Germany's second-largest lender Commerzbank on Monday abandoned plans to sell off its lucrative Polish subsidiary mBank, blaming unfavourable conditions caused by the coronavirus.
"Commerzbank has decided to retain its majority stake of 69.3 percent in its Polish subsidiary and to terminate the sales process," the Frankfurt-based bank said in a statement.
"Under the current market conditions which are dominated by the coronavirus crisis, a transaction doesn't seem feasible at reasonable terms," it added.
In 2019, mBank achieved a turnover of 1.1 billion euros ($1.01 billion) and an operating result of 289 million euros, contributing almost a quarter of Commerzbank's total revenues, according to its annual report.
Commerzbank bosses first announced plans to sell mBank in September after a failed bid early last year to merge with crosstown rival Deutsche Bank.
"It is clear that we will only sell such a valuable asset as mBank if the terms are right," said Bettina Orlopp, chief financial officer at Commerzbank.
The bank is due to publish its results for the first quarter of 2020 on Wednesday, with analysts expecting a net loss of 240 million euros, according to German national news agency DPA.
Net profits at Commerzbank, which is partially owned by the state, dropped over 25 percent to 644 million euros in 2019.
Severance charges for some 4,300 employees worldwide struck especially in the final three months of 2019, as the group slashed its payroll to just over 40,000 people.
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