Financial institution: Commerzbank increases profits before takeover by Unicredit - but lowers an important forecast

Frankfurt. Commerzbank increased its profits shortly before it was taken over by the major Italian bank Unicredit. Group earnings rose by 45 percent to 859 million euros in the third quarter, as Germany's second largest private bank announced on Thursday.

However, the Frankfurt financial institution slightly missed market expectations. Analysts on average had expected a profit of 864 million euros. At 3.2 billion, income was also slightly below analyst estimates.

For the year as a whole, Commerzbank reiterated its goal of a profit of at least 3.4 billion euros and income of around 13.2 billion euros. However, it lowered the forecast for net interest income, which was widely respected by analysts, from 8.6 to 8.5 billion euros. “The reason for this is the increased competition for deposits,” explained the institute.

In Germany, financial institutions have been advertising deposits from private customers more intensively than ever before this year - partly because of the launch of JP Morgan's Chase digital bank. This is positive for consumers because it means they receive higher interest rates on account deposits. For financial institutions, on the other hand, interest expenses increase or, like Commerzbank, they have to accept that customers withdraw money to the competition.