Saturday 9 November 2013

Commerzbank report Q3 2013

Q3 2013, Commerzbank, report

Also Commerzbank arrived with their jogging woman... sorry... their quarter report. One have to admit that when they start a concept they stick to it and she has now been running all over as well as inside the reports this year.

The market made a significant hiccup jump (+10.1%) on Thursday due to the quarter report from Commerzbank. Apparently the market was amazingly impressed that Commerzbank had a better operating profit quarter than Deutsche Bank... does that make sense?

Heck no! It has been a long time since I have seen such stupid reasoning for an increase of share price.

If we then take a look at the key figures from the report that can be found here:

So, looking at the full nine months then I must agree with the market that it is great that from the operating profit of 0.78 € per share I as a shareholder have out 0.03 € per share which is, as it should be, kept in the company. What are they happy about. You can guarantee you that I am not jumping up and down of joy right now. Hmmm... If we add to this that Commerzbank the last couple of years have loved to put all their "issues" into the fourth quarter so I am very much looking forward to the annual report.

They have decreased their work force this year with almost 3000 people and yet their Cost to Income has increased by 3.7% and believe you me that the costs for firing those people are outside of the ordinary costs.

What else is there to complain about? They continue to decrease their non-core assets significantly and have by now gone from a book value per share in 2012 of around 41€ to now having 23 €. Great! Still the P/B is also today fully acceptable accounting for this change.

What was then good you might wonder? They, just like with their jogging woman, are sticking to the strategy they started with and sooner or later it will also have a larger effect. The CEO claims that he sees it but I as a shareholder do still not see it in the figures. They are doing very well with accomplishing the various Capital Ratios that are required and well ahead of schedule. They manage to close down useless offices and I see it also here in Berlin how Commerzbank have closed offices. In Germany and in Berlin there is the saying "jeder Ecke eine Kneipe" which means in every corner one pub. That saying almost qualified for Commerzbank offices after they had taken of Dresdner Bank and they have therefore had a hard and long road to decrease that and they have and it starts to look pretty ok today at least here in Berlin.

Conclusion: Commerzbank are on their way. I still do not see the turnaround in the figures they are presenting but I guess I am stupid because the market did and pushed up the shares last Thursday by over 10%. I bought them as a turnaround / out of favour company and I will stick around until that turn happens and then some. So the shares stay both for me and my four little nephews.

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