The stated profit target at Commerzbank is likely not to be met due to the credit crunch, the firm has admitted.
In a statement yesterday, the German bank announced a further write-down of assets totalling $378 million for the previous quarter.
Included in the written-off assets are securitised US real estate loans and structured bonds related to the declining American housing market.
Commerzbank said that these sub-prime related losses could rise as the year continues, eating into profits.
It “could be very difficult to reach the good result of the previous year,” the statement says.
Overall net income for the first quarter at the bank stands at $640 million, driven by a strong performance at the bank’s private and business customer wings – although these profits are less than half those of January-March 2007.
Commerzbank’s current profits target stands at just under $3 billion.
The firm’s share price has now dropped 40% since the beginning of the year.