Germany's Commerzbank has today reported an expected dip in second-quarter net profit as net interest income fell and announced plans for a €600m stock buyback.
Commerzbank's net profit of €538m compared with a profit of €565m a year earlier.
Analysts, on average, had expected a profit of €539m, according to a July consensus forecast published by the German lender.
Share prices fell more than 5% in morning trade. Global stock markets have been volatile in recent sessions amid concerns that the US economy could fall into recession.
The profit drop of 4.8% from a year earlier came as net interest income fell and as the bank booked expenses related to a long-standing issue with mortgage loans at its Polish unit and litigation in Russia.
The bank nevertheless confirmed its forecast for a full-year profit of more than €2.2 billion, and analysts at Deutsche Bank and JPMorgan called the results "solid".
Commerzbank, one of Germany's best-known banks and partially held by the government after a bailout more than a decade ago, spent much of the past years in a major overhaul, slashing its workforce and branch network to restore profits.
The bank said it had sought approval with its regulators for a first tranche of a share buyback programme, and said it plans to apply for a second tranche with its third-quarter results later this year.
"The first half of the year was our best in 15 years," CEO Manfred Knof said.
