Commerzbank Stock: Q1 Profits Soar Beyond Expectations

Commerzbank has delivered a stunning first-quarter performance, with profits reaching €834 million—a 12% increase year-over-year and the strongest quarterly result since 2011. This impressive figure substantially exceeded analyst expectations of €698 million, driving the bank's shares up by 2.02% in pre-market trading. Despite a slight 2.6% decline in net interest income to €2.07 billion amid anticipated interest rate reductions, the Frankfurt-based institution more than compensated through other revenue streams. Commission income rose by 6.4% to €1.01 billion, helping push total revenue up by 11.8% to €3.07 billion. The bank has also demonstrated improved operational efficiency, with its cost-income ratio falling to 56%—already below the full-year target—while return on tangible equity reached a healthy 11.1%.

Outlook and Shareholder Returns

Management has confidently maintained its full-year 2025 profit forecast of €2.4 billion after restructuring costs, or €2.8 billion before these one-time charges. The bank expects net interest income of approximately €7.8 billion, supplemented by a positive fair-value adjustment of roughly €0.3 billion, while commission income is projected to grow by around 7%. In a significant boost for investors, Commerzbank plans to increase its dividend to €0.65 per share, nearly doubling the previous year's €0.35 payout. This proposed dividend, to be decided at the May 15 shareholders' meeting, would represent a total distribution of €733 million. The bank has already completed a €400 million share buyback program initiated in March, further enhancing shareholder returns while maintaining a robust CET1 capital ratio of 15.1%.

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Source StockWorld