In recent days, you could read in the press that the European Central Bank has slightly increased the bank-specific capital requirements for the Commerzbank Group for 2024. This does not sound particularly spectacular, especially since the bank can easily meet these conditions.

Commerzbank is well positioned, but… The Frankfurt-based financial institution has weathered the 2.0 banking crisis well and its third quarter profit in 2023 was more than three times that of the previous year. Among other things, rising interest rates in the eurozone and Poland have contributed significantly to the success. Some analysts then ventured out of cover and raised their ratings.

Nevertheless, the underlying risk of zombie companies remains, which were rescued from the Corona pandemic, energy crisis and Ukraine war. In view of the current stalled negotiations on the federal budget, numerous expenditure items already firmly promised are on ice, so that a larger wave of insolvencies with consequences for the banking sector is a quite realistic scenario. Losses in the millions were recorded by the Warsaw subsidiary mBank, as Polish banks had to accept a defeat at the European Court of Justice for abusive terms on foreign currency loans.

Commerzbank corporate development; Source: aktienscreener.com

Commerzbank stock in a sideways range The security is oscillating with a slightly rising tendency within the dashed sideways range. The current setback is supported solidly, from which you can enter a long trade. Since expectations are still limited, you should take any profits off the table in good time, for example by regularly pulling the stop loss. However, you should never let the Commerzbank stock fall below the support line, as the trading idea would no longer be intact.

Commerzbank stock (ISIN DE000CBK1001) – 1 year in daily chart; Source: aktienscreener.com

Conclusion: The banking environment still carries risks. Well-protected trades, on a more short-term perspective, could still be very lucrative.