The ratings on Germany-based Commerzbank AG reflect its sound business profile and improved financial profile based on reduced credit risk and higher profitability levels. This is underpinned by the more favorable domestic economic environment with a cyclical upswing that is broader based and likely to be longer lasting than expected. The ratings are mainly constrained by Commerzbank's profitability, which compares unfavorably with higher rated peers, partially a result of the bank's concentration on the German market where industry risk is higher than in other European countries (for further information see the article entitled " Bank Industry Risk Analysis: German Banks Profit From Healthier Credit Environment," published on March 27, 2007, on Ratings Direct). Commerzbank has a solid franchise in Germany
