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August 09, 2001

Commerzbank: half-year result reflects stock-market weakness and cost increase

The difficult economic and capital-market conditions exerted an adverse impact on the Commerzbank Group's earnings performance in the first half of 2001. At the same time, costs continued to rise, though recently somewhat less sharply. Overall, operating expenses in the first six months were 17.8% higher than a year previously. After balancing income and expenses, a pre-tax profit of 495m euros emerges, 73.9% lower in a year-on-year comparison. Last year`s results strongly reflected the high non-recurring proceeds from the IPO of comdirect bank, however. Adjusted for this additional income, the result for the first six months was down by just over a half. Once taxes and the profit attributable to minority interests have been deducted, the net profit totalled 262m euros; earnings per share declined to 0.49 euros (1.15 euros in the first half of 2000, adjusted for the comdirect effect).

In the second quarter alone, the pre-tax profit amounted to 186m euros, as against 309m euros in the first three months of this year.

In order to slow the surge in costs, the board of managing directors approved a set of measures designed to take effect in the short term. A recruitment freeze and cuts in IT projects are to achieve savings of 240m euros in the current year. If these are accompanied by a gradually improving market environment, the bank expects to achieve a distinct upturn in the months ahead.

Key Profit and Loss items in first half 2001 (first half 2000 in parentheses) in million euros

Net interest income1,834 (1,696)+8.1%
Provisions for possible loan losses329 (256)+28.5%
Net commission income1,216 (1,423)-14.5%
Trading profit541 (600)-9.8%
Result on financial investments179 (71)+152%
Other operating result-37 (834)-
Operating expenses2,909 (2,470) +17.8%
Pre-tax profit495 (1,898)-73.9%
Taxes on income183 (774)-76.4%
Net profit262 (1,095)-76.1%

(The complete interim report is available here)