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Germany's Commerzbank Reports Second-Quarter Loss as Restructuring, Write-Off Charges Bite

Alex Kraus | Bloomberg | Getty Images
  • Commerzbank booked restructuring expenses of 511 million euros and a write-off for ending an outsourcing project of 200 million euros.
  • This heavily impacted its performance in the second quarter.

LONDON — Commerzbank on Wednesday reported a net second-quarter loss due to restructuring costs and an exceptional write-off to an outsourcing project.

The German lender saw a net loss of 527 million euros ($625.7 million) in the three months through to the end of June, roughly in line with analyst expectations of a net loss of 504 million euros.

This was after booking restructuring expenses of 511 million euros and a write-off for ending an outsourcing project of 200 million euros.

Shares of Commerzbank tumbled to the bottom of the pan-European Stoxx 600 index on the news, down more than 5% during morning trade in London.

"We have kept our Common Equity Tier 1 ratio stable despite the high one-time write-off and restructuring expenses," Bettina Orlopp, chief financial officer of Commerzbank said in a statement.

"This again proves that we have a very strong basis for the transformation, and it demonstrates that we are also able to deal with exceptional charges on our way to a sustainably profitable future."

The German bank's CET1 ratio, a measure of bank solvency, stood at 13.4% at the end of the quarter.

Other highlights of the quarter:

  • Revenues reached 1.86 billion euros, an 18.1% drop from a year ago.
  • Operating expenses stood at 1.7 billion euros, versus 1.53 billion a year ago.

Speaking to CNBC's "Squawk Box Europe" on Wednesday, Orlopp said: "On the customer side we are satisfied, if you look at the numbers net commission income is 7% up year-on-year, so that's a good result."

She also said that the bank is aiming to achieve an operating profit this year, despite the latest results.

"We are targeting definitely an operating profit, I think the whole question is what happens with net income for the year – that's tougher to predict," Orlopp said.

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