Kirch drag on Commerzbank

12 April 2012

THE collapse of the Kirch media empire sent net profits at Commerzbank tumbling by 59% to e72m (£45m) in the first three months of the year. Germany's fourth biggest bank set aside e245m (£153m) to cover problem loans to KirchMedia and other troubled corporate borrowers.

'Even if economic performance picks up in the course of the year, the number of insolvencies in our core market will continue to rise for some time,' warned chief executive Klaus- Peter Mueller, who has embarked on a cost-cutting campaign at the bank.

Commerzbank is slashing 3,400 jobs and selling non-core assets. Group wide, fund management lost e38m in the quarter while the securities division, posted an e18m deficit.

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