The CreditWatch action on Commerzbank AG reflects its further weakened operating performance in the third quarter and uncertainties about management's plans to restore operating profitability to a level commensurate with Commerzbank's current ratings in the medium term. The actions particularly reflect Standard&Poor's concerns with regard to Commerzbank's ability to succeed on a stand-alone basis in its core business areas of retail banking, investment banking, and asset management given its lack of critical mass, and the fundamental structural problems of the German banking industry. Although Commerzbank announced further cost containment initiatives, Standard&Poor's doubts that these will sufficiently address Commerzbank's persistent cost problem. Standard&Poor's expects clarification on Commerzbank's strategic responses--including cost cutting and restructuring plans--from discussions
