Commerzbank swung to a better than expected fourth-quarter and annual net profit despite undergoing a major overhaul, the German lender said today, and also painted a rosy outlook for 2022.

Profit this year would exceed €1 billion, Commerzbank said, beating analyst forecasts. It added that it would pay a dividend for the year.

The bank's results were partly helped by revenue at its CommerzVentures venture capital funds as well as commissions from its securities trading business.

The positive finish to the full year at Germany's second biggest bank is a massive victory for chief executive Manfred Knof.

He joined the company at the start of 2021 to carry out a restructuring programme worth €2 billion, involving hundreds of branch closures and 10,000 job cuts to get back on a path to profit.

"In the first year of the transformation, we have delivered on our promises. This increases our confidence that we will achieve our ambitious goals for 2024," Knof said.

Commerzbank said its net profit came in at €421m in the fourth quarter, compared to a loss of €2.7 billion reported the same time a year ago due to restructuring charges.

Analysts had on average expected a profit of €81m, according to a consensus forecast published by Commerzbank.

For the full year, the bank swung to a net profit of €430m compared to a loss of €2.9 billion a year ago.

A provision made at its Polish mBank subsidiary that was announced in January was a drag on the quarter.

Ahead of today's outlook revision, analysts had expected the bank to post a profit of around €900m this year, which would be its biggest profit since 2015, followed by even bigger winnings in 2023.