Commerzbank posts 20% hike in annual profit and launches new share buyback as it wards off UniCredit

Commerzbank on Friday unexpectedly launched quarterly outcomes, touting “file” annual revenue and saying a brand new share buyback scheme.

The financial institution mentioned it achieved a 20% enhance in internet revenue to 2.68 billion euros ($2.78 billion) in 2024. This compares with a $2.47 billion internet revenue forecast for the interval, in line with a consensus estimate cited by Reuters.

The group laid out intentions to repurchase 400 million euros of shares and proposed to carry its dividend payout to 0.65 euros per share, in contrast with 0.35 euros per share within the earlier yr.

Shares within the lender ended the day 1.7% larger.

Different annual highlights included internet revenue of 8.33 billion euros in 2024, versus 8.37 billion euros within the earlier yr, with the financial institution noting it benefitted from overseas alternate valuation results within the fourth quarter. Its return on tangible fairness — a measure of revenue efficiency — picked as much as 9.2% in 2024 from 7.7% in 2023, exceeding the group’s goal of hitting at the least 8%.

The group had initially listed plans to publish its fourth-quarter and annual earnings on Feb. 13, when it additionally intends to ship its annual technique replace and outlook. The early launch falls consistent with German authorized necessities when the quantity of capital return considerably surpasses the expectations of capital markets.

The outcomes come as Commerzbank has been making a case to face alone, after a shock stake construct from Italy’s second-largest lender UniCredit stoked market hypothesis of curiosity in a possible takeover. UniCredit now owns a direct 9.5% stake and a 18.5% stake by way of derivatives in Commerzbank, after first constructing its stake in September, then subsequently growing its place.

The transfer has been met with resistance from the German authorities, whose Finance Minister Jörg Kukies criticized UniCredit’s “very aggressive, very opaque” bid in a CNBC interview final week.

“We’ve got exceeded our capital return promise to our shareholders,” mentioned Commerzbank CEO Bettina Orlopp in a press release accompanying the outcomes, citing price administration and development initiatives as driving the revenue enhance.

“Because of growing profitability and new development initiatives, we’ll additional improve capital return within the coming years. Commerzbank is and stays a lovely funding,” she famous.

Since its September overture, UniCredit has additionally launched a takeover bid for home Italian peer Banco BPM, elevating questions on whether or not it is going to press forward with a home or German enterprise.