Commerzbank boosts annual profit by 20% as it navigates UniCredit's looming interest

In Germany, Commerzbank recently disclosed its quarterly results, showcasing an exceptional annual profit performance. The financial institution reported a 20% increase in net profit, amounting to 2.68 billion euros for the year 2024. This figure significantly surpassed the anticipated net profit of $2.47 billion based on consensus estimates. The bank's established growth strategies and improved cost management have been highlighted as pivotal factors contributing to this profit surge. Additionally, Commerzbank announced plans to implement a new share buyback scheme valued at 400 million euros and proposed an increase in its dividend payout from 0.35 euros per share last year to 0.65 euros per share for this fiscal year. This initiative reflects the bank's commitment to enhance capital return promises to its shareholders. Following these announcements, shares of Commerzbank experienced a 2% increase shortly after the results were made public. While the annual highlights included a total net income of 8.33 billion euros and a return on tangible equity rising to 9.2%, the bank noted a positive impact from foreign exchange valuation effects in the latter part of the year. Originally, Commerzbank had slated to disclose its fourth-quarter and annual earnings on February 13, demonstrating a strategic decision to unveil the results earlier due to a significant capital return that surpassed market expectations. Amidst this financial triumph, Commerzbank is also facing challenges from UniCredit, Italy's second-largest lender, which has been expanding its stake in the bank. With a direct stake of 9.5% and additional derivatives, UniCredit's approach has generated speculation about a potential takeover. The German government, through Finance Minister Jörg Kukies, expressed concerns regarding UniCredit's aggressive tactics in acquiring shares. As Commerzbank asserts its independence while navigating these waters, CEO Bettina Orlopp emphasized the positive outlook for future profitability and capital return.