The chief govt of one in every of Germany’s greatest banks, Commerzbank, sought to reassure traders Thursday in regards to the prospect of non-performing loans this winter, saying banks are much better positioned to manage in comparison with earlier crises.
“The German economy is facing a difficult time ahead of us due to the Ukraine conflict, China, supply chain problems and the energy crisis,” Commerzbank CEO Manfred Knof instructed CNBC’s Annette Weisbach at a Handelsblatt convention in Frankfurt, Germany.
“Probably the German economy is going into a downward [trajectory] and maybe into a recession but the good news is there no reason to panic.”
Asked whether or not he anticipated non-performing loans to rise considerably over the course of the winter, Knof replied: “If a recession will be there then it is likely we will see something, but the situation is significantly better than in the past.”
Commerzbank reported a internet second-quarter loss resulting from restructing prices and an distinctive write-off to an outsourcing mission.
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“Banks have done their homework, we are all capable, we have enough buffer to help our customers during this crisis and this is really what counts,” Knof stated. “Therefore, we are concerned but we are not worried and there is no reason to panic.”
Fears of a recession have been exacerbated amid the potential for a winter fuel scarcity in Europe. Lawmakers throughout the area are scrambling to fill underground storage facilities with gas supplies with the intention to have sufficient gas to maintain properties heat in the course of the colder months.
Russia — historically Europe’s largest power provider — completely halted gas flows via the Nord Stream 1 pipeline earlier this month. The pipeline is Europe’s main provide route and connects Russia to Germany through the Baltic Sea. State-owned power large Gazprom cited technical points for the halt to provides, whereas the Kremlin has since stated it won’t flip the faucets again on till punitive sanctions are lifted.
Germany ‘happy’ with Commerzbank growth
Earlier on Thursday, German Finance Minister Christian Lindner sought to downplay hypothesis in regards to the authorities’s more-than-15% stake in Commerzbank.
Speaking on the Handelsblatt convention, Linder stated Olaf Scholz’s administration was “very satisfied with the development of Commerzbank,” Reuters reported.
Last month, Germany’s second-largest lender reported a internet second-quarter loss resulting from proscribing prices and an distinctive write-off to an outsourcing mission.
Shares of Commerzbank rose 1.7% on Thursday morning. The Frankfurt-listed inventory value is up round 4% year-to-date.
— CNBC’s Silvia Amaro contributed to this report.
