Loan losses hit Commerzbank
Commerzbank posted a worse-than-expected fourth-quarter operating loss, hit by a weak trading result and higher loan loss provisions but the lender gave a brighter outlook for 2010.
Germany's second largest bank, which is trying to reshape itself from an ill-timed takeover of struggling rival Dresdner Bank, said loan loss provisions would fall in 2010 and pledged significantly improved group results in 2010.
"We are not where we want to be yet, but we have reduced risks and made sustainable improvements to our capital base," chief executive Martin Blessing said in a statement today.
Commerzbank's €1.86 billion fourth quarter net loss missed the €1.36 billion loss expected on average in a Reuters poll of analysts.
Loan loss provisions for the quarter widened to €1.32 billion, from €638 million in the same period a year earlier due to its exposure to the weak German economy. Analysts had seen that figure at €1.35 billion.
The bank said its tier 1 capital ratio stood at 10.5 per cent at the end of the fourth quarter.
Commerzbank completed the acquisition of rival Dresdner Bank in January at the height of the fallout from the collapse of US investment bank Lehman Brothers, a takeover that will continue to weigh on earnings in 2010 the bank said.
Nonetheless, Commerzbank said its core bank will be profitable in 2010. The bank said it still aims to make an operating profit of more than €4 billion a year from 2012.