- “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 told CNBC on Thursday.
- “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,” he added.
- Fears of a recession have been exacerbated amid the possibility of a winter gas shortage in Europe.
The chief executive of one of Germany’s biggest banks, Commerzbank, sought to reassure investors Thursday about the prospect of non-performing loans this winter, saying banks are far better placed to cope compared to previous 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 told CNBC’s Annette Weisbach at a Handelsblatt conference 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 he expected non-performing loans to rise substantially 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.”
“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 said. “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 possibility of a winter gas shortage in Europe. Lawmakers across the region are scrambling to fill underground storage facilities with gas supplies in order to have enough fuel to keep homes warm during the colder months.
Russia — traditionally Europe’s largest energy supplier — completely halted gas flows via the Nord Stream 1 pipeline earlier this month. The pipeline is Europe’s major supply route and connects Russia to Germany via the Baltic Sea. State-owned energy giant Gazprom cited technical issues for the halt to supplies, while the Kremlin has since said it will not turn the taps back on until punitive sanctions are lifted.
Germany ‘satisfied’ with Commerzbank development
Earlier on Thursday, German Finance Minister Christian Lindner sought to downplay speculation about the government’s more-than-15% stake in Commerzbank.
Speaking at the Handelsblatt conference, Linder said Olaf Scholz’s administration was “very satisfied with the development of Commerzbank,” Reuters reported.
Last month, Germany’s second-largest lender reported a net second-quarter loss due to restricting costs and an exceptional write-off to an outsourcing project.
Shares of Commerzbank rose 1.7% on Thursday morning. The Frankfurt-listed stock price is up around 4% year-to-date.
— CNBC’s Silvia Amaro contributed to this report.
Source: Finance - cnbc.com
