Commerzbank expects net loss for 2020 after Q2 profit decline

Credit: REUTERS/Ralph Orlowski

Commerzbank is set to post a loss for 2020, as a big writedown on loans to collapsed firm Wirecard adds to the problems facing Germany's second-biggest lender, including the fallout from the COVID-19 crisis and a leadership vacuum.

Profit down 21% in quarter

Bank books a big Wirecard provision, adding to woes

Bank in midst of leadership crisis

Adds details

FRANKFURT, Aug 5 (Reuters) - Commerzbank CBKG.DE is set to post a loss for 2020, as a big writedown on loans to collapsed firm Wirecard WDIG.DEadds to the problems facing Germany's second-biggest lender, including the fallout from the COVID-19 crisis and a leadership vacuum.

The grimmer outlook for the year follows a 21% decline in net profit in the second quarter. Net profit in the April-June period of 220 million euros ($259.97 million) compares with net profit of 279 million euros a year earlier.

"The effects of the coronavirus pandemic and the ongoing difficult economic conditions have persisted in the year to date and continued to have a significant impact on our earnings performance in the first half of 2020," the bank said.

The 150-year-old bank, which is still partially owned by the state after a bailout during the last financial crisis, said provisions for credit losses in the quarter were 469 million euros, compared with 178 million euros a year ago.

Some 175 million of that provision was for a single case related to Wirecard WDIG.DE, the German payments company that collapsed amid an accounting scandal.

(Reporting by Tom Sims and Hans Seidenstuecker; Editing by Michelle Martin)

((Tom.Sims@thomsonreuters.com; +49 69 7565 1242;))

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