Commerzbank Profit Rises in Q2
FRANKFURT, Germany (AP) _ Germany’s Commerzbank on Wednesday announced a sharply higher profit for the second quarter as earnings from securities trading rose, but its finances were still heavily burdened by bad loans.
Commerzbank’s net profit for the April-June period of euro70 million (US$79 million) was up from a profit of euro2 million in the same quarter of 2002 and euro3 million in the first quarter of this year.
The bank’s latest results met the expectations of analysts surveyed by Dow Jones Newswires, who forecast earnings of euro67 million ($76 million).
Chief executive Klaus-Peter Mueller said the bank had turned the corner. ``The worst times are behind us,″ he said at a news conference.
The improvement was helped by better earnings from trading stocks and bonds, which rose to euro278 million ($314 million) from euro104 million a year ago, Commerzbank said.
But deductions for bad loans _ a big problem for all major banks as Germany’s economy stagnates _ amounted to euro303 million ($349 million) in the April-June period, down from euro308 million a year ago but up from euro252 million in January-March period of this year.
Commerzbank lost euro298 million last year amid slumping stock markets and a heavy load of bad loans from business customers _ the result of a wave of business bankruptcies.
One measure of the company’s cost-cutting efforts over the past year was an 11 percent reduction in its staff _ 33,850 employees as of June 30, compared to 38,017 a year earlier.
The company’s shares fell 5.6 percent, trading at euro13.36 ($15.09) by early afternoon in Frankfurt.
For the first six months of the year, net profit fell slightly to euro73 million ($82 million) from euro74 million in the same period last year.
The Frankfurt-based bank is the fourth-largest in Germany _ behind Deutsche Bank, HVB Group, and Allianz’s Dresdner Bank subsidiary.