Net income slid to just under $57.5m from over $360m in the second quarter of last year, the bank said in an e-mailed statement Tuesday.
Standard & Poor’s cut the firm’s debt rating to A-, four levels above junk, two months ago saying poor economic conditions mean it will struggle to boost earnings sustainably and will be vulnerable to 'its high-risk lending concentrations'.
'Investors can’t be that happy with these earnings', Dirk Becker, a Frankfurt-based analyst at Kepler Cheuvreux who has a sell recommendation on the stock, said by telephone. 'It was clear the results couldn’t be good and that has happened. Now we see that core banking operations aren’t doing so well either and the trend in loan-loss provisions hasn’t abated'.
Loan-loss provisions rose 33% to $717m in the second quarter from a year ago, Commerzbank said in the statement. The U.K. commercial real estate loan portfolio as well as 'single cases' at a unit catering to small and medium-sized companies have driven increases, the bank said. Net interest income fell to $2.1bn from just under $2.4bn a year earlier.
To access the complete Bloomberg article hit the link below