FRANKFURT, Germany ? Germany's Commerzbank AG reported Wednesday that net profit fell sharply in the second quarter as the bank wrote down euro760 million ($1.1 billion) in bonds issued by financially troubled Greece.
The bank otherwise showed improved results from trading securities and from its business financing medium-sized companies in a growing German economy.
Net profit fell to euro53 million from euro361 million in the same quarter a year ago.
The bank took the large writedown on Greek bonds effective June 30, the last day of the quarter. The Greek government has asked bondholders to take new bonds with longer maturity and lower interest as part of its effort to solve its debt crisis. That exchange is expected to reduce bond value by 21 percent.
Financial institutions agreed to the exchange plan as creditors' contribution to a second, euro109 billion bailout of Greece by eurozone governments aimed at solving the country's financial problems and preventing them from spreading to other countries. An earlier euro110 billion package of bailout loans last year failed to put the country back on its feet.
Frankfurt-headquartered Commerzbank had the biggest holdings of Greek debt among German commercial banks with euro3.0 billion as of the end of last year. German competitor Deutsche Bank AG also wrote down Greek bonds during the second quarter by euro155 million.
Commerzbank showed improvement in other areas thanks to Germany's growing economy. It was able to reduce set-asides for bad loans to euro278 million from euro639 million a year ago, and the bank's business focusing on small and medium-sized German companies increased its operating earnings 29 percent to euro501 million.
Income from trading securities rose 82 percent to euro576 million.
"The core bank segments performed gratifyingly," CEO Martin Blessing said in a statement. "This demonstrates that the efforts we have made over the past two years have resulted in an efficient business model."
The bank raised euro11 billion in new capital during the quarter and used other available capital to repay euro14.3 billion in government aid it received during the financial crisis. The government's rescue fund retains a 25 percent stake.
Commerzbank shares rose 2.6 percent to euro2.19 in mid-morning trading German time.
mario balotelli mario balotelli duffy goat lorem ipsum lorem ipsum jay cutler
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.