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.
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.
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“The second half of the year remains difficult, and Commerzbank will close 2009 with a loss,” said chief executive officer Martin Blessing.
Fred Crawley
