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Shipping loan portfolio not on sale (yet?) it seems.
UPDATE 1-Commerzbank sells 5 bln euros of UK property loans
Fri, Jun 21 2013
Mon Jul 15, 2013 9:41am EDT
* Wells Fargo buys performing assets, Lone Star distressed loans
* Transaction eclipses Lone Star's 2011 Lloyds deal
* Commerzbank agrees to 3.5 percent discount
* Bank's shares up 5 pct
FRANKFURT, July 15 (Reuters) - Germany's second-biggest lender Commerzbank has sold British property loans worth 5 billion euros ($6.5 billion) to U.S. rival Wells Fargo and private equity firm Lone Star Funds to shrink its loan book and reduce risk.
Commerzbank said on Monday that it agreed to a 3.5 percent discount on the loan portfolio's book value.
Wells Fargo is acquiring the performing loans, while Lone Star is scooping up the 1.2 billion in non-performing assets, Sascha Klaus, board member of Commerzbank's mortgage unit Hypothekenbank Frankfurt - formerly known as Eurohypo - said in an interview published on Commerzbank's intranet and seen by Reuters.
Distressed debt and equity investor Lone Star recently boosted its European staff numbers as it looks to buy portfolios of underperforming real estate debt from banks. In 2011 it bought a 900 million pound ($1.4 billion) portfolio from Lloyds Banking Group at a price sources said represented a discount of up to 40 percent.
Banks around the world have been trying to streamline assets, but few deals have materialised as buyers and sellers often disagree on valuations.
However, the low-interest environment, which leaves holders of some government bonds with hardly any returns, increases the attraction of higher-yielding alternatives. That has led to investors agreeing to lower discounts when buying risky assets such as non-performing mortgages.
"The expectations for returns have come down in certain markets due to the high liquidity (supplied by central banks)," Commerzbank's Klaus said.
The bank's lending deals included the Westfield Stratford City shopping centre next to the Olympic stadium in London and Europe's most expensive block of flats, One Hyde Park, near Harrods department store in central London.
Metzler Securities analyst Guido Hoymann described the 3.5 discount agreed by Commerzbank as "only a small amount", but added that the deal does not lead to a significant improvement of the bank's capital base.
Commerzbank shares extended gains after the announcement. They were up 5.1 percent at 1332 GMT, making the bank the top climber among Germany's blue-chip companies.
Commerzbank shares had risen by 3 percent in early trading after a magazine report that Germany has spoken to the chairman of UBS about the possibility of the Swiss bank buying the government's remaining Commerzbank stake.
Link doesnt work. Will repost same news :
R/S took place in Germany first and ADRS were adjusted by the same ratio: 1 for 10.
April 23, 2013, 7:08 a.m. EDT
Commerzbank carries out reverse stock split
x
By Ulrike Dauer
FRANKFURT--Commerzbank AG said Tuesday it carried out a reverse 1-for-10 stock split, consolidating its shares ahead of a planned capital raising.
As a result, the outstanding shares were reduced to around 583 million shares from 5.83 billion shares with the price multiplied by 10.
The share consolidation has been registered with the German commercial register and the shares received a new securities identification number, under which they will be traded from April 24 onward.
The reverse stock split, first announced in March, is part of a EUR2.5 billion capital increase Germany's second largest listed bank by market value will carry out between mid-May and early June, as it looks to bolster its balance sheet and take another bold step to reduce government involvement in the bank.
The capital increase, which will include subscription rights for current shareholders, and the reverse stock split were approved by the annual general meeting April 19.
Commerzbank said in March the move will allow it to fully repay the remaining EUR1.6 billion in non-voting shares, known as "silent participation," still held by the German government's SoFFin financial markets stabilization fund and the EUR750 million in non-voting shares held by Allianz SE (ALV.XE).
After the completion of the capital increase, SoFFin's 25% shareholding in Commerzbank, which it held in addition to the non-voting shares, is expected to decrease to below 20%.
The bank has said the repayment "marks the beginning of the end of the Federal Republic's engagement in Commerzbank."
The bank will also be able to resume dividend payments in the future, it said.
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Commerzbank Sells UK Commercial Real Estate Loans (7/15/13)
By Nicky Redl
Germany's Commerzbank AG (CBK.XE) said on Monday it has sold U.K. commercial real estate loans worth around 5 billion euros ($6.5 billion) to a consortium made up of U.S. Wells Fargo and Lone Star Funds.
The sale will significantly improve the bank's risk profile and reduces its volume of non-performing real estate loans by EUR1.2 billion, said Germany's second-biggest lender.
The sale will reduce its risk-weighted assets by EUR1.5 billion but it will also create charges of EUR179 million in 2013, of which around EUR134 million will be booked in the second quarter.
The sale won't have a notable impact on the Core Tier 1 ratio of Commerzbank.
Commerzbank now expects the exposure at default, including non-performing loans, to be significantly less than EUR90 billion at the end of 2016, it added.
The sale involves the entire commercial real estate financing activities of Hypothekenbank Frankfurt in the U.K.
Write to Nicky Redl at nicky.redl@dowjones.com
http://online.wsj.com/article/BT-CO-20130715-702107.html?mod=WSJ_qtoverview_wsjlatest
German Govt Has No Plans to Sell Commerzbank Stake (7/15/13)
BERLIN--Germany has no plans for now to sell its remaining shares in Commerzbank AG (CBK.XE), a spokeswoman for the finance ministry said Monday, responding to a report that the government is looking abroad for a buyer.
She declined to comment on whether German Finance Minister Wolfgang Schaeuble has spoken with UBS (UBS) Chairman Axel Weber about possibly acquiring the country's second-largest lender, as reported by the German news magazine Focus over the weekend.
"When the Commerzbank shares held by SoFFin will be sold is currently not foreseeable," Marianne Kothe said. She added that the government is "going openly into the sales process."
SoFFin is the government program set up in 2008 to stabilize and restore confidence in the financial system.
Neither Commerzbank nor UBS would comment on the Focus report when contacted by The Wall Street Journal over the weekend.
Germany became a shareholder of Commerzbank as part of a rescue operation in early 2009, in the wake of the market turbulence generated by the collapse of U.S. investment bank Lehman Brothers.
After a capital hike earlier this year, the government's share in the bank fell from 25% to 17%.
Write to Harriet Torry at harriet.torry@dowjones.com
http://online.wsj.com/article/BT-CO-20130715-702650.html?mod=WSJ_qtoverview_wsjlatest
Germany Looks Abroad to Unload Commerzbank-Report (7/13/13)
By Todd Buell
FRANKFURT--Germany is looking outside the country, including to Swiss bank UBS AG (UBS, UBSN.VX), to find a buyer for its remaining share of Commerzbank AG (CRZBY, CBK.XE), a German news magazine reports Saturday.
The publication FOCUS reports that German Finance Minister Wolfgang Schaeuble has spoken with UBS's Chairman Axel Weber about a possible acquisition of Germany's second-largest lender. Mr. Weber used to head Germany's central bank, the Deutsche Bundesbank. FOCUS did not say where it acquired its information.
Neither Commerzbank nor UBS would comment when contacted by The Wall Street Journal. The German Finance Ministry was not immediately available for comment. FOCUS quoted the ministry as saying that though the government intended to limit its time as a shareholder of Commerzbank to as short a time as possible, it was "not foreseeable" when it would unload its remaining shares.
Germany became a shareholder of Commerzbank as part of a rescue operation in early 2009, in the wake of the market turbulence which followed the collapse of U.S. investment bank Lehman Brothers.
