• Germany's news in English

Commerzbank profit hit by Greek holdings

The Local · 10 Aug 2011, 11:38

Published: 10 Aug 2011 11:38 GMT+02:00

Facebook Twitter Google+ reddit

In the second quarter, Commerzbank said its net profit slumped 93 percent to €24 million from €352 million in the year earlier period as it took a €760 million hit on its holdings of Greek government debt.

For the rest of 2011, the bank's results will depend on "the implementation of the package of measures to tackle the European sovereign debt crisis and the absence of any further escalation of the current situation," a statement said.

An ambitious 2012 target of an overall operating profit of more than $4 billion has not been abandoned but appears much less likely now.

It is "still conditional upon stable markets, which we are presently only seeing to a restricted extent owing to the sovereign debt crisis," it said.

"A return to more stable markets is dependent on how the current crisis develops," it added.

The bank said that on the positive side, its second quarter provisions for risky loans fell to €278 million from €639 million a year earlier.

Its core tier one capital ratio, a measure of its ability to weather exceptional shocks, stood "at a comfortable 9.9 percent" of assets as of June 30, the statement said.

The partly state-owned bank said it expects a 2011 operating profit "well above the figure achieved in 2010" on its core operations -- private customer services, lending to small- and medium-sized enterprises, activities in central and eastern Europe, and corporate banking and market operations.

But an internal 'bad bank' where Commerzbank has quarantined risky assets, and structured finance operations that transfer risks on such things as the securitisation of mortgage loans, are not taken into account in the forecast.

With core earnings of €2.1 billion for the first half, Commerzbank has already surpassed the 2010 figure of almost €2 billion.

In May, Commerzbank forecasted a 2011 operating profit significantly more than the previous year's level, which was €1.4 billion, and for the first half it chalked up €1.2 billion.

Story continues below…

However, most of that came in the first quarter, with operating profit slumping to just €55 million in the three months leading up to June.

In morning trade on the Frankfurt stock exchange, Commerzbank shares gained 1.12 percent while the DAX index on which they are listed was up 1.30 percent overall.


The Local (news@thelocal.de)

Facebook Twitter Google+ reddit

Your comments about this article

00:37 August 11, 2011 by catjones
....... a few more shoes to drop from commerz and DB....will feel like bombs on Wall Street and world-wide fallout. aka the disappearing portfolio.
14:42 August 11, 2011 by ChussKeDweele

And just this week I sent the paperwork to open a .comdirect account.
Today's headlines
Munich to get 'nice toilets' to serve cross-legged locals
Photo: DPA

The Bavarian capital has a pee problem - the city only has one public toilet for every 13,000 inhabitants. But a new plan could rescue desperate locals, the Süddeutsche Zeitung reports.

German kids get glowing report for their English skills
Photo: DPA.

As if multilingual Germans don't already put many English-speakers to shame, now the younger generation is improving their English skills even more.

Berlin museum controversially recreates Hitler bunker
The reconstruction of the Hitler bunker. Photo: DPA

Sensationalized or compelling history? Berlin museums clash over new Nazi bunker exhibit

Germans think they're fit, but they're really couch potatoes
Photo: DPA.

There's been an increase in the number of Germans who define themselves as "fit", but their lifestyle choices don't quite match this self-perception.

10 fascinating facts you never knew about German beer
Tennis coach Boris Becker and his wife Lilly at Oktoberfest 2016 in Munich. Photo: DPA

From malt and monks to Radlers and rivalries, the story of German beer is as rich and wonderful as its selection.

Intensive farming 'endangers a third of German species'
Photo: DPA

There are 32,000 species of animal, plant and mushroom life native to Germany. Due to intensive farming methods, one in every three of these is endangered, a new report shows.

German hospital uses therapy to 'treat' paedophiles
A poster from the campaigne "Don't offend", which offers therapy to paedophiles. The sign reads "Do you love kids more than you'd prefer? There's help." Photo: DB Scholz & Friends / DPA.

A unique German initiative is offering therapy to paedophiles to control their urges, with the aim of getting them help before they offend.

Minister: 'no tolerance' for clowns after chainsaw attack
Photo: DPA

Interior Minister Thomas de Maizière has called for a zero-tolerance approach to 'killer clowns' after a series of attacks culminating in two teenagers being chased by a clown wielding a chainsaw.

Baby who was auctioned on eBay taken away from father
Photo: DPA.

A German court ruled on Thursday that a man who put his one-month-old baby up for sale on the online auction platform eBay should only be allowed contact with the child under supervision.

Portugal's ruling party calls German minister 'pyromaniac'
Finance Minister Wolfgang Schäuble. Photo: DPA.

The head of Portugal's ruling Socialists called German Finance Minister Wolfgang Schäuble a "pyromaniac" on Thursday after he criticized Lisbon for reversing course on austerity.

10 German clichés that foreigners get very wrong
Sponsored Article
Last chance to vote absentee in the US elections
10 ways German completely messes up your English
Germany's 10 most weird and wonderful landmarks
10 things you never knew about socialist East Germany
How Germans fell in love with America's favourite squash
How I ditched London for Berlin and became a published author
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
jobs available
Toytown Germany
Germany's English-speaking crowd