A Mixed Blessing

Outlook for Germany's Commerzbank: Cloudy.
  • Why it matters

    Why it matters

    Whoever succeeds Martin Blessing will have to nurture a fragile recovery at Commerzbank.

  • Facts


    • Commerzbank still has €22 billion in bad debt on its books from the shipping and real estate industries.
    • Though most of the bailout has been paid back, the German government still has a 15 percent stake in the bank.
    • Prior to the financial crisis, Commerzbank shares reached an all-time high of €224. They currently trade at €10 a share.
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Martin Blessing doesn’t exactly leave Commerzbank as good as he found it. A quick look at the share price of Germany’s second-largest bank – worth a fraction of what it was before the 2008 financial crisis – will make that clear enough.

Long the problem child of German banking and still more than 15-percent owned by the government, Commerzbank has only just begun on the difficult road to recovery. The job of turning it back into a sustainable powerhouse is less than half done.

There are clear signs that the awful situation the bank found itself in after the 2008 crisis has at least been stabilized. The praise that Mr. Blessing, the bank’s chief executive, received Monday after announcing he will leave the post in October next year is a sign of just how far he has managed to take the troubled bank in the last few years. Even the German government expressed regret that he was leaving.

“Two or three years ago, we would have found it good if Blessing had left,” the representative of a major shareholder told Handelsblatt on the condition of anonymity. The one-time critic now admits that “Blessing mastered the Herculean task of restructuring” Commerzbank.

But as managers and investors turn the page on Commerzbank’s chief executive for the past seven years and look towards his successor, many note that there are still plenty of challenges ahead.

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