Commerzbank Q1 Earnings Call Highlights

Key Points

• Commerzbank opened 2026 with a record quarter — EUR 3.2bn revenues and a net result of EUR 913m — prompting management to raise 2026 guidance to at least EUR 3.4bn and reaffirm a 100% total payout policy (after AT1 coupons) while maintaining a CET1 ratio of 14.5%.
• Its new “Momentum 2030” plan targets much higher profitability — RoTE 21%, net result EUR 5.9bn, cost‑income ratio 43%, and 6% revenue CAGR — and includes about EUR 600m of cumulative AI investment through 2030 aimed at producing ~EUR 500m of annual value (70% from cost savings).
• Management also raised the 2026 net interest income outlook to ~EUR 8.6bn, citing a replication portfolio that could add EUR 400–600m p.a., plans further RWA relief via SRTs (~EUR 4–5bn this year and ~EUR 9bn total relief at end‑2025), and a group‑wide gross reduction of 3,000 FTEs by 2030 to improve efficiency.

Commerzbank ETR: CBK opened 2026 with what CEO Bettina Orlopp called “a very good start to the year,” posting record quarterly profit and prompting the lender to raise its full-year guidance while outlining a more ambitious long-term plan under its “Momentum 2030” strategy.

Orlopp said the bank increased quarterly revenues to EUR 3.2 billion and delivered a record net result of EUR 913 million. Total revenues rose 5% year-over-year, which Orlopp described as “broad-based,” and the operating result increased 11% to EUR 1.4 billion as the bank combined revenue growth with “strict cost discipline.” Return on tangible equity (RoTE) was 12.7% with a cost-income ratio of 53%, or 50% when excluding compulsory contributions. Commerzbank’s CET1 ratio was 14.5%, above its targeted 13.5%.

Raised 2026 guidance and reaffirmed payout policy

Following the first-quarter performance, Orlopp said Commerzbank now targets a 2026 net result of at least EUR 3.4 billion, tightening its cost-income ratio target to 53% and raising its RoTE target to 12%. She framed the updated outlook against an expectation for German economic growth of 0.6% and an average ECB rate of 2.2%.

Management reiterated what Orlopp called a “cornerstone” of its equity story: a total payout of 100% of net result after AT1 coupon payments and before extraordinary non-recurring items. CFO Carsten Schmitt later confirmed expectations for a year-end CET1 ratio “above 14%” and reiterated the 100% payout plan until the 13.5% CET1 target is reached. In Q&A, Orlopp said investors can assume distribution “shortly above 90% in 2029 and 2030.”

Momentum 2030 targets: higher profitability and AI-driven efficiency

Orlopp introduced “Momentum 2030” as an acceleration of Commerzbank’s transformation, aiming to “deliver higher profitability faster” through profitable growth and improved efficiency, including expanded use of AI. The bank set the following 2030 targets:

• RoTE of 21%
• Net result of EUR 5.9 billion
• Cost-income ratio of 43% (or 41% excluding compulsory contributions)
• Revenue CAGR of 6%

Schmitt said the plan assumes current forward rates and the bank’s economic outlook, including an uptick in German GDP growth in 2027 and a “moderate positive impact from the fiscal stimulus,” while remaining “conservative.” He outlined a revenue trajectory rising from EUR 13.2 billion in 2026 to EUR 16.8 billion by 2030.

AI is central to the plan. Orlopp said Commerzbank plans approximately EUR 600 million in cumulative AI investments through 2030 and expects to create “tangible value of EUR 500 million per annum,” with 70% attributed to cost reduction. She cited recent examples including an “Agentic AI” redesign of complaint management in retail banking, the introduction of “Hawk AI” for transaction-monitoring alerts, and AI tools supporting credit analysis such as screening annual reports and generating early warning messages.

Business momentum: record fee income and strong corporate loan growth

Schmitt highlighted improved operating leverage in the quarter, citing “higher revenues and slightly falling operating expenses.” He said the standout was record net commission income, up 9% year-over-year, with contributions across all customer segments:

• Corporate Clients: net commission income up 8%, driven mainly by bond origination.
• Private and Small-Business Customers Germany: up 9%, helped by securities business and higher account fees.
• mBank: up 12% across products.

Net interest income was described as “broadly stable,” with underlying growth in German retail and corporate banking offset by day-count effects and rate cuts in Poland.

