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Analysis before buying or selling Commerzbank shares

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The banking and finance sector is, both in Europe and worldwide, an investment sector that attracts many investors, since some renowned groups offer strong capitalisation and a wealth of financial and economic data useful for analysis. This is the case of the German group Commerzbank, whose activity and how to carry out a historical analysis of its share price on the stock market will be presented here in more detail.

Latest news

Commerzbank's revenue and market capitalization

15/11/2021 - 08h56

The Covid-19 health crisis has strongly affected the business of the German banking group Commerzbank in 2020. The bank recorded huge losses for the year as a whole.

Elements to consider before selling or buying Commerzbank shares

Analysis N°1

First of all, the Commerzbank Group's efforts to further expand its market expansion will be closely monitored. In particular, partnership transactions with other banks are very important from a strategic point of view and with the aim of expanding Commerzbank's range of offers or reaching new customers.

Analysis N°2

Geographically, Commerzbank still has a card to play when it comes to conquering the Asian and American markets. We will therefore carefully scrutinise all news in this direction, such as strategic acquisitions of local banks or alliance operations with banks well established in these geographical areas.

Analysis N°3

Of course, as with all securities in the banking sector, you will have to follow closely the evolution of Euro zone regulations, which still have a very strong influence on stock market securities in this area.

Analysis N°4

Similarly, the economic situation in the euro zone and the current decline in growth in this sector will have to be carefully analysed in order to anticipate the negative or positive impact this will have on the results of the banking sector and thus indirectly on the Commerzbank share price.

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General presentation of Commerzbank

In order to carry out your analysis of the Commerzbank share and before taking a buy or sell position, you must of course have a perfect knowledge of this company as well as its main activities and sources of income. For this reason, we offer you a complete and detailed presentation of this bank here:

Commerzbank AG is a German company in the banking sector. More specifically, the bank is currently one of the largest banking groups in Germany.

In order to gain a better understanding of the Commerzbank Group's activities and the factors that may influence them, it is possible to divide them into different divisions according to the share of net banking income they generate and in this way:

  • Market and investment banking, which generates 36.5% of NBI with the sale of traditional and specialised banking products and services such as consumer credit, leasing and others, private banking.
  • Market and investment banking, which generates 36.5% of NBI with financial engineering, merger and acquisition advisory services, equity transactions, capital market interventions and other products and services.
  • Other products and services which generate 10.1% of NBI with public project finance, specialised and structured finance, mortgages and others.

Currently, the Commerzbank Group manages more than EUR 315.9 billion in deposits and EUR 393.6 billion in loans.

It is also interesting to know the geographical distribution of the Commerzbank Group's income. Only 72.4% of its net banking income is generated in Germany. The rest of its net banking income comes from the European market with 23.2% of net banking income, the Asian market with 2.7% of net banking income and finally the American market with 1.7% of net banking income.

Analysis before buying or selling Commerzbank shares
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The major competitors of Commerzbank

A good analysis of the Commerzbank share also requires a good knowledge of the company's main rivals and their most important publications. Here is a presentation of the various competitors of this banking group in Germany:

Deutsche Bank 

The Deutsche Bank Group is currently the largest bank in Germany. It was founded in 1870 and is currently based in Frankfurt. It is also one of the largest European banks in terms of market capitalisation. This universal bank has several subsidiaries and a presence in more than 72 countries around the world with the most important centres in London, New York and Singapore. Deutsche Bank is a private bank and is not the German Federal Bank.

DZ Bank

This other German bank is headquartered in Frankfurt and actually comprises more than 1200 of Germany's 1400 mutual banks.

Kreditanstalt für Wiederaufbau

This bank, whose name means Credit Institution for Reconstruction, is an institution under German public law and one of the top 15 banks in Germany. The bank was established on the basis of the KfW Gesetz. The Federal Ministry of Finance has a right of supervision.

UniCredit Bank AG

This other bank, also known under the brand name HypoVereinsbank or HBV, is a German private bank. It is also a subsidiary of the Unicredit Group since 2005. Thus, when the transfer resolution was entered in the commercial register in 2008, the shares of the minority shareholders were transferred to the main shareholder Unicredit SpA, in a squeeze-out. HVB thus became a wholly owned subsidiary and has not been listed on the stock exchange since that time.

