Commerzbank SWOT and PESTLE Analysis

Strength

1. Dense network of Branches: : In private and small business sector, its rate of growth has continued to outpace the market. The profit has been improving due to the dense network. As per Commerzbank’s new strategy they focussed more on digitization and automation of process for efficient functioning, thus reducing operating expenses. In order to expand its network reach Commerzbank has created #openspace to support the SMEs and start-ups to cope up with fast digitization challenges.

2. Best bank in SMEs viewpoint: The Company is ranked at top in SMEs viewpoint and it ensures that the clients get more than their expectations. The bank is instead doubling down on trade finance, cash management, basic corporate hedging, and debt capital markets, particularly in smaller corporate clients to improve its relationship with various SMEs.

3. Effective and dominant in online banking: The growth in digitally networked multi-channel bank is huge. New standards with the banking app has been set .There is convenient and simple account switching app and the free current account, which can be easily set up online in a matter of minutes. Commerzbank will be altogether expanding its interests in IT and digitalisation with the point of defending its upper hands. As per its “Commerzbank 4.0” strategy, the banks plans to invest about €700m per year to execute end-to-end digitalisation for 80% of its overall business processes.

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Weakness

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Opportunity

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Threat

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Political

1. Further weakening of US-Euro ties: US-Euro ties have damaged further after U.S President Trump had taken over the office. This might lead to European banks losing on its business from American clients due to estranged relationship between the two countries along with administrative and regulatory changes.

2. Impact of Brexit in revival of usual workflow: After Brexit, many organizations are moving their headquarters from London to Frankfurt and Dublin. These physical transitions of work centre along with employees will slow-down the business a bit and will take time to settle down and revive.

Economic

1. Low Interest rates brings profit to Commerzbank: Lower interest rates have improved the competitive dynamics in the banking sector of the German market where a large bank benefits from the competition. Lower interest rates provides a positive boost to Commerzbank’s growth strategy by increasing the competition in market.

2. Weakening of Pound against Dollar as a result of Brexit: The weakening of Pounds will affect the UK economy negatively which in turn will have its ripple effect on European Bodies such as Banks, Companies, Households and also the Government is holding a large share of its GDP in UK assets.

Social

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Technological

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Legal

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Environmental

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