FRANKFURT: Commerzbank, Germany's second biggest lender, slipped to a net loss in the first quarter as its efforts to cut thousands of jobs by 2016 weighed on earnings.
The loss of 94 million euros ($123 million) was smaller than the 125 million euro average analyst estimate in a Reuters poll. Restructuring charges linked to the bank's plans to cut 4,000 to 6,000 jobs came to 493 million euros.
Shares were indicated to open 1 percent lower.
"Although at the start of the year our customers felt somewhat less uncertain generally, as did capital market participants, it is still too soon to speak of an underlying trend reversal," Chief Executive Martin Blessing said.
The bank said earnings will be under pressure this year as loan loss provisions rise and costs increase due to investments, including for a revamp of its retail business.
The bank did not provide a more specific earnings forecast.
Commerzbank is preparing for a capital increase of 2.5 billion euros later this month to strengthen its capital base and comply with stricter bank rules.
Chief Financial Officer Stephan Engels said the capital ratio under the most stringent application of Basel 3 rules should be increased by around 1 percentage point as a result. He added that the bank is targeting a 9 percent capital ratio by the end of 2014.
In the first quarter, the ratio stood at 7.5 percent.
By comparison, rival BNP Paribas has a capital ratio of 10 percent, Goldman Sachs 9 percent, JP Morgan 8.9 percent and Credit Suisse 8.6 percent.
Deutsche Bank raised 3 billion euros last week. Combined with other measures, this raised its capital ratio to 9.5 percent.
Since a 2008 bail-out in the wake of the financial crisis, the German government owns 25 percent of Commerzbank, but its holding will be diluted to roughly 18 percent as it will not participate in the capital increase.
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