Commerzbank second quarter net profit shrinks

Germany's second-biggest bank, Commerzbank, saw net profit dive in the second quarter owing to low interest rates and high provisions, its results showed on Thursday. Net profit crumpled more than six-fold to 43 million euros ($57 million) from April to June compared to 270 million euros booked in the same period a year earlier, the bank said. However the result was slightly better than forecasts by analysts polled by Dow Jones Newswires who had pencilled in net profit of 30 million euros. Shares in the bank soared more than nine percent on the Frankfurt stock exchange in early trading, to 7.26 euros. The bank also reported operating profit of 78 million euros, down from 442 million in the 2012 second quarter. It said the first half of this year had been hit by "the weaker interest rate environment and higher loan loss provisions". The bank said it took a 537-million-euro provision for loan losses in the second quarter, up from 404 million euros in the same period a year earlier. For the first six months of 2013, it reported a net loss of 51 million euros compared to a net profit of 625 million a year earlier due to costs for a vast restructuring plan that includes shaving 5,200 jobs by 2016 and dropping some of its activities. Last month Commerzbank said it was selling its Depotbank investment unit managing funds worth 93 billion euros to BNP Paribas and had agreed to sell a huge portfolio of commercial real estate loans in Britain to US bank Wells Fargo and Lone Star Funds. In the wake of the financial crisis, the German government bailed out Commerzbank in 2008 and again in 2009 with so-called silent participations totalling 16.4 billion euros.