Commerzbank AG

Sound domestic market position in corporate banking, supported by a robust German economy. Improved capitalization due to rapid progress in de-risking the bank's noncore activities. Adequate funding and liquidity. Below-average market share and earnings contribution from domestic retail activities. Limited options to improve earnings over the next few years, given competition and low yields. Loan book quality metrics and composition still below those of peers. The stable outlook on Germany-based Commerzbank AG reflects Standard&Poor's Ratings Services' assessment that Commerzbank should be able to offset prevailing downside risks to the macroeconomic environment, mainly by continued improvements in its capitalization and risk position. The most likely downside factor is a potential lowering of our economic risk assessment for Germany, which

...Outlook: Stable The stable outlook on Germany-based Commerzbank AG reflects Standard & Poor's Ratings Services' assessment that Commerzbank should be able to offset prevailing downside risks to the macroeconomic environment, mainly by continued improvements in its capitalization and risk position. The most likely downside factor is a potential lowering of our economic risk assessment for Germany, which is on a negative trend. This would lower the anchor for Commerzbank by one notch. We also estimate that it would have a modestly negative impact on our risk-adjusted capital (RAC) ratio. In this scenario, however, we would likely reassess Commerzbank's combined capital and risk position in the context of a weaker peer group with higher economic risk exposures, and maybe also the additional loss-absorbing capacity (ALAC) notching. We expect that, together, any actions would likely have a neutral effect, leaving the issuer credit rating unchanged. Nevertheless, we could lower the ratings if...

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