Following a capital hike earlier this year, the government's share in the bank fell from 25% to 17%.
-Alexandra Edinger and John Revill contributed to this report
Write to Todd Buell at todd.buell@wsj.com; Twitter: @ToddBuell
http://online.wsj.com/article/BT-CO-20130713-701992.html?mod=WSJ_qtoverview_wsjlatest
Commerzbank AG (CBK), the biggest loser on Germany’s benchmark DAX Index this year, has recently steepened its decline because of unfounded speculation about risks in its shipping portfolio, said Chief Financial Officer Stephan Engels.
“The stock retreat isn’t at all fundamentally justified,” Engels, 51, said today in an internal memo to staff obtained by Bloomberg News. “There’s renewed speculation about risks in our shipping portfolio. We on the management board find that incomprehensible.”
Commerzbank is selling assets and allowing loans to expire to comply with European Union requirements for 18.2 billion euros ($24 billion) in state aid the Frankfurt-based firm received in 2009. That portfolio, comprised of credit to shipping companies hit by oversupply in the freight industry as well as commercial real-estate loans and sovereign debt, is loss-making.
The shares have fallen 6.8 percent this week, extending losses this year to 42 percent, after a June 26 Dow Jones Newswires report raised speculation that offers for loans the bank plans to sell would require writedowns on its shipping portfolio. The stock rose 7.2 percent as of 4:35 p.m., after reaching a record intraday low earlier in the trading session.
“We’ve always said we expect unchanged high risk provisions for 2013,” Engels said. “Nothing has changed about that except that today I’m actually a bit more positive than I was a few months ago, as are other market participants.”
Engels said the speculation triggered “market technical reactions” that forced some shareholders to sell in order to comply with their own investment rules, according to the memo.
Repossessing Ships
Commerzbank also fell along with other financial stocks on concern related to a potential resurgence of Europe’s sovereign debt crisis and the European Central Bank’s plan to evaluate the financial health of banks, he said in the memo.
Commerzbank’s press department declined to comment on the contents of the memo.
The lender, whose soured shipping loans prompted a ratings downgrade by Standard & Poor’s in May, is repossessing ships from its debtors as it tries to salvage some of the 4.5 billion euros it holds in bad debt from the crisis-hit industry.
It’s holding off on a sale of the vessels until values recover, Stefan Otto, the head of the shipping unit, said in an interview with Bloomberg News published on June 13. The bank is focusing on ships in which it sees “significantly more upside than downside,” Otto said at the time.
Commerzbank, which had shipping loans of 18 billion euros in the first quarter, became the world’s second-biggest financier of ships with the 2009 acquisition of Dresdner Bank.
To contact the reporter on this story: Nicholas Comfort in Frankfurt at ncomfort1@bloomberg.net
To contact the editor responsible for this story: Frank Connelly at fconnelly@bloomberg.net
No Firesale of Commerzbank Shipping Credit Portfolio (6/26/13)
Commerzbank AG (CBK.XE) said Wednesday it isn't planning a firesale of its shipping credit portfolio, which amounts to around 18 billion euros ($23.6 billion).
"We want to sell our loans over time and preserve value; there won't be any firesales, which includes shipping credit," Stefan Otto, who is responsible for non-core assets at Commerzbank's Deutsche Schiffsbank AG unit, said in a statement.
The bank was responding to market speculation that it is struggling to sell the portfolio, and that bids are so low that the necessary writedowns related to a sale would jeopardize the bank's equity. The share price tumbled on the speculation. At 1130 GMT, Commerzbank was trading down 3.1% at EUR6.83.
Deutsche Schiffsbank was once one of the world's largest shipping financiers. In November 2012, Commerzbank said it was targeting a 40% reduction in shipping loans by 2016.
According to a report in Boersen-Zeitung earlier Wednesday that cited sources close to the company, Commerzbank is in final negotiations with France's BNP Paribas over the sale of the German bank's custody services unit. The deal will be signed by mid-July, according to the report. Commerzbank declined to comment on the report. The unit, which has custody of EUR92 billion of assets, could be valued at over EUR200 million.
Write to Isabel Gomez at isabel.gomez@dowjones.com
German New Net Borrowing Seen at 40-Year Low in 2014 (6/21/13)
By Harriet Torry
BERLIN--Germany's new net borrowing is expected to fall to a 40-year low of 6.2 billion euros ($8.1 billion) in 2014, sharply below the EUR25.1 billion expected this year, the German Finance Ministry said Saturday, due to higher tax revenue, budget consolidation and the low interest rates it currently pays to borrow money.
Germany won't take on any new debt at all from 2015, the ministry forecasts, for the first time since 1969. In 2015 it also expects to start paying back debt borrowed during the 2009 financial crisis and credit for the fund for reconstruction following recent flooding in large parts of southern and eastern Germany.
This year, German Finance Minister Wolfgang Schaeuble plans to borrow EUR8 billion more than anticipated due to the floods.
The German economy, seen as a safe haven during the euro-zone sovereign debt crisis, should be able to lower its borrowing costs by EUR5.2 billion in 2014, the ministry said, and expects to report a budget surplus of about EUR2.2 billion in 2014.
Germany expects to report a structural deficit as a percentage of gross domestic product of 0.2% for 2013, and then a budget surplus of 0.08% for 2014 and 0.1% in 2015.
The ministry warned that spending on flood recovery could alter the deficit predictions.
Write to Harriet Torry at harriet.torry@dowjones.com
Is Commerzbank Ax Enough? (6/19/13)
By Ulrike Dauer
After five months of negotiations, Commerzbank AG and labor representatives appear to have reached a milestone agreement on job cuts, considered crucial in helping Germany’s second biggest bank by market value return to sustained profitability over the next three years.
More than 5,000 full-time jobs will likely be axed groupwide according to an in-principle agreement reached between the bank and workers representatives, a person familiar with the matter said Tuesday.
Commerzbank had budgeted €500 million ($665 million) as restructuring costs for 2013 in order to reach financial targets by 2016. Costs were booked with first-quarter earnings.
It is positive that an agreement has been reached, though the number of job cuts is in line with the bank’s own guidance that between 4,000 and 6,000 jobs will be shed, said a bank analyst who declined to be named.
“It is not a sign of strength that the bank has to cut jobs again immediately after completing the integration of Dresdner Bank,” said analyst Dirk Becker, of brokerage Kepler Cheuvreux, who has a reduce rating on the share.
The bank has been under pressure to pick itself up since it took billions of euros from the German government in early 2009 to stay afloat.
Commerzbank has done a lot since then, such as setting up an internal bad bank for winding down risky assets. It also finally managed to wean itself off of German government aid last month with a capital increase that made Germany a “normal” 17%-shareholder.
Still, it has yet to prove those doubting it can rise from the ashes wrong.
Standard & Poors, which downgraded the bank a notch to “A-”/A-2' from ‘A/A-1' with a negative outlook, said restructuring will take longer than analysts previously thought Deutsche Bank sa DBK.XE -1.21%id in a note last week that “meaningful organic growth will at some point be needed to take returns to the cost of equity, and we have no visibility of this yet”.
Shareholders in April gruntingly approved the bank’s fifth capital increase in four years, and Commerzbank Chief Executive Martin Blessing has said 2013 will be a year of transition.
Investors are waiting for convincing signs that the transition is for the better, not the worse.
Commerzbank declined to comment.
http://blogs.wsj.com/moneybeat/2013/06/19/is-commerzbank-axe-enough/
Commerzbank to Cut 5,200 Jobs, Mainly in Germany - Source (6/19/13)
By Ulrike Dauer
FRANKFURT--Commerzbank AG (CBK.XE) will cut 5,200 full-time jobs over the next three years, mainly in Germany, as part of a restructuring that began late last year, a person familiar with the matter said Wednesday.
