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Commerz profit plunges
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August 9, 2001: 3:15 a.m. ET
Second-quarter Commerzbank profit down sharply amid weak markets
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LONDON (CNN) - Commerzbank, Germany's fourth-largest bank, said second-quarter profit plunged 87 percent amid gloomy financial markets and rising costs.
Net profit for the three months ended June 30 dived to  94 million ($83 million) from 731 million a year earlier. Analysts polled by Reuters expected, on average, net profit of 108 million.
The latest period's figures looked weak by comparison with a year earlier because the second quarter of 2000 had been inflated by an 856 million windfall from the floation of online brokerage Comdirect.
But Commerzbank also blamed the "difficult economic and capital market condistion" for the "adverse impact" on profit. At the same time, "cost continued to rise" with operating expenses up 17.8 percent in the first six months of 2001.
Net profit for the year's first half net profit fell to 262 million or 0.49 a share, from 1.1 billion, or 1.15 billion.
The bank, like its rivals HypoVereinsbank and Deutsche Bank, said it was increasing it bad debt provision for the first half-year to 329 million, up 73 million from a year ago, in response to sluggishness in the German and euro zone economy "which will lead to a higher number of bankruptcies."
Commerz's German rivals HypoVereinsbank and Deutsche Bank, Europe's biggest bank, have both posted lower profits for the second quarter and warned they will miss targets for the full year if the financial markets and the eurozone economy continued to weaken.
Commerzbank Chief Executive Klaus-Peter Mueller last month warned second-quarter financial trading revenues had fallen and would not be able to make up for compensate for declines in other areas of the bank.
"Up to June, our securities commissions were 240 million lower than a year earlier, reflecting the subdued mood and the slack turnover on stock exhanges," Commerzbank said.
Commerzbank, which ended merger talks with cross-town rival Dresdner Bank last year and has been rumoured to be a takeover target for Italy's
UniCredito Italiano, said it had introduced a hiring freeze and cancelled IT projects in a bid to save 240 million in the current year. 
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