Sound credit-risk management; Solid franchise in Germany; and Successful restructuring of core segments has started to bear fruit. Low growth and highly competitive domestic market environment; Modest profitability levels; and Limited franchise outside Germany. The ratings on Germany-based Commerzbank AG reflect its sound credit-risk management, which compares favorably with many domestic peers, and the bank's domestic franchise among private and corporate customers, which provides it with a sound and diversified funding base. The ratings also reflect Commerzbank's steady progress in executing a range of strategic and cost-cutting initiatives, which are expected to allow it to further improve its profitability levels in 2005. The primary negative rating factors are the bank's still modest core profitability and market position in a highly
