Commerzbank posts Q4 profit as loan loss provisions fall
Commerzbank AG on Friday announced its fourth quarter results. The bank posted a profit for the reporting period helped by lower provisions for bad debts. The robust German economy contributed to the fall in loan loss provisions.
The German-based lender earned a profit of EUR 187 million in the final quarter of 2015, compared to a loss of EUR 280 million in the same period last year. Earnings per share for the quarter amounted to EUR 0.15, compared to a loss of EUR 0.25 in the previous year period.
Quarterly operating profit totalled EUR 376 million, compared to a loss of EUR 260 million in the year-ago period. Commerzbank reported a pre-tax profit of EUR 356 million for the fourth quarter, compared to pre-tax loss of EUR 321 million in last year period.
Revenues, excluding provisions for loan loss, amounted to EUR 2.23 billion for the last three-month period in 2015, up from EUR 1.85 billion in the corresponding period last year. Total investment income increased to EUR 99 million from EUR 64 million in the fourth quarter of 2014. Loan loss provisions narrowed to EUR 112 million from EUR 308 million in the prior year period.
For the year 2015, the bank's net profit attributable to its shareholders increased to EUR 1.06 billion from EUR 266 million in the previous year. On a per share basis, annual earnings rose to EUR 0.88 from EUR 0.23 in 2014.
Profit before tax amounted to EUR 1.8 billion in 2015, up from EUR 628 million in the previous year. Operating profit accelerated to EUR 1.91 billion from EUR 689 million in 2014.
Annual revenues, excluding provisions for loan loss, totalled EUR 9.76 billion, an increase from EUR 8.76 billion in the previous year. Loan loss provisions narrowed to EUR 696 million from EUR 1.14 billion last year. The bank expects to offer a dividend of 20 cents a stock for 2015.
Commerzbank also plans to announce a new heir to Blessing at its shareholder summit, which is scheduled on April 20, Reuters said quoting Klaus-Peter Mueller's message to workers. The bank's results contrast with that of Deutsche Bank, whose debt was downgraded by Standard and Poor's on Thursday.
The bank expects to report a mild increase in 2016 net profit. Commerzbank also estimates provisions for loan losses to increase moderately as the reclamations from impaired debts fall.
Bloomberg said that the shares of Commerzbank swelled as high as 15%, which is the largest gain in the intraday trading session since August 2013. The shares traded at EUR 7.31, up 14% in Frankfurt trading at 10:31 am. A Bankhaus Lampe analyst, Neil Smith, suggested investors buy Commerzbank's shares.
The bank expects to strengthen its financial base in the forthcoming years. The quarterly earnings results motivate the German lender to boost its growth in the home market.
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