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Commerzbank Stock Up On Higher Q1 Net Profit; Backs 2018 Outlook


Shares of Commerzbank AG (CRZBY.PK) were gaining around 3 percent in the morning trading in Germany after the lender reported Tuesday higher net profit in its first quarter. Pre-tax profit, meanwhile, declined and revenues were nearly flat. Further, the outlook for fiscal 2018 remains unchanged. Also, the Bank aims to resume dividend payments for financial year 2018.

In 2018, the Bank said it will focus on further growth and the implementation of its Commerzbank 4.0 strategy. Higher adjusted revenues are expected for both the Private and Small Business Customers and the Corporate Clients segments. Despite ongoing investments in digitalisation and IT, the Bank will manage its costs at around 7.0 billion euros. The risk result under IFRS 9 is expected to be below 600 million euros.

Stephan Engels, Chief Financial Officer of Commerzbank, said, "Strict cost management remains a priority to compensate for large investments in digitalisation, increasing compulsory levies and the implementation of regulatory projects."

For the first quarter, consolidated net profit rose to 250 million euros from last year's 229 million euros, and earnings per share improved to 0.20 euros from 0.18 euros in the prior year. The results were benefited by lower tax charges.

Pre-tax profit, meanwhile, declined to 289 million euros from 330 million euros last year. The risk result under International Financial Reporting Standard 9 or IFRS 9 stood at minus 77 million euros. It reflects the eliminated drag from ship finance, due to the revaluation of the Ship Finance portfolio following the introduction of IFRS 9.

Revenues stood at 2.302 billion euros, compared to 2.390 billion euros in the prior year. Revenues adjusted for exceptional items rose slightly to 2.301 billion euros from 2.282 billion euros in the prior year.

Net interest income edged down to 1.045 billion euros from 1.049 billion euros last year. Net fair value result dropped to 345 million euros from 402 million euros a year ago.

Provisions for loan losses declined to 77 million euros from 195 million euros a year ago.

The company reported a net 712,000 new customers for Private and Small Business Customers in Germany since October 2016. The bank is on track to reach its target of 1 million by end of 2018.

In Germany, Commerzbank shares were trading at 10.96 euros, up 3.44 percent.

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