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Massive profit losses at Commerzbank

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Massive profit losses at Commerzbank
Photo: DPA
13:02 CET+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

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