Mon, 28 Sep 2020

Germany's Commerzbank expects net loss for 2020

Xinhua
05 Aug 2020, 21:44 GMT+10

FRANKFURT, Aug. 5 (Xinhua) -- Commerzbank, Germany's second largest commercial bank, expects a net loss in 2020 after posting a 21-percent drop in net profit in the second quarter, according to the bank's financial statement published on Wednesday.

In the April-June period, Commerzbank reported a net profit of 220 million euros (261 million U.S. dollars), down from 279 million euros in the same period last year.

The bank said that group revenues increased by 6.8 percent to 2.27 billion euros in the second quarter buoyed by robust growth in net commission income. However, the bank's provisions for credit losses increased significantly from 178 million euros a year earlier to 469 million euros.

The company said 175 million euros of the risk provisions are due to "a large single case", referring to a commercial fraud scandal of German payment company Wirecard. Another 131 million euros are due to the impact of the coronavirus pandemic, the bank said.

Overall, Commerzbank said it expects a negative net result for 2020 in light of an expected risk result between 1.3 billion and 1.5 billion euros for the entire year, as well as potential restructuring charges.

If there's no second lockdown and the economy gradually recovers, the bank said it expects largely stable customer revenues for the private and small-business customers segment in the following months but a stronger impact from the pandemic in corporate clients segment.

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