"We continue to be committed to our original operating profit target of €4.0 billion ($5.5 billion) for the group, but on account of the market environment we will be unable to reach this target next year," said chief executive Martin Blessing in a statement.
Commerzbank had already warned back in August that its 2012 profit targets were "conditional upon stable markets," Blessing noted, saying the group was now simply projecting a "good operating result" for its core banking activities next year.
"In the non-core areas the result for 2012 will be dependent to a great degree on how the European sovereign debt crisis continues to develop," he added.
Turning to its third-quarter results, Commerzbank said additional writedowns on its holdings of Greek sovereign bonds had pushed it to a net loss of €687 million in the period from July to September.
That was much deeper than expected: analysts polled by Dow Jones Newswires had been pencilling in a net loss of €585 million. Commerzbank booked bottom-line profit of €24 million in the preceding quarter and net profit of €113 million in the third quarter of 2010.
The group attributed the bigger-than-expected loss in the third quarter of the current year to an additional writedown of €798 million on its Greek bond holdings.
Commerzbank is one of the German banks most heavily exposed to Greek debt.
"With a view to the ongoing uncertainty regarding Greece's financial solvency and with regard to the EU summit on October 26, the positions held by the bank were depreciated by 52 percent of their nominal value," a spokesman from the bank explained.
At a crunch summit last month, EU leaders agreed that banks and private investors take a 50 percent loss or "haircut", slicing €100 billion off the €350 billion debt mountain around Greece's neck.
Commerzbank also said it was examining all options so as to meet the additional capital requirements of the European Banking Authority (EBA).
In an immediate move to accelerate the reduction of risk-weighted assets, the group would temporarily suspend all new business at its troubled mortgage lender, Eurohypo; temporarily suspend all new loan business outside its core regions of Germany and Poland; speed up the sale of non-strategic assets; and examine the possibility of selling financial investments.
But those would not include its online unit, Comdirect, or its Polish subsidiary BRE Bank, "which are part of the core business," Commerzbank insisted.
Commerzbank was biggest loser on the Frankfurt stock exchange on Friday, with its shares shedding 4.6 percent to €1.67.