Commerzbank’s Q1 2025: Can It Match Its 2024 Triumph?

Commerzbank’s 2024 began with a historic bang, posting its strongest first-quarter net profit in over a decade. But as investors await the release of its Q1 2025 results on May 8, 2025, the question looms: Can the German lender replicate its 2024 success? Let’s unpack the numbers, strategies, and risks shaping this critical earnings report.

The 2024 Benchmark: A Record-Breaking Start

Commerzbank’s Q1 2024 was a landmark quarter. The bank reported a net profit of €747 million, its highest since at least 2011 and a 32% increase from the previous year. This surge was driven by robust revenue growth, particularly in net commission income (up 7.4% to €3.6 billion), and strict cost discipline, with a cost-income ratio improving to 59%. The result set the stage for a record-breaking full-year 2024, where net profit hit €2.7 billion, a 20% jump from .

The 2024 performance also reflected Commerzbank’s strategic pivot: doubling down on corporate and international banking, expanding its green finance offerings, and resisting takeover attempts by Italy’s Unicredit. CEO Manfred Knof and CFO Bettina Orlopp positioned cost savings—targeting €2.7 billion annually by 2027—as key to maintaining independence.

2025 Projections: A Steady Hand or Signs of Slippage?

Analysts project Q1 2025 net profit of €698 million, slightly below 2024’s €747 million but still robust. Forecasts suggest:
- Net sales: €2.95 billion (up 13% from Q1 2024’s €2.61 billion).
- Earnings before tax (EBT): €885 million (vs. €844 million in 2024).
- EPS: €0.29 (down from €0.41 in 2024, but still healthy).

The dip in EPS projections reflects higher tax rates and one-off costs tied to its €4.5 billion cost-saving plan, which includes eliminating thousands of jobs. While this may pressure near-term profits, the long-term goal is to boost RoTE (return on tangible equity) to over 11% by 2027, up from 9.2% in 2024.

Strategic Headwinds and Tailwinds

Tailwinds:
1. Sustainable Finance Growth: Commerzbank’s green loans portfolio grew by 20% in 2024, and demand for ESG products remains strong.
2. Debt and Wealth Management: Corporate clients’ need for capital markets expertise could fuel commission income, which analysts expect to rise 7% in 2025.
3. Capital Strength: A CET1 ratio of 15.1% (2024) provides a buffer against economic shocks.

Headwinds:
1. Interest Rate Uncertainty: Fluctuating rates may compress net interest margins, especially if the ECB pauses hikes or begins cuts.
2. Unicredit’s Shadow: Despite Commerzbank’s resistance, Unicredit’s 29% stake looms. Employee protests and regulatory scrutiny add operational risks.
3. Cost-Cutting Costs: Job cuts, while necessary, could strain morale and short-term productivity.

Risks to Watch

• Loan Loss Provisions: Rising default risks in Commerzbank’s Polish subsidiary, mBank, could pressure earnings.
• Competitor Pressure: German rivals like Deutsche Bank and HypoVereinsbank are also cutting costs, intensifying price wars.
• Regulatory Hurdles: EU banking rules, such as stricter liquidity requirements, may eat into capital buffers.

Conclusion: A Steady Hand, But Challenges Linger

Commerzbank’s Q1 2025 results are likely to show sustained profitability, even if slightly below 2024’s record start. The projected €698 million net profit aligns with analysts’ expectations and underscores management’s discipline. However, investors must weigh short-term EPS pressures against long-term goals like 11% RoTE and €2.7 billion annual savings.

The bank’s focus on sustainable finance, cost-cutting, and resisting Unicredit’s advances positions it for resilience. Yet, risks like interest rate volatility and regulatory headwinds mean investors should stay cautious. For now, Commerzbank’s Q1 2025 appears to be a solid, if less dazzling, follow-up to its 2024 triumph—provided it executes its strategy without missteps.

In the end, the numbers will speak. If Commerzbank can grow its EBT to €885 million and maintain a CET1 ratio above 14%, it’ll validate its path to independence—and justify its €28.7 billion market cap. The world will know on May 8.