Rating action

Scope Ratings GmbH (Scope) has affirmed Commerzbank AG’s (Commerzbank) issuer rating of A and senior preferred unsecured debt rating of A, with a Stable Outlook.

The full list of rating actions and rated entities is provided at the end of this rating action release.

Key rating drivers

Business model assessment: Resilient (Low). Commerzbank’s issuer rating is anchored by the Resilient (Low) business model assessment. With total assets of EUR 593bn as of Q3 2025, the bank is one of Germany’s largest banks. However, its market share is still relatively moderate, reflecting Germany’s fragmented banking sector. In business banking, the bank operates through two segments, with a focus on providing a comprehensive range of financial products to the German ‘Mittelstand’, or small-and medium-sized enterprises (SMEs), as well as large companies and institutional customers. In the retail segment (Private and Small-Business Customers), the Bank operates via its Commerzbank and comdirect brands. Finally, the bank operates via mBank, its Polish subsidiary.

The bank’s current focus is on leveraging its stand-alone strengths via its “Momentum 2028” strategy. The group is on track to achieve updated targets for 2025, thanks to broadly stable net interest income despite falling policy rates in the EU and Poland, the group’s main markets, strong growth in net fees and commissions, and the successful implementation of cost savings initiatives.

Headline targets include increased profitability, with return on tangible equity targeted at 15% for 2028, from 10% in the first nine months of 2025, excluding restructuring costs, and a reduction in the cost-to-income ratio to 50%, from 57% expected for this year. The bank targets a payout ratio of 100% for 2025-28 with a target CET1 ratio of above 13.5% by 2028, from 14.7% in Q3 2025.

Scope views the strategy as ambitious, but achievable if macroeconomic factors evolve as projected. The bank has a track record to deliver against targets, with 2025 results providing a solid off-ramp until 2028. The strategy relies on maintaining a broadly stable cost base, robust revenue growth, relatively low cost of risk and low legal costs related to mBank.

Much of the additional projected revenue until 2028 stems from net commission income, with average annual growth of 7%. Maintaining high growth rates will partly depend on external macroeconomic factors, as well as potential select bolt-on acquisitions to increase market share, such as the acquisition of Aquila Capital in 2024. On net interest income, the main downside risk relates to lower-than-assumed growth in lending, which is expected to grow by 5% per year on average. Despite downside risks pertaining to lower-than-projected economic growth in Germany, Commerzbank has a track record of growing its lending book despite a largely stagnant domestic economy. The bank’s structural hedge portfolio will further stabilise net interest income.

Finally, UniCredit SpA’s (A/Stable) stake-building, with the bank holding around 29% of Commerzbank shares (including around 3% via derivatives), does not have immediate rating implications for Commerzbank. Commerzbank’s strategy since UniCredit’s stake-building began has been to focus on its stand-alone strengths and delivering against ambitious KPI’s in its 2028 strategy, as well as increasing shareholder returns to bolster its share price.

Operating environment assessment: Supportive (High). The assessment reflects Scope’s blended view of the different markets where Commerzbank operates.

Germany (Supportive High) accounts for most of the bank’s exposure and revenues. As Europe’s largest economy, with high wealth levels, economic resilience is very high, although the country’s export-oriented manufacturing sector is facing multiple headwinds, leading to stagnant growth in recent years. From 2026, real GDP growth is expected to recover, significantly supported by public investments. Despite fiscal loosening, Germany’s fiscal space remains intact, with overall manageable fiscal deficits and a relatively low debt-to-GDP ratio. The German banking sector is fragmented, with large market shares of cooperative and saving banking groups, and aggregate profitability is low. The national legislative framework is predictable and stable.

Germany is part of the European Banking Union, which has brought about a significant strengthening and harmonisation in bank regulation and supervision under the ECB’s Single Supervisory Mechanism, which Scope considers to be supportive of financial stability. The European Central Bank also shares with national central banks the role of lender of last resort, which limits illiquidity risks to the banks.

Poland (Moderately Supportive High) is a also key market for the group via its subsidiary mBank. The country's economic outlook remains strong, underpinned by solid macroeconomic fundamentals, including robust private consumption, a flexible labour market and a competitive manufacturing sector. Scope projects GDP growth of 3.1% in 2025, supported by real income growth, falling inflation and accelerated investment driven by EU RRF fund absorption. Medium-term growth is expected to remain robust, gradually moderating to 2.7% by 2030 due to narrowing productivity gains and demographic pressures. This will be partially offset by rising labour participation and net migration.

Poland’s banking sector remains stable and resilient. Financial stability risks are contained, and there is adequate provision for litigation risks from legacy CHF mortgages. Prudential buffers have been strengthened since the pandemic, with new measures including an increasing countercyclical buffer and long-term funding requirements to address mismatches in loan maturities. Although litigation risks persist, particularly concerning CHF contracts and potentially WIBOR-linked loans, the strong profitability and capital positions of banks help to mitigate these pressures.

