Commerzbank chief says he’s not preparing for disaster, sees a mild recession
A “mild recession” is on the cards, according to Commerzbank CEO Manfred Knof.
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Commerzbank CEO Manfred Knof says the bank has prepared for an uplift in nonperforming loans, but the situation is “definitely not a disaster or default issue” as a “mild recession” is likely in the cards.
“We have already made provisions but still at the moment we don’t see a lot of issues ahead of us,” Knof told CNBC’s Annette Weisbach at the European Banking Congress in Frankfurt Friday.
Nonperforming loans are bank loans likely to be repaid late or not in full and are also known as “bad debt.”
“We are looking forward to a very stable and good result next year,” Knof said.
Other predictions for Europe’s economic outlook have not been as optimistic. The chief economist at Berenberg, Holger Schmieding, told CNBC that consumer confidence had “plunged so badly that the recession will likely not be shallow.”
‘Resilient and strong’
The Commerzbank CEO also said the actions of regulators, politicians and corporate banks have established “optimism” that the sector can manage the current economic environment.
“We will have two difficult years ahead of us but we are resilient and strong. [If] we all work together we should be [able to] handle the situation,” he said.
The chief of Deutsche Bank Christian Sewing was more frank in his comments about regulation in Germany and Europe more widely, saying he was concerned that “the pendulum is about to swing too far” and could “structurally disadvantage” the industry among global competitors.
“The current regulatory framework does little to strengthen European banks,” he said, speaking at the same event Friday. “Instead of further expanding and tightening, we should also look at where it might have gone too far.”
He added that while Europe is currently a leader in sustainable finance, the bloc “will soon lose this leadership” if regulation “continues as it has.”
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