The ratings on Germany-based Commerzbank AG reflect its turnaround following a prolonged restructuring, which is nearing completion, sound risk management, and the bank's domestic franchise among private and corporate customers. The primary negative rating factors remain the bank's improved but still modest core profitability and market position in a highly competitive and structurally difficult domestic market environment, and its limited franchise outside Germany, which confine the prospects for substantial revenue growth as long as economic growth remains subdued. In November 2005, the bank announced it would increase its stake in Eurohypo AG (A-/Stable/A-2) to about 98% from about 32%. Standard&Poor's Ratings Services believes that the financial risk of the transaction is consistent with the current ratings. Positive factors
