The Frankfurt banks will not play for European titles in the foreseeable future.
(Photo: Reuters)
At Commerzbank there is currently a good mood. Tomorrow, Thursday, the institute will announce that it has increased its profit to more than one billion euros in 2022. On Friday, Deutsche Börse is likely to announce that the money house is returning to the leading index Dax after four and a half years.
However, there is no reason for euphoria at Commerzbank. Because it’s far from first class. The return to the Dax is only possible because the leading index was increased from 30 to 40 values a year and a half ago. This rise is not really deserved. In any case, SAP, Siemens and the car manufacturers in this country are much more popular than the banks, and for good reason: the profitability of the banks is low, they haven’t even earned their cost of capital for years.
The result: The ratio of market value to equity, the so-called price-to-book ratio, is just 0.38 at Deutsche Bank and 0.48 at Commerzbank.
Competitors such as BNP Paribas (0.71), ING (0.94) and UBS (1.19) fare significantly better. The Frankfurt banks will not play for European titles in the foreseeable future.
Globally, the gap is even greater. Here, Deutsche Bank is only 78th in a ranking of the most valuable financial institutions compiled by EY. Commerzbank does not appear on the list at all.
A sale in the near future is not expected
So the pressure to act remains high. Commerzbank has made progress with its restructuring, but has also benefited greatly from the ECB’s interest rate turnaround. It is an irony of fate that this turnaround came shortly after the departure of ex-boss Martin Zielke, who had bet in vain on rising interest rates for years.
Zielke’s successor Manfred Knof now has to prove that he can not only restructure the bank, but also make it fit for the future. It will depend on whether the institute can survive on its own – or whether it will be swallowed up by a competitor at some point.
The federal government, which is the largest shareholder with 15.6 percent, also plays an important role. She recently emphasized that she was in no hurry to sell the state’s stake, for example to a French or Italian bank. If Commerzbank develops into a solid Dax member that takes good care of German medium-sized companies and private customers, it could stay that way for a while.
More: Commerzbank has to pay compensation for the missing tax certificate