Earning trust

8 August 2013 By Olaf Storbeck

Germany’s second-largest lender has delivered on its promises in the first half of 2013. Its restructuring plan remains in its infancy and for now is inflicting big charges. Complete transformation is still years away. But the investment story is getting easier to believe in.

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Commerzbank reported operating profit of 547 million euros for the first half of 2013, 46 percent less than a year earlier. The German lender blamed the drop on loan-loss provisions, low interest rates and the weak European economy.
After taking restructuring charges of 493 million euros, Commerzbank made a net loss of 51 million euros in the period.
“As a consequence of the portfolio reduction and the ongoing weak interest rate environment, the revenues before loan-loss provisions are likely to remain under pressure,” Chief Financial Officer Stephan Engels said.

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