Commerzbank, which lost its commended status in the 2001 Global Custodian agernt bank review, announced results today which were as unhappy as predicted. With prer-tax profits of just Euros 37 million, and a restructuring charge of Euros 283 million, the dividend was halved.
With total assets topping 510bn euros, up more than 10 percent, net interest income increased a good two percent. At the same time, provisions for possible loan losses, in light of weaker economic performance, increased more than one-third to 935m euros. The lower net commission income (minus 16 percent) contrasts with the 20 percent higher trading profit, partially due to the first-time application of IAS 39. As a result of increased cost-cutting measures, the growth rate in operating expenses slowed from 18 percent in the first half of the year to less than seven percent for the year as a whole. In the Other operating result, the minus 179m euro includes both amortization of goodwill and a special charge for the German Industry Foundation Initiative (“Stiftungsinitiative der deutschen Wirtschaft”) for paying compensation to WWII forced-labor victims.
The Board sees its dividend recommendation as an expression of confidence in 2002. For the current year the Bank, in light of its initiated restructuring measures, plans a clear improvement in its earnings.