* Q4 net profit 183 mln euros vs forecast 154 mln
* Expects 2017 flat cost base, higher shipping provisions
* Shares slide nearly 4 pct
* Follows disappointing Deutsche Bank earnings last week
(Recasts, adds CEO comments)
By Arno Schuetze
FRANKFURT, Feb 9 Commerzbank said it
expects net profit to remain low this year as it reported flat
fourth quarter earnings on Thursday, blaming low interest rates,
weak loan demand from German companies and its exposure to the
Germany's second-largest lender, which announced in
September it would cut more than a fifth of its workforce and
suspend its dividend as it tackles weak profits and a shift to
online banking, also said it was cutting 2016 bonus payments by
a third or about 100 million euros.
It reported flat fourth-quarter revenues of 1.3 billion
euros ($1.4 billion) and Chief Executive Martin Zielke indicated
that profit would remain low this year but did not give a
specific earnings target.
Asked whether the bank would just about break even in 2017,
Zielke told a press conference. "I can almost leave it at that
(assessment)," without elaborating on whether that meant it
would be close to the meagre 279 million euro net profit it
reported for 2016.
Shares in Commerzbank's shares were down 3.2 percent by 1215
GMT, at the bottom of Germany's blue-chip index.
Commerzbank took a hit of 212 million euros in the fourth
quarter from the European Central Bank's negative interest rates
that were supposed to ignite growth in the euro zone, but which
cut banks' margins.
"We cannot yet be satisfied with the quality of our
earnings," Zielke said.
The bank reported a fourth-quarter net profit of 183 million
euros ($195 million), beating analysts' average forecast for 154
"A closer look shows that earnings were only in line with
expectations if one-offs are accounted for," said Ingo Frommen
analyst at brokerage LBBW.
Bigger rival Deutsche Bank also disappointed
investors last week when it reported a 1.9 billion euro
quarterly loss as its clean-up bill weighed on earnings and
peers took some of its market share.
Commerzbank said it expects to set aside the same amount of
money this year as in 2016 to cover bad loans at its retail and
corporate bank, but sees provisions for bad shipping loans
rising to 450-600 million euros. In 2016, it increased group
provisions by a third to 900 million euros, mainly due to its
shipping industry exposure.
The bank has a 3.5 billion euro exposure to the shipping
sector and 26 percent of its shipping loans are non-performing.
Shipping firms are suffering due to a glut of vessels and
sluggish global trade and the world's largest container shipping
group, Maersk, reported a $2.7 billion quarterly
loss on Wednesday.
Commerzbank said its view on the sector had not improved.
It also said it aims to keep its capital ratio above 12
percent this year and maintain a stable cost base.
Operating earnings at Commerzbank's cash cow
Mittelstandsbank unit, which caters to the German economy's
backbone of small and medium-sized companies, were up
quarter-on-quarter as provisions fell.
The retail bank saw flat operating profit due to pressure on
its deposits business, where negative interest rates weighed,
despite cost cuts and rising demand for mortgages.
($1 = 0.9366 euros)
(Editing by Mark Potter and Susan Fenton)