Commerzbank net loss of 687mn euros in third quarter
Germany's second-biggest bank Commerzbank on Friday announced a larger-than-expected net loss of 687 million euros ($949 million) in the third quarter, as it took a 798 million euro hit on its holdings of Greek government debt.
The bank, one of the German banks most heavily exposed to Greek debt, also said it was abandoning its ambitious 2012 target of an overall operating profit of more than $4 billion dollars.
"Given the state of the market, we will not be able to reach it the next year," chief executive officer Martin Blessing said in a statement.
The net loss in the third quarter compared with a net profit of 113 million euros in the year earlier period.
The bank said it had revalued its holdings of Greek debt, resulting in a depreciation of 798 million euros, an action that it had taken earlier in the year along with other German banks and insurance companies as well.
Because of its heavy exposure to Greek debt Commerzbank will have to take heavy writedowns as part of the "haircut" agreed by the EU as part of a Greek debt reduction deal.
© 2011 AFP