Friday 9 August 2013

Commerzbank report Q2 2013

A German bank

Yesterday one of mine as well as my nephews stocks (I give them shares for their birthdays) came out with their Q2 report and it can be found here. The market found it very exciting and the stock directly jumped in the morning by 9% and it finished the day with over 15% plus. There was only one thing that I found exciting in this report and that was that they actually reported the specific result for Q2 and did not hide the result by combining it directly with Q1 which they have previously used to do. So that part of the report I found great but I assume the market cares very little about such a detail.

So why was there then some excitement over Commerzbank? The reason for that was that the analysts expected Commerzbank to have am operating profit of 7 million € but they ended up with 78 million in operating profit. Buhuu! For a bank that size it will be so easy to trick 70 million here or there by for instance pushing a loss to another quarter or a write down for that matter. Either way here follows some of the things that were in the reports.

What I do not like at all with this half year statement is that they have once again lost interest income. That is their bread an butter and it must start going in the other direction before they have really managed to turn the boat around.

I bought this stock for the long run and Commerzbank will continue to have a tough time until ECB decide that they can start to push up the interest rate again but I do not see that happening within the next year so I also do not expect something dramatic from Commerzbank for that very same reason.

Conclusion: I will of course keep mine as well as my nephews Commerzbank stocks because from this report for me there was no change. Only benefit for me is that maybe I get a little closer to Index but besides from that... the only day the price of the stock is of importance is the day you tend to sell it until then who cares? And a great company will stay great (here I of course do not mean Commerzbank but they still have great turnaround potential and I seem to like turnarounds much more then what I like other companies. Maybe I got good mentality for turnarounds because I honestly do not care when my stock is down even 70% as much Asian Bamboo was at some point).

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