Commerzbank on track for 2017 after Q3 profit boost

FRANKFURT AM MAIN: Germany's second-largest lender Commerzbank on Thursday reported higher profits in the third quarter, saying it was on track to meet its targets for the full year.

Net profit at the bank reached 472 million euros ($548 million) between July and September, compared with a 288-million-euro loss in the third quarter last year.

Operating, or underlying profit grew 47 percent year-on-year to 629 million euros, on the back of revenues up 3.0 percent at 2.5 billion euros.

The group's turnover was boosted by one-off effects as it sold off a share in payment processor Concardis and ended cooperation with France's BNP Paribas in consumer loans.

Excluding those two elements, revenues shrank 9.0 percent to 2.0 billion euros.

Commerzbank's renewed focus on winning fresh customers has seen it add 450,000 retail clients since the beginning of 2017, but the unit saw lower profits over the first nine months despite revenues at around the same level.

Meanwhile, the group's corporate banking business, which lends to many of the "Mittelstand" small- and medium-sized business that make up the backbone of the German economy, complained of weak markets and historic low interest rates in the eurozone.

Those translated into lower revenues and profits between January and September.

Nevertheless, "we have made good progress in laying the foundations for our transformation this year," chief executive Martin Zielke said in a statement.

Commerzbank is in the throes of a restructuring dubbed "Commerzbank 4.0" designed to secure "sustainable long term profitability", which includes digitising some 80 percent of its internal processes.

Looking ahead to the full year, the group upheld its forecast of a "slightly positive" net result in 2017, after reporting 66 million euros net profit over the first nine months -- down 31 percent year-on-year.

Commerzbank's latest earnings report comes after weeks of rumours that foreign banks including France's BNP Paribas and Italy's Unicredit are eyeing it as a possible merger target.

But the lender will have to boost its performance before a sale can go ahead, as the German state is loath to lose money on the 15-percent stake it owns in the lender following a rescue in the throes of the financial crisis.