Thursday 8 May 2014

Commerzbank report Q1 2014

Commerzbank, Q1, 2014, report, front page

Commerzbank arrived with their report today for Q1 2014 and the management was congratulating themselves while the market responded with -3.7%. My bet goes towards that the market decided wisely when the share price dropped today.

The first thing that I was scanning over before jumping to the back to see the real data was their selected key figures as can be seen below. The entire Commerzbank report Q1 2014 can be found on the Commerzbank home page. The operating profit dropped by -30%, ROE was down to less than 5% and the C/I had gone from around 70% which is a bad value to 75% which is even worse. Well done! For being a company that have been trying at least verbally to claim that they will decrease their balance sheet they failed completely and instead their assets increased with over 4% and especially their risk-weighed assets increased with almost 15%. All their capital ratios have dropped like a stone and decreased with around 20 to 30% which is bad news! They claim that the new figures comes from new regulations and sure that might be... but I doubt that the demanded core tier %-age figures will be changed along with the new regulations. It simply means that the banks need to step up and improve their balance sheets even more. They have also continued to close down offices and to remove employees from the payroll. This is mainly done in Germany and they still try to expand abroad.

Key figures, Commerzbank, Q1, 2014

When quickly jumping to the back then the table below is what could be seen. I did not like it much. Their interest income decreased yet again by -10% and this is bad news. The only thing that was even slightly interesting was that the trading revenue almost doubled. It seems as if the Germans are starting once again to bring money into the stock market / funds but future will tell.

Income statement, Commerzbank, Q1, 2014

Conclusion: Still nothing good from Commerzbank. They are expecting big losses from their shipping part but still less than what I would have thought. They are still struggling and whatever these new calculation regulations actually means for making banks more solid it seems to have hit Commerzbank really bad. I will of course keep my shares. To find out more then please see the analysis of Commerzbank 2014.



Anonymous said...

Why is it given to keep the shares? Is the bank undervalued and/or you have reason to beleive that there will be a turn around?

Fredrik von Oberhausen said...

I say that I will keep my shares because I will. I do believe Commerzbank to be a contrarian stock so at some point the turn around should happen. If that is 5 years from now or 10 years I simply do not know. The last analysis of Commerzbank can be found here and there you can decide for yourself if you find it over or undervalued. I have owned Commerzbank for a longer time now and the development for me has not been great.