The rating reflects Commerzbank’s leading position in private and commercial banking in its home market of Germany, also through its digital bank Comdirect, and the solid franchise built in Poland with mBank.

The transformation programme initiated in 2016, and oriented towards streamlining back-end processes and digitalisation, is on track. On the other hand, the front-loading of investment is further depressing profitability levels which are already suffering from the low interest rate environment. Nevertheless, we expect cost savings to materialise in the medium term.

Client acquisition numbers in the target segments are improving, and the bank maintains strong market shares in corporate banking, particularly in the SME segment.

Asset quality metrics reflect good risk management capabilities coupled with the low risk nature of mostly domestic exposures. Liquidity and solvency ratios remain strong, although declining profitability is affecting capital build-up.

Download the report on Commerzbank here.