FRANKFURT (Reuters) - Commerzbank (DE:CBKG) reported flat revenues and earnings for the fourth quarter, hit by the impact of low interest rates coupled with weak loan demand from German companies.
"We cannot yet be satisfied with the quality of our earnings," Chief Executive Martin Zielke said in a statement on Thursday.
The 183 million-euro (156 million pounds) net profit of Germany's second-largest lender after Deutsche Bank (DE:DBKGn) was, however, ahead of analysts' expectations for 154 million euro euros.
Shares were indicated to open 2.5 percent higher, according to pre-market data from brokerage Lang & Schwarz.
Commerzbank stopped short of giving an earnings outlook for 2017 but said that it aims to keep its cost base stable and expects to set aside the same amount of money as in the previous year to cover bad loans of its retail and corporate bank.
But it expects provisions for bad shipping loans to increase to 450 to 600 million euros. In 2016, it hiked group provisions by a third to 900 million euros, mainly due to its exposure to the shipping industry.
In a sign of the sector's crisis that has suffered for years from a glut of vessels and sluggish global trade, the world's largest container shipping group Maersk (CO:MAERSKb) reported a $2.7 billion quarterly loss on Wednesday.
Operating earnings at Commerzbank's cash cow Mittelstandsbank unit, which caters to Germany's prized small and medium-sized companies, was up quarter-on-quarter as provisions fell.
The retail bank saw a flat operating profit due to pressure on its deposits business, where negative interest rates weighed, despite cost cuts and higher customer demand for mortgages.
The bank announced in September it would cut more than a fifth of its workforce and suspend its dividend as it tackles the challenges of weak profits and a shift to online banking.