A first-quarter profit and raised revenue outlook are given by the Commerzbank, which is all against the expectation on it. This is buoyed by strong trading commission as the German lender shrinks operations and makes heavy job cuts.
This Germany’s second-biggest bank is expected to remain in the red this year as it conducts a 2-billion-euro ($2.42 billion) restructuring involving hundreds of branch closures while axing 10,000 jobs. This is the expectation of all analysts, despite its profit. There was a 291 million euros loss a year earlier. And now against the expected loss by the analysts, the Commerzbank showed a net profit of 133 million euros in the three months.
Net commission income from securities trading is the main attribution to this better performance. This same trend has also helped other banks in the first quarter. The bank is still partially owned by the state after a bailout during the financial crisis more than a decade ago. Chief Executive Manfred Knof said that after a very good start into this year, they are looking confidently to the future despite the ongoing pandemic.
Knof struck a deal with employees over the planned job losses. Shares were up 2% in pre-market trade. Since its bailout, the agreement is central to Knof’s effort to restore profitability for a bank that has never fully recovered.