Commerzbank Q2 beats expectations despite pandemic

FRANKFURT AM MAIN: Commerzbank on Wednesday posted a smaller-than-expected drop in its second quarter net profit, despite booking charges related to the coronavirus pandemic and losses over a "large single case" -- reportedly the disgraced payment provider Wirecard.

Germany's second-largest lender said it set aside provisions of 131 million euros ($155 million) during the three months ending June over the impact of the coronavirus pandemic.

It also booked a 175 million-euro loss over the "single case", which according to the Financial Times were loans made to Wirecard, which collapsed in June in what Germany's finance minister had described as an unparalleled scandal.

Despite the charges, the bank posted a net profit of 220 million euros in the three months to the end of June, compared with a 279 million euro profit in the same period a year earlier, beating expectations of analysts compiled by FactSet.

Revenue for the quarter rose slightly to 2.3 billion euros from 2.1 billion euros the previous year.

The Frankfurt-based bank, more than 15 percent owned by the German state, said, however, that it expected to post a loss for the full year on the back of "expected risk result and potential restructuring charges".

The bank had said it would slash its high-street presence and cut 10,000 jobs -- around a quarter of its workforce. It had also abandoned plans to sell its lucrative Polish subsidiary mBank.

The earnings come a day after the company selected Hans-Joerg Vetter as its new chairman, despite opposition from its second-biggest shareholder Cerberus.

Vetter's first task will be to find a successor to chief executive Martin Zielke, who announced his resignation last month.

"In the second quarter, we achieved a positive result in spite of the coronavirus and we were able to support our customers in overcoming the consequences of the pandemic. That is the top priority," Zielke said.

Shares at 1050 GMT were up 3.9 percent, outperforming the MDAX which is up 0.97 percent.