Commerzbank slips to Q2 loss

Germany's Commerzbank swung to a net loss in the second quarter due to weak markets and job-related restructuring charges but said it expected a small net profit for the full year. The 637 million-euro ($754.34 million) net loss was bigger than the 584 million euro shortfall expected by analysts polled by Reuters. In June, the bank warned of a loss due to the booking of 807 million euros of restructuring charges.
Commerzbank, Germany's second biggest bank, said it expected a "slightly positive" net profit for the full year thanks to asset sales such as the sale of its headquarters - Germany's tallest building - to Samsung Life Insurance. Chief Financial Officer Stephan Engels wouldn't give any figures for its full-year outlook, but UBS estimated net profit of between 100 million and 150 million euros. Commerzbank made 279 million euros in net profit in 2016.
Commerzbank said first-half weakness was "due to the numerous geopolitical events and landmark elections in Europe, a difficult capital market environment and the challenges posed by low interest rates". Commerzbank shares were down 2 percent at 0936 GMT, regaining some ground after a steep fall at the start of trading.
It is reducing its staff to 36,000 by 2020 from 43,000 at the end of 2015. "We have booked the provisions for the personnel reductions early and in full and have made further progress in the implementation of our strategy," Chief Executive Martin Zielke said in a statement.
The bank has also been focusing on digitising its back office and expanding its retail customer base. As part of its restructuring, Commerzbank reduced its shipping portfolio by 900 million euros in the first half of the year to 3.9 billion euros. Commerzbank aims to reduce the portfolio to around 3 billion euros this year.
It also expects 2017 provisions for bad shipping loans to be at the lower end of its 450-600 million euro range. Commerzbank said it had added a net 500,000 customers as it makes a push to redesign branches and improves apps for new accounts and credit.
Second-quarter operating profit in its corporate clients segment fell to 235 million euros from 267 million in the first quarter. In a sign of the bank's improving financial health, its Common Equity Tier 1 capital ratio rose to 13 percent from 12.5 percent at the end of the first quarter.