German Commerzbank forecasts 2010 profit
Commerzbank said on Thursday it could post a full-year profit after recording second-quarter results which were well above market expectations.
"On the basis of the pleasing development in results in the first six months, we now assume that in a stable market environment we will conclude 2010 as a whole with a profit," a statement quoted chairman Martin Blessing as saying.
The partially state-owned bank, the second-biggest bank in Germany, had previously forecast a return to profit by 2011 at the latest.
In the second quarter of this year, Commerzbank reported a net profit of 352 million euros (460 million dollars), compared with a loss of 761 million in the same period a year earlier.
Analysts polled by Dow Jones Newswires had forecast a much smaller net profit of 121 million euros.
For the first half of the year, Commerzbank posted a net profit of nearly 1.1 billion euros, as it decreased loan loss provisions in the second quarter to 639 million euros from 993 million in the same period a year earlier.
The bank also benefited from a positive tax effect worth 151 million euros in the second quarter.
Commerzbank made a second-quarter operating profit of 243 million euros, against a loss of 223 million in 2009, and analysts at the regional bank LBBW said a full-year net profit was realistic in their view.
Shares in the bank gained 0.58 percent to 7.24 euros in midday trading on the Frankfurt stock exchange, while the DAX index of German blue-chips was 0.34 percent higher overall.
Blessing stressed that reducing risks had become a top priority.
"Stability is more important to us than maximizing short-term earnings," he said.
Risk provisions for the entire year were expected to soar therefore to around three billion euros, which would nonetheless be less than the previous forecast of 3.8 billion and much less than the 2009 figure of 4.2 billion.
"A steep road still lies ahead and we are still a fair way from normalcy," Blessing acknowledged.
Commerzbank has struggled to integrate the loss-making Dresdner Bank and carried out an emergency recapitalisation in January 2009 with 18.2 billion euros in German government aid.
The state currently holds a stake of 25 percent in the bank.
© 2010 AFP