Commerzbank returns to the Dax

The return to the Dax is perfect: Commerzbank is returning to the first German stock exchange league after almost exactly four and a half years. From February 27th, the money house will again be one of the 40 members of the German stock index. The index provider Stoxx, a subsidiary of Deutsche Börse, announced the decision expected by experts on Friday evening after Wall Street closed in Zug.

The early return of the Dax founding member was made possible by the withdrawal of the Linde industrial group from the Frankfurt Stock Exchange. The currently most valuable Dax group no longer meets one of the criteria and is removed from the Dax price list.

Commerzbank lost its place in the Dax in autumn 2018 due to its sharply reduced stock market value and has been listed in the MDax of medium-sized stocks since September 24, 2018. The then Commerzbank boss Martin Zielke had calmly commented on the descent of the Dax-Dinos - of all things in the year of the 30th anniversary of the leading German index: "In terms of the importance of the bank for the German economy, nothing will change at all."

However, the truth also includes: Belonging to the Dax is definitely a question of prestige. A place in the showcase of the German economy guarantees attention and attracts international investors. In addition, index funds (exchange traded funds/ETFs) that replicate the composition of the leading index have to be rebalanced depending on the Dax list, which usually has an impact on the share prices of certain titles.

The acting Commerzbank boss Manfred Knof made no secret of the fact that the return to the Dax would be good news for his company when the balance sheet was presented on Thursday: This would be "first and foremost an important signal to our customers," said the manager. He expects that being part of the Dax will “reinforce” Commerzbank’s position in corporate customer business.

It is no coincidence that the current Commerzbank management banged its own drum before the stock exchange's current decision: at the end of January, a good two weeks before the balance sheet was presented, the partially nationalized money house announced that it was ready to return to the Dax. In 2022, the bank made a profit of almost 3.4 billion euros before interest, taxes, depreciation and amortization (Ebitda). This means that the requirement introduced by the stock exchange in the meantime, that Dax members must have been profitable at least on the basis of the Ebitda in the previous two financial years, is fulfilled. The bottom line is that Commerzbank made the highest profit since 2007 last year with a good 1.4 billion euros.

For the money house, the return to the Dax is also a confirmation of the restructuring of the group: CEO Knof, who took office at the beginning of 2021, had tightened the austerity course. The bank cut thousands of jobs and significantly reduced its comparatively dense branch network in Germany with around 1,000 locations before the corona pandemic.

The joke of the story: In autumn 2018, the payment service provider Wirecard took the place of Commerzbank among the then 30 companies in the first German stock exchange league. For the once highly acclaimed company, it was over in the summer of 2020: After a balance sheet scandal involving air bookings worth billions, Wirecard collapsed, and a trial is currently underway in Munich on suspicion of commercial gang fraud. Among others in the dock: the former Wirecard boss Markus Braun.

Ultimately, however, the Wirecard scandal did have one good thing: The Dax was not only expanded from 30 to 40 companies, but also received new rules - including those that only profitable companies were included in the first German stock exchange league.

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