Commerzbank profits, capital down on higher risky assets

Where do European banks head from here?

Commerzbank's second-quarter operating profit fell and the lender's capital cushion took a hit, the German lender said in a preliminary earnings release on Monday.

Second-quarter operating profit dropped to 342 million euros ($375.82 million), from 419 million euros in the year-earlier period, the lender said in an abbreviated earnings statement.

Commerzbank is due to publish full figures for the second quarter 2016 on Aug. 2.

Net profit attributable to Commerzbank shareholders fell to 209 million euros, down from 307 million euros in the first quarter.

Commerzbank said its Common Equity Tier 1 ratio, under full application of Basel 3 rules, stood at 11.5 percent at the end of June 2016, compared with a ratio of 12 percent at the end of the first quarter.

The bank said valuation and methodology effects were to blame, citing, "higher risk-weighted assets (RWA) in particular for operational risks due to the consideration of new external events factored in by external databases representing industrywide damage claims of banks."

Higher pension liabilities as well as higher capital deductions from revaluation reserves in particular driven by higher credit spreads for Italian sovereign debt were to blame, the Frankfurt-based lender said.

Thomas Lohnes | Getty Images

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