Commerzbank profit rises, says overhaul on track
Commerzbank posted a 15 percent rise in quarterly net profit as it set aside less cash to cover ailing loans held in its restructuring division, saying the strategic overhaul of the group was on track.
Revenue is likely to remain under pressure, Germany's No. 2 lender said in its third-quarter report published on Thursday. It declined to give a more specific outlook.
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Commerzbank's 77 million euros net profit in the third quarter beat an average forecast of 31 million.
"We have further enhanced the stability of the bank," Chief Executive Martin Blessing said, adding: "We shall push ahead with our efforts to reduce non-strategic portfolios further."
Shares of Germany's No. 2 lender, which have gained around 44 percent since the beginning of the third quarter, were indicated to open 2.9 percent higher.
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Commerzbank's profit rise mainly reflected lower loan-loss provisions in its non-core asset portfolio, which the bank split off as part of a restructuring plan after the financial crisis. Revenue weakened slightly in the quarter versus the year-ago period.
In its core bank, however, Commerzbank needed to set aside more spare cash to cover potential bad loans. Levels of provisions are normalizing after the Germany's economic success in 2012 allowed the bank to reclaim bad-loan reserves it had set aside during the financial crisis.
Commerzbank's investment banking unit saw operating profit fall by more than half to 85 million euros due to lower trading income.
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