Commerzbank Research

Chief economist Jörg Krämer: "The competitiveness of Germany's industry sector has suffered in the last ten years"
No significant upturn in China
ECB President Lagarde maintains the status quo in uncertain times
DAX year-end forecast at 13,700 points

An upward movement with below-average growth rates is more likely for Germany and the euro area in 2020 than a recession or a classically strong recovery. "Conflicting economic factors speak for such a bloodless upward movement," says Commerzbank's chief economist Jörg Krämer. Although loose monetary policy and a probable partial settlement in the trade dispute are creating the economy. At the same time, however, growth will be slowed by fears of a renewed flare-up of the trade war and by a lack of recovery in China. For the full year 2020, Commerzbank economists expect Germany to grow by 0.8 percent, which is only 0.4 percent adjusted for the unusually high number of working days.

"Our major concern - more than the economy - is the competitiveness of Germany as a production location. For two years the economy in this country has been growing at a weaker rate than the rest of the euro area," said Krämer. "The erosion of competitiveness over a number of years is beginning to show itself."

IN 2020 Commerzbank economists expect growth of 0.9 percent in the euro area. This is half a percentage point more than in Germany, but much less than in previous years. A slow economic upward movement and the continued failure to meet an inflation target of just under two per cent would probably have prompted former ECB President Mario Draghi to ease monetary policy again. But for the first time in a long time, the euro economy has grown stronger than the ECB expected. In addition, new ECB President Christine Lagarde maintains a consensual style of leadership. "In doubt, she maintains the status quo," Chief Economist Krämer said. He does not expect further easing of monetary policy for 2020, unlike in the past. The ECB will also continue to pursue the policy of negative interest rates for many years to come. The vast majority of the so-called "pigeons" in the Governing Council also support this.

In the short term the Dax could grow even further if Trump and the Chinese agreed economically. "But if it becomes clear in the course of the year that the trade conflict is not fundamentally resolved and the economy is only recovering little, the mood could tilt and the Dax could recede again. Our end-of-year target for the Dax is therefore deliberately conservative with 13,700 points," says Krämer. Commerzbank economists tend to expect higher prices for EUR-USD next year. The year-end forecast is 1.18.

About Commerzbank

Commerzbank is a leading international commercial bank with branches and offices in nearly 50 countries. The Bank’s two business segments – Private and Small Business Customers and Corporate Clients – offer a comprehensive portfolio of financial services precisely tailored to their customers’ needs. Commerzbank transacts approximately 30% of Germany's foreign trade and is the market leader in German corporate banking. The Bank offers its sector expertise to its corporate clients in Germany and abroad and is a leading provider of capital market products. Its subsidiaries, Comdirect in Germany and mBank in Poland, are two of the world’s most innovative online banks. With approximately 800 branches going forward, Commerzbank has one of the densest branch networks in Germany. The Bank serves more than 11 million private and small business customers nationwide and over 70,000 corporate clients, multinationals, financial service providers, and institutional clients worldwide. Its Polish subsidiary mBank S.A. has around 5.6 million private and corporate customers, predominantly in Poland, but also in the Czech Republic and Slovakia. In 2018 Commerzbank generated gross revenues of €8.6 billion with approximately 49,000 employees.

Disclaimer and Forward-Looking Statement

This release is neither an offer to purchase nor a solicitation of an offer to sell comdirect bank Aktiengesellschaft shares or any other security. The offer document, the terms and conditions contained therein shall have sole relevance in respect to the offer. Investors and holders of shares in comdirect bank Aktiengesellschaft are advised to read the relevant documents regarding the takeover offer to be published by Commerzbank Inlandsbanken Holding GmbH as they contain important information. Investors and holders of shares in comdirect bank Aktiengesellschaft can receive the offer document as well as other documents in connection with the offer from the website www.commerzbank-offer.com once they become available.

This release contains forward-looking statements. Forward-looking statements are statements that are not historical facts. In this release, these statements concern inter alia the expected future business of Commerzbank, efficiency gains and expected synergies, expected growth prospects and other opportunities for an increase in value of Commerzbank as well as expected future financial results, restructuring costs and other financial developments and information. These forward-looking statements are based on the management’s current plans, expectations, estimates and projections. They are subject to a number of assumptions and involve known and unknown risks, uncertainties and other factors that may cause actual results and developments to differ materially from any future results and developments expressed or implied by such forward-looking statements. Such factors include the conditions in the financial markets in Germany, in Europe, in the USA and other regions from which Commerzbank derives a substantial portion of its revenues and in which Commerzbank holds a substantial portion of its assets, the development of asset prices and market volatility, especially due to the ongoing European debt crisis, potential defaults of borrowers or trading counterparties, the implementation of its strategic initiatives to improve its business model, the reliability of its risk management policies, procedures and methods, risks arising as a result of regulatory change and other risks. Forward-looking statements therefore speak only as of the date they are made. Commerzbank has no obligation to update or release any revisions to the forward-looking statements contained in this release to reflect events or circumstances after the date of this release.