Commerzbank AG (PINK:CRZBY) (ETR:CBK) (FRA:CBK) posted a loss for the second straight quarter. The net loss for the bank came in at 94 million euros versus the profit of 355 million euros a year earlier. The loss, however, beat the analyst estimates of 153.7 million-euro owing to a decent performance by the lender’s corporates and markets unit.
Clients unit posted an operating profit of 325 million euros, which was down 33 percent, on account of weak revenues and higher loan-loss provisions. The earnings from the private sector unit were down 49 percent to 70 million euros, again owing to lower revenues and increased provisioning. Operating profit at corporate and markets division was up nine times to 271 million euros owing to a better macro environment.
The German Bank that got 18.2 billion euros ($23.8 billion) in state aid, is slashing jobs across the organization and requesting the shareholders to contribute to a 2.5 billion-euro capital increase, which will be utilized to pay off the German government and insurer Allianz SE (ADR) (OTCMKTS:AZSEY) (FRA:ALV) (ETR:ALV). The German bank apart from slashing 6,000 jobs by 2016, plans to close unprofitable shipping and real estate units.
Chief Executive Officer Martin Blessing told that the restructuring results will be evident from 2014 as currently the bank has issues concerning revenue pressure, higher provisions and costs. The bank is yet to pay a dividend since the financial crisis.
Nomura’s Report For Commerzbank AG:
As per a report from Nomura, the revenue environment for the coming few quarters won’t be easy for the Commerzbank AG (PINK:CRZBY) (ETR:CBK) (FRA:CBK), given the low rates scenario. The report believes the full year consensus revenues of EUR 9,882 million to be slightly on the higher side, as Q1 has been generally been the strongest quarter for revenues and annualizing it the figure comes at EUR 9,840 million.
On Net Interest Income, a report says “Restatements and product mix will increase the volatility in net interest income, with expenses potentially appearing as NII in some instances and income in trading.”
Overall costs reported by the bank were ahead of consensus, and reports expects some addition in costs due to investments in strategic repositioning. Therefore for 2013, reports expects the cost to come in around EUR 7,196 million versus consensus of EUR 7,165 million.
The Frankfurt based bank was up 1 percent in the morning trading session, in Frankfurt. This year, the stock is down 24 percent against the 8.4 percent gain in the 40-member Bloomberg Europe Banks and Financial Services Index.
Since 2008, the bank has increased its capital five times that have reduced the share price by more than 93 percent. It has been the worst performing financial company in Europe outside of Ireland and Greece.