Full circle

13 May 2020 By Liam Proud Follow @liamwardproud

ABN Amro and Commerzbank, both former bailout recipients, lost money in the first quarter. The cause, virus-induced bad debt, is common. But a narrow focus and low profitability make them particularly exposed, leaving taxpayers stuck with some of the lowest returns in Europe.

This content is for Subscribers only

Context News

Dutch lender ABN Amro lost 395 million euros in the first three months of 2020, chiefly because of a 1.1 billion euro charge for bad debt, the bank said on May 13.

Commerzbank on the same day reported a 295 million euro loss for the first quarter of 2020, driven by 326 million euros of bad-debt charges. Those loan-loss provisions were roughly four times the amount the German lender took in the same period a year earlier.

Chief Executive Martin Zielke said that Commerzbank’s revenue this year should be flat in its two core businesses of corporate and private banking, provided the Covid-19 lockdown in Germany only lasts two months, and the economy gradually recovers afterwards.

Shares in ABN and Commerzbank were down 5.7% and 3.6% respectively at 0745 GMT on May 13.

Email a friend

Please complete the form below.

Required fields *