Commerzbank (CBK) JP Morgan European Financials Conference 2024 summary

Business performance and sentiment

• Strong Q3 results have boosted staff morale and fostered unity, with positive client relationships and a supportive atmosphere prevailing despite some client concerns and a general wait-and-see approach.

• Clients value the bank's German roots and diversified banking relationships, with many preferring to keep multiple banking partners for risk and competition reasons.

Strategic priorities and M&A outlook

• Three main priorities: implement the 2027 strategy, prepare an upgraded strategy for Capital Markets Day in February, and remain ready to evaluate any merger proposals.

• No significant new developments in UniCredit discussions; interactions have been limited to investment-related matters.

• Acquisitions must be value-accretive, fit the business model, and avoid complex integrations, especially on the retail side.

• Focus areas for M&A include wealth and asset management, and product additions for corporate clients, with core markets being Germany, Austria, Switzerland, and Poland.

Financial guidance and capital management

• Updated RoTE target of 12%+ by 2027, with ongoing efforts to improve RWA efficiency and cost-income ratio.

• Capital return policy currently below 100%, with gradual increases in payout ratio and potential for higher payouts if conditions allow.

• Free capital may be used for bolt-on acquisitions, growth, or increased payouts, always prioritizing shareholder value.