Germany's second largest bank, Commerzbank, posted a 1.86 billion euro ($2.53 billion) net operational loss in the fourth quarter of 2009, despite last year's huge state bailout.

Commerzbank blamed the loss on asset writedowns. The loss far exceeded forecasts from analysts surveyed by Dow Jones Newswires, who were expecting a shortfall of 1.02 billion euros.

Commerzbank's net loss for all of 2009 was 4.54 billion euros. Bank Chairman Martin Blessing blamed the result on the ongoing financial crisis.

"The result reflects the effects of the ongoing economic and financial market crisis - and the crisis is not yet over, although the start of 2010 has been promising," Blessing said in a statement.

The news caused the bank's shares to fall in midday trading by 6.68 percent to 5.63 euros per share.

Last summer Commerzbank received 18 billion euros from the German government following its expensive merger with another German bank. The deal to buy Dresdner Bank from German insurer Allianz was finalized in September 2008, just weeks before the collapse of US investment bank Lehman Brothers, which triggered the global financial crisis.

In a statement, Commerzbank said that "against the background of difficult markets," it suffered a trading loss of 561 million euros in the final three months of 2009 linked to insurance guarantees. It described the fourth quarter as "typically seasonally weak."

In the first nine months of 2009 Commerzbank recorded a net loss of more than 2.68 billion euros.

The bank last year carried out a recapitalisation with German government aid in the amount of 18.2 billion euros, which gave the state a 25 percent stake.

Finance director Eric Strutz told reporters at a news coonference that the bank would begin reimbursing state money in 2012, but it was unclear if it would see an operating profit this year. Commerzbank projected a return to profit by 2011.

Greek fallout

Analysts say they are concerned about Commerzbank's Eurohypo subsidiary and uncertainty about Greece's ballooning budget deficit, which reached 12.7 percent of the euro-zone country's gross domestic profit.

An internal report by Germany's financial market watchdog Bafin concluded that German banks could be seriously threatened if any of a number of debt-ridden European countries became insolvent.

“The main risk for the German finance sector is the collective problems” of Portugal, Italy, Ireland, Greece and Spain, said BaFin's President Jochen Sanio, in the letter reported by the German news magazine Der Spiegel. “Greece may just provide the spark.”


svs/nrt/dpa/Reuters/AFP
Editor: Chuck Penfold