Commerzbank Q2 beats expectations despite pandemic

FRANKFURT AM MAIN (AFP) – Commerzbank yesterday posted a smaller-than-expected drop in its second quarter net profit, despite booking charges related to the coronavirus pandemic and losses over a “large single case” – reportedly the disgraced payment provider Wirecard.

Germany’s second-largest lender said it set aside provisions of EUR131 million during the three months ending June over the impact of the coronavirus pandemic.

It also booked a EUR175 million loss over the “single case”, which according to the Financial Times were loans made to Wirecard, which collapsed in June in what Germany’s Finance Minister described as an unparalleled scandal.

Despite the charges, the bank posted a net profit of EUR220 million in the three months to the end of June, compared with a EUR279 million profit in the same period a year earlier, beating expectations of analysts compiled by FactSet.

Revenue for the quarter rose slightly to EUR2.3 billion from EUR2.1 billion the previous year.

The Frankfurt-based bank, more than 15 per cent owned by the German state, said, however, that it expected to post a loss for the full year on the back of “expected risk result and potential restructuring charges”.

The bank said it would slash its high-street presence and cut 10,000 jobs – around a quarter of its workforce.

It also abandoned plans to sell its lucrative Polish subsidiary mBank.

The earnings come a day after the company selected Hans-Joerg Vetter as its new chairman, despite opposition from its second-biggest shareholder Cerberus.

Vetter’s first task will be to find a successor to Chief Executive Martin Zielke, who announced his resignation last month.

“In the second quarter, we achieved a positive result in spite of the coronavirus and we were able to support our customers in overcoming the consequences of the pandemic. That is the top priority,” Zielke said.

Shares at 1050GMT were up 3.9 per cent, outperforming the MDAX which is up 0.97 per cent.