Commerzbank And Pfandbriefbank Outlooks Stay Negative, Despite Stable Economic Risk Trend In Germany; 'A-/A-2' Affirmed

OVERVIEW In our view, the economic risk trend for Germany's banking industry over the next 24 months is stable rather than negative, with banks' profitability and asset quality benefitting from supportive economic and credit conditions. We have reviewed Commerzbank and Deutsche Pfandbriefbank (PBB), in particular, because we had indicated that the previous negative economic risk trend could have led to a downgrade. We are affirming our 'A-/A-2' ratings on Commerzbank and PBB. The negative outlook on Commerzbank indicates that we might lower our ratings within the next two years if the bank's capitalization and earnings do not improve to what we would regard as strong levels. The negative outlook on PBB indicates that we might lower our ratings within the

...OVERVIEW + In our view, the economic risk trend for Germany's banking industry over the next 24 months is stable rather than negative, with banks' profitability and asset quality benefitting from supportive economic and credit conditions. + We have reviewed Commerzbank and Deutsche Pfandbriefbank (PBB), in particular, because we had indicated that the previous negative economic risk trend could have led to a downgrade. + We are affirming our 'A-/A-2' ratings on Commerzbank and PBB. + The negative outlook on Commerzbank indicates that we might lower our ratings within the next two years if the bank's capitalization and earnings do not improve to what we would regard as strong levels. + The negative outlook on PBB indicates that we might lower our ratings within the next two years if the bank does not sustain strong capitalization and robust asset quality, thereby avoiding additional pressure on its already low earnings. FRANKFURT (S&P Global Ratings) Oct. 11, 2017--S&P Global Ratings said...

Ratings Action