Commerzbank May Report Profit on Decline in Bad-Loan Provisions

Commerzbank AG, Germany’s second- largest bank, may post a profit for the second quarter as it set aside less money for bad loans and trading income increased.

Net income probably totaled 122 million euros ($162 million), compared with a loss of 761 million euros in the year-earlier period, according to the median estimate of 10 analysts surveyed by Bloomberg.

Commerzbank’s second-quarter profit will be “driven by lower loan loss provisions and a positive trading result,” Andreas Plaesier, an analyst at M.M. Warburg & Co. in Hamburg, wrote in a research report dated July 29. He has a “sell” recommendation on the shares.

The following are the analysts’ median estimates for Commerzbank’s second-quarter earnings and year-earlier results. The figures are in millions of euros. The Frankfurt-based bank is scheduled to publish earnings on Aug. 5 before the German stock market opens.

                              Q2 2010       Q2 2009    Number of
                             estimate      reported    estimates

Net interest income
before risk provisions          1,810        1,838            8
Loan-loss provisions              655          993            8
Net commission income             929          947            8
Trading profit                    295           71            8
Net investment income/loss        -45          172            6
Operating expenses              2,199        2,263            8
Pretax profit/loss                159         -509            9
Net income/loss                   122         -761           10

Brokerages surveyed: Merck Finck, Kepler, Equinet, M.M. Warburg, Citigroup, Helvea, LBBW, DZ Bank, Keefe Bruyette & Woods, WestLB. Two companies declined to be identified by name.

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