Germany’s second-biggest lender Commerzbank on Wednesday (May 17) said net profit almost doubled in the first quarter, thanks to “a tailwind” from higher interest rates.

The group said it made a bottom-line profit of 580 million euros (S$844.9 million), compared with 298 million euros over the same period a year earlier.

“We had a very good start to 2023,” CEO Manfred Knof said in a statement.

“The interest-rate development continues to give us a tailwind, and the fee business has delivered a good result,” he said.

Like other lenders in Europe, Commerzbank has benefited from a higher interest-rate environment as the European Central Bank has raised borrowing costs at an unprecedented rate in recent months to combat inflation.

Inflation in Germany, Europe’s biggest economy, eased to 7.2 per cent in April after peaking at 8.8 per cent last October.

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Commerzbank said quarterly revenues fell slightly to just under 2.7 billion euros, from 2.8 billion euros a year earlier. The lender said the dip was partly due to charges set aside to cover legal costs at its Polish unit mBank.

Commerzbank embarked on a major turnaround in recent years, focused on winning new customers, digitisation and reducing its workforce.

The bank has culled around 9,000 jobs since 2021, out of a planned 10,000.

The overhaul helped the group remain in the black for a second consecutive year in 2022, when it booked a net profit of 1.4 billion euros.

Commerzbank returned to the prestigious DAX index of Germany’s 40 top listed companies in February.

Looking ahead, Commerzbank said it was aiming for a full-year net profit “well above that of 2022“. AFP