GERMANY’s second-largest bank Commerzbank remained mired in losses over 2009, after the group was struck by higher-than-expected trading losses, bad debt provisions and exposure to the crisis-hit monoline insurance sector.
Commerzbank yesterday posted an operating loss of €2.27bn (£1.99bn) for the past financial year, compared to a €5.45bn loss in the depths of the financial crisis in 2008, just after it agreed to a grossly ill-timed acquisition of distressed rival Dresdner Bank.
Full-year gross revenue rose by over half to €10.9bn but was offset by a 17 per cent rise in loan loss provisions to €4.2bn and trading losses of €358m.
Commerzbank chairman Martin Blessing said the result was “not satisfying” and issued a stark warning about the bank’s performance over the coming year.
“The bottom line of the whole group will only be in the black if the development of the economy and the financial markets will be very positive in 2010,” he said.
However, Commerzbank added that loan loss provisions should have peaked in 2009 and said the group should return to profitability in 2011 at the latest. It also addressed concerns about its €3.1bn exposure to Greece, claiming it is not expecting any defaults.
The group, which received European Union approval last summer for an €18.2bn package of state aid from the German government, plans to start repaying the money by 2012. As part of the bailout, the bank was required by the European Union to shrink its assets by €900bn, a target which it said has been achieved three years ahead of schedule.