Commerzbank reports digital growth as profits boom
Commerzbank has reported a quadrupling of profits on the back of digital growth, as European banks are balancing their investment in digital services with cost cutting initiatives. Stephan Engels, chief financial officer at Commerzbank, said that adoption of digital technology is proving invaluable in an earnings call with analysts on 12 February.
He observed, “Due to a strong management focus on digitalisation, we have made a significant strategic move towards becoming a multichannel bank. In Mittelstandsbank, we have increased our loan volume by 12% since 2012, clearly outperforming the market. We have significantly improved our digital client in the phase with the introduction of new multilingual online portal and cash management app.”
The bank, which has reported a $1.2 billion profit in 2015, a quadrupling of the $266 million profit in 2014, also announced it would be re-introducing dividend payments. It also reported a successful implementation of its group finance architecture in Q4 2015.
“The new platform significantly reduces complexity and provides a structural basis for further regulatory reporting,” said Engels. “We are now able to consolidate our financial data on a single platform. This innovative architecture is one of the largest investments ever made by Commerzbank.”
He went on to note that strategic investments, such as those into digitisation could be fully offset by the bank’s ongoing cost initiatives.
“In addition, regulatory and compliance related cost as well as the Polish deposit insurance contribution could be entirely compensated,” he said. “The cost base solely increased due to external burdens such as the European bank levy amounting to €119 million unless and FX resulting effects resulting from a weaker euro of €85 million.”
Reported by Dan Barnes