In Corporate Clients, Schmitt pointed to loan growth of nearly EUR 17 billion over the past 12 months, or 16%, including EUR 5 billion in the first quarter. He said growth was broad-based, including increases tied to German corporates, the public sector, green infrastructure financing, and Germany-connected corporates outside Germany, as well as financial institutions activity in trade finance and lending.

Net interest income outlook supported by replication portfolio and SRTs

Schmitt raised the bank’s 2026 net interest income outlook to around EUR 8.6 billion, citing a more favorable rates outlook than assumed in February and “successful margin management of deposits in Q1.” He said the bank now expects a 2026 average deposit beta of 41%, one percentage point lower than its original assumption, and noted that the replication portfolio had been “slightly increased” to help stabilize NII in coming years.

He described the replication portfolio as a “very important and very reliable” revenue contributor, citing an “additional benefit” of EUR 600 million in 2026. Based on the current structure and forward rates, Schmitt said the portfolio could contribute EUR 400 million to EUR 600 million per year through 2032, with cumulative contributions of EUR 1.6 billion in 2028, EUR 2.7 billion in 2030, and EUR 3.7 billion by 2032, and about EUR 200 million per year even beyond 2032.

On capital efficiency, management discussed Significant Risk Transfers (SRTs) as a tool to free up risk-weighted assets. Schmitt said the bank executed around EUR 4 billion of RWA relief last year, expects EUR 4 billion to EUR 5 billion this year, and “likely another EUR 4 billion” in 2028. He later added that, as of end-2025, total RWA relief in the group was around EUR 9 billion (about EUR 7 billion at Commerzbank AG and EUR 2 billion at mBank). In a follow-up, he said Commerzbank had around EUR 3.5 billion of relief from SRTs “already before” the Momentum program began, and that the bank has “pretty much doubled it since start of Momentum.”

Cost, risk and staffing: transformation agreement and planned reductions

Costs in the quarter were “slightly below” the prior year despite higher investments, and the risk result was EUR 142 million, in line with last year, with a non-performing exposure ratio of 1.1%. Schmitt maintained guidance for a full-year risk result of around EUR 850 million, noting headwinds from conflict in the Middle East but describing the portfolio as “highly resilient.”

Looking to 2030, Orlopp said Commerzbank plans a group-wide gross reduction of 3,000 FTEs by 2030, with “almost 50%” reduced on a net basis. The program is expected to carry around EUR 450 million in costs to achieve and be “largely achieved” via early retirement schemes and natural attrition. Orlopp also confirmed in Q&A that Commerzbank signed a transformation agreement with the workers’ council “yesterday,” including agreement on the type of social plan to apply, with detailed negotiations to follow. She said the additional 3,000 FTE measures are meant mainly for 2029 and 2030, although she later said the timing of restructuring costs could depend on negotiations and could potentially begin earlier.

Response to UniCredit offer: undervaluation and execution risk

Orlopp addressed UniCredit’s offer, saying Commerzbank’s management and supervisory boards would issue a “full reasoned statement, including a recommendation,” after reviewing the offer document. She said Commerzbank had published a separate presentation highlighting preliminary observations on UniCredit’s proposal.

Orlopp criticized UniCredit’s approach on several fronts, arguing that UniCredit was “using misleading” commentary to “talk down our valuation,” that its proposition to shareholders was “vague” with “considerable execution risk,” and that shareholders were being asked to give up upside “for no premium.” She also disputed assumptions UniCredit made around cost cutting, revenue effects, investments, and RWAs, calling claimed standalone cost-efficiency potential of EUR 1.3 billion by 2028 “extremely aggressive” and warning it could cause “significant execution risk and revenue attrition.”

She said Commerzbank remains open to discussions if there is willingness to address issues it flagged and if shareholders are offered “an attractive premium” that reflects the bank’s strategy and business model, including its international franchise.

About Commerzbank ETR: CBK

Commerzbank AG provides banking and capital market products and services to private and small business customers, corporate, financial service providers, and institutional clients in Germany, rest of Europe, the Americas, Asia, and internationally. It operates through two segments, Private and Small-Business Customers, and Corporate Clients. The company offers saving, checking, business, and current accounts; term deposits; pension; credit and debit cards; payment solutions; overdraft services; various loans; and insurance products.

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