FRANKFURT, March 31 (Reuters) - Commerzbank is launching a 6 billion euro ($6.4 billion) loan offering for small- and medium-sized companies as it seeks to benefit from growing loan demand in anticipation of rising interest rates, an executive told Reuters.
“Many CFOs believe that a hike in interest rates is nearing and want to fill their coffers ahead of time,” said Michael Reuther, who heads the bank’s corporate clients unit, which has recently been merged with Commerzbank’s investment bank.
“In recent years demand was low,” Reuther said, adding that the lender hoped to compensate part of the dent that low interest rates have left on the unit with the loan initiative.
Commerzbank expects group earnings to remain flat this year and in 2016 saw its net profit fall by three quarters to 279 million euros, blaming low interest rates and weak loan demand.
The bank is targeting winning 10,000 new customers mainly among companies with sales of 15-100 million euros, a segment where competition mainly from local savings banks is fierce, Reuther said.
Despite the pressure from peers, Commerzbank will not sacrifice its margins, he said, adding: “We do not want to be the cheapest supplier on the market.”
$1 = 0.9361 euros Reporting by Alexander Hübner; Writing by Arno Schuetze; Editing by Harro ten Wolde