February 13, 2020 / 6:16 AM / 7 days ago

Commerzbank's cost cull to continue after quarterly loss

FRANKFURT (Reuters) - Germany’s Commerzbank (CBKG.DE) reported to a smaller-than-expected fourth-quarter loss on Thursday, adding that it was looking for further cost cuts as it restructures after a failed attempt to merge with Deutsche Bank (DBKGn.DE).

Martin Zielke, CEO of Germany's Commerzbank AG and new CFO Bettina Orlopp attend the Commerzbank AG annual results news conference in Frankfurt, Germany, February 13, 2020. REUTERS/Ralph Orlowski

Commerzbank Chief Executive Martin Zielke said he was growing more optimistic about the bank’s prospects despite the 54 million euro ($59 million) quarterly loss, which it said was due to higher taxes and provisions for staff cuts.

The loss, which compared with a net profit of 113 million euros a year earlier, was not as bad as a consensus forecast of 99 million euros and Commerzbank shares were up 4.7% at 0855 GMT.

Revenue for the quarter was also slightly ahead of analysts’ expectations. The bank said it would announce the further measures to trim expenses in the coming months.

“We have already made tangible progress with our strategy,” Zielke said of state-backed Commerzbank’s overhaul, which includes staff cuts, absorbing its Comdirect online brokerage and closing branches.

Investors are also awaiting news on the sale of its Polish arm mBank (MBK.WA), which Commerzbank confirmed had begun.

But some prospective bidders are shying away from bidding out of fear of Polish political interference, people close to the matter have told Reuters.

A scarcity of bids has raised questions about the price Commerzbank will be able to fetch.

Bettina Orlopp, Commerzbank’s new finance chief, told analysts that the bank was sticking to its plans to sell mBank but would only do so at the right price.

Commerzbank, which had expected that its 2019 profit would be lower than 2018, has warned of revenue pressure due to a weaker economy and ultra-low euro zone interest rates.

For the full year, Commerzbank recorded a profit of 644 million euros, down from 862 million in 2018.

Reporting by Tom Sims and Hans Seidenstuecker; Editing by Riham Alkousaa, Thomas Escritt and Alexander Smith

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