Commerzbank, Germany’s second largest bank by branch network, has returned to profit a year earlier than it had forecast with a net income for fiscal 2010 of €1.43bn ($1.97bn), compared with a net loss of €4.53bn in the prior fiscal.
Commerzbank’s retail banking-focused Private Customers unit posted pre-tax profit of €48m in the twelve months to 31 December, after it had recorded a net loss of €196m a year earlier.
Net interest income at the unit fell 7.3% from the previous year-end to €1.98bn. Net commission income declined by 10.27% to €1.94bn.
Loan loss provisions in the unit remained at the same level as the previous fiscal.
Commerzbank said that the unit was still facing charges from the impact of the Dresdner Bank integration.
Customer numbers remained flat at 11m.
At group level, net interest income was down 1.7% at year-end 2010 versus the previous fiscal to €7bn; net commission income fell 3.3% to €3.64bn year on year.
The bank improved its cost-income ratio by 12.9 percentage points in the twelve months to 31 December to 69.3% – but the cost-income ratio at the bank’s Private Customers unit increased further from fiscal 2009 by 16 percentage points to 92.4%.
At group level, loan loss provisions were reduced by 40.7% in fiscal 2010 versus the previous fiscal, to €2.5bn.
In Central and Eastern Europe, the bank returned to the black with a pre-tax profit of €53m, versus a pre-tax loss of €398m in the prior year.
Chairman Martin Blessing said: “2010 was a successful year for Commerzbank in many respects. We have achieved key targets and the Commerzbank Group has returned to profitability one year earlier than forecasted in the ‘Roadmap 2012’. We have also implemented the integration of Dresdner Bank more quickly than planned in some important areas.”