Commerzbank back in profit in 2013
Operating profit slumped to 725 million Euros from 1.17 billion Euros a year earlier.
FRANKFURT (AFP) - Commerzbank, Germany s second-biggest lender said it returned to profit last year but warned the environment would remain difficult this year and it would unlikely resume dividend payouts just yet.
Commerzbank said in a statement it booked net profit of 78 million Euros ($106 million) in 2013, compared with a loss of 47 million Euros a year earlier.
But operating profit slumped to 725 million Euros from 1.17 billion Euros a year earlier.
All sources of income were lower, with overall revenues falling 5.9 percent to 9.269 billion Euros.
Of the different revenue components, net interest income was down 5.2 percent at 6.148 billion Euros and net commission income slipped 1.0 percent to 3.215 billion Euros.
Net trading income showed a loss of 82 million Euros and net investment income was down 79 percent at 17 million Euros.
Chief executive Martin Blessing described 2013 as a "year of transition."
He said: "We have attained a solid operating profit in both the group and the core bank. As announced, we have invested in our growth and, at the same time, further lowered our costs. We have been able to implement as scheduled what we had planned for 2013."
The bank said it had set aside 1.747 billion Euros in loan-loss provisions, up 5.2 percent over a year earlier.
At the same time, operating expenses fell by 3.3 percent to 6.797 billion Euros.
Commerzbank had made progress "considerably more quickly" in its reduction of non-core assets and "we have increased the core capital ratio to 9.0 percent one year earlier than planned," Blessing said.
On top of this, the bank had repaid in full the silent participations of the German government and Allianz, and further strengthened its capital base.
Looking ahead, Commerzbank said revenues would "still probably be impacted as a consequence of the low interest-rate environment and the low level of investment activity on the part of companies."
This year, loan loss provisions should be lower than the overall figure for 2013 and operating expenses "should not exceed 7.0 billion Euros," the bank added.
Commerzbank has not paid shareholders a dividend since 2008, but a payout was not on the cards for the time being, CEO Blessing said.
"We first want to establish a stable financial situation before resuming dividend payments," he told the bank s annual earnings news conference.
Like other banks in the euro area, Commerzbank will have to undergo stringent stress tests drawn up by the European Central Bank and the European Banking Authority and is cleaning up its balance sheet in preparation.
Against this background, "I d tend not to set too much store by a dividend," Blessing said. He also said he personally would forego any pay bonuses for 2013.
Commerzbank shares were the biggest gainers on the Frankfurt stock exchange on Thursday, adding 2.44 percent in a slightly softer market.
