FRANKFURT—In the midst of a large overhaul, Germany’s Commerzbank connected Thursday posted better-than-expected third-quarter nett net and forecast a profit for the afloat year, defying analysts’ predictions for a 2021 loss.
The quarterly results were supported by a alteration successful provisions acceptable speech to cushion the fallout from the pandemic, arsenic good arsenic little costs.
The affirmative code successful Germany echoed crossed overmuch of Europe’s banking sector, which for the past fewer years has been struggling with antagonistic involvement rates and the interaction of COVID-19.
Societe Generale and ING besides some reported better-than-expected nett connected Thursday, helped by the merchandise of provisions acceptable speech for indebtedness losses that didn’t materialise.
Shares successful Commerzbank roseate 6.4 percent successful aboriginal trade, portion SocGen gained 3.6 percent and ING 2.3 percent.
The outlook astatine Germany’s No. 2 slope is simply a triumph for the caller Chief Executive Manfred Knof, who joined the slope astatine the commencement of the twelvemonth to transportation retired a 2 cardinal euro restructuring involving hundreds of subdivision closures and 10,000 occupation cuts to get backmost connected a way to profit.
“Despite the restructuring expenses, we are anticipating a affirmative nett effect for the afloat year,” Knof said.
Before Thursday, analysts had expected Commerzbank to station a nonaccomplishment of much than 100 cardinal euros for 2021 and to lone instrumentality to nett adjacent year. The slope posted a steep nonaccomplishment of 2.9 cardinal euros successful 2020 owed to restructuring costs.
It has been a rocky fewer years for Commerzbank. Merger talks with Deutsche Bank failed and it was ejected from the premier DAX scale of German blue-chips. Last year, a large investor, Cerberus, launched a run for alteration that prompted a shuffle successful apical enactment and the plans for steep occupation cuts.
Commerzbank, which is inactive partially owned by the authorities aft a bailout during the fiscal situation much than a decennary ago, has mislaid astir 2 cardinal euros from 2009 done past year.
The slope said it was halfway done the task of cutting positions, but arsenic it does that it is besides facing demands for higher wages amid soaring inflation.
Workers volition onslaught adjacent week for 1 time arsenic unions request 4.5 percent wage increases for bankers successful the industry.
Despite a diminution successful provisions successful the 4th to 22 cardinal euros from 272 cardinal euros a twelvemonth ago, Commerzbank’s Chief Financial Officer Bettina Orlopp told analysts that the slope wasn’t retired of the woods yet.
The extremity of authorities pandemic enactment efforts volition effect successful a emergence successful firm defaults successful the adjacent quarter, she said.
Provisions astatine SocGen were astir fractional of what analysts had expected, Jefferies said successful a note.
($1 = 0.8633 euros)
By Tom Sims and Frank Siebelt
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