Germany's Commerzbank posted a near six fold increase in second-quarter earnings.
But it warned that profits would fall in the second half of the year because of a rough economy and the European debt crisis.
The bank said today that earnings for the period bounced back to €300m from only €53m a year ago when the bank took deep losses on Greek bonds.
Other key numbers fell, however, income from trading and commissions declined, while bad loans rose.
The company said the difficult economy meant profit for the second half would come up short of the first half's.
Germany, Europe's biggest economy, is coming off the boil and some economists are even predicting that it may fall back into recession, officially defined as two quarters of falling output in a row.
Commerzbank said it expected lower income from commissions due to subdued investment and customer activity, along with weaker loan demand and continuing low interest returns due to rock bottom rates.
The result would be "profit that clearly lags behind the performance in the first six months of the year."
Despite its warning, the bank said it was in good shape to meet the challenging market conditions, as it continues to shed risky investments and boost its financial reserves to meet new regulatory requirements.
Commerzbank said it cut its investments and loans, adjusted for risk, by €13 billion to €210 billion and that it had exceeded requirements from European Union regulators by €2.8 billion.
Overall, the bank said it is well-positioned to meet new capital buffer requirements under the international Basel III agreement.
European banks have seen earnings sag alongside the wider economic slowdown, the European government debt crisis and new regulatory requirements. The EU and Basel III requirements have meant shedding potentially profitable but risky investments, loans and lines of businesses.
Meanwhile, the debt crisis and the related market turmoil have meant fewer companies taking out new loans or using banks to help them issue new shares and bonds.
Commerzbank said bad loans rose 45% to €404m during the second quarter, while income from trading securities was off 13% at €574 billion. Net interest income sagged 25% to €1.33 billion.
Its net profit improved because the bank took €760m in losses on Greek government bonds a year ago. Greek bonds fell because of that country's debt crisis.