Shares in Commerzbank opened up nearly 2.5 per cent after chief executive Martin Blessing said he would not step down until the bank’s reform programme had been completed.
Speaking to German newspaper Handelsblatt, Blessing said it would be “absurd” to leave before this point.
I can and want to bring the reorganization of Commerzbank to a successful end. That is my goal.
Commerzbank is aiming to achieve a post tax return on equity of over ten per cent by 2016. The bank is backed by the German government after it needed an €18.2bn bailout during the financial crisis, and is still 17 per cent state-owned. Shares are currently trading around €7.85 – far below the €26 the government paid for its stake.
After reporting second quarter earnings rose to €9.18bn from €8.71bn, Credit Suisse announced this morning it was downgrading its 2013 earnings per share by 13 per cent, but increasing its 2014 and 2015 forecasts by one per cent.
We maintain our Neutral rating on the name, as we believe management strategy doesn't make the stock appealing over the long term… To turn positive, we will be looking at further earning stabilization in Private Customer, Mittelstandbank and Investment banking.