The German bank employed 54,000 staff at the end of March, but some work part-time. Bank and employee representatives have agreed to the cuts, said two people familiar with the matter, adding that the bank was already notifying staff.
About 3,900 jobs will be shed in Germany, including the bulk of cuts to retail operations, said two people close to the matter. Commerzbank will keep the number of retail branches virtually stable at 1,200 but will have four different types of branches with staffing depending on the services offered.
About 1,000 new jobs will be created in Germany, mainly in the Mittelstandsbank --the business with mid-sized corporate clients-- but also in central units such as in the accounting and auditing departments.
The bank will refrain from compulsory redundancies through 2016 and will use measures such as early retirement and pre-retirement part-time work to cut jobs. Those measures are common in Germany to avoid outright layoffs.
Write to Ulrike Dauer at ulrike.dauer@dowjones.com
http://online.wsj.com/article/BT-CO-20130619-706252.html?mod=WSJ_qtoverview_wsjlatest
Commerzbank, Labor In Principle Agree on Job Cuts - Source (6/18/13)
By Ulrike Dauer
FRANKFURT--Germany's Commerzbank AG (CBK.XE) and the bank's labor representatives have in principle agreed on cutting over 5,000 full-time jobs group-wide, a person familiar with the matter said Tuesday.
The number is the mid-point of the planned 4,000 to 6,000 job cuts the bank had announced several months ago as part of its restructuring program, which is aimed at putting the bank on a competitive footing by 2016.
Commerzbank said at the time the exact number of the job cuts will depend on talks with labor representatives and specific internal targets.
The bank's works council is currently meeting to discuss the agreement and will likely vote on it on Wednesday, two people familiar with the matter said.
Commerzbank employed 54,000 staff at the end of March. In terms of full-time job equivalents, this translates into almost 49,000 full-time job equivalents at the end of December. A more recent number isn't yet available.
Write to Ulrike Dauer at ulrike.dauer@dowjones.com
http://online.wsj.com/article/BT-CO-20130618-701055.html?mod=WSJ_qtoverview_wsjlatest
Always find the pro "rating game" to be overweighted.
Personally, the only one that really matters to me is mine!
Commerzbank AG Receives Hold Rating from Deutsche Bank (6/14/13)
Deutsche Bank restated their hold rating on shares of Commerzbank AG (ETR: CBK) in a report issued on Wednesday, Analyst Ratings Network.com reports. They currently have a €9.00 ($11.69) target price on the stock.
A number of other firms have also recently commented on CBK. Analysts at RBC Capital upgraded shares of Commerzbank AG to a sector perform rating in a research note to investors on Tuesday, May 28th. They now have a €8.50 ($11.04) price target on the stock. Separately, analysts at JP Morgan Cazenove cut their price target on shares of Commerzbank AG from €10.20 ($13.25) to €8.74 ($11.35) in a research note to investors on Thursday, May 23rd. They now have a neutral rating on the stock. Finally, analysts at Credit Suisse reiterated a neutral rating on shares of Commerzbank AG in a research note to investors on Thursday, May 23rd. They now have a €8.71 ($11.31) price target on the stock.
Twelve analysts have rated the stock with a sell rating, ten have given a hold rating and one has given a buy rating to the company. The company has an average rating of Hold and a consensus target price of €5.13 ($6.66).
Commerzbank AG (ETR: CBK) opened at 7.502 on Wednesday. Commerzbank AG has a 1-year low of €6.8061 and a 1-year high of €13.0737. The stock’s 50-day moving average is currently €0..
COMMERZBANK AG is a Germany-based bank for private and corporate customers in Germany. The bank operates six business segments: Private Customers, which operates Retail, Business and Wealth Management Customers, Sales Retail and Business Customers North-East and South-West, Sales Wealth Management, and Credit operating units, among others; Mittelstandsbank, which operates Small and Medium Enterprises, Large Corporations, Corporate Banking, Corporates International and Financial Institutions units; Central & Eastern Europe, which operates CEE-Holding/Subsidiaries & Branches, BRE Bank and Bank Forum units; Corporates & Markets, which operates Equity Markets & Commodities, Fixed Income Trading, Corporate Finance, Fixed Income Sales, Client Relationship Management, and Research units, among others; Asset Based Finance, which operates CRE Germany, Public Finance and Ship Finance units, among others, and Portfolio Restructuring Unit, which operates Portfolio Restructuring Unit.
http://www.watchlistnews.com/2013/06/14/commerzbank-ag-receives-hold-rating-from-deutsche-bank-cbk/
Deutsche Bank "horribly undercapitalized"-US regulator (6/14/13)
By Emily Stephenson and Douwe Miedema
(Reuters) - A top U.S. banking regulator called Deutsche Bank's capital levels "horrible" and said it is the worst on a list of global banks based on one measurement of leverage ratios.
"It's horrible, I mean they're horribly undercapitalized," said Federal Deposit Insurance Corp Vice Chairman Thomas Hoenig in an interview. "They have no margin of error."
Hoenig, who is second-in-command at the regulator, said global capital rules, known as the Basel III accord, allow lenders to appear well-capitalized when they are not. That is because the rules allow the banks to use complicated measurements of how risky their loans are to determine the capital they must hold, he said.
But using a tougher leverage ratio measurement - which compares a bank's shareholder equity to its total assets without using risk-weightings - the picture for banks such as Deutsche Bank is very different, he said.
Deutsche Bank this year is almost done raising 5 billion euros ($6.67 billion) in new debt and equity, boosting its core capital ratio to around 9.5 percent, which it says has made it one of the best-capitalized banks among its peers.
"To say that we are undercapitalized is inaccurate because if you look at the Basel framework, we're now one of the best capitalized banks in the world after our capital raise," Deutsche Bank's Chief Financial Officer Stefan Krause told Reuters in an interview, when asked about Hoenig's comments.
"To suggest that leverage puts us in a position to be a risk to the system is incorrect," Krause said, calling the gauge a "misleading measure" when used on its own.
Deutsche's leverage ratio stood at 1.63 percent, according to Hoenig's numbers, which are based on European IFRS accounting rules as of the end of 2012.
Deutsche said the number now stands at 2.1 percent but that it does not look at the gauge. Using U.S. generally accepted accounting principles, the ratio stood at a much more comfortable 4.5 percent, Krause said.
OUTSPOKEN CRITIC
The difference is due to the way derivatives on a bank's books are measured. Neither number directly corresponds to the Basel leverage ratio, which calculates capital in another way and sets a 3 percent minimum.
The FDIC - which guarantees deposits at U.S. banks - stressed that Hoenig was speaking in a personal capacity and that the agency did not comment on individual banks.
Hoenig staked out a reputation as a dissenting voice against the Federal Reserve's loose monetary policy in the immediate aftermath of the financial crisis when he was president of the Federal Reserve Bank of Kansas City.
He's also an outspoken critic of the Basel III rules - introduced globally after the crisis - which he says do not do enough to reduce the size of the riskiest banks and are easy for them to game.
Other banks with a low ratio, according to Hoenig, are UBS at 2.52 percent, Morgan Stanley at 2.55 percent, Credit Agricole at 2.72 percent and Societe Generale at 2.84 percent.
Detailed rules for Basel III, which other U.S. politicians and regulators have questioned, are expected to come out in the United States in the next few months, well past the January deadline agreed upon internationally.
