FRANKFURT: Germany’s Commerzbank said on Thursday that net profit rose a better-than-expected 12% in the fourth quarter, helped by higher interest rates and capping a second consecutive year of full-year profit as it undergoes a major restructuring.

The bank said it would aim for a 2023 result that is “well above” 2022, helped by higher interest rates and despite “another demanding year in view of the challenging environment”.

Commerzbank, one of Germany’s best known banks, has been cutting thousands of workers and hundreds of branches to save on costs and lift profit.

The bank is a candidate to rejoin the prestigious DAX index of blue-chip companies.

Net profit of 472 million euros ($505.3 million) in the quarter compares with a profit of 421 million euros a year earlier.

Analysts had on average expected a profit of more than 350 million euros, according to a consensus forecast published by Commerzbank.

For the full year, Commerzbank generated net profit of 1.435 billion euros, up from 430 million euros a year earlier, and better than expectations for around 1.359 billion.

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“Our turnaround is a success. Commerzbank is back,” said Chief Executive Officer Manfred Knof. Still, the bank’s home market faces soaring inflation and a slowing economy. Problems at a Polish unit have continued to weigh.

Analysts with Deutsche Bank said in a recent note that downside risks for Commerzbank include soured loans, a big decline in loan growth, falling interest rates and delays in cost cutting.