BayernLB

This bank is also called Bayerische Landesbank or Bavarian public bank. It is a German bank based in Munich and is one of the Landesbanks. It is also 94% owned by the Land of Bavaria through BayernLB Holding AG, with the remaining 6% owned by the Sparkassenverband Bayern. BayernLB currently employs around 19,200 people and is the eighth largest financial group in Germany.

Norddeutsche Landesbank

Finally, this German bank is also a Landesbank and owns the subsidiary DnB Nord A/S, in parity with the Norwegian bank DnB NOR. Its head office is currently in Hanover.


The major partners of Commerzbank

The Commerzbank Group has often set up partnerships in order to boost its market presence and win new customers. Here are the most important partnerships of this company.

BNP Paribas

Since 2010, it has been a partner of BNP Paribas in the field of personal loans in Germany. This partnership was renewed in 2016 to develop consumer credit in the country.

Santander & Société Générale

In 2014, two European banking groups, Santander and Société Générale, are interested in a partnership with Commerzbank through the purchase of a 17% stake still held by the Federal Republic.

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Positive factors for Commerzbank shares
The factors in favour of a rise in the Commerzbank share price:

Firstly, what is undoubtedly one of the Commerzbank Group's greatest strengths today is its strong positioning in its home country. Indeed, Commerzbank is now the second largest bank in Germany, which makes it one of the most attractive and well-attended German banking securities of the moment. This positioning has been made possible in particular by the banking group's creation of a very large network of branches and subsidiaries throughout the country.

The Commerzbank banking group also enjoys a very strong reputation among the country's businesses. The bank was voted best bank by German SMEs, which makes it easier for it to win new customers thanks to its excellent brand image.

Commerzbank and its stock are obviously attractive to shareholders and investors thanks to the very large customer base of this banking group. To date, Commerzbank has more than 15 million private customers and over one million corporate customers worldwide, not just in Germany.

Another strong point of the Commerzbank Group is its strategic positioning in the market for new technologies. Commerzbank is currently Germany's leading online bank, which will enable it to gain even more market share and customers.

Negative factors for Commerzbank shares
The factors in favour of a drop in the Commerzbank share price:

First of all, Commerzbank's biggest shortcoming according to the major economic analysts in this sector concerns the distribution of the banking group's activities. Indeed, today, the vast majority of the group's revenues come from retail banking activities, while investment banking activities remain largely a minority. This therefore entails a significant risk of losses in the event that the retail banking sector suffers a certain recession. Moreover, it has been proven that investment banking activities are often more profitable and therefore more attractive in the long term.

Finally, the second and last major weakness of the Commerzbank group this time concerns its difficulties in positioning itself in markets other than the German market. Indeed, Commerzbank is barely able to operate in some European countries but is struggling to gain market share elsewhere in the world. In particular, we regret its lack of presence in Asian countries, which are recognised as very buoyant emerging markets, as well as in most American markets. Due to this poor geographical distribution of its activities, Commerzbank remains closely linked to the German market on which it depends heavily and is therefore exposed to a very significant geo-economic risk.

The information supplied here is only for indicative purposes and should not be used without the completion of a comprehensive and complete fundamental analysis of this asset notably taking into account exterior data, future publications and announcements and all fundamental events and news that could influence the strengths and weaknesses or make them more or less significant. This information does not in any way constitute recommendations relating to the completion of transactions or a solicitation to buy or sell an asset.

Frequently Asked Questions

How is Commerzbank's shareholding currently distributed?

At present, Commerzbank's shareholding is distributed as follows: 54% of the shares are held by institutional investors, 20% by private investors. The Federal Republic of Germany still holds 15% of the bank's shares and the largest institutional shareholders are Cerberus with 5% of the shares, BlackRock with 3% of the shares and Norges Bank with 3% of the shares. The part of the capital traded freely on the market is the free float.

How can I find out about future trends in the Commerzbank share?

If you want to effectively anticipate future trends in the Commerzbank share before buying or selling, you need to perform several types of analysis. The first is a technical analysis, which studies historical and current price movements using graphical indicators. The second is fundamental analysis, which is based on the study of events and publications that are most likely to influence the share price.

Does Commerzbank pay a dividend to its shareholders?

Currently, Commerzbank has not paid a dividend to its shareholders for two years. Previously and for several years, the dividend for this share was €0.20 per share. This suspension of the dividend payment is explained by the significant losses recorded by this bank during the Covid-19 pandemic. It is therefore not impossible that the bank will start paying its shareholders again in the coming years.

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