The price of a share can never be too high for shareholders.

But measured against the general conditions, the share certificate from Germany's second largest commercial bank is doing well.

Certainly: On June 23, the Commerzbank share was punished just like that of Deutsche Bank because of burgeoning fears of a recession.

In just a single trading day, the paper lost almost 12 percent of its value.

Nevertheless, the competitors also had to lose feathers.

Depending on the period you look at, the Commerzbank share even performed better than the Euro Stoxx banks sector index.

Archibald Preuschat

Editor in Business

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Jochen Schmitt, analyst at Bankhaus Metzler, rightly judges: "The yield curve in Germany, which has become steeper since the beginning of the year, improves Commerzbank's earnings prospects." Schmitt also points out that management has managed to reduce the cost base through the ongoing restructuring.

“Overall, in our opinion, Commerzbank is much more crisis-proof today than it was a few years ago;

In view of the currently probably deteriorating prospects for loan loss provisions, we also consider this to be necessary," says the Metzler analyst.

An opinion apparently shared by many of his colleagues.

The majority of the 25 analyst recommendations, namely 13, are “buy”. The remainder recommend “holding” the share.

None of the analysts are currently recommending to part with Commerzbank shares.

That looks different with the big competitor Deutsche Bank.

Of the first 25 analyst recommendations that Bloomberg lists, five are “sell” and the remaining 20 are equally divided between “buy” and “hold”.

The analysts who recommend buying Commerzbank shares also include those of Deutsche Bank.

“We expect Commerzbank to post good results in the second quarter.

However, the question of gas supply in Germany remains of crucial importance.

The gas situation will determine whether there will be a shallow or a severe recession in 2023, which will affect Commerzbank's profitability in the second half of the current year and next.

Thanks to more pro-cyclical loan loss provisions and likely ongoing interest rate hikes in the euro area, 2024 could be another very profitable year for the bank, according to the latest analyst report.

The analysts at Deutsche Bank only mention Poland in passing.

There, Commerzbank owns M-Bank.

"If you could wish for a bank today that should be set up with digital services, then M-Bank would come very close to the ideal," said Commerzbank Chairman Manfred Knof in a recent interview with the FAZ. But anything but ideal are the political framework for the institute in the neighboring country to the east.

Commerzbank only had to announce last Friday that its subsidiary will burden the third-quarter result with 210 to 290 million euros.

The reason is a new Polish law on interest and repayment deferrals for private real estate financing.

Borrowers will be able to suspend their monthly installment payments for current mortgage loans up to eight times by the end of next year.

A possibility that Commerzbank's Polish subsidiary estimates that 60 to 80 percent of eligible borrowers will make use of.

"Commerzbank's course lives on the potential increase in earnings, which is largely based on M-Bank," says DZ Bank analyst Timo Dums: "In Poland, real estate loans are predominantly subject to variable interest rates".

This increases earnings, the key interest rate in Poland is now 6.5 percent, while the first rate hike in the euro zone is still to come.

However, Dums points out: “In Poland, legal certainty for banks needs to be improved.

Not only the deferrals, but also an excess profit tax is still in the room, since the interest on savings lags far behind the interest on loans. ”Income that M-Bank may still need to cover loan defaults, as Dieter Hein from Fairesearch points out.

In addition, there is the legally unresolved issue of Swiss franc loans to Polish home builders, the costs of which have risen drastically for borrowers due to the devaluation of the zloty.

"Especially since M-Bank's comparable offers to customers were not necessarily crowned with success," says Dums.

Despite the "uncertainty factors" in the Polish business, Hein does not want to be dissuaded from his buy recommendation.

"You can already see that Manfred Knof's strategy is bearing fruit," he explains his assessment.