Börse Express – Germany's financial groups

Cash registers also ring at Commerzbank. Buoyed by the interest rate hike, Germany's second-largest financial institution's surplus rose to a new record of 2.2 billion euros last year. Net interest income increased by almost 30 percent to around 8.4 billion euros. So shareholders should have a dividend of 35 cents per share, up from 15 cents a year ago. In addition, own shares must be bought back.

But of course not only banks but also insurance companies like Allianz get interest rate hikes by central banks; After all, the collected money can be invested under better conditions. Additionally, Germany's largest insurance group was able to pass on inflationary costs to its customers through price increases, posting record profits despite a weak economy in many parts of the world. Shareholders should therefore receive a dividend increase of 21.1 percent to 13.8 euros per share certificate. Also, a new share buyback plan was announced.

Rising interest rates helped stock exchange operator Deutsche Börse achieve new record levels, including strong net interest income in the banking business. The group benefited from brisk trading activities in the markets and good business in gas and power products trading. So the dividend for 2023 should increase by 20 cents to 3.80 euros per share. In early January, Deutsche Börse also launched its first share buyback program in six years.

Are interest rates falling?

It remains to be seen whether interest rates will continue to provide a strong rebound for financial groups in the new year. In view of declining inflation and a weak economy, it will be a while before the ECB eases its monetary policy again. Although companies are optimistic, at least Commerzbank boss Manfred Knof has already warned against excessive expectations. He firmly believes that “the bank can grow profitably even in a less favorable interest rate environment.” “However, this will not be a definitive victory,” he stressed. If you want to be a little more cautious when investing, you might find Goldman Sachs' new Protect bond interesting. The note has a fixed tenure of one year and offers a fixed interest rate of 10.55 percent. Repayment of the bond at face value depends on the price growth of three stocks: 100 percent repayment if none of the three stocks. Reimbursement during the period loses 40 percent or more of operating time. However, if during the observation period one of the stocks hits the barrier and at the end of the period only one basis value is below the exercise price, the bond is redeemed by issuing the stock with the worst price growth based on the exercise price. (bad policy). This can lead to price loss or even total loss.

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