German Commerzbank Braces for Higher Subprime Loss
Commerzbank is bracing itself for a higher-than-predicted loss from investments related to risky U.S. mortgages that are set to knock a hole in profits, sources familiar with the matter told Reuters.
The bank could tell investors as early as this week that the roughly 80 million euros ($111 million) it had put aside to cover losses from debt products including subprime mortgages will not be enough, said one source.
"Since that estimate was announced, the situation has become more critical," said that source, adding that the bank now faced having to make a higher charge. "There is no market at the moment -- it could go in any direction."
"There is no knowing what will happen -- it could be a loss of 500 million euros or even a complete loss. You can't say now," said another source. Commerzbank declined to comment.