Commerzbank Posts Surprise Quarterly Loss
Commerzbank, Germany's No. 2 bank, posted a larger-than-expected quarterly loss after a cut in its medium-term profit forecasts had a damaging effect on its tax accounting.
The bank, which received an 18-billion-euro ($24.7 billion) government bailout at the height of the financial crisis, said on Monday it lost 720 million euros in the fourth quarter after booking a depreciation on deferred tax accruals of 560 million.
Commerzbank cut its profit expectations in November and said at the time it was aiming for a 10 percent return on equity (RoE) at its core operations by 2016, or roughly 8 percent at group level.
As a result of that, the lender was no longer able to use losses carried forward - mainly stemming from its Eurohypo mortgage unit, which is being wound down - to reduce its tax bill.
Separately, Commerzbank booked charges of 185 million euros related to the sale of its Ukrainian Bank Forum unit.
Commerzbank shares were down 2.3 percent on Monday morning, lagging the sector index, as the loss came in higher than the 295 million euros analysts had expected, according to StarMine.
Commerzbank barely broke even last year, posting a net profit of just 6 million euros, down from 638 million in 2011, with extraordinary charges totaling 980 million.
The bank said it also expected restructuring charges of around 500 million euros in the first quarter of 2013 in connection with its move to cut 4,000 to 6,000 jobs by 2016.
Commerzbank said it assumed it would be able to pay the 2012 coupon on the debt-equity hybrid, called "silent participation", it got from German bailout fund SoFFin.