Commerzbank back in profit, reassures on Greek debt

6th May 2010, Comments 0 comments

Germany's Commerzbank, hard hit by the financial crisis, announced on Thursday a return to quarterly profit and sought to reassure investors about its exposure to Greek debt.

Germany's second biggest bank said it held 3.1 billion euros (four billion dollars) in Greek bonds and would not increase its exposure to Greek debt, which has been at the forefront of investor fears in recent days.

"I do not foresee any cost from our exposure to Greece in the second quarter," Commerzbank finance firector Eric Strutz told a press conference.

Commerzbank said its first quarter net profit stood at 708 million euros (905 million euros), against a loss of 864 million euros for the same period last year, the company said.

It was the bank's first quarterly net profit in 20 months and it exceeded a forecast by analyst polled by Dow Jones Newswires who had predicted a net profit of 435 million euros.

Operating profit reached 771 million euros in the first quarter compared to a loss of 595 million euros a year earlier.

After a meeting with top bankers on Tuesday, Finance Minister Wolfgang Schaeuble said German banks are prepared to contribute to an EU-IMF rescue plan for heavily indebted Greece, without giving specific figures.

Under the agreement, the banks would subscribe to bonds being issued by the KfW state development bank to provide Germany's 22.4-billion-euro slice of the 110-billion-euro bailout.

But Strutz said he was not sure yet how Commerzbank would contribute to the effort because "several options are on the table."

Foreign banks are exposed to 236.2 billion dollars of public and private debt in Greece, the Bank for International Settlements said last week.

French banks were the most exposed with holdings of 75.2 billion dollars, followed by German banks (45 billion dollars) US (16.6 billion dollars), British (15 billion dollars) and Dutch banks (11.9 billion dollars), BIS said.

© 2010 AFP

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