(Bloomberg) -- Commerzbank AG Chief Executive Officer Bettina Orlopp is intensifying a plan to cut back the expected growth in risk-weighted assets as a cornerstone of her strategy to keep the lender independent.
The German bank lowered the amount of RWA it expects to have in 2027 to €186 billion ($200 billion), according to a presentation on Wednesday, from an expectation of €189 billion given in late September. The move, which confirms an earlier Bloomberg report, means the bank will need to hold less capital as a backstop, creating more room for investor payouts and investments.
Orlopp is seeking to prove that her standalone strategy for Commerzbank offers a better value for investors than a potential takeover by UniCredit SpA. The Italian bank has built a large stake in the German competitor and it’s considering an acquisition.
Orlopp, who was appointed CEO shortly after UniCredit first unveiled a major holding in September, has since increased profitability and payout targets. She has promised to provide more details at an investor day in February on how she wants to get there and beyond.
The comments on Wednesday show how a focus on mitigating RWA growth and getting more money out of existing RWA — a process known as improving RWA efficiency — will be a central plank in Orlopp’s future strategy.
“We will look into our RWA growth to see whether we can even reduce that further and increase RWA efficiency further,” Orlopp said Wednesday on a call with analysts, indicating that she wants to continue sharpening the plan while she prepares for the investor day early next year. “That is one of the key levers in the strategy we are currently analyzing and which we will present in February.”
Increasing the use of significant risk transfers will play a role in that plan, Orlopp said in a Bloomberg TV interview on Wednesday. The lender is currently marketing such a deal, Bloomberg reported on Tuesday.
Orlopp also said on the analyst call that there have been “certain model releases” which will help the lender curb RWA growth. Bloomberg previously reported that Commerzbank has received regulatory approval for its internal risk models, which is releasing capital.
(Adds Orlopp comments from analyst call in final paragraph.)
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