DESCRIBES "RIDICULOUS" CHANGE
Hoenig pointed to the gain in Deutsche Bank shares in January on the same day it posted a big quarterly loss, because it had improved its Basel III capital ratios by cutting risk-weighted assets.
"My other example with poor Deutsche Bank is that they lose $2 billion and raise their capital ratio. It's - I don't want to say insane, but it's ridiculous," Hoenig said.
A leverage ratio is a better method to show a firm's ability to absorb sudden losses, Hoenig says, and he has floated a plan to raise the ratio to 10 percent. He said the 3 percent leverage hurdle under Basel was a "pretend number."
Opponents of using such a ratio say that it ignores the risk in a bank's loan books, and can make a bank with only healthy borrowers look equally risky as a bank whose clients are less likely to pay back their loans.
It also fails to take into account how easily a bank can sell its assets - so-called liquidity - or whether it is hedged against risk.
Still, equity analysts said that while Deutsche Bank likely will meet regulatory capital requirements, its ratios look weak.
"(The) capital raise was warmly received by the market," Berenberg Bank said in a note this week. "However, we still remain concerned about the leverage in the business."
"To get above the 3 percent level (mandated by Basel), required by 2019, requires four years' worth of profits and, in our view, delays dividends."
($1 = 0.7496 euros) (Reporting by Emily Stephenson and Douwe Miedema; Editing by Karey Van Hall, Martin Howell and Leslie Gevirtz)
http://www.reuters.com/article/2013/06/14/financial-regulation-deutsche-idUSL2N0EO1D220130614
Received $3.65 per ADR on 6/13/13.
CRZBY closed at $14.50 on 5/29/13 and $11.10 on 5/30/13.
Detailed as a dividend, but obviously related to the rights offering. ADR holders did not participate.
Commerzbank Ready to Take Losses on Asset Sales, CEO Says (6/06/13)
Commerzbank AG, Germany’s second-largest lender, said it is willing to take losses when selling assets as part of a plan to boost capital levels.
Commerzbank would be ready to take such losses if the sales released sufficient capital or helped the bank lower the funds it has to set aside for soured loans, Martin Blessing, the lender’s chief executive officer, said today in a speech to investors at a conference in New York.
Commerzbank is in “intense and advanced” talks to sell a portfolio of commercial real estate loans in the U.K., Blessing said without identifying potential buyers.
The lender is ready to take “a little bit more of a price hit” if it can sell whole portfolios in countries such as the U.K. to avoid the cost of firing the staff, Blessing said.
To contact the reporter on this story: Nicholas Comfort in Frankfurt at ncomfort1@bloomberg.net
According to this interview of WB, business in Europe is getting better each day or it is already better. Their problem is with currency related difficulties among each other and he does not have a fix but it seems Germany will benefit the most because of their financial system that seem to put them as the top creditor of Europe among other EU nations. Sort of like senior secured note holders. I don't know if that makes sense but this bank with German back up must be benefiting along the way.
AXA and Commerzbank Sign Financing Agreement for Mid Caps (6/06/13)
By Noemie Bisserbe
PARIS--French insurer AXA SA (CS.FR) said Thursday it had signed a financing agreement with German lender Commerzbank AG (CBK.XE) to help fund medium-sized companies in Germany, Switzerland and Austria.
The deal will allow Commerzbank to issue loans, which will in turn be sold to the French insurer, the two companies said in a joint statement.
The agreement highlights how banks in Europe are increasingly moving the loans they issue off their balance sheet to meet new stringent banking regulation.
AXA last year signed a similar agreement with French lender Societe Generale SA (GLE.FR).
Write to Noemie Bisserbe at noemie.bisserbe@dowjones.com
http://online.wsj.com/article/BT-CO-20130606-705028.html
Polish BRE Bank to Focus on Organic Growth, Not Buys (6/04/13)
WARSAW--BRE Bank SA (BRE.WA), the Polish unit of Germany's Commerzbank AG (CBK.XE), doesn't see suitable acquisition opportunities at present and will instead focus on organic growth, BRE's chief executive, Cezary Stypulkowski, said Tuesday.
Poland's fourth largest lender by assets Tuesday said it will overhaul its internet retail banking operations and embark on a 100 million zloty ($31 million) rebranding plan that will lay the foundation for further growth.
"We have a long history of organic growth [...] also we are an internet bank at heart, we wouldn't know what to do with 500 [brick and mortar] branches," Mr. Stypulkowski said. "At the moment there is no partner on the market that would be an easy fit in terms of synergies."
BRE Bank, originally focused on providing banking services to the biggest Polish corporations, launched internet-based retail banking operations in 2000 and currently its revenues are nearly evenly split between corporations and individuals.
The prolonged financial crisis in the European Union gave rise to speculation that many international banks, like Scandinavian Nordea (NDA.SK) or Dutch Rabobank, are willing to sell their local Polish operations.
At the same time, biggest local lenders are on a lookout for opportunities to build scale in their operations. Top Polish bank PKO BP (PKO.WA) in its latest strategy declared its interest in acquiring smaller rivals.
Banco Santander (SAN.MC) Polish unit BZ WBK (BZW.WA) is also likely to turn to acquisitions to gain market share once it finishes restructuring after its latest buy, BZ WBK chief executive told The Wall Street Journal last week.
Write to Patryk Wasilewski at patryk.wasilewski@dowjones.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
June 04, 2013 08:08 ET (12:08 GMT)
Copyright (c) 2013 Dow Jones & Company, Inc.
Commerzbank AG (CBK:GR) closed at €8.40 Friday in Frankfurt.
http://www.bloomberg.com/quote/CBK:GR
This is equivalent to $10.45 (€=$1.30). However, CRZBY actually closed at $10.90.
http://www.bloomberg.com/quote/CRZBY:US
Pricing would be closest at the opening in the morning. The Xetra stops trading at 5:30 CET. Frankfurt and New York are currently six hours apart.
Staggering free-fall drop today on CRZBY ...down a mind-numbing 23%!
No news yet that explains what happened but could be their ship lending unit hit a reef ???...or possibly a delayed reaction to the dilution..??
Commerzbank unit Deutsche Schiffsbank has ship loans worth 18.3 billion euros ($23.8 billion) on its books, 25 percent of which are classified as non-performing... ":~O
Commerzbank Completes Share Sale as S&P Warns on Lending (5/29/13)
By Mark Bentley - May 29, 2013 8:01 AM CT
Commerzbank AG (CBK), the German bank that got a 18.2 billion-euro ($23.5 billion) state bailout, completed its fifth capital increase in four years, the day after Standard & Poor’s cut its credit rating, warning of risky lending.
Shareholders took up 99.7 percent of subscription rights in the 2.5 billion-euro share sale held between May 15 and May 28, when 555.6 million new shares were issued, Frankfurt-based Commerzbank said in an e-mailed statement today.
Chief Executive Officer Martin Blessing asked investors to buy the stock as part of a plan to return to profit and repay debt to the government. S&P lowered Commerzbank’s long-term credit rating to A- from A, saying economic conditions had left the firm vulnerable to “high-risk lending concentrations,” particularly in shipping and property.
Germany’s second-largest bank will use the funds it raised in the share sale to repay 1.6 billion euros to the government’s bank rescue fund and 750 million euros to insurer Allianz SE (ALV), redeeming silent participations issued during the rescue, Commerzbank said. The government’s stake has declined to 17 percent during the capital increase, it said.
The bank’s capital adequacy ratio under full Basel III banking rules, a key measure of financial strength, increased to 8.4 percent from 7.5 percent as a result of the repayments, Commerzbank said.
