A company logo is pictured at the headquarters of Germany's Commerzbank AG in Frankfurt, Germany, February 13, 2020. REUTERS/Ralph Orlowski/File PhotoRegister now for FREE unlimited access to Reuters.comSummaryCompaniesConfirms 2022 profit targetBank going through major restructuringShares down in early tradeFRANKFURT, Aug 3 (Reuters) - Germany's Commerzbank (CBKG.DE) swung on Wednesday to a bigger-than-expected second-quarter net profit, helped by higher interest rates and commission income, and confirmed it was on track to meet its profit target despite "clouds" on the horizon.The return to profit at Germany's No. 2 bank is a victory for CEO Manfred Knof, who joined the company at the start of 2021 to carry out a 2 billion euro restructuring programme involving hundreds of branch closures and 10,000 job cuts to get back on a sustainable path.Net profit of 470 million euros ($478.60 million) for the three months through end-June compares with a loss of 527 million euros a year earlier. Analysts had on average expected a profit of 370 million euros, according to a consensus forecast published by Commerzbank.Register now for FREE unlimited access to Reuters.comInvestors have been watching earnings reports of major lenders in Europe for signs that a weaker economy, higher interest rates and the war in Ukraine are weighing on their operations and outlooks.Some of them, including rival Deutsche Bank (DBKGn.DE), have reported surprisingly strong quarterly reports but voiced concerns about the economic outlook. read more Germany's banks are at the centre of a geopolitical storm because the country is particularly dependent on Russian energy and its economy will be hit hard by any supply shortages.CEO Knof spoke of "bright spots and clouds" in a call with analysts."The most difficult and pressing question is about natural gas supply and GDP development," he said, referring to gross domestic product.The shares nevertheless fell 3.5% in early trade.The bank said that it took charges of 228 million euros in the quarter related to the war in Ukraine, and that it had on hand 564 million euros for any further war-related effects or impact from energy supply disruptions.Commerzbank reiterated that it would maintain its profit target of more than 1 billion euros for the full year, though it slightly raised its cost target to 6.4 billion euros from 6.3 billion euros.During the same period last year, the German lender generated a loss due to its restructuring and after a write-off to end an outsourcing project. read more Niklas Kammer, an analyst with Morningstar, said ahead of the earnings that profitability "remains challenging" for Commerzbank."The competitive German banking market leaves little opportunity for Commerzbank to significantly out-earn its cost of equity," he said.Analysts at Deutsche Bank said the earnings were good overall but noted the macroeconomic environment "still matters a lot".($1 = 0.9820 euros)Register now for FREE unlimited access to Reuters.comReporting by Tom Sims and Marta Orosz; editing by Muralikumar Anantharaman and Jason NeelyOur Standards: The Thomson Reuters Trust Principles.Tom SimsThomson ReutersCovers German finance with a focus on big banks, insurance companies, regulation and financial crime, previous experience at the Wall Street Journal and New York Times in Europe and Asia.
Commerzbank sees energy and growth 'clouds' after Q2 profit beat.