Commerzbank: New Strategy Is Ambitious; Shareholders Benefit From UniCredit's Takeover Attempt

Commerzbank announced its new strategic plan in tandem with full 2024 results. A reduced set of results was released on Jan. 31, which we previously discussed. The new strategy sets a target for return on tangible equity of 15% by 2028. For context, we currently model a ROTE of 9%. Consensus figures don’t go that far out yet reliably, but 2027 consensus ROTE sits at 11%. Reaching the target would lift Commerzbank’s profitability to levels not seen at the German lender since the global financial crisis in 2008. We are skeptical that the rosy picture of strong income growth across all segments and above-market rates is easily achievable. Moreover, targets are too back-end loaded to our taste, with profitability accelerating in 2027 and 2028.