FRANKFURT, May 12 — Germany’s second-largest lender Commerzbank today turned in a solid first-quarter performance, surprising markets despite the drag on profits of a major restructuring.

Net profit during the first three months of 2021 reached €133 million (RM664 million), beating the forecast of analysts polled by Factset who expected a loss of €82 million.  

"After a very good start into the year, we are looking confidently to the future despite the ongoing pandemic,” said CEO Manfred Knof in a statement.

The bank booked €465 million in restructuring costs, notably to cover staff layoffs. But it was able to slash its risk provision to €149 million from €326 million one year ago at the start of the coronavirus outbreak.

Revenues surged 35 per cent year-on-year to reach €2.49 billion.

Chief financial officer Bettina Orlopp put the gains down to a "strong securities business” which "enabled us to largely compensate for the effects arising from the negative interest-rate environment”. 

After net losses of €2.9 billion last year — the first since 2009 — the bank said it expected to be back in the black this year.

That drive will include cutting staff levels to 32,000 by the end of 2024, down from nearly 40,000 at the end of last year. 

It said it had negotiated with employee representatives for a "maximally socially responsible downsizing” which would include a voluntary redundancy programme for 1,700 people this year.

Its network of bank branches will be halved to about 450 sites across Germany.

Like other banks, Commerzbank’s earnings have been pummelled by years of ultra-low interest rates.

The German government still holds an around 15-per cent stake in the bank which it bailed out during the 2008-2009 financial crisis. — AFP