Germany's Commerzbank saw its second-quarter profit slide as it continues to take the bad real estate loans and shipping losses - but the company's share price jumped after it said that the progress of the strategy to get rid of the expensive non-core assets.
Said on Thursday that net profit in the quarter it was 43 million euros (about 5.7 billion U.S. dollars), which a year earlier 27 billion euros fell 84%.
Earnings performance for the quarter fell preparation of financial information provider FactSet analysts expected 48 million euros consensus.
No. 2 in Germany after Deutsche Bank (Deutsche Bank) lenders, banks, will not be fully repaid in the second quarter of 537 million euros loan losses, an increase of 404 million euros a year earlier. Earnings also squeezed by the current interest rate is very low. A year ago from 178 million to 163 million U.S. dollars, net interest income declined.
The company said that this figure includes 11 billion euros in the UK and non-performing loans shipbuilding its commercial real estate loan portfolio losses. The bank is exiting its commercial real estate and ship operations and wrapped in non-core assets are divided. It also cited the bank's non-performing loans from the German small and medium enterprises to provide services "single case."
In July it reached an agreement with Wells Fargo Bank and the private equity firm Lone Star Funds consortium sold 500 million euros of commercial real estate loans in the UK. Then, the company said the deal would lead to profitability in the second quarter of 134 million euros and 450 thousand in the third deduction. The deal means that commercial banks are no longer lending further losses.
CFO Stephan Engels said in a conference call with analysts, the bank is gradually reducing its non-core assets, including shipping and real estate of the "tremendous progress" and said they would be reduced to 125 one billion euros at the end of the low at $ 9 billion by 2016, rather than $ 9.3 billion, the previous forecast.
The bank's shares rose 9.8 percent to 7.27 euros. The stock is still down more than 50% of the year.
Hamburg Savings Bank analyst Christian Hamann said, including the progress of non-core assets, the result is "good", "is expected to be quite low." However, he warned that the rising share of "overdone" Banks of trouble.
Commercial banks are still working properly, causing it to be bailed out in 2009 by the German government through. It has 17% owned by the German government, down from 25 percent, the bank carried out a capital increase in May.
Engels said the bank "exposed" in the bankruptcy of the U.S. city of Detroit, it is said that it can not pay all its debts, including municipal bonds sold to investors after the court protection from its creditors.
He refused this figure than the bank's potential losses that it has been fully deployed and the final loss figures are in U.S. bankruptcy negotiations theme.
 



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