By Tom Sims and Alexander Hübner
FRANKFURT (Reuters) -Germany’s Commerzbank, fending off a potential takeover by Italy’s UniCredit, posted a 14% drop in quarterly net profit on Wednesday due to restructuring costs, but beat expectations and raised parts of its full-year outlook.
UniCredit has amassed a 20.2% equity stake in the German lender as it pushes for a tie-up between the banks, despite resistance from Commerzbank management, employees and the German government.
Commerzbank executives have been working to win shareholder support for its standalone strategy by delivering robust earnings and initiating share buybacks.
The bank’s second-quarter net profit came in at 462 million euros ($535.09 million), compared with a profit of 538 million euros last year. Analysts, on average, projected a profit of 369 million euros, according to a consensus forecast published by Commerzbank.
The bank said it has applied to regulators for approval to buy back up to 1 billion euros worth of shares.
“In the first half of the year, we achieved the best operating result in the history of Commerzbank and are progressing fast with our transformation,” CEO Bettina Orlopp said.
The bank said it was increasing its net profit outlook for 2025 to around 2.5 billion euros after restructuring expenses, up from an earlier forecast of 2.4 billion euros. It also raised its forecast for net interest income.
The bank announced earlier this year that it would axe 3,900 mostly local jobs to help it deliver more ambitious profit targets as part of its effort to fight off UniCredit’s advances.
The bank had flagged that it would book most of the resulting restructuring expenses in the second quarter. They totalled 534 million euros.
($1 = 0.8634 euros)
(Reporting by Tom Sims and Alexander Huebner; Editing by Miranda Murray and Sherry Jacob-Phillips)
