Tags: EU | Germany | Earns | Commerzbank

Commerzbank Loss Widens to $2.6 Billion

Tuesday, 23 Feb 2010 07:35 AM

Germany's Commerzbank AG said Tuesday its fourth-quarter loss widened to 1.9 billion euros ($2.6 billion) due to write-downs related to bond insurer investments and provisions for bad loans.

The loss for the final three months of 2009 compared with an 809 million euro loss the year before.

Commerzbank, the country's second biggest lender after Deutsche Bank AG, took part in the German government's financial-sector bailout program and is around 25 percent owned by the government.

For the year, the bank reported an annual loss of  4.5 billion euros, which was less than the 6.5 billion euros it lost in 2008.

The figure was hampered by loan loss provisions, which reached 1.3 billion euros in the quarter compared with 638 million euros a year earlier, amid a weaker German economy.

The bank's net interest income, one measure of revenue, was nearly 1.9 billion euros in the final three months of the year compared with 2.2 billion euros a year earlier. For the year it was 7.18 billion euros, down slightly from 7.2 billion euros in 2008.

The bank, based in Frankfurt, cited write-downs related to bond insurers for the decline, along with a 561 million euro loss in fourth-quarter trading profit.

Chief Executive Martin Blessing said the net loss for 2009 reflected the "ongoing economic and financial market crisis" and added that the crisis was not yet over.

He said the costs of integrating Dresdner Bank AG, which it acquired last year, had weighed on the annual result in the amount of some 1.9 billion euros.

"We are not where we want to be yet, but we have reduced risks and made sustainable improvements to our capital base," Blessing said, adding that this year would see improvement in its customer-focused business.

"The bottom line of the whole group will only be in the black if the development of the economy and the financial markets will be very positive in 2010," he said.

Looking ahead, chief financial officer Eric Strutz said the bank wants to achieve gross revenue of euro13.8 billion a year and position itself when "international trade and capital markets pick up in the course of the year"

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Germany's Commerzbank AG said Tuesday its fourth-quarter loss widened to 1.9 billion euros ($2.6 billion) due to write-downs related to bond insurer investments and provisions for bad loans.The loss for the final three months of 2009 compared with an 809 million euro loss...
EU,Germany,Earns,Commerzbank
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2010-35-23
 

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