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Germany's Commerzbank takes heavy loss, warns of more
2009-11-02
FRANKFURT (AFP) - Germany's second biggest bank, Commerzbank, posted a worse-than-expected third-quarter net loss Monday of 1.05 billion euros (1.56 billion dollars) due to group restructuring costs and writedowns. The bank, which was part nationalised because of the global financial crisis with the German state taking a 25-percent stake plus one share, said it expected to show a net loss for the full year. It said that the writedowns of 650 million euros related to its Eurohypo unit and 900 million euros in restructuring costs for Dresdner Bank, bought from insurer Allianz for 4.7 billion euros. The result was worse than expected, with analysts polled by Dow Jones Newswires forecasting on average a loss of 782 million euros. At the operating level, however, before booking the one-off items, the bank said that it posted a profit of 120 million euros, up from an operating loss of 201 million euros in the second quarter. Full results were due on Thursday. After the financial crisis sent the global banking system close to collapse last year, the German government propped up Frankfurt-based Commerzbank with 18 billion euros in fresh capital. It had to agree to shrink its 1.1-trillion-euro balance sheet by about 45 percent through asset sales, however, in order to win approval for the state aid from European Union regulators in Brussels. In 2008, Commerzbank posted a record loss of 6.6 billion euros.
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