Commerzbank bounces back with strong Q3 performance

German-based finance group Commerzbank has continued the trend of upbeat quarterly statements among European banks by revealing a Q3 net profit of E262 million.

Operating profit meanwhile reached E419 million, in stark contrast to the equivalent period a year ago, when Commerzbank recorded a loss of E129 million. The figures reflect strong expansion in trading profits, while the bank noted that the ongoing upward trend for net commission income and healthy net interest income underlined the improved earnings quality. All major business lines performed well in the third quarter, making important contributions to the overall result, Commerzbank said. Its recent tough restructuring, the various programs to boost revenues and the persistently tight control over costs are now bearing fruit, the bank added. All of the major revenue components registered progress in a year-on-year comparison. At E2,339 million, net interest income was 3% higher, partly because the bank has now returned to a growth course. As a result, the consolidated balance-sheet total of E458 billion at end-September was almost 8% higher than at end-2004. Provisioning continues to develop very positively, the results showed. Thanks to a persistent easing of credit risk and the conservative provisioning policy pursued in the past, Commerzbank said it was possible to reduce it again to a budgeted figure of under E680 million for 2005 as a whole. Asset management performed far better in the third quarter than in the preceding three months. Up to September, an operating profit of exactly E100 million was achieved, although a return on equity of 25.3% is lower than in 2004.