Blessing, who handed the government a 25 percent stake in the 2009 bailout, is also eliminating staff and winding down real estate and shipping assets to help turn the company around.
Shares Fall
Commerzbank shares fell 0.4 percent to 7.97 euros at 1:45 p.m. in Frankfurt, paring earlier losses of as much as 2.4 percent. The stock has dropped 26 percent this year compared with a gain of 9.2 percent for the Bloomberg Europe Banks & Financial Services Index.
Six of 34 analysts are recommending clients buy Commerzbank’s shares, data compiled by Bloomberg show. The average 12-month price estimate among the analysts was 8.24 euros a share, 3 percent more than yesterday’s closing price.
Moody’s Investors Service lowered its rating to Baa1 last month, one step lower than S&P, citing weak earnings power.
To contact the reporters on this story: James Amott in London at jamott@bloomberg.net; Mark Bentley in Frankfurt at mbentley3@bloomberg.net
http://www.bloomberg.com/news/2013-05-29/commerzbank-completes-share-sale-as-s-p-warns-on-lending.html
Great day for Commerzbank
Commerzbank (PC) (CRZBY)
$ 14.15 up 0.55 (4.04%)
Volume: 28,378
Deleted Symbol
Mon, Apr 29, 2013 12:00 - Commerzbank AG (CRZBF: Grey Market) - Deleted Symbol - As of Mon, Apr 29, 2013, CRZBF is no longer a valid symbol. You may find a complete list of deleted symbols at otcmarkets.com.
CRZBF is the ticker on my screen.
Commerzbank CEO to Buy Shares Worth EUR170,000 (5/24/13)
Commerzbank AG (CBK.XE) Chief Executive Martin Blessing, who will fully participate in the bank's capital increase that is under way, will buy new shares worth about EUR170,000, according to a Dow Jones Newswires calculation.
"I will fully exercise my subscription rights," Mr. Blessing said Friday.
Currently, Mr. Blessing holds almost 40,000 shares in Commerzbank.
If fully exercising his subscription rights in the capital increase, in which Commerzbank shareholders will get 20 new shares for every 21 shares they own at a price of EUR4.50 a share, Mr. Blessing will spend EUR169,564 in the transaction.
Until May 28, shareholders in Commerzbank, Germany's second-largest listed bank, can exercise their subscription rights in a EUR2.5 billion capital increase aimed to bolster the bank's balance sheet and reduce government involvement in the bank.
During the financial crisis, the German government injected EUR18.2 billion into Commerzbank to keep the bank afloat in the wake of the ill-timed acquisition of Dresdner Bank.
Write to Ulrike Dauer at ulrike.dauer@dowjones.com and Madeleine Nissen at madeleine.nissen@dowjones.com
Commerzbank AG (CRZBD: OTC Link) | Symbol Change
Wed, May 22, 2013 12:00 - Commerzbank AG (CRZBD: OTC Link) - Symbol Change - The symbol, CRZBD, is no longer a valid symbol for Commerzbank AG. As of Wed, May 22, 2013, the new trading symbol is CRZBY.
Initial investment on 5/17/13 at $13.58.
Investors have to prepared for up and down price moves. This will be a long-term investment for me.
56Chevy deserves credit for getting me to "think outside the box" (the U.S.).
I see your first post was less than two weeks ago. Stock is up big today! When did you invest in CRZBD?
Commerzbank to Buy Ships From Debtors in Restructuring Effort (5/17/13)
By Nicholas Brautlecht - May 17, 2013 5:52 AM CT
Commerzbank AG (CBK), Germany’s second-biggest bank, plans to buy and run ships from its borrowers as part of an effort to restructure its ship-financing business.
Hanseatic Ship Asset Management GmbH, a Hamburg-based unit of the German bank, will run the vessels with partners and sell them when the shipping market recovers, Commerzbank said in a share sale prospectus published on its website on May 14.
Commerzbank gave the German government a 25 percent stake in 2009 in return for an 18.2 billion-euro ($23.4 billion) bailout. To make final debt repayments to the state and meet tighter capital rules, the bank started offering 2.5 billion euros of new shares on May 15. The subscription period ends on May 28.
“The reduction of the ship-financing portfolio is subject to significant risks due to the difficult market situation at the moment and the price volatility of ships,” Frankfurt-based Commerzbank said. Thomas Kleyboldt, a spokesman, declined to comment on the number of vessels, the size of the investment or the time frame.
The shipping industry is suffering as the euro-region debt crisis saps demand for seaborne goods and an overcapacity of ships weighs on rates.
To contact the reporter on this story: Nicholas Brautlecht in Hamburg at nbrautlecht@bloomberg.net
http://www.bloomberg.com/news/2013-05-17/commerzbank-to-buy-ships-from-debtors-in-restructuring-effort.html
EUROPE MARKETS: Europe Stocks Climb To Multiyear Highs
By Sara Sjolin, MarketWatch
LONDON (MarketWatch) -- European stock markets turned higher Tuesday, taking inspiration from the U.S. where markets climbed after top hedge-fund manager David Tepper said he remains bullish.
Germany's benchmark index extended gains to an all-time closing high, shaking off weaker-than-expected investor-confidence data.
The Stoxx Europe 600 index added 0.4% to 305.66, closing at the highest level since June 2008.
The index has recently defied worries about sluggish growth in large parts of Europe, as cheap liquidity from central banks and relatively lackluster returns in the bond markets lured investors into equities globally.
Most of major country-specific benchmarks have been climbing to multiyear highs, and Frances Hudson, global thematic strategist at Standard Life Investments, said the rally is poised to continue.
"Unless we get something really disturbing markets will go higher," she said. "We're at the end of the earnings season and the news driver moves from the corporate sector to be focused more on the political and economic arena. It's a bit more risky, but there aren't any major political upsets at the moment."
Among upbeat company news on Tuesday, shares of Severn Trent PLC soared 14% after the water-utility firm said it received a "very early stage" bid approach, although no proposal has been made.
Deutsche Post AG gained 3.9% after the company reported a rise in first-quarter adjusted profit of more than 45%.
Tepper pep talk
The broader European stock markets erased earlier losses after U.S. markets showed positive moves, after Tepper told CNBC that he's "definitely bullish" on stocks and that "every place is the place to be in stock markets around the world."
"So, today's afternoon reversal clearly suggests markets are getting comfortable with the view that although Fed stimulus measures will have to come an end at some point, with a backdrop of a recovering U.S. economy, perhaps withdrawal from the stimulus pills won't be as crippling as some had previously thought," said Ishaq Siddiqi, market strategist at ETX Capital in a note.
Last week, The Wall Street Journal reported that the U.S. Federal Reserve is mapping out a strategy for exiting its easing program, although the timing remains uncertain.
Most indexes in Europe traded in negative territory in the beginning of the session, as investors were looking at economic data in Germany. The ZEW economic sentiment indicator, a gauge of investor confidence, inched 0.1 point higher to 36.4 in May, but still well below the 40 print expected by analysts. The reading comes after the index slumped to 36.3 in April, stoking worries about Germany's economic performance and the country's ability to pull the rest of Europe of sluggish growth.
The data contrasted reports out last week, when German trade data and industrial-production figures beat market expectations and fueled hopes the economy is picking up after a soft patch earlier in the year.
[....]
http://ih.advfn.com/p.php?pid=nmona&article=57564567
CRZBD may look very much like C five years down the road.
