Bank Results Leave Way Clear For Merger

The market has now had time to disgest Commerzbank's third quarter results and the general feeling it that the bank is tidying itself up, ready for merger.

The German bank reported a record net loss of $2.66bn in the quarter after writing off roughly the same amount in the value of certain of its investments, including a write down of $408m against the value of Jupiter Asset Management. The bank has confirmed that it will not pay a dividend this year, for the first time in 21 years. Commerzbank's operating profit in the third quarter was $117.9m. The bank also announced plans to raise an additional $887m from a share sale to bolster capital.

Although a number of banks are keen to expand their activities in Germany, and Citigroup, Credit Suisse and Royal Bank of Scotland are all said to have been looking at Commerzbank from afar, no firm interest in a takeover appears to have been shown so far. The smart money is on Commerzbank reinstigating merger talks with rival HVB Group in the coming weeks.

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