Connect with us
Finance Digest is a leading online platform for finance and business news, providing insights on banking, finance, technology, investing,trading, insurance, fintech, and more. The platform covers a diverse range of topics, including banking, insurance, investment, wealth management, fintech, and regulatory issues. The website publishes news, press releases, opinion and advertorials on various financial organizations, products and services which are commissioned from various Companies, Organizations, PR agencies, Bloggers etc. These commissioned articles are commercial in nature. This is not to be considered as financial advice and should be considered only for information purposes. It does not reflect the views or opinion of our website and is not to be considered an endorsement or a recommendation. We cannot guarantee the accuracy or applicability of any information provided with respect to your individual or personal circumstances. Please seek Professional advice from a qualified professional before making any financial decisions. We link to various third-party websites, affiliate sales networks, and to our advertising partners websites. When you view or click on certain links available on our articles, our partners may compensate us for displaying the content to you or make a purchase or fill a form. This will not incur any additional charges to you. To make things simpler for you to identity or distinguish advertised or sponsored articles or links, you may consider all articles or links hosted on our site as a commercial article placement. We will not be responsible for any loss you may suffer as a result of any omission or inaccuracy on the website.


Commerzbank shares slump on outlook, despite 20% profit rise

Commerzbank shares slump on outlook, despite 20% profit rise

By Tom Sims and Frank Siebelt

FRANKFURT (Reuters) -Commerzbank’s shares sank 5% on Friday, despite a big jump in net profit in the second quarter, after the German lender raised its cost outlook and cut its commission income forecast.

The less rosy outlook for net commission income and the raised cost expectations due to higher employee compensation were in line with what analysts had been expecting.

But analysts at KBW said they were disappointed about a lack of detail on plans for Commerbank’s share buyback.

The bank announced plans for a further buyback that it hoped to conclude well ahead of next year’s annual shareholder meeting, saying it had applied for regulatory approval.

Shares in Commerzbank, one of Germany’s best-known lenders that is partially owned by the government after a bailout more than a decade ago, widened their losses during morning trade and were the biggest loser on Germany’s benchmark DAX index.

The fall came despite Commerzbank’s net profit rising a better-than-expected 20%, aided by higher interest rates but held back by previously flagged problems in Poland.

Commerzbank raised its outlook for full-year net interest income to 7.8 billion euros ($8.54 billion) from previous expectations of some 7 billion euros, above expectations.

The bank is in the middle of a major overhaul, slashing its workforce and branch network to restore profits.

Like many banks, it is benefiting from a rise in interest rates and the income that generates, which was up 44% in the quarter from a year earlier.

Net profit of 565 million euros in the quarter compared with a profit of 470 million euros a year earlier. Analysts had on average forecast profit of 538 million euros, according to a consensus published by Commerzbank.

Analysts with Deutsche Bank called the results “solid”.

The bank increased the provisions it sets aside for bad loans and related writedowns to 208 million euros, up from 106 million euros, but it said credit quality remained high.

It took a 347 million euro hit in the quarter from a provision it announced in June following a court ruling on how banks treat Swiss franc loans in Poland, where it has extensive operations with its mBank unit.

Commerzbank said that it now expects costs of 6.4 billion euros this year, up from earlier expectations of 6.3 billion.

($1 = 0.9132 euros)

(Reporting by Tom Sims and Frank Siebelt; additional reporting by Tristan Veyet; Editing by Miranda Murray, Friederike Heine and Alexander Smith)


Continue Reading

Why pay for news and opinions when you can get them for free?

       Subscribe for free now!

By submitting this form, you are consenting to receive marketing emails from: . You can revoke your consent to receive emails at any time by using the SafeUnsubscribe® link, found at the bottom of every email. Emails are serviced by Constant Contact

Recent Posts