* Q1 net loss of 94 mln euro includes revamp charge of 493
* Analysts had expected net loss of 125 million euros
* Commerzbank offers no earnings guidance for 2013
* Commerzbank may offer new shares for 5.50 euros - source
(Adds comments from CEO, fund managers)
By Arno Schuetze
FRANKFURT, May 7 Commerzbank,
Germany's No.2 lender, will have to work hard to entice
investors to its 2.5 billion euro ($3.3 billion) share call this
month after painting a bleak outlook for the rest of this year.
Chief Financial Officer Stephan Engels said 2013 would be a
year of transition for the bank, which posted a net loss of 94
million euros in the first three months as it booked a 493
million euro restructuring charge linked to 4-6,000 job cuts.
"Revenues will stay under pressure, costs are expected to
increase," Engels said on Tuesday, adding the bank hoped to see
positive effects from its revamp next year.
A source with knowledge of the bank's capital increase said
Commerzbank may therefore have to offer new shares at a hefty
discount of about 50 percent. The source also said Commerzbank
could knock at least 35 percent off the theoretical ex-rights
price of the new shares, implying that these may be sold at
around 5.50 euros apiece.
"Commerzbank will need a lot of persuasive power to enthuse
investors to buy the new Commerzbank shares," said Felix
Scherhaufer from LBBW Asset Management.
Commerzbank shares rose 1.8 percent by 1117 GMT, as analysts
pointed to slightly better-than-expected quarterly earnings.
They had expected a loss of 125 million.
However, investors criticised the bleak outlook.
"The better first quarter results so far give no hint of a
fundamentally better business development in 2013," said Lutz
Wockel from fund manager NordLB Capital Management.
Commerzbank's Engels said he expected the bank's interest
income to decrease in 2013 as the low interest rate environment
makes it increasingly difficult to make money. Costs are set to
rise by up to 100 million euros each quarter due to investments,
including for a revamp of its retail business.
The lender will also set aside "slightly more" money for bad
loans, Engels said. Last year, Commerzbank - whose cash cow
Mittelstandsbank unit specialises in providing loans to
Germany's important medium-sized companies - benefited from
extremely low provisions as Germany's economy powered ahead most
of the year.
Commerzbank did not provide a more specific earnings
Commerzbank intends to use the proceeds from the capital
increase to repay some of the state aid it received in the
financial crisis and to strengthen its capital buffers to comply
with stricter bank rules.
The transaction will increase Commerzbank's capital ratio
under the most stringent application of Basel 3 rules by around
1 percentage point, Engels said. He added that the bank is
targeting a 9 percent capital ratio by the end of 2014.
In the first quarter, the ratio stood at 7.5 percent.
By comparison, rival BNP Paribas has a capital
ratio of 10 percent, Deutsche Bank - which last week
raised 3 billion euros in a capital increase - 9.5 percent,
Goldman Sachs 9 percent, JP Morgan 8.9 percent
and Credit Suisse 8.6 percent.
Since a 2008 bail-out in the wake of the financial crisis,
the German government owns 25 percent of Commerzbank, but its
holding will be diluted to roughly 18 percent as it will not
participate in the capital increase.
($1 = 0.7659 euros)
(Additional reporting by Alexander Hübner; Editing by Sophie