Commerzbank shrinks lending to build capital
GERMAN lender Commerzbank has posted a 63 per cent fall in quarterly profit after shrinking its business to strengthen its capital base, which now comfortably meets EU requirements.
“We have again made good progress with our strategic goal of consistently deleveraging the balance sheet and further strengthening the capital base,” chief executive Martin Blessing said yesterday.
Germany’s second biggest lender said it was €1.1bn above a capital target of €5.3bn set by the European Banking Authority, the European Union’s banking watchdog.
Commerzbank said first-quarter net income fell to €369m, compared with a forecast for €416m.
“It is clearly good news that the capital issue is off the table,” said analyst Dirk Becker from brokerage Kepler, adding the bank now had no need to raise capital, a step some investors had still feared.
The bank, which received an €18bn bailout in the financial crisis, has strengthened its balance sheet by shedding risky assets, hiking capital and converting debt instruments into equity.