Commerzbank operating profit fell to €1,399 million
Staff Writer |
Commerzbank generated a solid operating profit and further improved its Common Equity Tier 1 ratio in 2016.
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The implementation of the “Commerzbank 4.0†strategy announced in autumn last year has begun on schedule.
The operating profit for financial year 2016 fell to €1,399 million as of the end of 2016 (2015: €1,942 million).
This was due mainly to challenging market conditions and the continued negative interest environment, which had an adverse impact on net interest income. Revenues before loan loss provisions fell year-on-year to €9,399 million (2015: €9,795 million).
They also include some positive one-off effects, for example in the second quarter as a result of the sale of the Visa Europe shares, and in the fourth quarter in connection with the Heta exposure.
Loan loss provisions stood at €900 million in financial year 2016 (2015: €696 million). The year-on-year increase in loan loss provisions was the result of high loan loss provisions for ship finance due to the difficult situation on the shipping markets.
The Bank’s non-performing loan ratio of just 1.6%, which remains very good compared to its European peers, reflects the Bank`s healthy risk profile. Operating expenses were reduced to €7,100 million despite the charges arising from the new Polish banking tax and the European Bank Levy (2015: €7,157 million).
The pre-tax profit, taking into account the impairment on goodwill and other intangible assets of €627 million in the third quarter and restructuring costs of €129 million, came in at €643 million for 2016.
So after deduction of taxes of €261 million and minority interests of €103 million, Commerzbank posted a net profit of €279 million for 2016 (2015: €1,084 million). Earnings per share came in at €0.22 in financial year 2016 (2015: €0.90).
In the fourth quarter of 2016, the net profit fell year-on-year to €183 million (Q4 2015: €193 million).
An operating profit of €337 million was recorded, versus €384 million in the fourth quarter of 2015. Revenues before loan loss provisions increased year-on-year to €2,399 million (Q4 2015: €2,240 million).
This increase was attributable to the reinstatement of the value of the Heta exposure and revenues from the Bank`s sales of real estate, among other things. Loan loss provisions rose sharply year-on-year in the fourth quarter to €290 million (Q4 2015: €112 million).
This development was due to the loan loss provisions on the ship finance portfolio, as was the case for the year as a whole. Operating expenses remained almost stable year-on-year, at €1,772 million (Q4 2015: €1,744 million). ■