Salem Radio Network News Wednesday, September 22, 2021

Business

Commerzbank swings to Q2 loss amid restructuring and write off

FRANKFURT (Reuters) – Germany’s Commerzbank on Wednesday said that it swung to a second-quarter loss as the lender undergoes a major restructuring and after a write off to end an outsourcing project.

The net loss of 527 million euros ($625.50 million) in the second quarter compares with a profit of 183 million euros a year earlier. Analysts had expected a net loss of 504 million euros.

Germany’s No. 2 lender is trying to turn over a new leaf under its new chief executive, Manfred Knof. It is carrying out a 2 billion euro restructuring involving hundreds of branch closures and 10,000 job cuts to get back on a path to profit.

“The implementation of the strategy is right on track,” Knof said, adding the bank was ready to make tough decisions “if necessary”.

Commerzbank, which is still partially owned by the state after a bailout during the financial crisis more than a decade ago, is expected to post a loss for the full year as well, according to analysts.

Last month, Commerzbank announced it would abandon a project to outsource securities settlement to HSBC and as a result would write off 200 million euros in the quarter. The bank said it was halting the outsourcing plan after identifying risks to its technical implementation.

($1 = 0.8425 euros)

(Reporting by Tom Sims and Matthias Inverardi, editing by Kirsti Knolle)

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