COMMERZBANK hiked its outlook yesterday after beating expectations with its second-quarter results, underscoring the recovery trend among Europe’s banks.
“We have always said that we will be profitable by 2011 at the latest,” said chief executive Martin Blessing. “We now assume that in a stable market environment we will conclude 2010 as a whole with a profit,” he said
Given the economic recovery the bank now expects risk provisions of up to €3bn (£2.48bn) in 2010, below its earlier estimate of €3.8bn.
Commerzbank again broke even in the second quarter. Its net profit of €352m was higher than the €100m expected by analysts, but significantly lower than the €708m booked in the first quarter.
Investment banking income was hit as activity slumped following Greece’s economic crisis which threatened to spread and rattled investors.
Trading profit came in at €337m, up from the €71m booked a year earlier, but down from the €850m booked in the first three months.
Loan loss provisions fell to €639m, down from the €993m in the previous year and the €644m booked in the first quarter.
Analysts expect Commerzbank to post a 2010 net profit of €509m and a pre-tax profit of €855m.
City A.M. Reporter