Commerzbank, Germany's second biggest bank, today posted a sharp second-quarter net loss of €746m, in large part owing to the integration of Dresdner Bank.
The result compared with a profit of €200m the same time last year, and was markedly worse than the forecast loss of €636m. In the first quarter of the year, Commerzbank, in which the state owns a stake of 25%, had suffered a net loss of €861m.
By reducing its losses in the second quarter, Commerzbank chairman Martin Blessing said, 'We are heading in the right direction'.
The bank also reported an operating loss of €201m in the three-month period from April to June, which was still an improvement from the loss of €591m posted in the first quarter of the year.
The integration of Dresdner Bank weighed heavily on the second quarter results, a statement said, with provisions against risks and losses more than doubling to €993m.
Commerzbank did not give a forecast for the full year, but said guarantees of €5 billion granted by the German financial markets stability fund SoFFin would be returned ahead of time.
The improvement in the bank's operating result was the result of lower charges on structured credit products which have been the cause of heavy losses at banks since the financial crisis erupted in mid 2007.
'We are also running perfectly to schedule with the integration of Dresdner Bank,' Blessing said.
He added that lending to German-based companies stood at a record €134 billion, amid a controversy over whether commercial banks are squeezing off business credit needed to pull the biggest European economy out of its worst recession since World War II.
