Commerzbank AG, Germany’s second-largest bank, had a loss in the fourth quarter on debt-related writedowns and higher provisions for bad loans.
The net loss was €809 million ($1.02 billion), compared with a profit of €201 million a year earlier, the Frankfurt-based company said today in a statement.
Chief executive officer Martin Blessing was forced to seek €18.2 billion in capital from the German government after the September bankruptcy of Lehman Brothers Holdings froze credit markets. Commerzbank, which also faces the challenge of integrating newly acquired Dresdner Bank, said today it had a “good start” in January.
“The fourth quarter was one of the toughest ever,” Konrad Becker, an analyst at Merck Finck & Co. in Munich, said before the announcement.
“Given the financial crisis, the Dresdner integration and the recession, this year and the next one will be the most difficult in post-war history.”
Commerzbank has declined about 86 per cent in the past year, valuing the company at €2.5 billion.
“We had a good start in January 2009, mainly driven by net interest income and trading profit,” chief financial officer Eric Strutz said in the statement.
“But we have to be realistic: 2009 will be another very difficult year.”
The integration of Dresdner Bank is proceeding “according to plan,” he said, adding that no bonuses will be paid to employees or management board members for 2008. Commerzbank reported writedowns of €334 million on asset-backed securities in the quarter, the bank said in a presentation on its website.
Commerzbank also said it won’t pay any dividend for 2008 after paying €1 a share for the previous year. Loan-loss provisions in the quarter jumped to €638 million from €61 million a year earlier.
The company had a trading loss of €701 million, including a loss of €271 million for credit derivatives and a €303 million charge from a “total return swap.”
Bloomberg