Wednesday 22 April 2020

Analysis of Coba 2020

Logo of Commerzbank 2018

Company: Commerzbank 

ISIN DE000CBK1001 | WKN CBK100

Business: A German bank. The now claim to have only 2 business segments: Private and Small-business customers and secondly Corporate clients. They have recently taken over comDirect to expand more into internet banking and to take over the customers.

Active: Claim presence in 50 countries. Europe with Germany and Poland the biggest.

P/E: 6.2

Here you can find the previous Analysis of Coba 2018

The P/E for Commerzbank is low with 6.2 and the P/B is good with 0.14 which gives an ok from Graham. Earnings to sales is at 7% which means it has improved, the ROE is poor with 2.2% and the book to debt ratio is nothing to sneer at with 0.7.

In the last two years they have showed a somewhat increase in revenue but looking back five years then the result is still negative with a yearly revenue loss of -5.5%. This gives us a motivated P/E of anything between 2 and 9 which means that Commerzbank is today fairly valued by the market.

They pay no dividends.

Future: What is the future of the old banks? Honestly I do not know. Humanity keeps over consuming by using credit, they keep buying houses with credit (fully normal). There are several clever online banks that have low overheads dealing with loans, savings and stocks and the generation that wanted and needed to step into an office are becoming fewer for each passing year. What does Commerzbank have that makes them survive?

Conclusion: Grahams formula shows a positive result. I am no longer convinced and this is one of those failed investments that was made during my first year of investing... and on top of it, it is still hanging around even after the cleanout session. I clearly need to read up on Commerzbank to find out if they have a future or not and then also decide how to move forward with this money drain.

1 comment:

Fredrik von Oberhausen said...

The plan that they have put in place was called Commerzbank 5.0 a big part of that was to take over comDirect which they have now also done. Besides from that I have not managed to find out more on the details in the plan.

I was a customer previously at comDirect and it was ok but not even close to what I expect from a proper online bank. Therefore unless there are some stronger point in plan 5.0 then I do not have high hopes on Commerzbank.