Commerzbank AG, Germany’s second-largest lender, posted its biggest quarterly loss in three years after taking charges related to the sale of Bank Forum and a tax asset writedown.
The fourth-quarter loss of 720 million euros ($976 million) compares with a profit of 320 million euros in the year-earlier period, the Frankfurt-based bank said today in a statement. Bank Forum charges totaled 185 million euros, while Commerzbank wrote down 560 million euros on deferred tax accruals.
“Management already indicated at the investor’s day some deferred tax issues, but we are surprised by the large amount,” Christoph Bast, an analyst at DZ Bank in Frankfurt with a hold rating on the shares, wrote in a note. “This was due to Commerzbank’s weaker earnings outlook in the medium term.”
Commerzbank last month announced plans to cut as many as 6,000 jobs over the next four years to achieve an after tax return on equity of more than 10 percent at the core bank. The lender, which is restructuring its retail unit as it offloads sovereign debt and exits shipping and real estate funding, expects the job losses to result in 500 million euros of charges in the first quarter.
Commerzbank shares declined as much as 2.6 percent and were 1.8 percent lower at 1:18 p.m. in Frankfurt trading.
“The cost of the staff restructuring sounds pretty realistic,” said Christian Hamann, a Hamburg-based analyst with Hamburger Sparkasse, who recommends selling the shares. “If the bank wanted to reduce headcount more quickly, they might face twice or three times as much in costs.”
Full-year operating profit increased to 1.2 billion euros from 507 million euros in 2011, the bank said. Revenue before loan-loss provisions was unchanged at 9.9 billion euros in 2012, while those provisions increased to 1.7 billion euros from 1.4 billion euros in 2011.
Commerzbank will publish detailed fourth-quarter financial results on Feb. 15.