# Commerzbank keeps outlook as lower Q3 profit still beats expectations
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2022-11-09
Category: NEWS
Category URL: https://financedigest.com/category/news
Meta Title: Commerzbank Q3 Net Profit Falls 52% Amid Polish Unit Woes
Meta Description: Germany's Commerzbank's Q3 net profit falls but maintains full-year outlook despite challenges. Stay updated on the latest financial news.
URL: https://financedigest.com/commerzbank-keeps-outlook-as-lower-q3-profit-still-beats-expectationshtml

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By Tom Sims and Unknown 9629b5b2-3983-43b7-ac6e-49eba7f61a04

FRANKFURT (Reuters) -Germany’s Commerzbank said on Wednesday its net profit fell by 52% in the third quarter in a better-than-expected outcome helped by higher interest rates, though previously flagged problems at a Polish unit weighed.

The lender also maintained its profit outlook for the full year even as its home market faces soaring inflation and a slowing economy, though it spelled out a grim scenario if Germany resorts to rationing gas during its ongoing energy crisis.

The [quarterly profit](https://www.financedigest.com/ericssons-quarterly-core-profit-misses-expectations.html "Ericsson’s quarterly core profit misses expectations"), while down from last year, is still a healthy sign for Germany’s No. 2 bank, which is engaged in a 2 billion euro ($2.01 billion) restructuring programme that has closed hundreds of branches and [cut 10,000 jobs](https://www.financedigest.com/icrc-to-cut-some-1500-jobs-as-humanitarian-budgets-seen-sliding.html "ICRC to cut some 1,500 jobs as humanitarian budgets seen sliding").

We have [made great progress](https://www.financedigest.com/sweden-finland-and-turkey-have-made-progress-on-nato-membership-sweden-says.html "Sweden, Finland and Turkey have made progress on NATO membership, Sweden says") in the execution of our strategy … and are well on [track to achieving our targets,”](https://www.financedigest.com/insurer-aviva-says-capital-return-and-costs-targets-on-track.html "Insurer Aviva says capital return and costs targets on track") said Chief Executive Manfred Knof.

Net [profit of 195 million euros in the quarter compares with a profit of 403 million a year](https://www.financedigest.com/crop-merchant-louis-dreyfus-gets-profit-boost-in-volatile-year.html "Crop merchant Louis Dreyfus gets profit boost in volatile year") earlier. Analysts had expected profit of 116 million euros on average in a consensus [forecast published](https://www.financedigest.com/publisher-bloomsbury-casts-upbeat-forecast-says-books-affordable-pastime.html "Publisher Bloomsbury casts upbeat forecast, says books ‘affordable pastime’") by the bank.

Some of Europe’s largest banks have [warned of growing risks as the economy fizzles after posting stronger-than-expected profits](https://www.financedigest.com/bootmaker-dr-martens-warns-on-profit-as-finance-chief-walks.html "Bootmaker Dr Martens warns on profit as finance chief walks") for the third quarter, and executives at Commerzbank have said they foresee a difficult fourth quarter.

The bank nevertheless kept its full-year [outlook of a net](https://www.financedigest.com/recruiter-hays-boosted-by-record-net-fees-but-cautious-on-outlook.html "Recruiter Hays boosted by record net fees, but cautious on outlook") profit of more than 1 billion euros, helped by an increase in net interest income, even though prospects for commission income are less rosy, because of turbulence in financial markets.

The biggest drag on the quarter came from neighbouring [Poland and its mBank unit](https://www.financedigest.com/carlsbergs-poland-unit-could-stop-production-lack-of-co2-threatens-food-industry.html "Carlsberg’s Poland unit could stop production; lack of CO2 threatens food industry"). In July, Commerzbank announced it would be affected by a Polish [law allowing mortgage borrowers to skip monthly repayments up to eight times through the end](https://www.financedigest.com/eu-approves-law-to-end-sales-of-new-co2-emitting-cars-by-2035.html "EU approves law to end sales of new CO2-emitting cars by 2035") of 2023.

In September, it flagged that it would take a hit after the unit booked additional provisions for its [Swiss franc](https://www.financedigest.com/swiss-franc-grapples-with-safe-haven-identity-crisis-after-credit-suisse.html "Swiss franc grapples with safe-haven identity crisis after Credit Suisse") loans. The two issues amounted to a burden of about 750 [million euros](https://www.financedigest.com/hellofresh-sees-2023-core-profit-of-460-540-million-euros.html "HelloFresh sees 2023 core profit of 460-540 million euros") in the quarter.

Commerzbank, which focuses on the medium-sized [firms known as Mittelstand that form](https://www.financedigest.com/schlumberger-subsea-7-and-aker-solutions-to-form-subsea-engineering-firm.html "Schlumberger, Subsea 7 and Aker Solutions to form subsea engineering firm") the backbone of the economy, is a barometer of Germany’s health.

In a scenario presented to analysts, Commerzbank said it would potentially [need to book an additional provision of up to 600 million euros if the country](https://www.financedigest.com/5-countries-you-need-to-have-an-offshore-account-in.html "5 Countries You Need To Have An Offshore Account In") rations gas, as the bank’s corporate clients would faces shortages that affect production.

Any [potential provision would be distributed among all its business segments](https://www.financedigest.com/case-handling-machines-market-global-size-growth-opportunities-industry-potential-segmentation-overview-trends-and-forecast-studies-2028.html "Case Handling Machines Market Global Size, Growth Opportunities, Industry Potential, Segmentation Overview, Trends And Forecast Studies 2028") and clients, it said.

($1=0.9933 euros)

[(Reporting by Tom Sims](https://www.financedigest.com/simalliance-members-report-shipments-of-4-9-billion-sims-in-2017-while-estimated-total-available-sim-market-in-2017-increases-2-75-to-5-6-billion-units.html "SIMalliance Members Report Shipments of 4.9 Billion SIMs in 2017, while Estimated Total Available SIM Market in 2017 Increases 2.75% to 5.6 Billion Units   ") and Marta Orosz; Editing by Miranda Murray, Clarence Fernandez and Jan Harvey)


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