BERLIN (AP) — Germany's Commerzbank eked out a small profit in the fourth quarter following heavy losses in the same quarter a year ago, helping it end 2013 in the black and send its stock soaring
The Frankfurt-based bank said Thursday that it made a net profit of 64 million euros ($87 million) during the period, in contrast to last year's massive loss of 726 million euros. As a result, it ended 2013 with a profit of 78 million euros, again in contrast to 2012's 47 million euros loss.
A key reason behind its turnaround was that provisions for loan losses were down to 451 million euros in the fourth quarter from 614 million euros in the same quarter last year. Commerzbank shares closed 1.3 percent higher in Frankfurt at 13.57 euros.
Commerzbank is undergoing widespread change to meet regulatory requirement. Its non-core assets division, for example, is winding down its commercial real estate and shipping loans. Commerzbank was required to leave some lines of businesses under European Union rules to offset the anti-competitive effect of state aid it received from the Germany government when it was bailed out in 2009.
Chairman Martin Blessing said the bank has "already achieved major objectives" ahead of schedule and plans now to reduce the portfolio more quickly than originally planned to about 75 billion euros by the end of 2016 after the previous target of less than 90 billion euros.
"In the year of transition 2013, we have attained a solid operating profit in both the Group and the Core Bank, also seeing important successes in the implementation of our strategic agenda," Blessing said.