Commerzbank (CBK) Barclays 22nd Annual Global Financial Services Conference summary

Macroeconomic and political environment

• German GDP growth remains near zero, with a slight increase in bankruptcies, but this scenario was already embedded in forecasts and guidance.

• Default rates are returning to pre-pandemic levels, seen as a normalization rather than a cause for concern.

• Political uncertainty in Germany is a concern, with reforms needed in tax, immigration, and bureaucracy to boost investment and growth.

• Upcoming elections may influence government momentum for implementing necessary measures.

Risk management and provisions

• Risk results in Q2 were below normal expectations, with 20 bps versus a typical 25-30 bps.

• Management overlays and buffers are being flexibly managed, with decisions on their use to be made in coming quarters.

• Single credit cases are expected, but no systemic industry weakness is seen in the loan portfolio.

Capital and government stake

• The German government’s decision to sell its stake was expected and aligns with prior commitments and the bank’s strong capital position.

• Share buybacks are planned, with the next tranche likely to start in November, and the government can participate via market transactions.