00:00Look, let's start with the President of the United States coming here.
00:02It's all anyone's talking about.
00:04I know there are going to be long queues to hear from him.
00:06And this is about reshaping a new world order.
00:08What does that mean for banks servicing clients in Europe?
00:12Well, first of all, I think we need to be very diligent.
00:17So a good risk management needs to be in place
00:21because we really have to have a diversified portfolio.
00:25But we also have to have the profitability to support our clients
00:30because we only know that there are lots of ideas for investments
00:36and it's also the necessity for investments.
00:39And the banks are there to be at the site of their clients.
00:44But there's also, again, because of Greenland partly,
00:47an idea or people saying,
00:50well, let's just diversify away from U.S. assets.
00:52We could see a de-dollarization or a slow asset decline
00:56of maybe clients interested in playing that game.
01:00Do you see any rumors or clients saying,
01:02look, this is something that I'd like to look into?
01:05I mean, clients are clearly cautious.
01:07That's for sure.
01:08And we always also have seen, after Liberation Day, a dip,
01:12but then also a recovery because we should not forget
01:14U.S. is a very attractive, very large market.
01:18And there are a lot of very strong ties between Germany,
01:23between Europe and the U.S.
01:25So therefore, yes, you see that people are cautious,
01:30but they are also thinking about how can we make it work?
01:33So how can we localize business more
01:36and how can we, yeah, reduce dependencies?
01:40So you don't see clients saying like, you know,
01:42I mean, it's obviously not calling you up,
01:44but calling the bankers up and saying,
01:45sell all treasuries I own.
01:47No, we don't see that.
01:48We were talking also about the fact that
01:50there has been really a sea change in Germany
01:52because of the defense spending, infrastructure spending.
01:55They were expecting to have an impact on GDP
01:57either later this year into 2027.
01:59What does that mean for Commerce Bank?
02:01Well, I mean, our latest assumption now
02:03is something around 0.9% for 2026.
02:07That at least is a little bit of growth.
02:09It's not great, but it's a good starting point.
02:13And it's also that, I mean, this year is really the year
02:16where the whole investment program starts
02:18and will be continued then in the years to come.
02:23And we will see more of an impact if we see also the reforms unfolding.
02:28And therefore, there is a big ask not to only have the reforms we have seen so far,
02:35but speed up and do even more.
02:38I mean, because, you know, Germany policymakers are so busy
02:42with not only infrastructure, pension reform, defense and everything else,
02:46are banking topics a little bit off the table?
02:48Do you feel like maybe that's being forgotten a bit?
02:52Well, we do not feel forgotten.
02:54We feel in the center of all discussions
02:56because it's very clear and it's also very clear for the politician
03:01that, at least my opinion, that we are part of the solution
03:06and we are not part of the problem.
03:08That has already been the case during COVID.
03:12And it's also now the case.
03:14So we're really front and center of the debates,
03:16which is rightfully so because we can really support,
03:19we can leverage, and that's our task.
03:21And luckily also we have improved our profitability so much
03:25that we also have the power to do so.
03:27What do you make of the latest efforts by the ECB to simplify regulation?
03:32I'd say it's a great effort.
03:34I have to say we would like to see more.
03:36I know the word is not very popular,
03:38but deregulation is also necessary.
03:42We see that there is no level playing field,
03:45not when it comes to the U.S. banks,
03:48but also when it comes to some non-bank players.
03:52And therefore we really ask to review at least some of the initiatives
03:58and make sure that we really have the power
04:00and also the flexibility and also the speed
04:03to move forward and to be competitive.
04:06Does it help you already?
04:07Or what would be your number one wish list for regulators?
04:11Well, it helps.
04:12We see that there are really some initiatives ongoing
04:17when it comes to the SREP process and stuff like that.
04:20But clearly, I mean, one of the key debates is Basel.
04:24We all know that and we would wish for some support here.
04:28Another topic which is about to also impact us quite a lot
04:33is how we deal with AI.
04:36I mean, there is a governance necessary, clearly,
04:38but we really need to make sure that we really make the best out of AI
04:42and that we also need the support of the regulator.
04:44Bettina, overall, I mean, big banks like J.P. Morgan
04:47are actually expecting the benefits from AI to outweigh some of the costs.
04:52Do you agree with that?
04:53And can you point to specific projects that Commerce Bank is doing right now?
04:57Yeah, it's a very important theme for us
04:59that it will be the key priority for 2026, actually,
05:02that only by starting digitizing even more our clients,
05:06but also digitizing our staff,
05:08have our staff become more familiar with AI.
05:11We have some very, very, very good use cases already in place.
05:16We use AI in pricing.
05:19We use AI to avoid negative revenues because of avoiding fraud.
05:25But we also use it for cost efficiency, like in KYC,
05:29to have really cost avoidance in place.
05:33Where do you see in the future actually it most impacting your business?
05:37Well, actually, it will impact everything.
05:40I don't see any area, I mean, the support functions anyhow are touched by it
05:45because we are, I mean, banks are data-driven.
05:48We also are very complex because of the regulation,
05:51and this is the ideal components to apply AI.
05:56Do you need less bankers because of it?
05:57How do you look at your hiring over the next four to five years?
06:00I think in the moment we see rather that we see change in what profiles we need.
06:08So that is more the point and more the discussion,
06:11and the rest we'll see because we don't see it yet
06:14that you really have big replacement of big processes.
06:18And in our case, for example, when I talk about KYC,
06:20it was more the question do we need to hire more people for KYC
06:23because of change regulation when it comes to review cycles and stuff like that.
06:29So what we do now is that we can stick with the people we have.
06:34So it's more cost avoidance so far.
06:37Bettina, overall, I mean, how much do you worry about valuations actually in AI bursting
06:41and it impacting something, you know, impacting maybe the larger banks
06:45but then filtering through to some of the European banks as well?
06:48Yeah, I think it's more a positive impact.
06:51I see really AI as an opportunity to even accelerate profitability improvements
06:58and things like that and not as a threat.
07:01So it was clear that 2025 was dominated in the banking space in Europe
07:06by a possible takeover of Commerce Bank.
07:09Have you had a conversation of late with the Unicredit CEO, Andrea Rochelle?
07:12I mean, Unicredit is an investor and it's a large investor.
07:16It's actually our largest investor and largest shareholder.
07:20So clearly we have a constant dialogue as we have with all our larger investors
07:26and that comes with the quarterly calls.
07:29I mean, is there anything that they could offer to actually make their offer overall more palatable?
07:38Well, you know, I mean, there is no proposal out there.
07:40It has never been.
07:41So we really focus on our, and very successfully, on our own standalone strategy.
07:48And I think Unicredit shares the opinion that current valuation levels
07:53do not suggest that there is a value-accretive deal really possible.
Comments