Commerzbank Profit Falls Short of Estimates on Asset Sale
Commerzbank AG (CBK), Germany’s second- biggest lender, reported profit that fell short of analysts’ estimates after saying it would sell its stake in Ukraine’s Bank Forum JSC and take a charge of 286 million euros ($351 million).
Second-quarter pretax profit was about 350 million euros, the Frankfurt-based lender said in a statement yesterday, falling short of the 491-million-euro average estimate of six analysts surveyed by Bloomberg.
Commerzbank, which spent three years freeing itself from government aid needed to survive the 2008 financial crisis, announced plans last month to exit shipping and real estate finance in a bid to boost capital as a shield against more writedowns on its sovereign-debt portfolio. European lenders are taking steps to weather the crisis that forced five euro countries to seek bailouts.
The sale of the Bank Forum stake acquired in 2008, which will reduce the German lender’s risk-weighted assets, won’t have a significant impact on its core Tier 1 capital ratio, which rose to about 12 percent by the end of the second quarter, Commerzbank said.
“The dynamic development of the Ukraine has not come into effect as expected in past years,” the bank said in the statement. “Commerzbank does not expect a sustainable improvement in the near future. In the course of the ongoing review of its group strategy, Commerzbank therefore decided to sell its stake in Bank Forum.”
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