Commerzbank writedowns hit net profits
Thursday, 5 November 2009 11:11The second biggest German bank, Commerzbank, said today that its operating profit climbed in the third quarter of 2009 but confirmed a heavy net loss owing to restructuring costs and writedowns.
Operating profit reached €120m in the three month period, compared with a loss of €1.45 billion the same time a year earlier, a Commerzbank statement said.
But the bank, which was part nationalised because of the global financial crisis with the German state taking a 25% stake plus one share, posted a net loss of €1.055 billion.
That was mainly the result of €650m in writedowns on the value of bank assets and an estimated €904m in planned charges for the integration of Dresdner Bank, the statement said. Commerzbank bought Dresdner Bank from the insurance group Allianz for €4.7 billion.
Looking ahead, bank chairman Martin Blessing said that the bank's German core business is profitable, but Commerzbank will close 2009 with a loss.
The bank raised its provisions against loan defaults slightly to €1.053 billion from €993m at the end of the second quarter.
After the financial crisis sent the global banking system close to collapse last year, the German government propped up Frankfurt-based Commerzbank with €18 billion in fresh capital.
It had to agree to shrink its €1.1 trillion balance sheet by about 45% through asset sales, however, in order to win approval for the state aid from European Union regulators in Brussels.
In 2008, Commerzbank posted a record loss of €6.6 billion.
