FRANKFURT (Reuters) - Germany's Commerzbank (DE:CBKG) said on Wednesday it swung to a loss in the first quarter as the impact of the coronavirus pandemic drove up loan loss provisions and risked derailing its recovery.
The German lender has endured a rough few months as it halted its 2019 dividend plans, back-tracked on the sale of its Polish lender mBank (WA:MBK), faced credit rating downgrades, and lost a long-standing sponsorship deal for the local soccer team to larger rival Deutsche Bank (DE:DBKGn).
The bank reported a net loss of 295 million euros ($319.99 million) in the first quarter, compared with a net profit of 122 million euros last year. The quarterly numbers came in worse than a consensus forecast for a 240 million euro loss.
It said that the impact of measures to control the coronavirus hit earnings by 479 million euros in the quarter, and it expects charges for credit losses of between 1 billion and 1.4 billion euros this year.
Provisions for credit losses in the quarter were 326 million euros, compared with 78 million euros a year ago.
The bank said it was difficult to provide an outlook for the full year, but assuming a gradual recovery after a two-month lockdown in Germany, and no second lockdown, Commerzbank will keep revenue in its customer business "largely stable" this year.
"We will intensify our cost management this year," Chief Financial Officer Bettina Orlopp said.
Commerzbank, the second-largest lender in Germany, is now looking for further cost cuts as it restructures after a failed attempt to merge with Deutsche. It has hired consultants to identify possible cuts.
The bank holds its annual general meeting later on Wednesday.