COMMERZBANK yesterday reported an unexpected jump in third quarter profit and said turnaround plans were on track, moving the German government a small step closer to a sale of its 17 per cent stake.
Germany’s second-largest bank, bailed out by the German state after the financial crisis, produced a 15 per cent net profit increase, ahead of forecasts, mainly due to fewer problem loans than last year.
The bank’s shares shot up an initial 12 per cent in response to the performance, in which the bank sold assets more quickly than planned and said losses in problem portfolios like shipping were unlikely to rise.
Signs that Commerzbank is returning to health could potentially make it easier for Germany to sell its stake. But the bank’s shares still trade at less than half the roughly €26 price at which the government would have to sell at to avoid losses.
The bank reported a 15 per cent rise in quarterly net profit to €77m euros as it set aside less cash to cover ailing loans held in its restructuring division
Commerzbank remained cautious, saying revenue was likely to remain under pressure and that the operating result for the last quarter of 2013 would fall short of that achieved in the previous quarter.
In its core business, Commerzbank had to set aside more cash to cover potential bad loans.
The shares eventually closed up 10.1 per cent at €10.26 during yesterday’s session.