Germany’s Commerzbank said on Wednesday (May 13) it swung to a loss in the first quarter as the impact of the coronavirus pandemic drove up loan loss provisions and risked derailing its recovery.
As Francis Maguire reports, Dutch bank ABN Amro also saw a Q1 downturn.
Commerzbank's tough year took another rocky turn on Wednesday (May 13).
Germany's second largest lender announced a net loss of 295 million euros - or about $320 million - in the first quarter... Way down on its net profit of 122 million euros last year.
Commerzbank said measures put in place to control the new disease knocked almost half a billion euros off earnings in the quarter.
The bank also expects credit losses of between 1 billion and 1.4 billion euros this year, and warned loan loss provisions risked ruining its recovery.
2020 has been a difficult year for Commerzbank.
So far it has stopped its 2019 dividend plans, back-tracked on selling its Polish lender mBank, and faced credit rating downgrades.
Dutch lender ABN Amro also announced first-quarter woes on Wednesday.
It blamed the virus crisis and crashing oil prices for a worse-than-expected downturn.
ABN reported a first-quarter loss of 395 million euros compared with a net profit of 478 million euros a year before.
The bank also warned provisions for souring loans could rise to 2.5 billion euros this year.
By lunchtime Wednesday, Commerzbank shares were down over 4%, while ABN Amro stock had plunged over 7%.
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