Germany's Commerzbank jumps to Q1 profit of $915M

[May 06, 2010]  BERLIN (AP) -- Commerzbank AG rebounded to profitability in the first quarter, as big gains in trading stemmed a string of quarterly losses, the bank said Thursday.

Germany's second-biggest lender earned a net profit of euro708 million ($915 million) in the January-March period, compared with a loss of euro864 million the year before.

The figure was helped, in part, by a major improvement in trading profits, which reached euro850 million in the first quarter compared with a loss of euro527 million last year.

"Overall, the first quarter of 2010 went better than originally anticipated," Chief Financial Officer Eric Strutz said in a statement.

"We have made considerable operational progress in all areas," he said, noting that efforts to cut costs and integrate Dresdner Bank "were also supported by the market recovery."

Commerz bought Dresdner from Allianz SE in 2009.

Several other banks, both in Europe and the U.S., have likewise reported strong trading earnings for the first quarter and Commerzbank investors cheered the results, pushing shares up 2.9 percent to euro5.88 in Frankfurt trading.

The bank's net interest income, one measure of revenue, rose 12 percent to euro1.88 billion in the quarter, compared with euro1.69 billion a year earlier.

Strutz said the bank's total assets fell by 16 percent to euro846 billion and its overall capitalization -- measured by the so-called tier 1 capital ratio -- was 10.8 percent at the end of the quarter.

Looking through 2010, Strutz said that while the first quarter results were an improvement, it is not the benchmark.

"One cannot extrapolate a good first quarter to the entire year," he said. "That is why we are sticking to our guidance: in 2010 as a whole, the group will only return to profit if the economy and financial markets remain supportive."

Commerzbank took part in the German government's financial-sector bailout program and is around 25 percent owned by the government.

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On the Net:

http://www.commerzbank.com/

[Associated Press]

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