 2024 is still around 800 million euros. In the first half of the year, only 274 million euros were used. However, the remaining TLAs should be used for the rest of the year.
The bid for another share buyback program and a second tranche, which is also on the horizon after the Q3 figures, received little attention yesterday. Instead, the market focused on risk provisioning. The share lost 3.7 percent and is now close to the 200-day line at 12.37 euros. If this indicator does not hold, there is a risk of further weight loss. The stop at 12.00 euros is now dangerously close.
Note on conflict of interest
The chairman of the board and majority owner of the publisher Börsenmedien AG, Mr. Bernd Förtsch, has taken direct and indirect positions on the following financial instruments or related products mentioned in the publication , which could benefit from any price improvement due to the release: Commerzbank.
The board of the publisher Börsenmedien AG, Mr. Leon Müller, has taken a direct and indirect position on the following financial instruments or related products mentioned in the publication, which may benefit from any price development due to the publication: Commerzbank.
2024-08-08 06:14:14
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