Commerzbank has implicated writedowns in its new Asset Based
Lending (ABL) arm as one of the main factors behind its disastrous
third quarter results, which showed a net loss of €1.06 billion for
Germany’s second biggest bank.
The new ABL division, including property leasing subsidiary
Commerzreal, a shipping finance business and newly acquired public
finance lender Eurohypo, contributed heavily to the quarter’s
loan-loss provisions of €1.05 billion.
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Eric Strutz, chief financial officer of the Frankfurt-based
bank, said in a statement that Commerzbank’s asset finance
activities “will continue to face difficult conditions” in the
market.
The German government provided €18.2 billion to Commerzbank as a
response to the financial crisis, and took a 25
percent-plus-one-share stake in the group in return. The bank also
cut its total assets by 15% during the year’s third quarter.
“The second half of the year remains difficult, and Commerzbank
will close 2009 with a loss,” said chief executive officer Martin
Blessing.
Fred Crawley
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