Commerzbank Swings To Quarterly Net Loss Amid Pandemic, Restructuring
FRANKFURT: Germany’s Commerzbank on Thursday said it swung to a third-quarter loss, as the lender undergoes a restructuring and deals with fallout from the coronavirus crisis.
The nation’s No. 2 bank, which is waiting for a new chief executive to take the helm in January before deciding on a new strategy, confirmed earlier warnings that it would post a full-year loss.
The bank booked a restructuring charge of 201 million euros ($235.9 million) in the quarter to close 200 branches and offer early retirement to hundreds of employees.
The bank also set aside 272 million euros in provisions for future credit losses, up from 114 million euros a year ago and largely related to the pandemic. The provisions were less than analysts had expected.
The net loss of 69 million euros in the quarter compares with a net profit of 297 million euros a year earlier. A 62 million euro loss was expected, according to a consensus forecast posted on the bank’s website.
The bank is considering staff cuts, branch closures and streamlining international operations as part of its overhaul.
“We have paved the way for further cost savings,” said finance chief Bettina Orlopp.
Commerzbank has been under pressure from one of its largest shareholders, the private equity investor Cerberus, to carry out an overhaul.
The bank was left leaderless over the summer when the chief executive and chairman stepped down in a move they said would give Commerzbank a fresh start.
Hans-Joerg Vetter, the retired chief of a German regional bank, was elected as the new chairman.
Vetter installed Manfred Knof, a former top manager at rival Deutsche Bank, as the new CEO. He takes up the post in January when the bank is expected to make progress on its strategy discussion.
($1 = 0.8519 euros)
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