German bailed-out lender Commerzbank has posted a net loss of several million euros in the third quarter, hit by restructuring costs and the impact from low interest rates. The loss was, however, lower than expected.Between July and September, Germany’s second-largest lender ran up a net loss of 288 million euros ($320 million), surprising analysts who had expected a net loss of 509 million euros for the quarter.
Commerzbank, which was bailed out by the German state in the wake of the 2008/2009 financial crisis and is still partly state-owned, blamed the loss on “impairment on goodwill and other intangible assets” at a time when the company was amid a restructuring program that also included job cuts.
The lender has announced it will slash its payroll by 9,600 jobs out of 45,000 globally by 2020. Last year, it reported its first annual profit since the financial crisis and resumed paying a dividend. However, due to ultra-low interest rates, the bank said it would find it hard to remain profitable in 2016.
Nevertheless, Commerzbank Chief Executive Martin Zielke said in the earnings report that the bank had regained “a strong market position” in corporate banking and had seen “further growth” in retail banking. Moreover, its Polish subsidiary mBank was making a profit.
“These are good prerequisites for the implementation of our Commerzbank 4.0 strategy, which will enable us to sustainably increase our profitability. We are pursuing our growth targets ambitiously, consistently, and forcefully,” he said.
The bank highlighted that operating profits had risen to 429 million euros in the quarter, compared to 351 million euros for the second quarter of this year. However, this was still a fall from 452 million euros seen in the third quarter last year.
It also reported that its capital ratio – a measure of the bank’s health – increased to 11.8 percent in the last three months, rising from 11.5 percent in the second quarter.
uhe/hg (Reuters, dpa)