The main executive of 1 of Germany’s largest financial institutions, Commerzbank, sought to reassure buyers Thursday about the prospect of non-executing loans this winter, indicating banking institutions are significantly better positioned to cope in comparison to preceding crises.
“The German financial system is going through a tough time forward of us because of to the Ukraine conflict, China, offer chain troubles and the power crisis,” Commerzbank CEO Manfred Knof explained to CNBC’s Annette Weisbach at a Handelsblatt meeting in Frankfurt, Germany.
“Probably the German overall economy is heading into a downward [trajectory] and perhaps into a economic downturn but the good news is there no cause to worry.”
Requested irrespective of whether he anticipated non-undertaking financial loans to increase considerably around the system of the winter season, Knof replied: “If a economic downturn will be there then it is possible we will see some thing, but the problem is drastically greater than in the previous.”
Commerzbank documented a net 2nd-quarter loss thanks to restructing expenses and an excellent create-off to an outsourcing undertaking.
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“Financial institutions have completed their research, we are all capable, we have sufficient buffer to help our clients during this crisis and this is genuinely what counts,” Knof stated. “Thus, we are concerned but we are not worried and there is no explanation to panic.”
Fears of a recession have been exacerbated amid the probability of a winter season gas scarcity in Europe. Lawmakers across the location are scrambling to fill underground storage amenities with gas provides in order to have sufficient fuel to keep houses warm throughout the colder months.
Russia — customarily Europe’s premier vitality provider — fully halted fuel flows via the Nord Stream 1 pipeline earlier this thirty day period. The pipeline is Europe’s main provide route and connects Russia to Germany via the Baltic Sea. State-owned electricity large Gazprom cited technical challenges for the halt to materials, whilst the Kremlin has due to the fact reported it will not turn the faucets again on until punitive sanctions are lifted.
Germany ‘satisfied’ with Commerzbank advancement
Earlier on Thursday, German Finance Minister Christian Lindner sought to downplay speculation about the government’s a lot more-than-15% stake in Commerzbank.
Talking at the Handelsblatt conference, Linder claimed Olaf Scholz’s administration was “extremely happy with the progress of Commerzbank,” Reuters reported.
Final thirty day period, Germany’s 2nd-premier loan company reported a web second-quarter reduction because of to restricting expenditures and an fantastic create-off to an outsourcing venture.
Shares of Commerzbank rose 1.7% on Thursday morning. The Frankfurt-shown inventory price tag is up around 4% year-to-day.
— CNBC’s Silvia Amaro contributed to this report.
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