Euromoney, is part of the Delinian Group, Delinian Limited, 8 Bouverie Street, London, EC4Y 8AX, Registered in England & Wales, Company number 00954730
Copyright © Delinian Limited and its affiliated companies 2023
Accessibility | Terms of Use | Privacy Policy | Modern Slavery Statement
OPINION

Commerzbank is far from fixed

A merger is still CEO Martin Zielke’s only real hope.

Much better than expected third quarter results at Commerzbank don’t change the harsh truth: Germany’s second biggest bank is going nowhere. Chief executive Martin Zielke’s new three-year strategy falls well short of what is necessary to revive it.

Martin Zielke 2017-160x186

Martin Zielke,
Commerzbank

There are spots of brightness in what Zielke wants to do ‒ like integrating digital bank Comdirect, which could avoid cannibalization and bring together the group’s digital investment. But, overall, the plan is more like an admission of weakness than a recovery strategy, mainly involving paying for redundancy settlements with the sale of one of its best assets (mBank, in Poland).

It is, of course, understandable that Zielke is lowering his medium-term profitability targets: because the last ones turned out to be so unrealistic. He previously targeted a return on equity of more than 6% next year. He is struggling even to get to 3% this year. The extent of his ambition is now to reach 4% by 2023.

These targets, ultimately, are irrelevant, as the bank’s position is miserable either way.