(RTTNews) - German lender Commerzbank AG (CRZBY.PK) reported Wednesday lower profit in its first quarter with weak revenues. Underlying revenues in client business increased slightly. Looking ahead for fiscal 2019, the Bank said it will continue its growth strategy and is expecting higher underlying revenues. The shares were gaining around 1 percent in the morning trading in Germany.
The Bank further said it is planning to maintain a pay-out ratio for financial year 2019 same as last year. It also targets a Common Equity Tier 1 ratio of at least 12.75 percent by the end of 2019.
Stephan Engels, Chief Financial Officer of Commerzbank, said, "Business with our clients remains on a positive track. … We are continuing to implement cost reductions despite further increases in compulsory contributions and ongoing strategic investments. Our cost targets remain unchanged."
For the first quarter, profit attributable to shareholders declined to 120 million euros from last year's 262 million euros. Earnings per share were 0.10 euro, down from 0.21 euro a year ago.
The weak results reflected a higher tax burden of about 90 million euros, while the tax refunds in the last year had a positive impact. The results were also hurt by weaker performance of the discontinued Equity Markets and Commodities business.
Operating profit was 244 million euros, down from 258 million euros last year. Operating expenses declined to 1.83 billion euros from 1.88 billion euros last year despite higher compulsory contributions.
Group revenues for the quarter declined to 2.16 billion euros from last year's 2.22 billion euros, due to exceptional items and valuation effects.
Underlying revenues were 2.19 billion euros, down from 2.22 billion euros in the previous year.
In the first quarter, Commerzbank said it grew in terms of both customers and assets and slightly increased its underlying revenues in the customer segments.
Further, the company said the revamp of the Bank's head office through the programme "Campus 2.0" is progressing as planned and is expected to be completed in July 2019.
In Germany, Commerzbank shares were trading around 7.82 euros, up 0.96 percent.
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