Germany’s Commerzbank posts $2.6 billion 4th quarter loss on increase in write-downs

Commerzbank posts $2.6 billion Q4 loss

BERLIN — Germany’s Commerzbank AG said Tuesday its fourth-quarter loss widened to euro1.9 billion ($2.6 billion) due to write-downs related to bond insurer investments and provisions for bad loans.

The loss for the final three months of 2009 compared with an euro809 million loss the year before.

Shares in the company plunged 6.2 percent to euro5.65 in Frankfurt trading after the statement.

Commerzbank, the country’s second biggest lender after Deutsche Bank AG, took part in the German government’s financial-sector bailout program and is around 25 percent owned by the government.

For the year, the bank reported an annual loss of euro4.5 billion, which was less than the euro6.5 billion it lost in 2008.

The figure was hampered by loan loss provisions, which reached euro1.3 billion in the quarter compared with euro638 million a year earlier, amid a weaker German economy.

The bank’s net interest income, one measure of revenue, was nearly euro1.9 billion in the final three months of the year compared with euro2.2 billion a year earlier. For the year it was euro7.18 billion, down slightly from euro7.2 billion in 2008.

The bank, based in Frankfurt, cited write-downs related to bond insurers for the decline, along with a euro561 million loss in fourth-quarter trading profit.

Chief Executive Martin Blessing said the net loss for 2009 reflected the “ongoing economic and financial market crisis” and added that the crisis was not yet over.

He said the costs of integrating Dresdner Bank AG, which it acquired last year, had weighed on the annual result in the amount of some euro1.9 billion.

“We are not where we want to be yet, but we have reduced risks and made sustainable improvements to our capital base,” Blessing said, adding that this year would see improvement in its customer-focused business.

“The bottom line of the whole group will only be in the black if the development of the economy and the financial markets will be very positive in 2010,” he said.

Looking ahead, chief financial officer Eric Strutz said the bank wants to achieve gross revenue of euro13.8 billion a year and position itself when “international trade and capital markets pick up in the course of the year”

On the Net:

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