FRANKFURT: Supervisors at the European Central Bank have conducted a special audit of Commerzbank’s business plans until 2021 and discovered major weaknesses, a German newspaper reported on Friday.
The Sueddeutsche Zeitung, citing unnamed supervisory sources, said the ECB was particularly concerned about the German lender’s business for corporate clients, an important profit driver.
A spokesman for Commerzbank declined to comment. The ECB also declined to comment.
There are risks to the bank’s long-term profitability, and it will have to tackle the problem, Sueddeutsche reported, without adding more detail.
In its third-quarter earnings on Thursday, Commerzbank said it had reduced risk and improved the quality of its balance sheet, contributing to a “significantly improved result” in this year’s European Banking Authority stress test.
Also on Thursday, Chief Financial Officer Stephan Engels said the bank was slightly revising down its 2020 revenue target of 9.8 billion euros due to macroeconomic factors like Brexit and ongoing trade tensions.
He said the bank would give a further update on profit targets at its full year press conference in early 2019.