Commerzbank earns rise in Q2, outlook grim
Germany's Commerzbank posted a near six fold increase in second-quarter earnings, but warned that profits would fall in the second half of the year because of a rough economy and the European debt crisis
The bank said Thursday that earnings for the period bounced back to ?300 million ($370 million) from only ?53 million a year ago when the bank took deep losses on Greek bonds.
Other key numbers fell, however. Income from trading and commissions declined, while bad loans rose.
The company said the difficult economy meant profit for the second half would come up short of the first half's - Germany, Europe's biggest economy, is coming off the boil and some economists are even predicting that it may fall back into recession, officially defined as two straight quarters of falling output.
Commerzbank said it expected lower income from commissions due to subdued investment and customer activity, along with weaker loan demand and continuing low interest returns due to rock bottom rates. The result would be "profit that clearly lags behind the performance in the first six months of the year."
Investors were disappointed by the downbeat outlook, and the bank's share price was trading 3.7 percent lower in morning trading in Frankfurt.
Despite its warning, the bank said it was in good shape to meet the challenging market conditions, as it continues to shed
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