We are the bank at the side of our corporate clients
Interview with Roland Boekhout, the Board Member responsible for Corporate Clients at Commerzbank
In addition to posing significant public health concerns, the coronavirus crisis is causing considerable strain on businesses in Europe and globally – causing severe near-term liquidity challenges as well as longer-term uncertainties.
As one of Germany’s leading commercial banks for corporates, we at Commerzbank will support our clients throughout this difficult time. Insights speaks to Roland Boekhout, the Board Member responsible for Corporate Clients at Commerzbank, to outline the rapid financial support made available to German corporates, and the current position for international corporates amid the outbreak
Insights: What is your assessment of the liquidity position of Germany’s Mittelstand through the current crisis?
Roland Boekhout: In our view, Germany’s small and medium-sized enterprises (SMEs) have done well to strengthen their balance sheets in recent years. Nonetheless, the economic consequences that have followed the country’s lockdown measures have posed serious challenges. The situation came with little warning and its impact continues to vary from sector to sector. Some travel-related businesses, transportation and leisure companies for instance, have seen revenue streams stop abruptly, whereas some others, while experiencing reduced revenues, can largely continue to operate as before.
Insights: What financial support is available to Germany’s corporates during the coronavirus crisis?
Roland Boekhout: The state has been remarkably swift in providing strong support to corporates and freelancers. The German government immediately launched three enormous financial support programmes: the Stabilisation Fund for Large Corporates, the KfW Loan Programme for the Mittelstand, and the Direct Subsidy Programme for SMEs and Freelancers. A further loan programme for German SMEs and freelancers has since been launched – offering 100% state-funded, fast-track loans up to €800,000 with no risk assessment.
Insights: How is Commerzbank providing support?
Roland Boekhout: As one of the largest lenders to Germany’s corporates, we too are playing our part. Our current focus is on providing loans and support in bridging near-term liquidity shortfalls. In addition to the loans from the KfW programme, at Commerzbank, we have established a dedicated Commerzbank Mittelstand loan facility of €700 million to support corporates with corona-related financing demand. We are fulfilling our role as a German “hausbank” by administering and part-financing the packages available via the KfW-backed programmes: since March, we have granted a total of €1 billion of coronavirus-related financing to our corporate clients.
We have also made available several additional measures for our clients on a case-by-case basis. These include the extension of credit lines, the introduction of repayment holidays, near-term liquidity solutions serving as a bridge until KfW support has been cleared, as well as temporary suspensions of loan covenants.
Insights: How has the bank made the application process as accessible as possible?
Roland Boekhout: Throughout the current situation, we understand that timely advice and promptly delivered financial support are absolutely critical. So far we have received over 18,000 loan enquiries.
For these reasons, we significantly ramped up internal capacity in the days immediately following the announcement of Germany’s lockdown measures to ensure we were fully equipped to manage the incoming enquiries. We now have 100 specialists dedicated solely to processing KfW loans, and have given additional training to our team of around 700 corporate client advisors on the coronavirus-related state subsidies and other support available. Our experts already have ample expertise and experience of such programmes: as a leading German bank for the Mittelstand, we have, for many decades, cooperated with KfW and other development banks.
We have also – in the shortest timeframe possible – streamlined the online application process for customers seeking access to the KfW’s coronavirus-related programmes. Implementing these initiatives so rapidly required a Herculean effort across various teams: Corporate Clients, Risk Management, as well as back-office departments. It truly is “all hands on deck”.
Insights: How does the current crisis impact your commitment to corporate clients?
Roland Boekhout: As a leading financier of the Mittelstand as well as corporates across Europe and beyond, we are fully committed to our clients. Through previous spells of uncertainty, we have been the trusted partner at the side of our clients – wherever they need us. Things are no different today.
Of course, we remain prudent: not all the support we can offer is fully state-subsidised and remains subject to risk assessments. Nevertheless, many of our client relationships – both in Germany and internationally – span decades. Now, more than ever before, it’s time for us to go above and beyond and guide our clients as best we can through the current situation.
Commerzbank: At your side right now
It’s precisely in this critical situation that we can offer our expertise to our corporate clients: Take advantage of our global network, ask us for liquidity solutions and contact us if your supply chains come to a standstill. Your personal advisor can support you as your first point of contact.
In order to provide increased availability, we will make increased use of telephone, video and WebEx conferences to be there for you.
We have also taken the necessary precautionary measures to ensure that our worldwide business operations continue to run smoothly. We have distributed operationally critical teams to different locations in order to maintain the continuity of our services, even if COVID-19 continues to spread.
Facts and assessments of the development of the capital markets can be found on our research webpage.