Germany's Commerzbank saw earnings hit by a long series of one-time charges, undermining an otherwise solid performance and complicating efforts by chief executive Manfred Knof to grow the lender.
Shares fell after Commerzbank reported 18 per cent lower revenue and a net loss of €527 million, both worse than estimated. However, it reiterated a forecast for revenue to increase slightly this year and said a key measure of capital strength will probably come in better than planned.
"Performance was impacted by a number of one-offs," Anke Reingen, an analyst at RBC Capital Markets, wrote in a note. Still, "we calculate that operating performance was better than expected."
Mr Knof in February embarked on a restructuring that aims to restore profitability by cutting 10,000 jobs and lowering costs by a fifth.
The hits to earnings last quarter included compensation payments in the "double-digit million euro" that Commerzbank made to HSBC after scrapping a major outsourcing project. Provisions for potential claims relating to a controversial tax practice known as "cum cum" also weighed on results.
Among the one-off items was a court ruling that resulted in provisions of €66 million, while a Swiss franc loan portfolio at its mBank subsidiary caused €55 million in provisions. Most of these issue had been flagged before, but their impact still surprised analysts. – Bloomberg
