Commerzbank sees first quarter profits halved on crisis
The bank's profits have plummeted during the first quarter due mainly to the international financial crisis .
Frankfurt -- Commerzbank, Germany's second-largest bank, announced on Wednesday its profits had halved in the first quarter, largely as a result of the international financial crisis, and predicted that reaching its targets for this year would be "difficult."
Chairman Klaus-Peter Mueller nevertheless described the operating profit of 435 million euros (673 million dollars) as "a respectable result in an extremely challenging market phase."
The "unusual market situation" meant there could be no definite target for 2008 as a whole, Mueller said.
"From today's perspective, it could be very difficult to reach the good result of the previous year."
The bank was compelled to make write downs totalling 244 million euros, 179 million in investment income and 65 million in trading profit, over the first quarter.
Apart from the effects of the financial crisis triggered by the collapse in US sub-prime mortgages in August last year, the bank also bore further expenses due to the restructuring of the Essen-based Hypothekenbank.
Commerzbank last year wrote off 583 million euros of its sub-prime portfolio of originally 1.2 billion euros.
Operating profit of 435 million euros was down 52 percent from the same quarter last year, while net profit came in at 280 million euros, down from 609 million.
Mueller said, however, that the bank's balanced business model and conservative investment policy had allowed it to weather the financial crisis well.