Commerzbank AG

The positive outlook reflects our view that better earnings generation could strengthen the bank's resilience. We could raise the ratings in the next 12 months if management executes on its strategic measures and improves the bank's structural profitability. A positive rating action would also depend on the bank maintaining a robust balance sheet, solid capital buffers, and liquidity metrics. If we see Commerzbank strengthening its business position by establishing a track record of stronger and more consistent profitability, we could revise its SACP to 'bbb+' and raise our long- and short-term ratings on the bank and its debt instruments. Alternatively, we could raise the ratings if we have greater confidence that the RAC ratio would remain solidly above 10% while

... is strengthening its resilience. We revised the outlook on our long-term ratings on Commerzbank to positive in November 2023 (see: Commerzbank Outlook Revised To Positive On Improving Resilience From Strengthening Earnings; 'A-/A-2' Affirmed Nov. 10, 2023). This reflects our view that it has reached key milestones in the multiyear transformation and realignment of its business model, primarily focused on deep cost and efficiency measures, and now shows improving profitability. We think the bank now has a solid foundation to further improve its structural profitability under its ambitious revised strategic agenda announced Nov. 8, 2023. This would provide additional capacity to absorb potential risks that may materialize and to fund ongoing...

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