German bank defies recession

(First Edition)

FRANKFURT - Commerzbank, the smallest of Germany's big three Frankfurt-based commercial banks, outperformed its rivals with a near 25 per cent leap in profits in 1993. Group operating profit after loan loss provisions rose to DM1.13bn (pounds 452m), writes John Eisenhammer.

The strength of the increase partly reflected the fact that Commerzbank was one of the few German banks to reduce its provisions for bad loans last year. Its provisions fell to DM1.8bn from DM2.1bn in 1992.

Martin Kohlhaussen, Commerzbank's chief executive, said operating profits before loan loss provisions in the first two months of 1994 were higher than a year earlier, but gave no details.

He said the bank expected improved profits for the full year, despite continued high credit risks. He described 1993 as an 'unusual year for banks with an attractive constellation in the financial markets, but we could not escape the consequences of the recession.'

Like all the big German banks, Commerzbank benefited from the strength of the financial markets last year as net income on own-account trading soared by 109 per cent to DM550m. Net interest income rose 12 per cent to DM4.8bn. The bank's total assets at the end of 1993 rose to DM285.4bn from DM232.7bn a year earlier.