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Business

Commerzbank logs anticipated profit plunge

Germany's second-largest lender, Commerzbank, has booked a steep decline in bottom-line earnings for 2016. The bank kept battling through a tough restructuring in a volatile business environment.

Commerzbank announced Thursday its net profits were down more than 74 percent year on year in 2016.

Releasing full-year financial results, Germany's second-biggest lender said it logged bottom-line earnings of 279 million euros ($298 million) last year, way below the 1.1-billion-euro result it reported for 2015.

However, the 2016 figure beat the 222-million-euro forecast by analysts surveyed by Factset, the bank noted.

Low interest rates a problem

Commerzbank CEO Martin Zielke indicated the drop in earnings was first and foremost attributable to the low-interest environment and a number of problematic loans.

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German banks in turmoil (2016)

"We logged a solid result for 2016, which is not to say that we can be satisfied," Zielke said in a statement, pointing to the need to follow through reforms amid a large-scale restructuring program also involving massive job cuts.

Commerzbank stopped short of giving an earnings outlook for the current year, saying only it would aim to keep its cost base stable and expecting loan loss provisions for its retail and corporate bank to remain largely unchanged.

hg/jd (dpa, AFP, Reuters)

 

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