Commerzbank reported an operating profit of €629m for the third quarter of 2017 (up 46% year-on-year) and €1.1bn after nine months (9M 2016: €1bn). Adjusted revenues came to €6.35bn in the first nine months (9M 2016: €6.46bn), according to the bank.

At the end of September, trading liabilities, which show the negative fair values of derivative financial instruments used for hedging purposes (but do not qualify as hedging instruments for hedge accounting purposes), included certificates and other notes issued worth €5.8bn, up 20.8% from €4.8bn on December 31, 2016. However, total trading liabilities fell by 17%, from €71.6bn at the end of December to €59.4bn on September 30.

Securitised liabilities, which consist, among other, of bonds and notes, money market instruments and index certificates stood at €36.7bn at September 30, 2017 (December 31, 2016: €38.9bn), including €31.8bn worth of issued bonds and notes. The latter fell slightly, down €1.1bn, owing in particular to a lower volume of public sector Pfandbriefe and other bonds and notes, according to the bank.

'We have made good progress in laying foundations for our transformation this year. In the interest of sustainable long-term profitability, we are focussing on growth,' said Martin Zielke (pictured), chairman of the board of managing directors of Commerzbank, in a statement. 'We have grown both in terms of clients and assets, having successfully reallocated risk-weighted assets (RWAs) and capital to our core businesses and strongly invested into our digitalisation and IT.'

Commerzbank issued 44,506 structured products in the third quarter of 2017 (9M 2017: 133,490 products), according to SRP data. The majority of the bank's products were listed certificates issued in its domestic market Germany. However, Commerz also had a strong presence in Asia where products were launched in Hong Kong (119), Singapore (32) and Japan (19) while the Netherlands, with 32 products in the quarter, was the most active European market (behind Germany).

Deutsche Bank reported profits increased significantly both in the third quarter and in the first nine months of 2017. For the third quarter, income before income taxes was up by 51% to €933m (9M 2017: €2.6bn), while net income more than doubled to €649m (9M 2017: 1.7bn), according to the bank. Net revenues were €6.8bn for the third quarter, down by 10% year-on-year, or 7% if adjusted for exchange rate movements. Client activity was subdued compared to a strong prior year quarter, while volatility and interest rates remained low, Deutsche reported.

The Sales & Trading (Equity) business unit generated net revenues of €525m, a decrease of €98m, or 16%. Prime finance revenues were lower compared to the prior year due to reduced margins and lower average balances during the quarter; cash equity revenues were significantly higher driven by strong performance in the US; and equity derivatives revenues were significantly lower due to lower client activity and lower volatility, according to the bank

'While the revenue environment remained challenging, we have made significant progress on our key initiatives such as the planned merger of Deutsche Bank and Postbank in Germany as well as the preparation for the IPO of our asset management business,' said John Cryan, chief executive officer, in a statement. 'We are convinced that the benefits of our efforts will step by step become more apparent in the coming quarters and years.'

Deutsche Bank was the second most active issuer of structured products in the third quarter of 2017 (behind BNP Paribas), according to SRP data. The bank issued 46,506 structured products between July 1 and September 30, 2017 (9M 2017: 140,638 products) of which the vast majority were leverage and flow certificates issued in its home market Germany. Deutsche was also active in the US, where 14 structures worth US$49m (€42m) were sold, Belgium (11 products/€62m), Italy (eight/€300m), Poland and Spain (three products each) and Portugal (one product/€25m).
Click the link to view the interim report as of September 30, 2017 for Commerzbank and Deutsche Bank.

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