Commerzbank open to merger talks
18 February 2004 , FRANKFURT - Commerzbank reported Wednesday that it lost EUR 2.32 billion in 2003 with bank chief Klaus-Peter Mueller saying the Frankfurt-based institution was open to merger talks.
18 February 2004
FRANKFURT - Commerzbank reported Wednesday that it lost EUR 2.32 billion in 2003 with bank chief Klaus-Peter Mueller saying the Frankfurt-based institution was open to merger talks.
In the end the 2003 result was slightly higher than what banking industry analysts had been forecasting, but the bank now is back on the road to profitability.
"After 2003 was a year of consolidation for us, 2004 will be a year of upswing with controlled expansion," said Mueller.
Remarking on persistent speculation about Commerzbank being a target for takeover or merger, he said the bank continues to plan to operate independently, while remaining "open" to outside interests.
"However, entirely in the interest of our shareholders, customers and staff, we remain open to any reasonable solution involving others, whether at the national or international level," Mueller said. "But we are not now conducting any negotiations."
He said that as an example of its expansion aims, Commerzbank was now holding promising talks on the acquisition of the branch business of the private bank SchmidtBank.
Commerzbank's final red-ink figure came after Germany's third- largest bank lost EUR 88 million in the fourth quarter, contrary to expectations that the bank had returned to the black in the period.
The fourth-quarter loss was a major improvement on the EUR 243 million losses in the final period of 2002.
Commerzbank also pointed out that its operating profits, at EUR 559 million in 2003, were nearly triple the EUR 192 million figure the year before, resulting from sharp reductions in administrative costs. The final-quarter operating result was EUR 92 million.
The bank had previously projected a big loss for 2003, coming after a net loss of EUR 232 million the year before, when it undertook an extensive revaluation of its investments and securities portfolio in September.
Restructuring expenses also contributed to the 2003 losses, in addition to a tax charge of EUR 249 million, Commerzbank said.
Mueller said that Commerzbank had done its "homework diligently and successfully" last year, cutting costs more strongly and rapidly than planned. The bank had already achieved its cost target for 2004.
The bank held its core capital ratio steady at 7.3 percent while also lowering its risk provisions on problematic loans by 18 percent to EUR 1.08 billion. Administrative costs were cut 12 percent to just over EUR 4.5 billion, while payrolls were reduced by nearly 4,200 employees to 32,377 at the end of 2003.
"These figures show that Commerzbank has successfully performed its radical restructuring, is well-positioned in its core areas and will be perceived as an attractive bank again by the public, analysts and rating agencies," Mueller said.
Altogether, the costs of restructuring last year reached EUR 2.43 billion. Group pre-tax results showed a loss of EUR 1.98 billion, while higher tax charges produced the net loss of EUR 2.32 billion.
Subject: German news