YWR: Killer Charts
Disclosure: Personal Views Only. Not investment recommendations.
Today we will get away from the usual macro charts everyone focuses on and check out slides from the Commerzbank and Mercedes Benz 2022 results presentations.
First, let’s focus on what isn’t happening. Despite the doom and gloom about how Germany was going to go into a deep recession this year and loan losses would spike, so far it hasn’t happened. Fingers crossed, knock on wood, etc, but the YWR view is loan growth was been non-existent and so there isn’t a loan bubble to pop.
Across the most cyclical industries the NPL ratio (Commerzbank uses the acronym NPE) is between 0.1 and 0.2%, ie super low.
At Mercedes their car financing business is also benefitting from low credit losses. Lowest ever. Note this is a global number.
One is a bank and one is a car company, but they are both German, so there were also ESG initiatives in the results. Commerzbank is growing a renewables loan book (wind and PV) while Mercedes is promising to go all electric by 2030. Note how Commerzbank grew their renewables book 74% in 3 years. No projects in Africa yet. Just one in Chile.