Commerzbank Jumps Most in Four Years as Share Sale Begins (5/15/13)
Commerzbank AG (CBK), the German bank that got an 18.2 billion-euro ($23.5 billion) government bailout, surged the most in almost four years as it sold new shares to repay taxpayers and bolster capital.
The stock rose as much as 18 percent, the biggest gain since July 2009, and climbed 15 percent to 8 euros at 1:25 p.m, in Frankfurt. That pared losses this year to 25 percent compared with an increase of 10 percent for the 40-member Bloomberg Europe Banks and Financial Services Index.
Commerzbank is offering 2.5 billion euros of new shares from today until May 28 to make final debt repayments to the German state and insurer Allianz SE (ALV) and to meet tighter capital rules. The plan and the recent decline of the share price prompted Bank of America Merrill Lynch to raise its recommendation on Commerzbank to buy and set a 12-month price estimate of 10 euros a share.
“This is an attractive opportunity,” BofA analyst Johan Ekblom wrote in an e-mailed report to clients. A re-rating of the stock by investors may “make Commerzbank one of the best-performing European bank stocks this summer,” he said.
Government Sells
The bank is offering shareholders 20 new shares for every 21 shares they own at 4.5 euros apiece in the capital increase. Meantime, Germany’s state-run rescue fund Soffin completed the placement of about 625 million euros of Commerzbank shares at 7 euros apiece as part of the bank’s plan to repay taxpayers, Soffin said in an e-mailed statement.
Soffin, which is participating fully in the capital increase, will get a remaining 1 billion euros in cash from Commerzbank as the company pays back the final 1.63 billion euros of the 16.4 billion euros in silent participations it borrowed in the bailout during 2008 and 2009. The debt is a form of non-voting capital.
Investors are now purchasing Commerzbank’s shares as recent declines don’t reflect the bank’s value and prospects, said Ronny Rehn, an analyst with Keefe, Bruyette & Woods Inc.
“The stock is looking much cheaper,” Rehn, who raised his recommendation on the shares to the equivalent of hold from sell today, said by telephone from London. “This is an indication that there will be enough demand for the bank’s share sale.”
The government, which owns 25 percent of Commerzbank, will have reduced its stake to about 17 percent following the capital increase, Soffin said.
Allianz Debt
Commerzbank is also repaying the 750 million euros it owes Allianz from the cash raised in the share sale. Allianz Chief Financial Officer Dieter Wemmer declined to say whether the Munich-based company, which has a 2.84 percent stake in Commerzbank, would take part in the capital increase on a conference call with reporters.
The bank’s common equity Tier 1 ratio under full Basel III rules, a key measure of financial strength, will increase to 8.4 percent from 7.5 percent after the share sale. The ratio is expected to rise to 9 percent by the end of next year, the company said in a statement yesterday.
While Commerzbank’s capital levels will still lag behind those of some of its competitors, “the near-term dilution risk is minimal” for shareholders, Ekblom said.
Three of 33 analysts recommend buying Commerzbank’s shares, according to data compiled by Bloomberg. The average price estimate for the stock is 7.90 euros.
To contact the reporter on this story: Nicholas Comfort in Frankfurt at ncomfort1@bloomberg.net
http://www.bloomberg.com/news/2013-05-15/commerzbank-jumps-most-in-four-years-after-selling-shares.html
Commerzbank Sells New Shares at Substantial Discount (5/14/13)
By LAURA STEVENS And ULRIKE DAUER
FRANKFURT—Commerzbank AG said it would issue new shares at a more than 50% discount, as the battered German lender struggles to wean itself off state aid.
Germany's second-largest bank by assets said it would nearly double its outstanding stock, issuing 556 million new shares at €4.50 a share ($5.84), about half Monday's closing price of €9.94. Investors won a steep discount because the stock has sunk in recent months, according to people familiar with the deal.
Though Commerzbank previously announced the capital raising, the discount came as a shock to some investors, the latest in a series of setbacks. The bank's shares finished down 6.3% at €9.31 in Frankfurt trading Tuesday.
"For current shareholders, this is another disaster," said Jürgen Kurz, spokesman for retail shareholders association Deutsche Schutzvereinigung fuer Wertpapierbesitz. "The question is whether that's the last of such measures. I hope so, but it looks as if the bank is muddling through rather than having a sustained business model."
The steep discount Commerzbank is offering investors highlights the growing divide between Europe's largest banks, which have had little difficulty raising capital, and second-tier lenders like Commerzbank.
European banks are increasingly being judged by investors as either being in growth mode or as riskier restructuring cases, bankers and analysts say. Top-tier banks can typically offer smaller discounts of around 15% to 25%, while more troubled banks are forced to offer discounts of anywhere from 35% to 50%.
Last month, Deutsche Bank AG, Germany's largest bank, placed 90 million new shares, raising €2.96 billion and boosting a key measure of its health under new regulations. The shares rose 6% in trading the next day.
Commerzbank is perceived as a riskier investment because of the proportionally larger amount of troubled assets and noncore businesses it is trying to unload, its lower capital ratio and its murky earnings outlook, analysts and bankers say.
Since announcing it would restructure its core retail and other operations in November, Commerzbank's share price has plummeted. First-quarter earnings last week showed the bank's most reliable revenue producers—its small and midsize corporate business and private-client division—are significantly less profitable than in the same quarter a year ago.
Now, shareholders are being diluted as the bank attempts to raise €2.5 billion in capital to finish paying back all but a fraction of the bank's remaining state aid injection. The bank said it decided to make the move now to take advantage of favorable market conditions, to eliminate fees associated with the state-aid stake and to strengthen its capital base.
Commerzbank was forced to seek a government bailout in the wake of the Lehman Brothers collapse, primarily because of heavy losses in its subprime and real-estate portfolios and an untimely acquisition of Dresdner Bank, which was one of the country's largest banks. The German government injected €18.2 billion to keep Commerzbank afloat, taking a 25%-plus-one-share stake, in addition to €16.4 billion in nonvoting rights known as silent participation.
Since then, the bank has struggled to find a functioning business model in the new environment as it has come under pressure to pay back the government aid. The bank faced another hurdle last year after regulators identified a €5.3 billion capital shortfall.
Commerzbank has raised capital five times in four years, including in spring 2011, when it tapped shareholders for a total of €11 billion. Last month, the bank moved to consolidate shares outstanding in a 10-for-1 exchange. The bank's market capitalization was about €5.5 billion before the capital increase, and is expected to climb to about €8 billion. The subscription period runs from May 15 through May 28.
Nomura analysts said in a research note Tuesday that "we believe the valuation still does not look attractive next to peers, given the levels of earnings uncertainty."
The capital increase will allow the bank to strengthen a key capital ratio to risk-adjusted assets, an important measure of health under new regulations being phased in. Commerzbank has one of the lowest capital ratios of its peer group.
The move will allow the bank to fully repay the remaining €1.6 billion in silent participations still held by the German government's bailout fund, in addition to €750 million in silent participations held by insure Allianz SE. After the completion of the capital increase, the government's stake in the bank is expected to fall below 20%.
The decline in share value has drawn investor criticism of Chief Executive Martin Blessing. Some shareholders at the bank's annual general meeting last month called for him to step down, and they added an item to the agenda calling for a vote of no confidence. The measure garnered 5% support from voting shareholders.
Mr. Blessing in November laid out a new strategy for the bank, calling for broad restructuring, a shift in private banking strategy to win new customers, a boost to online banking and a turn away from businesses such as ship financing.
Commerzbank has been losing some corporate clients as it cuts back on its business models and faces more competition in its home market, say people familiar with the bank's business. At the same time, the low-interest-rate environment is hitting the bank's core private-customer business.
