Germany's Commerzbank said today it had swung to a loss in the first quarter as the impact of the coronavirus pandemic drove up loan loss provisions and risked derailing its recovery. 

The German lender has endured a rough few months as it halted its 2019 dividend plans, back-tracked on the sale of its Polish lender mBank, faced credit rating downgrades, and lost a long-standing sponsorship deal for the local soccer team to larger rival Deutsche Bank. 

The 150-year-old bank, which is still partially owned by the state after a bailout during the last financial crisis, warned that its target for turning a profit in 2020 now seems "very ambitious".

Its chief executive Martin Zielke said the bank faces a difficult market environment for the foreseeable future and is focusing on additional cost cuts. 

"This crisis is a profound turning point," he told shareholders at its annual shareholder meeting. 

The bank reported a net loss of €295m in the first quarter, compared with a net profit of €122m last year. The quarterly numbers came in worse than a consensus forecast for a €240m loss.

It said that the impact of measures to control the coronavirus hit earnings by €479m in the quarter, and it expects charges for credit losses of between €1 billion and €1.4 billion this year. 

Provisions for credit losses in the quarter were €326m, compared with €78m a year ago. 

The ratings agency S&P said that it expects a "manageable increase" in loan loss provisions and non-performing assets during the course of the year. 

The bank said it was difficult to provide an outlook for the full year, but assuming a gradual recovery after a two-month lockdown in Germany, and no second lockdown, Commerzbank will keep revenue in its customer business "largely stable" this year. 

Commerzbank, the second-largest listed lender in Germany, is now looking for further cost cuts as it restructures after a failed attempt to merge with Deutsche.

It has hired consultants to identify possible cuts, which may include further trims to its branch network.