Economy

Commerzbank will receive 490 million euros affected in the third quarter due to the bank unit

Commerzbank will receive 490 million euros affected in the third quarter due to the bank unit

FRANKFURT (Reuters) – German bank Commerzbank said on Tuesday it would post a third-quarter operating profit of 490 million euros ($471 million) after its mBank unit in Poland booked additional provisions for its Swiss franc loans.

The German bank said, however, that it still expected its net profit target to reach more than 1 billion euros for the full year.

Frankfurt-listed Commerzbank shares, which are in the midst of a costly restructuring that includes 10,000 job cuts and branch closures, fell 5.5% after the news.

The problem, which has affected banks across Poland, stems from more than a decade ago, when mortgage clients took out loans in Swiss francs to take advantage of low Swiss interest rates, only to face much higher costs when the Polish zloty plummeted. .

Polish courts have decided how to handle loans, including what banks can charge in interest on loans, creating uncertainty for the banks and their bottom line.

โ€œDespite the new burden in Poland, we are maintaining our earnings target for the whole of 2022 in light of the strong overall revenue development,โ€ said Bettina Orlop, Chief Financial Officer of Commerzbank.

Commerzbank attempted to sell mBank but abandoned that effort after auctioning halted in 2020.

Commerzbank announced in July that it would also be affected in the third quarter by a law in Poland that allows mortgage borrowers to skip monthly payments up to eight times through the end of 2023.

(1 dollar = 1.0408 euros)

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