Bank regulation in Poland is aligned to the EU regulatory framework. However, Poland is not formally part of the European Banking Union.

The assessment incorporates a positive one notch adjustment to account for the positive trajectory of Poland's economy and the forward-looking view of a stronger macroeconomic environment and higher wealth levels in the medium term.

Scope arrives at an initial mapping of a- based on a combined assessment of the issuer’s operating environment and business model.

Long-term sustainability assessment (ESG factor): Neutral. The assessment reflects Scope’s view that the issuer is embracing changes to ensure the long term sustainability of its business model. Progress made may be tangible but does not warrant further credit differentiation.

Commerzbank continues to focus on dedicated digital banking capabilities. Comdirect provides a leading role in the online banking and brokerage market, and it provides digital solutions to corporate customers via the digital ‘Mittelstandsbank Direkt’.

Commerzbank’s public commitment to environmental factors is solid and stipulated by its comprehensive set of policies. The bank has established sector-specific exclusion lists and criteria, including for deforestation and fossil-fuel based projects. Commerzbank aims to increase sustainable products to EUR 300bn (advisory and lending). Lending products include the green infrastructure finance portfolio with investments in renewables.

The assessment for governance is sound. Near-term governance considerations include the bank’s defence strategy against Unicredit’s stake-building and potential takeover attempt, with a focus on increasing capital returns to shareholders.

The long-term sustainability assessment leads to an adjusted rating anchor of a-.

Earnings capacity and risk exposures assessment: Neutral. The assessment reflects Scope’s view that the group’s earnings capacity may be variable over economic cycles but is sufficient to cover expected losses. Asset quality is broadly in line with peers. Risks are unlikely to generate losses capable of undermining the issuer’s viability.

In line with the bank’s 2028 strategy, Scope assesses Commerzbank’s ability to generate earnings through the cycle as strengthened and sustainable, with metrics on profitability and underlying earnings now broadly aligned to European peers. Given strong performance in 9M2025, guidance on full-year NII was moderately increased to EUR 8.2bn and is expected to increase further to EUR 8.4bn in 2026. In addition, the strategy is built on strong growth in net commission income via a strengthened securities business.

Asset quality is very robust, despite some continued asset quality pressures in Germany, with a gross non-performing exposure ratio broadly stable in recent quarters at 1% as of Q3 2025. Scope does not foresee a material deterioration in Commerzbank’s asset quality. Cost of risk was 23bps in Q3 2025. Scope deems the group’s loan loss reserves to be appropriate. Exposure is somewhat concentrated on the German ‘Mittelstand’, with more than half of the bank’s exposure in Germany. Thus, Commerzbank would be exposed to a worsening in the macroeconomic situation in the country beyond Scope’s baseline assumptions.

Financial viability management assessment: Comfortable (+1 notch). The assessment reflects Scope’s view that the issuer’s maintains comfortable buffer to relevant regulatory requirements and Scope expects it to continue to do so. The issuer’s financial viability is largely resilient to tail-risk events.

Commerzbank’s capitalisation is sound, with a CET1 ratio of 14.7% reported as of Q3 2025. With the announced dividend policy of distributing 100% of net profit until 2028, Commerzbank plans to maintain a common equity tier 1 ratio of at least 13.5%, which supports the rating. The distance to the requirement is in line with most of its European peers. Effective from 2026, Commerzbank’s own funds requirement for Pillar 2 (P2R) has been reduced by 10bps to 2.15% of total capital.

Commerzbank's solid funding and liquidity profile reflects a strong deposit base and good access to capital markets. The group’s liquidity has consistently been strong in recent years, considerably exceeding regulatory requirements and Scope expects the funding and liquidity profiles to remain robust.

One or more key drivers of the credit rating action are considered an ESG factor.

Outlook and rating sensitivities

The Stable Outlook reflects Scope’s view that the risks to the current rating are balanced.

The upside scenarios for the ratings and Outlooks are (individually or collectively):

1. A sustained improvement in the bank’s profitability, with continued controlled risk appetite and sound asset quality, leading to a higher earnings capacity and risk exposure assessment.
    
2. An increase in the group’s geographic and business diversification profile, strengthening the bank’s business model assessment.

The downside scenarios for the ratings and Outlooks are (individually or collectively):

1. A material deterioration in the group’s profitability and asset quality, leading to a downwards reassessment of the group’s earnings capacity and risk exposure.
    
2. A material reduction of capital buffers, due to unexpected events or a more aggressive capital policy, putting downwards pressure on the assessment of financial viability management.

Debt ratings

Preferred senior unsecured debt: A/Stable. The rating is aligned with the issuer rating and applies to senior unsecured debt ranking above other classes of senior unsecured debt.

