The gGerman sovereign will exit from the capital of Commerzbank, by “gradually” selling its stake in Germany’s second largest bank by assets. The sale will involve share of 16.49% anstill in the hands of the federal government, held through the Financial Market Stabilization Fund (FMS). The sale of shares – a note from the German Ministry of Finance assures – will be “transparent, non-discriminatory and market friendly”.
The entry into the capital dates back to 2008
The German Federal Government’s entry into the capital of Commerzbank, through the financial vehicle for market stability, dates back to financial crisis of 2008, when the German bank found itself in dire straits following the Lehman Brothers bankruptcy. This is how Commerz got the public supportor, with the aim of ensuring the stability of the financial markets, since the German bank was too big to fail
Commerzbank received approximately 18.2 billion in aid, between 2008 and 2009, from the Financial Market Stabilization Fund. Of these, 13.15 billion euros have been repaid to date. A 16.49% share remains to be sold.
The decision to sell
Since that Commerzbank has returned to profitability since 2021, The German government has now decided to sell its remaining stake in the German Institute in a gradual manner.
“We are pleased to say that the stabilization was the right choice. “The bank’s economic situation has steadily improved since 2021,” commented Eva Grunwald, member of the board of directors of the Finance Agency, adding “the federal government’s commitment during the financial crisis prevented a domino effect with unforeseeable macroeconomic consequences.”
“The reduction of the stake in Commerzbank is a sign of strength of Commerzbank and the German financial center itself,” said Florian Toncar, State Secretary at the Federal Ministry of Finance.
Commerzbank’s positive accounts
Commerzbank has closed 2023 with a net profit of 2.2 billion eurosthe highest in the last 15 years and up 55% compared to the previous year. A result driven by the high rates applied by the ECB, which allowed the bank to obtain a interest margin of 8.4 billion, up 30% on the previous year, on revenues which are overall increased by 10.6% to 10.5 billion of euros. The bank has also reserved for shareholders a dividend of 0.35 euros and a buyback plan of 600 million euros.
Even the First half 2024 accounts are the best in 15 years to this part, having generated a net profit of 1.3 billion euros, up 12% compared to a year ago, while total revenues rose to 5.4 billion euros.
