‘No reason to panic’: Commerzbank CEO says lenders are better prepared to deal with loan defaults

The main enforcement of 1 of Germany's biggest banks, Commerzbank, sought to reassure investors Thursday astir the imaginable of non-performing loans this winter, saying banks are acold amended placed to header compared to erstwhile crises.

"The German system is facing a hard clip up of america owed to the Ukraine conflict, China, proviso concatenation problems and the vigor crisis," Commerzbank CEO Manfred Knof told CNBC's Annette Weisbach astatine a Handelsblatt league successful Frankfurt, Germany.

"Probably the German system is going into a downward [trajectory] and possibly into a recession but the bully quality is determination nary crushed to panic."

Asked whether helium expected non-performing loans to emergence substantially implicit the people of the winter, Knof replied: "If a recession volition beryllium determination past it is apt we volition spot something, but the concern is importantly amended than successful the past."

"Banks person done their homework, we are each capable, we person capable buffer to assistance our customers during this situation and this is truly what counts," Knof said. "Therefore, we are acrophobic but we are not disquieted and determination is nary crushed to panic."

Fears of a recession person been exacerbated amid the anticipation of a wintertime state shortage successful Europe. Lawmakers crossed the portion are scrambling to capable underground retention facilities with state supplies successful bid to person capable substance to support homes lukewarm during the colder months.

Russia — traditionally Europe's largest vigor supplier — completely halted state flows via the Nord Stream 1 pipeline earlier this month. The pipeline is Europe's large proviso way and connects Russia to Germany via the Baltic Sea. State-owned vigor elephantine Gazprom cited method issues for the halt to supplies, portion the Kremlin has since said it volition not crook the taps backmost connected until punitive sanctions are lifted.

Earlier connected Thursday, German Finance Minister Christian Lindner sought to downplay speculation astir the government's more-than-15% involvement successful Commerzbank.

Speaking astatine the Handelsblatt conference, Linder said Olaf Scholz's medication was "very satisfied with the improvement of Commerzbank," Reuters reported.

Last month, Germany's second-largest lender reported a nett second-quarter nonaccomplishment owed to restricting costs and an exceptional write-off to an outsourcing project.

Shares of Commerzbank roseate 1.7% connected Thursday morning. The Frankfurt-listed banal terms is up astir 4% year-to-date.

— CNBC's Silvia Amaro contributed to this report.