"No bankruptcy wave in sight": Commerzbank boss sees zero interest rates by 2025

Saturday February 13th 2021

"No bankruptcy wave in sight"
Commerzbank boss sees zero interest rates by 2025

Manfred Knof, the new boss of Commerzbank, does not assume that the ECB will change the key interest rate significantly anytime soon. "The zero interest rate for savers will unfortunately remain for the time being," he says in an interview. The manager is confident about the consequences of the corona pandemic.

The new Commerzbank boss Manfred Knof does not expect an increase in interest rates by the European Central Bank (ECB) anytime soon. "Unfortunately, the zero interest rate for savers will remain for a few more years," Knof told the "Bild" newspaper. "We are preparing for interest rates to remain this low until the middle of the decade."

The ultra-low interest rates are making life difficult not only for savers, but also for banks, as it reduces profit margins in the traditional deposit and loan business, among other things. At Commerzbank, too, in the Corona year 2020, net interest income fell due to the tightened low interest rates.

Knof also comments on the pandemic in the interview: With regard to the solvency of Germans, the picture is "divided" for him. "Industry and medium-sized companies have shown themselves to be robust in the Corona crisis," he said. "Most customers get through this time well." In some areas, for example in gastronomy and retail, there are undoubtedly problems. The bank boss does not see a wave of bankruptcies rolling towards Germany.

"I think the federal government is doing a good job with the banks," he said. He does not see that Germany is breaking its gigantic national debt. "No, that will not happen. Despite the increased national debt, Germany is still creditworthy like hardly any other country."

The second largest German financial institution is in a state of upheaval: Knof, who had already earned the reputation of a restructuring engineer as head of the German insurance company Allianz, is currently tackling the radical restructuring of the Commerzbank group at great speed. After losing billions in 2020, the Frankfurt institute is expected to be in the black again in the current year, at least in day-to-day business.

To this end, it should concentrate primarily on German medium-sized companies. "This also includes a considerable downsizing of staff. Unfortunately, this is unavoidable in order to secure the majority of jobs in the long term," he admitted. Every second branch is closed. The job cuts should be implemented quickly: Knof wants to have a social plan for the cut of 10,000 jobs by the beginning of May.