Non-preferred senior unsecured debt: A-/Stable. The rating is one notch lower than the issuer rating, reflecting statutory subordination. The rating also applies to legacy senior debt issued by German banks prior to the introduction of the senior non-preferred debt class in 2018.

Short-term debt: S-1/Stable. Commerzbank’s S-1 short-term credit rating is derived from the long-term issuer credit rating. The rating is consistent with Scope’s long-term/short-term rating correspondence table. The choice of the highest possible short-term rating (S-1 given the A issuer rating) reflects the strength of the liquidity profile of the group and access to central bank funding (lender of last resort, ECB).

Environmental, social and governance (ESG) factors

Please refer to the ‘long-term sustainability assessment’ under the ‘key rating drivers’ section above for the ESG analysis.

All rating actions and rated entities

Commerzbank AG

Issuer rating: A/Stable, affirmed

Preferred senior unsecured debt rating: A/Stable, affirmed

Non-preferred senior unsecured debt rating: A-/Stable, affirmed

Short-term debt rating: S-1/Stable, affirmed

Stress testing & cash flow analysis
No stress testing was performed. No cash flow analysis was performed.

Methodology
The methodology used for these Credit Ratings and Outlooks, (Financial Institutions Rating Methodology, 18 September 2025), is available on scoperatings.com/governance-and-policies/rating-governance/methodologies.
Information on the meaning of each Credit Rating category, including definitions of default, recoveries, Outlooks and Under Review, can be viewed in ‘Rating Definitions – Credit Ratings, Ancillary and Other Services’, published on scoperatings.com/governance-and-policies/rating-governance/definitions-and-scales. Historical default rates of the entities rated by Scope Ratings can be viewed in the Credit Rating performance report at scoperatings.com/governance-and-policies/regulatory/eu-regulation. Also refer to the central platform (CEREP) of the European Securities and Markets Authority (ESMA): registers.esma.europa.eu/cerep-publication. A comprehensive clarification of Scope Ratings’ definitions of default and Credit Rating notations can be found at scoperatings.com/governance-and-policies/rating-governance/definitions-and-scales. Guidance and information on how environmental, social or governance factors (ESG factors) are incorporated into the Credit Rating can be found in the respective sections of the methodologies or guidance documents provided on scoperatings.com/governance-and-policies/rating-governance/methodologies.
The Outlook indicates the most likely direction of the Credit Ratings if the Credit Ratings were to change within the next 12 to 18 months.

Solicitation, key sources and quality of information
The Credit Ratings were not requested by the Rated Entity or its Related Third Parties. The Credit Rating process was conducted:
With Rated Entity or Related Third Party participation         YES
With access to internal documents                                       NO
With access to management                                                NO
The following substantially material sources of information were used to prepare the Credit Ratings: public domain and Scope Ratings’ internal sources.
Scope Ratings considers the quality of information available to Scope Ratings on the Rated Entity or instrument to be satisfactory. The information and data supporting these Credit Ratings originate from sources Scope Ratings considers to be reliable and accurate. Scope Ratings does not, however, independently verify the reliability and accuracy of the information and data.
Prior to the issuance of the Credit Rating action, the Rated Entity was given the opportunity to review the Credit Ratings and Outlooks and the principal grounds on which the Credit Ratings and Outlooks are based. Following that review, the Credit Ratings and Outlooks were not amended before being issued.

Regulatory disclosures
These Credit Ratings and Outlooks are issued by Scope Ratings GmbH, Lennéstraße 5, D-10785 Berlin, Tel +49 30 27891-0. The Credit Ratings and Outlooks are UK-endorsed.
Lead analyst: Julian Zimmermann, Director
Person responsible for approval of the Credit Ratings: Marco Troiano, Managing Director
The issuer Credit Rating/Outlook was first released by Scope Ratings on 2 April 2014. The Credit Rating/Outlook was last updated on 13 December 2024.
The short-term debt Credit Rating/Outlook was first released by Scope Ratings on 22 May 2014. The Credit Rating/Outlook was last updated on 13 December 2024.
The non-preferred senior unsecured debt Credit Rating/Outlook was first released by Scope Ratings on 2 April 2014. The Credit Rating/Outlook was last updated on 13 December 2024.
The preferred senior unsecured debt Credit Rating/Outlook was first released by Scope Ratings on 26 July 2018. The Credit Rating/Outlook was last updated on 13 December 2024.

Potential conflicts
See scoperatings.com under Governance & Policies/Regulatory for a list of potential conflicts of interest disclosures related to the issuance of Credit Ratings, as well as a list of Ancillary Services and certain non-Credit Rating Agency services provided to Rated Entities and/or Related Third Parties.

Conditions of use / exclusion of liability
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