Commerzbank back in black in Q1

May 07, 2014 - 10:01:49 am

FRANKFURT: Commerzbank, Germany's second biggest bank, said Wednesday it returned to profit in the first quarter as it presses ahead with its restructuring programme in a difficult market environment.

In the period from January to March, Commerzbank posted net profit of 200 million euros ($278 million), compared with a loss of 98 million euros a year earlier.

"In the first quarter of 2014 Commerzbank increased the net profit over the previous year and made further progress with the reduction of non-strategic portfolios," it said in a statement.

In the wake of that restructuring and the reduction of non-core assets, underlying or operating profit tumbled 30 percent to 324 million euros and revenues were down 7.9 percent at 2.26 billion euros.

But chief executive Martin Blessing insisted that Commerzbank was "on the right track."

"We have, as announced, seen further growth at the core bank in terms of customers, the loan volume, and assets under management. In the strategic customer-centric business we have attained a robust result," Blessing said.

Looking ahead, chief financial officer Stephan Engels expressed confidence for the whole year.

"We will continue along our growth path in the core bank -- despite weak demand for loans, customer reticence, and the low interest-rate environment," Engels said.

Full-year loan loss provisions would be "lower than the total figure for 2013."

And Commerzbank was sticking to its target for its so-called Tier 1 equity ratio -- a measure of a bank's profit strength -- to "more than 10 percent by 2016."

The ratio stood at 9.0 percent in the first quarter of this year. (AFP)