No rate hikes or cuts — Commerzbank CFO says the European Central Bank has likely hit pause

The European Central Bank has apt pressed intermission connected its complaint hiking cycle, the main fiscal serviceman of Commerzbank told CNBC connected Friday.

The ECB raised involvement rates successful July, completing a afloat twelvemonth of complaint increases. ECB President Christine Lagarde flagged that the cardinal slope could proceed oregon intermission complaint hikes astatine its adjacent gathering successful September, but decidedly volition not cut. The ECB's main complaint presently stands astatine 3.75%.

Commerzbank CFO Bettina Orlopp told CNBC that the ECB is improbable to rise rates successful September — going against the atom of respective analysts who expect a last complaint hike adjacent month.

"It is not our presumption we volition spot [a] complaint cut, we bash not presume determination volition beryllium complaint increases [too]," Orlopp said erstwhile asked astir the outlook for 2024. "We volition instrumentality to the 3.75% that we presently have."

Commerzbank is the 2nd largest lender successful Germany by marketplace capitalization, and its show is intimately linked to the involvement complaint environment.

Second-quarter results retired Friday showed a 20% leap successful the bank's nett profit, compared with the erstwhile year. Revenue besides came successful higher than analysts had anticipated, reaching 2.6 cardinal euros ($2.84 billion). The coagulated results led the German lender to summation its expectations for nett involvement income successful 2023 to "at slightest 7.8 cardinal euros," from a erstwhile guidance of 7 cardinal euros.

Orlopp added that: "If determination were to beryllium different involvement complaint hike similar successful the fall, that would beryllium again an upside imaginable for us."

A batch of uncertainty remains astir which absorption the ECB volition instrumentality successful September, with the cardinal slope arguing its determination volition beryllium connected data.

"We are precise adjacent to the highest successful rates and I deliberation the highest is going to travel successful the adjacent mates of months," Akshay Singal, EMEA caput of short-term involvement complaint trading astatine Citi, told CNBC's Street Signs connected Friday.

"[The] September gathering volition beryllium the past hike for each of them, if they bash [increase rates]," helium added, referencing the ECB, Bank of England and Federal Reserve.