In the first quarter, the bank said its private-customer profit had fallen to €70 million, compared with nearly double that a year ago. The bank's business with small and medium-size German corporate firms, known as the Mittelstand, saw a 33% drop in profit to €325 million compared with the same quarter the previous year.
—Eyk Henning and Madeleine Nissen contributed to this article.
Write to Ulrike Dauer at ulrike.dauer@dowjones.com
http://online.wsj.com/article/SB10001424127887323716304578482670294593726.html
Regulatory Pressure Drives Commerzbank to Seek Out New Capital (5/14/13)
LONDON — European banks have gone on a capital-raising binge.
Commerzbank of Germany, the latest entrant, began a heavily discounted effort on Tuesday to raise 2.5 billion euros ($3.2 billion) in new capital.
The push by Commerzbank follows similar moves by other European lenders, which have come under growing regulatory pressure to increase capital reserves to protect against future financial shocks.
Despite a series of stress tests on the Continent’s largest financial institutions, investors have remained wary of the firms’ continued exposure to risky loans and sputtering economies like those of Spain and Greece.
Regulators have also pushed banks to shed unprofitable assets and protect against rising delinquent loans, and a proposed banking union for the euro zone is expected to lead to even greater scrutiny of balance sheets. Authorities say they want to ensure that banks meet stringent capital requirements outlined in new rules known as Basel III.
Under the rules, which are to come into force by 2019, firms must achieve a 7 percent core Tier 1 ratio, a measure of an institution’s financial health. Banks considered to be systemically important must hold an additional 1 to 2.5 percent in reserve.
As a result, banks have been pressing ahead to meet the capital demands. Last month, Deutsche Bank raised almost 3 billion euros through a rights issue specifically intended to improve its capital buffers.
The British bank Barclays has issued a number of contingent capital instruments, known as CoCos, which are intended to ensure that the firm’s core Tier 1 ratio stays above a certain level. A number of other banks, including Credit Suisse and BBVA of Spain, also have raised capital by this method.
The Swiss bank UBS, which announced a major reorganization last year, has a 10.1 percent core Tier 1 ratio. That is currently the highest figure among Europe’s largest banks, according to the data provider SNL Financial. Other big banks, including Deutsche Bank and HSBC, have ratios greater than 9.5 percent.
For Commerzbank, whose current core Tier 1 capital ratio of 7.5 percent is expected rise to 8.4 percent after its capital-raising effort is completed, the new funds will help to repay an 18 billion euro government bailout the firm received in 2009.
“The transaction marks the beginning of the federal government’s exit from Commerzbank,” the bank said in a statement. “The capital structure of the bank is improving considerably.”
The offering, the bank’s fifth since 2010, allows investors to buy 20 shares at 4.50 euros apiece for every 21 shares they already hold. The price represents a discount of about 55 percent on Commerzbank’s closing share price on Monday. The bank’s shares fell 3.8 percent in afternoon trading in Frankfurt on Tuesday.
As part of the deal, Commerzbank is reportedly in talks to sell 5.7 billion euros of British property loans to the American bank Wells Fargo and the investment firm Lone Star.
More capital-raising moves are expected. British banks, for example, must raise a combined £25 billion ($38 billion) by the end of the year, according to local regulators. That includes potentially raising up to £1.8 billion, according to banking analysts at Barclays, for the small British lender Co-Operative Banking Group, which was downgraded to junk status last week by Moody’s Investors Service over concerns about an increase in delinquent loans.
Commerzbank, Deutsche Bank, Citigroup and HSBC are handling Commerzbank’s capital-raising effort, which the bank said would close on May 28.
http://dealbook.nytimes.com/2013/05/14/commerzbank-to-raise-3-2-billion-in-new-capital/
Commerzbank to start capital increase mid-week -sources (5/13/13)
FRANKFURT, May 13 (Reuters) - The subscription period for new Commerzbank shares will start in the middle of this week, two people familiar with the transaction told Reuters.
Germany's No.2 lender will offer the shares at a discount of at least 35 percent on the theoretical ex-rights price of the new shares, implying that these are likely be sold at around 5.50 euros apiece, they added.
Commerzbank, which last month secured shareholder approval for the 2.5 billion euro ($3.2 billion) capital increase, declined to comment. ($1 = 0.7709 euros) (Reporting by Alexander Hübner; Writing Arno Schuetze; Editing by Christoph Steitz)
Commerzbank sees bleak 2013 as it fishes for investors (5/07/13)
By Arno Schuetze
FRANKFURT (Reuters) - Commerzbank (CBKGk.DE), Germany's No.2 lender, will have to work hard to entice investors to its 2.5 billion euro ($3.3 billion) share call this month after painting a bleak outlook for the rest of this year.
Chief Financial Officer Stephan Engels said 2013 would be a year of transition for the bank, which posted a net loss of 94 million euros in the first three months as it booked a 493 million euro restructuring charge linked to 4-6,000 job cuts.
"Revenues will stay under pressure, costs are expected to increase," Engels said on Tuesday, adding the bank hoped to see positive effects from its revamp next year.
A source with knowledge of the bank's capital increase said Commerzbank may therefore have to offer new shares at a hefty discount of about 50 percent. The source also said Commerzbank could knock at least 35 percent off the theoretical ex-rights price of the new shares, implying that these may be sold at around 5.50 euros apiece.
"Commerzbank will need a lot of persuasive power to enthuse investors to buy the new Commerzbank shares," said Felix Scherhaufer from LBBW Asset Management.
Commerzbank shares rose 1.8 percent by 1117 GMT, as analysts pointed to slightly better-than-expected quarterly earnings. They had expected a loss of 125 million.
However, investors criticized the bleak outlook.
"The better first quarter results so far give no hint of a fundamentally better business development in 2013," said Lutz Wockel from fund manager NordLB Capital Management.
Commerzbank's Engels said he expected the bank's interest income to decrease in 2013 as the low interest rate environment makes it increasingly difficult to make money. Costs are set to rise by up to 100 million euros each quarter due to investments, including for a revamp of its retail business.
The lender will also set aside "slightly more" money for bad loans, Engels said. Last year, Commerzbank - whose cash cow Mittelstandsbank unit specializes in providing loans to Germany's important medium-sized companies - benefited from extremely low provisions as Germany's economy powered ahead most of the year.
Commerzbank did not provide a more specific earnings forecast.
Commerzbank intends to use the proceeds from the capital increase to repay some of the state aid it received in the financial crisis and to strengthen its capital buffers to comply with stricter bank rules.
The transaction will increase Commerzbank's capital ratio under the most stringent application of Basel 3 rules by around 1 percentage point, Engels said. He added that the bank is targeting a 9 percent capital ratio by the end of 2014.
In the first quarter, the ratio stood at 7.5 percent.
By comparison, rival BNP Paribas (BNPP.PA) has a capital ratio of 10 percent, Deutsche Bank (DBKGn.DE) - which last week raised 3 billion euros in a capital increase - 9.5 percent, Goldman Sachs (GS.N) 9 percent, JP Morgan (JPM.N) 8.9 percent and Credit Suisse (CSGN.VX) 8.6 percent.
Since a 2008 bail-out in the wake of the financial crisis, the German government owns 25 percent of Commerzbank, but its holding will be diluted to roughly 18 percent as it will not participate in the capital increase.
