Net income rose to 1 billion euros ($1.48 billion), the Frankfurt-based bank said in a statement today. That compared with 716 million euros of net income before minorities in the year-earlier period and beat the average estimate of 626 million euros from three analysts, according to data compiled by Bloomberg. The shares rallied as much as 3.5 percent.
The record result comes after the lender said last month that it’s planning to repay about 14.3 billion euros of government aid by June by selling new shares and using excess capital. Commerzbank has raised more than half of a targeted 11 billion euros from investors and Germany’s Soffin bank-rescue fund by selling exchangeable notes and plans to raise the remainder through a rights offer.
“The better-than-expected earnings figures should provide a tailwind for the second part of the capital increase,” said Michael Seufert, an analyst at Norddeutsche Landesbank Girozentrale in Hannover, Germany. “Commerzbank is definitely benefiting from the German economic boom.”
The country’s economy, which is driving euro-region growth, may have expanded as much as 1 percent in the first three months of 2011 and will probably maintain its growth momentum in the current quarter, the Bundesbank said April 18.
Loan-loss provisions declined “significantly” to 320 million euros in the first quarter, Commerzbank said today. Operating profit totaled 1.1 billion euros and gross revenue was 3.6 billion euros, the lender said, without providing year- earlier figures. The bank is scheduled to report detailed results on May 6, the day of its annual general meeting, where it will ask shareholders to approve the rights offer.
Commerzbank climbed as much as 3.5 percent to 4.45 euros in Frankfurt trading and was at 4.43 euros as of 12:12 p.m. local time.
The lender said its core Tier 1 ratio, a measure of financial strength being assessed in this year’s round of European stress tests, was 11 percent at the end of March. Total assets declined to 700 billion euros, Commerzbank said.
To contact the reporter on this story: Aaron Kirchfeld in Frankfurt at firstname.lastname@example.org