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Massive profit losses at Commerzbank
Photo: DPA

Massive profit losses at Commerzbank

Published: 04 Feb 2013 13:02 GMT+01:00
Updated: 04 Feb 2013 13:02 GMT+01:00

Commmerzbank, Germany's second-biggest bank, said on Monday its full-year net profit tumbled to just €6.0 million in 2012 after heavy write downs pushed it into the red in the fourth quarter.

The bank said in a statement it booked a full-year profit of €6.0 million for the whole of 2012, compared with €638 million a year earlier, after it ran up net loss of €720 million in the period from October-December alone.

"On the basis of preliminary, unaudited figures the Commerzbank expects a net loss of approximately €720 million for the fourth quarter of 2012," the statement said.

The fourth-quarter loss included charges of €185 million from the sale of Ukrainian subsidiary Bank Forum announced last July, as well as €560 million in one-off write downs on deferred tax accruals, it explained.

For the whole year, Commerzbank booked a total €980 million in one-off charges.

However, underlying earnings, as measured by operating profit, increased to €1.2 billion in 2012 from €507 million, the bank added.

Revenues before loan loss provisions were virtually unchanged at €9.9 billion, while administrative expenses were cut to €7.0 billion from €7.992 billion. Loan loss provisions rose to almost €1.7 billion in 2012 from €1.4 billion in 2011.

Commerzbank said it would publish detailed fourth-quarter and full-year 2012 earnings on February 15.

Investors appeared disappointed by the heavy loss and Commerzbank shares were the biggest losers on the Frankfurt stock exchange where they were showing a loss of 2.11 percent just after midday, while the overall DAX 30 blue-chip index was down 0.4 percent.

Last month, Commerzbank said it will axe 4,000-6,000 jobs – or more than one in 10 of its workforce – over the next three years as it tots up the toll from the financial and sovereign debt crisis.

In its statement on Monday, Commerzbank cautioned that restructuring charges of approximately €500 million were expected in the first quarter of 2013 in connection with these measures.

AFP/jcw

The Local (news@thelocal.de)

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Your comments about this article

17:25 February 4, 2013 by steel jaws
Once the Commerz Bank was one of the best in Germany, now its only one of the biggest. The trouble is, who can you trust at all these days? The GE Bank was also very good, then came a Spanish concern, bought it out, stopped paying interest and started charging for everything which had been free.

Nevertheless, its not just the Bank managers who, despite colossal remuneration, are proving to be so inadequate. The industry is little better. According to a local newspaper last Saturday, a large button manufacturer is going to sack off 55 employees, a result of bad management of course, but the managers are able to keep their positions with no loss of income. The production will be moved to Poland and China where the working conditions are not comparable with those here.

I wonder what the customers think, when they find out that German trade names are being used for buttons from China, or that the hard hit German textile industry is selling clothes made in Bangladesh.

These methods may result in high, short time profit, but people who are used to and want quality products, will almost certainly turn to France or Scotland when they realise what is going on. That will then cost even more workers their jobs!
18:56 February 4, 2013 by raandy
I would like to know how much of a write was for risky investments,

And banks do not need supervision , wrong.
20:22 February 4, 2013 by iseedaftpeople
Those poor banks... so heartbreaking. Always an unspeakable tragedy when banks are struggling like that.
06:11 February 5, 2013 by Beachrider
Profit losses? Who talks like that?
12:02 February 6, 2013 by LIMA
Ten or so years ago we would have heard "Oh that can`t happen in Germany"

yeah....ok...

That no longer applies.

The misguided opinion of some Germans that their country is somehow immune to the economic ups and downs is no longer true.
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