bitter medicine pushes commerzbank into loss
Last Updated : GMT 05:21:58
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Last Updated : GMT 05:21:58
Arab Today, arab today

Bitter medicine pushes Commerzbank into loss

Arab Today, arab today

Arab Today, arab today Bitter medicine pushes Commerzbank into loss

Commerzbank expects to make a net profit
Frankfurt - AFP

Commerzbank said Friday it suffered a 288-million-euro ($320-million) net loss in the third quarter due to a massive restructuring that will see Germany's second-largest lender shed nearly a fifth of its workforce.

The Frankfurt-based group had warned it would flip into loss when announcing in September the 1.1-billion-euro restructuring that will see Commerzbank curtail its investment bank and shift its focus back to retail banking for consumers and businesses.

Operating profits slid 5.0 percent year on year to 429 million euros in the third quarter, but this was more than eaten up by restructuring costs.

It booked 627 million euros in writedowns of goodwill linked to the trimming-back of its investment bank's trading activities. 

The bank earned a net profit of 235 million during the July through September period last year.

Meanwhile, the bank said it had increased its capital ratio -- a key measure of solvency in the sector -- to 11.8 percent, compared with 11.5 percent at the end of June.

Commerzbank said it expects to make a net profit over the whole year despite the heavy restructuring costs.

It had initially forecast a slightly higher annual net profit this year than in 2015, but cut back that forecast in August as low interest rates sapped its margins and geopolitical uncertainty grew.

The bank also announced it would suspend dividends to shareholders when it announced the restructuring in late September.

In 2015, the bank paid out a dividend for the first time since the 2008 financial crisis of 20 cents per share, in a symbolic exit from the crisis period.

Like its rivals, Commerzbank is suffering from low interest rates and tougher banking regulations. It also faces intense competition at home in Germany and new digital actors arriving on the scene.

Commerzbank's shares slid 0.9 percent in morning trading to 6.01 euros, while Frankfurt's DAX 30 index was down 0.7 percent. 

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bitter medicine pushes commerzbank into loss bitter medicine pushes commerzbank into loss

 



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bitter medicine pushes commerzbank into loss bitter medicine pushes commerzbank into loss

 



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