Commerzbank's third-quarter net profit tripled to €225m as earnings in its retail and corporate banking units rose and costs for bad loans fell, in a sign that the bank's turnaround plan was gaining traction.
Germany's second-biggest lender beat analysts' expectations, which had estimated a net profit of €192m.
Many analysts had expected the bank to fail a European bank stress test carried out by the ECB.
It said today its capital ratio calculated in the most stringent form of new bank rules reached 9.6% at the end of September, comfortably exceeding the 7% minimum required by 2019.
Commerzbank's Mittelstandsbank unit, which caters to Germany's raft of medium-sized companies, saw operating quarterly earnings rise by 4% as a sharp drop in loan loss provisions compensated for weak demand.
Its retail banking unit, which has been a focus of the group's restructuring efforts, saw operating profit triple.
In investment banking, trading revenues improved and operating earnings almost doubled, benefiting from high volatility in interest rates and currency markets which drove client demand.
"Even though the remaining weeks of this year will remain challenging due to the ongoing difficult operating environment for financial institutions, we are maintaining our forecast that we will achieve a significantly improved consolidated profit for the whole year 2014," chief executive Martin Blessing said.
The bank's troubled asset portfolio, which it put into a "bad bank" for restructuring purposes, shrank by 4% to €88 billion in a sign that the lender's revamp is on track.
The unit contains investments stemming from an expansion drive that backfired, requiring the German government spending around €18 billion on a bailout of the bank in the financial crisis.