DGAP-News: Commerzbank Aktiengesellschaft / Key word(s): Miscellaneous
- CET 1 ratio of 9.9% in the adverse scenario (2016: 7.4%) - stress effect decreases to 3.4 percentage points (2016: 4.7 percentage points) thanks to systematic reduction of risks
- Chief Risk Officer Chromik: "We have markedly improved our result in the stress test despite the even more challenging macroeconomic scenario. This is further proof of Commerzbank's healthy risk profile and high resilience to stress."
Commerzbank markedly improved its result in this year's European Banking Authority (EBA) stress test. In the so-called adverse stress test scenario, Commerzbank's Common Equity Tier 1 (CET 1) ratio stood at 9.9% in 2020, at the end of the stress test horizon. This is 2.5 percentage points above the previous test result in 2016. Overall, the adverse stress effect lowered the Bank's CET 1 ratio of 13.3% (Basel III fully phased-in with application of the new IFRS 9 accounting rules at the turn of the year 2017/2018) by 3.4 percentage points. In 2016, the ratio had decreased by 4.7 percentage points under the adverse stress scenario.
"Our systematic reduction of risks over the last few years is paying off", said Marcus Chromik, Chief Risk Officer of Commerzbank. "We have significantly improved our result in the stress test despite the even more challenging macroeconomic scenario. This is further proof of Commerzbank's healthy risk profile and high resilience to stress."
Since the EBA stress test in 2016, Commerzbank has undertaken a value-preserving reduction of its non-strategic portfolios and cut its Risk-weighted Assets (RWA) by roughly 29 billion euros. Its CET 1 ratio increased from 12.1% to 13.3% (considering the counter-effects of IFRS 9 at the turn of the year 2017/2018).
The 2018 stress test scenario was based on even more challenging macroeconomic conditions. Among other things, the test simulated an economic downturn of a cumulative -3.3% over the three-year period to 2020 for Germany (2016: -1.4%).
The stress test assumed a static balance sheet based on the IFRS 9 opening balance sheet for 2018, and therefore did not take account of any current or future business strategies or management initiatives. It is also not a forecast of Commerzbank's profits. The results of the stress test feed into the Supervisory Review and Evaluation Process (SREP).
Further information on the EBA's publication of 2 November 2018 can be found at https://www.commerzbank.de/en/hauptnavigation/aktionaere/aktuelles_2/stresstest2018.html.
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