A view into the trade hall of the Commerzbank in Frankfurt, central GermanyIn a move to strengthen its balance sheet, the bank is hiking capital by 10 percent by converting hybrid capital instruments and subordinated debt securities into shares, Commerzbank said on Thursday.Commerzbank needs to plug a 5.3 billion euro capital hole as required by Europe's banking regulator.By shedding risky assets, Commerzbank said it can reduce its capital shortfall to 1.8 billion although the debt crisis still has the potential to disrupt earnings for the stricken lender."The high degree of uncertainty associated with the European sovereign debt crisis will, however, continue to pose challenges for us," Chief Executive Martin Blessing said.Commerzbank shares were down almost 4 percent after 25 minutes of trade in Germany.The European Banking authority (EBA) now requires banks to hold core tier one capital of at least 9 percent as a safety cushion to avoid a repeat of the 2008 crisis that led to massive injections of public funds.The lender which had a core tier one capital ratio of 9.9 percent at the end of 2011, said it was on track to meet the EBA targets.In 2012 the bank said it intends to improve its operating profit, although the European sovereign debt crisis will continue to pose a challenge for the bank, Blessing said."We assume that the core bank will again post a solid operating profit in 2012", he added.The core bank comprises of its corporate lending, private customer, investment banking and Eastern European units but does not include the loss-making units asset-based-finance and its portfolio restructuring unit.Writedowns on its sovereign bonds exposure and its mortgage lender Eurohypo left Commerzbank a fourth-quarter operating profit of only 163 million euros, down from 256 million in the year-earlier period.Earnings were flattered by a one-off 735 million euros gain from repurchasing hybrid debt.Commerzbank's exposure to Portugal, Italy, Ireland, Greece and Spain remains 12.3 billion euros at the end of 2012.Full-year net earnings of 316 million Euros ($418.42 million), however, beat the analyst forcast of 217 million.For 2012 the bank said it has no need for refinancing on the capital markets.Copyright 2012 Thomson Reuters. Click for restrictions.Thursday, February 23, 2012
Greek Writedown Hits Commerzbank Earnings
Commerzbank's fourth-quarter earnings were spoiled by a 700 million euro ($927 million) hit on Greek sovereign debt as Germany's second-largest bank said euro zone market jitters continue to threaten earnings.
A view into the trade hall of the Commerzbank in Frankfurt, central GermanyIn a move to strengthen its balance sheet, the bank is hiking capital by 10 percent by converting hybrid capital instruments and subordinated debt securities into shares, Commerzbank said on Thursday.Commerzbank needs to plug a 5.3 billion euro capital hole as required by Europe's banking regulator.By shedding risky assets, Commerzbank said it can reduce its capital shortfall to 1.8 billion although the debt crisis still has the potential to disrupt earnings for the stricken lender."The high degree of uncertainty associated with the European sovereign debt crisis will, however, continue to pose challenges for us," Chief Executive Martin Blessing said.Commerzbank shares were down almost 4 percent after 25 minutes of trade in Germany.The European Banking authority (EBA) now requires banks to hold core tier one capital of at least 9 percent as a safety cushion to avoid a repeat of the 2008 crisis that led to massive injections of public funds.The lender which had a core tier one capital ratio of 9.9 percent at the end of 2011, said it was on track to meet the EBA targets.In 2012 the bank said it intends to improve its operating profit, although the European sovereign debt crisis will continue to pose a challenge for the bank, Blessing said."We assume that the core bank will again post a solid operating profit in 2012", he added.The core bank comprises of its corporate lending, private customer, investment banking and Eastern European units but does not include the loss-making units asset-based-finance and its portfolio restructuring unit.Writedowns on its sovereign bonds exposure and its mortgage lender Eurohypo left Commerzbank a fourth-quarter operating profit of only 163 million euros, down from 256 million in the year-earlier period.Earnings were flattered by a one-off 735 million euros gain from repurchasing hybrid debt.Commerzbank's exposure to Portugal, Italy, Ireland, Greece and Spain remains 12.3 billion euros at the end of 2012.Full-year net earnings of 316 million Euros ($418.42 million), however, beat the analyst forcast of 217 million.For 2012 the bank said it has no need for refinancing on the capital markets.Copyright 2012 Thomson Reuters. Click for restrictions.![]()
A view into the trade hall of the Commerzbank in Frankfurt, central GermanyIn a move to strengthen its balance sheet, the bank is hiking capital by 10 percent by converting hybrid capital instruments and subordinated debt securities into shares, Commerzbank said on Thursday.Commerzbank needs to plug a 5.3 billion euro capital hole as required by Europe's banking regulator.By shedding risky assets, Commerzbank said it can reduce its capital shortfall to 1.8 billion although the debt crisis still has the potential to disrupt earnings for the stricken lender."The high degree of uncertainty associated with the European sovereign debt crisis will, however, continue to pose challenges for us," Chief Executive Martin Blessing said.Commerzbank shares were down almost 4 percent after 25 minutes of trade in Germany.The European Banking authority (EBA) now requires banks to hold core tier one capital of at least 9 percent as a safety cushion to avoid a repeat of the 2008 crisis that led to massive injections of public funds.The lender which had a core tier one capital ratio of 9.9 percent at the end of 2011, said it was on track to meet the EBA targets.In 2012 the bank said it intends to improve its operating profit, although the European sovereign debt crisis will continue to pose a challenge for the bank, Blessing said."We assume that the core bank will again post a solid operating profit in 2012", he added.The core bank comprises of its corporate lending, private customer, investment banking and Eastern European units but does not include the loss-making units asset-based-finance and its portfolio restructuring unit.Writedowns on its sovereign bonds exposure and its mortgage lender Eurohypo left Commerzbank a fourth-quarter operating profit of only 163 million euros, down from 256 million in the year-earlier period.Earnings were flattered by a one-off 735 million euros gain from repurchasing hybrid debt.Commerzbank's exposure to Portugal, Italy, Ireland, Greece and Spain remains 12.3 billion euros at the end of 2012.Full-year net earnings of 316 million Euros ($418.42 million), however, beat the analyst forcast of 217 million.For 2012 the bank said it has no need for refinancing on the capital markets.Copyright 2012 Thomson Reuters. Click for restrictions.
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