German Commerzbank swings to profit in second quarter

5th August 2010, Comments 0 comments

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

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