GERMANY - Provisional figures from Commerzbank indicate a massive EUR1.25bn slide in net profit for 2001.
Commerzbank, Germany’s third largest bank, has been plagued by revenue costs and last year the firm instigated a restructuring programme which left it with a one-off expense blot of EUR283m on its balance sheet.
Net profit for year ended 2001 is expected to reach only EUR92m, compared with EUR1342m for the corresponding period 2000.
Total assets now top EUR510bn, up more than 10%. At the same time, provisions for possible loan losses, in light of weaker economic performance, increased by more than one-third to EUR935m.
Bank chairman Klaus-Peter Müller’s extensive cost-cutting offensive - announced last year - aims to slash around 3,400 jobs by 2003. The plan expects to bring 2002 operating expenses down to the year 2000 level of around EUR5.5bn.
During last July and August, Commerzbank posted a negative after-tax result of about EUR120m. The bank conceded that earnings performance was weak, but stated that it still expected to achieve a net profit for the year that would enable it to pay a dividend. Today Müller recommended a dividend of EUR0.40, half that of the previous year.
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