• Germany's news in English

Commerzbank posts heavy Q2 loss

AFP · 6 Aug 2009, 14:09

Published: 06 Aug 2009 14:09 GMT+02:00

Facebook Twitter Google+ reddit

Commerzbank, the second-biggest German bank, joined a list of big banks which have unveiled weak results when it posted a net loss of €746 million ($1.08 billion). That compared to a profit of €200 million in the same period of 2008. The result was much worse than an average analyst forecast for a loss of €636 million compiled by Dow Jones Newswires.

"I cannot be satisfied" with the results, finance director Eric Strutz acknowledged during a telephone press conference. "But we are advancing by stages, we will become profitable once again," he stressed.

In the first quarter of the year, Commerzbank, in which the state owns a stake of 25 percent, had suffered an even bigger net loss of €861 million. But the third quarter had gotten off to a "good start," Strutz said.

Commerzbank chairman Martin Blessing said in a statement that "2009 will remain a challenging year but we are heading in the right direction."

The bank reported an operating loss of €201 million in the three-month period, better than its first-quarter loss of €591 million. The acquisition of Dresdner Bank weighed on the results, forcing Commerzbank to book another €216 million in charges from a projected total of around €2 billion.

Blessing said his bank was "running perfectly to schedule with the integration of Dresdner Bank." But Commerzbank more than doubled provisions against risks and losses to €993 million as it braced for loan defaults from recession-hit businesses.

It is also exposed to slumping real-estate markets in Britain, Spain and the United States, Strutz said. The bank depreciated the value of risky assets by €621 million, on top of €5.8 billion in write-downs since the beginning of 2008.

"Due to the ongoing difficult markets, a forecast for all of 2009 is still not possible," the statement said.

A positive development at Commerzbank was an increase in its Tier 1 ratio, an important indicator of financial health, to 11.3 percent.

To raise badly-needed cash, it sold stakes in the industrial gases group Linde, the airline Lufthansa and the conglomerate ThyssenKrupp, earning €328 million in the process, Strutz said.

Story continues below…

The bank planned to reimburse €18 billion in state aid by 2011 if financial markets stage a strong recovery, the statement added.

Blessing added that lending to German-based companies stood at a record €134 billion, amid a controversy over whether commercial banks are squeezing off business credit needed to pull Europe's biggest economy out of its worst recession since World War II.

Shares in Commerzbank had posted strong gains in early trading, but in midday deals they showed a loss of 1.86 percent to €5.80 on the Frankfurt stock exchange, while the DAX index on which they are listed was 0.65 percent higher overall.

Facebook Twitter Google+ reddit

Your comments about this article

Today's headlines
Creepy clown scare spreads to Germany
Two of the clowns were apparently equipped with chainsaws. Photo: Pedro Pardo / AFP file picture

Police said Friday five incidents involving so-called scary clowns had occurred in two north German town, including one assailant who hit a man with a baseball bat, amid fears that Halloween could spark a rash of similar attacks.

Student fined for spying on women via their webcams
Photo: DPA

Student from Munich fined €1,000 for spying on 32 different computers, using their webcams to take photographs, or record their keyboard history.

This is how much startup geeks earn in Germany
Photo: DPA

A comprehensive new survey of 143 startup founders shows how much you are likely to be earning at a German startup, from entry level all the way up to sitting on the board.

Man dies after beating for peeing near Freiburg church
The Johannes Church in Freiburg. Photo Jörgens Mi/Wikipedia

A middle-aged man from southern Germany has died after being attacked by a group of men who took umbrage with the fact he was urinating in the vicinity of a church.

The Local List
Seven German celebrities with uncanny doppelgängers
Former Berlin mayor Klaus Wowereit and actor Alec Baldwin. Photo: DPA; Gage Skidmore, Wikimedia Commons

Check out these seven look-a-likes of well known German figures - we admit that some are more tenuous than others...

Israel seeks to buy three new German submarines: report
A Dolphin class submarine. Photo: DPA

Israel is seeking to buy three more advanced submarines from Germany at a combined price of €1.2 billion, an Israeli newspaper reported Friday.

Here’s where people live the longest in Germany
Photo: DPA

Germans down south seem to know the secret to a long life.

More Germans identify as LGBT than in rest of Europe
Photo: DPA

The percentage of the German population which identifies as lesbian, gay, bisexual or transgender is higher than anywhere else in Europe, according to a new study.

'Reichsbürger' pair attack police in Saxony-Anhalt
File photo: DPA.

A "Reichsbürger" and his wife attacked police officers on Thursday, just a day after another Reichsbürger fatally shot an officer in Bavaria.

Five things not to miss at the Frankfurt Book Fair
Photo: DPA

From consulting a book doctor to immersing yourself in an author's world with the help of virtual reality, here are five things not to miss at this week's Frankfurt Book Fair, the world's largest publishing event.

Sponsored Article
How to vote absentee from abroad in the US elections
10 things you never knew about socialist East Germany
Sponsored Article
Last chance to vote absentee in the US elections
How Germans fell in love with America's favourite squash
How I ditched London for Berlin and became a published author
Sponsored Article
How to vote absentee from abroad in the US elections
12 clever German idioms that'll make you sound like a pro
23 fascinating facts you never knew about Berlin
9 unmissable events to check out in Germany this October
10 things you never knew about German reunification
10 things you're sure to notice after an Oktoberfest visit
Germany's 10 most Instagram-able places
15 pics that prove Germany is absolutely enchanting in autumn
10 German films you have to watch before you die
6 things about Munich that’ll stay with you forever
10 pieces of German slang you'll never learn in class
Ouch! Naked swimmer hospitalized after angler hooks his penis
Six reasons why Berlin is now known as 'the failed city'
15 tell-tale signs you’ll never quite master German
7 American habits that make Germans very, very uncomfortable
Story of a fugitive cow who outwitted police for weeks before capture
Eleven famous Germans with surnames that'll make your sides split
The best ways to get a visa as an American in Germany
jobs available
Toytown Germany
Germany's English-speaking crowd