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Commerzbank Q3 Profit Down, Backs FY18 Underlying Revenue Growth View; Stock Up

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Shares of Commerzbank AG (CRZBY.PK) were gaining around 5 percent in German trading after the lender said Thursday that it continues to expect higher underlying revenues for fiscal 2018 after reporting strong underlying revenue growth in its third quarter. Meanwhile, quarterly profit and revenues on a reported basis declined.

In 2018, the Bank said it will focus on further growth and the implementation of its Commerzbank 4.0 strategy. Higher underlying revenues are expected at Group level with the Private and Small Business Customers segment exceeding and the Corporate Clients segment being below the 2017 figures. Driven by investments and compulsory contributions, costs are expected to be at around 7.1 billion euros.

Further, Commerzbank said it is on track to achieve its target of one million net new customers by the end of 2018. The Corporate Clients segment is still ahead of its 2018 targets for new customers and volume of lending.

The Bank still aims to resume dividend payments of 20 cents per share for financial year 2018.

Net result for the third quarter plunged to 218 million euros from 467 million euros last year. Earnings per share were 0.17 euro, down from 0.37 euro a year ago.

Quarterly operating profit also declined to 331 million euros from the prior year's 623 million euros. The year-on-year decline was attributable mainly to exceptional revenues of 502 million euros in the third quarter of 2017, including from real estate sales.

Revenues for the quarter were 2.193 billion euros, down from 2.505 billion euros in the prior year. In the third quarter, the Bank increased its underlying revenues by nearly 9% year-on-year to 2.175 billion euros.

The Private and Small Business Customers segment's underlying revenues were also up year-on-year for the third quarter. Assets under Control in Germany went up in all product categories, to stand at 392 billion euros at the end of the third quarter.

Commerzbank recorded continued growth in the first nine months of 2018 and increased its underlying revenues.

In Germany, Commerzbank shares were trading at 8.77 euros, up 4.85 percent.

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