(Additional reporting by Alexander Hübner; Editing by Sophie Walker)
CRZBY one for 10 reverse split:
http://www.otcbb.com/asp/dailylist_detail.asp?d=04/24/2013&mkt_ctg=NON-OTCBB
CBKG.DE 1.14 euro-52 weeks low level
http://www.reuters.com/finance/stocks/overview?symbol=CBKG.DE
Commerzbank Sets Measures to Cut Government Stake, Lift Capital
7:48a ET March 13, 2013 (Dow Jones)
Commerzbank Sets Measures to Cut Government Stake, Lift Capital
By Ulrike Dauer
FRANKFURT--Commerzbank, Germany's second-largest listed bank, said it will take advantage of "attractive" market conditions to conduct a EUR2.5 billion capital increase, as it looks to bolster its balance sheet and take another bold step to reduce government involvement in the bank.
The capital increase will include subscription rights for current shareholders and be voted on at the annual meeting, moved up to April 19 from the original date of May 22.
Commerzbank said the move will allow it to fully repay the remaining EUR1.6 billion in non-voting shares, known as "silent participation," still held by the German government's SoFFin financial markets stabilization fund and the EUR750 million held by Allianz SE (ALV.XE).
After the completion of the capital increase, SoFFin's 25% shareholding in Commerzbank, which it held in addition to the non-voting shares, is expected to decrease to below 20%.
"For us, the repayment of the [non-voting] silent participations and the reduction in the Federal Republic's stake marks the beginning of the end of the Federal Republic's engagement in Commerzbank," the bank said.
Subsequently, the bank will also be able to resume dividend payments in the future, it said. The bank also announced plans for a consolidation, or reverse 1-for-10 stock split, that will reduce the outstanding shares to 583 million shares from 5.83 billion shares, with the price multiplied by 10.
During the financial crisis, the German government injected EUR18.2 billion in Commerzbank to keep the bank afloat in the wake of the ill-timed acquisition of Dresdner Bank.
Along with a 25%-plus-one-share stake, the government received so-called silent participations, essentially non-voting shares, totaling EUR16.4 billion. The bank repaid EUR14.3 billion of the silent participations in 2011, along with a one-time payment of EUR1.03 billion.
As a result of the transaction announced Wednesday, the fully phased-in Basel 3 Common Equity Tier 1 ratio--a key measure of a bank's financial health--will rise to 8.6% from 7.6% as of year-end 2012 on a pro forma basis as of that date. That figure will rise to 9% by the end of 2014, Commerzbank said.
-Write to Ulrike Dauer at ulrike.dauer@dowjones.com
(END) Dow Jones Newswires
March 13, 2013 07:48 ET (11:48 GMT)
Copyright (c) 2013 Dow Jones & Company, Inc.DN201303130051792013-03-13 11:48:00.00036C14J7F8GJC6UBFKVT7T7UFPVDJNF
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Recent news:
March 13, 2013
1:19p
UPDATE 3: Italy auction, data weigh on Europe stocks (MarketWatch)
11:15a
UPDATE 2: Costly Italian auction adds to Europe stock gloom (MarketWatch)
8:51a
Commerzbank: Likelihood For Dividend After 2013 Substantially Up After Transaction (Dow Jones)
8:49a
Commerzbank CEO Repeats Unlikely Bank To Pay Dividend For 2013 (Dow Jones)
8:47a
Commerzbank: German Govt Decided Wanted Silent Participation Back,Not More Not Less (Dow Jones)
8:44a
Commerzbank CEO: No Specific Demand By Regulator For Cap Hike (Dow Jones)
8:43a
Commerzbank CEO: EUR1.10 Minimum Subscription Price In Transaction (Dow Jones)
8:32a
Commerzbank CEO: Aim To Wind Dn Business In Value-Preserving Way (Dow Jones)
7:53a
Commerzbank: Non-Core Asset Run Down Making Further Good Progress (Dow Jones)
7:52a
Commerzbank: 1Q Revenues Had Solid Start In Jan, Feb (Dow Jones)
7:48a
Commerzbank Sets Measures to Cut Government Stake, Lift Capital (Dow Jones)
7:37a
Commerzbank: Repayment Of Allianz, Remainder SoFFin Non-Voting Shrs In Cash (Dow Jones)
7:34a
Commerzbank: EUR2.5B Size Of Rights Issue Includes Transaction Costs (Dow Jones)
7:33a
Commerzbank: Launch Of Discounted Rights Offering Expected After 1Q Results (Dow Jones)
7:31a
Commerzbank: Net Asset Value Per Share To Increase Tenfold In Transaction (Dow Jones)
7:29a
Commerzbank: Detailed Terms To Be Announced A Day Before Subscription Period (Dow Jones)
7:28a
Commerzbank: Faster Compliance With Basel 3 Allows Earlier Div Pay Resumption (Dow Jones)
7:27a
Commerzbank: Measures Improve Mid-Term Dividend Pay Ability (Dow Jones)
7:25a
Commerzbank: Transaction Allows Faster Compliance With Fully Phased In Basel 3 (Dow Jones)
7:23a
Commerzbank To Reach 9% Fully Phased In Basel 3 Common Tier 1 Ratio By End-'14 (Dow Jones)
6:37a
SoFFin: This Is the Beginning of Govt's Commerzbank Exit (Dow Jones)
6:30a
Commerzbank: Transaction Aims To Fully Repay SoFFin, Allianz Non-Voting Shrs (Dow Jones)
Grades: DB and suisse bank
Credit Suisse:
Commerzbank neutral (outperform) EUR1.25 (EUR2)
=========================================================
Deutsche Bank:
Commerzbank hold EUR1.20 (EUR1.50)
The indexes, along with the broader European markets, had opened in positive territory, but was sent lower in the afternoon. Jeroen Dijsselbloem, the chairman of the Eurogroup of euro-zone finance ministers, said according to Reuters that the rescue program for Cyprus reached early Monday morning served as a template for addressing future banking problems in the euro zone.
"If the bank can't do it, then we'll talk to shareholders and the bondholders, we'll ask them to contribute in recapitalizing the bank, and if necessary the uninsured deposit holders," he said, according to the report. See: Cyprus deal will dent euro, eventually--Citi's Englander
As part of the 10 billion euros ($13 billion) bailout deal, Cyprus agreed to restructure the two largest Cypriot banks, with depositors with more than EUR100,000, the cutoff for uninsured deposits, to face losses.
"There was a sigh of relief this morning following the Cyprus deal, but now there has been a lot of criticism leveled at this deal. It highlights many of the old flaws in the euro zone and it doesn't bode well for future resolutions," said Peter Dixon, strategist at Commerzbank in London.
"They had to tap into deposits, which is not a good thing," he added.
But even as investors were spooked by the prospect of bail-in solutions spreading to other ailing banking sectors, European equity markets still had the scope to move a little higher, Dixon said.
"If we got investors or corporations sitting on big piles of cash in the peripheral countries and they have seen what happened in Cyprus, the sensitive strategy would be to not hold cash and move them somewhere else like the equity markets," he said. "Other asset classes look awful and you don't get anything on fixed income."
The Cyprus Stock Exchange was closed for trading all of last week, but said it would reopen Tuesday. Monday is a public holiday in Cyprus. See: C
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Commerzbank is a leading bank in Germany and Poland. It is also present worldwide in all major markets for its customers as a partner to the business world.
With the business areas Private Customers, Mittelstandsbank, Corporates & Markets and Central & Eastern Europe, it offers its private and corporate clients as well as institutional investors the banking and capital market services they need.
With some 1,200 branches Commerzbank has one of the densest branch networks among German private banks. In total, Commerzbank boasts nearly 15 million private customers, as well as 1 million business and corporate clients. In 2012, it generated revenues of just under EUR 10 billion with approximately 56,000 employees on average.
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