German Commerzbank swings to profit in second quarter
The second biggest German bank, Commerzbank, said Thursday that it swung back into profit in the second quarter of the year and predicted it would end 2010 with a profit as well.
The bank made a net profit of 352 million euros (460 million dollars), compared with a loss of 761 million in the same period a year earlier, owing in part to lower provisions against losses on risky loans, a statement said.
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.
"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," chairman Martin Blessing was quoted as saying.
Commerzbank made a second-quarter operating profit of 243 million euros, against a loss of 223 million in 2009, and Blessing stressed that reducing risks had become a top priority.
"Stability is more important to us than maximizing short-term earnings," he said.
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 that left the state with a stake of 25 percent.
Repaying that debt, which will allow the bank to regain its independence, is another top priority.
© 2010 AFP