Back in the black

7 May 2003

The German bank has made progress on cutting costs, and it is racking up fewer bad debts. But this is its seasonally strongest quarter. There s still plenty of scope for disappointment.

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Commerzbank returned to the black in the first quarter of the year, posting a net profit of E3m after a loss of E243m in the fourth quarter of 2002. In the same quarter a year ago, Germany's third largest bank made net profits of E72m.

The result exceeded the consensus of analysts' forecasts, which had been for a loss of E17m.

Commerzbank said it was confident that it would return to a successful path in 2003, although the bank did not explicitly restate its goal of making a profit this year.

The group's stock has risen by more than 80% from its lows in early March and is also up 30% in the year to date.

Group revenues fell by about 14% to E1.4bn in the quarter. The better than expected figures were achieved mainly by virtue of costcutting and lower loan loss provisioning.

Operating costs fell by 16% to E1.2bn, while bad debt provisions were unchanged at E252m, year on year, but well down on the E436m recorded in the third quarter of the year.

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