BERLIN, Aug. 7 (Xinhua) -- Commerzbank has made progress with corporate reforms to restore the ailing financial institute to profitability, according to earnings data published on Tuesday by the Frankfurt-based company.
Germany's fourth largest bank recorded gross revenue, adjusted for one-off effects, of 4.52 billion euros (5.24 billion U.S. dollars) between January and June, marking a four-percent increase compared to the same period last year. Corporate income during the second quarter of 2018 hereby rose slightly from 2.1 to 2.2 billion euros.
At the same time, Q2 operative profits at Commerzbank nearly doubled to 389 million euros and were measured at 689 million euros for the entire half-year. Net profits came in at 533 million euros during the first six months of 2018 after having posted a loss of 414 million euros the previous year.
"Commerzbank has made progress during the first half of 2018 in implementing its 'Commerzbank 4.0' strategy," a statement by the DAX-listed lender read.
Commerzbank further highlighted the successful sale of its Equity-Markets-and-Commodities (EMC) business to French Societe Generale as another important milestone in its ongoing turn-around efforts.
Back in 2017, the launch of a far-reaching restructuring initiative to simplify Commerzbank's business model and focus on its core strengths had weighed heavily on Q2 earnings.
The financial institute has now digested most of the costs associated with these reforms and also benefited from a strong performance of its private banking unit between during the past six months.
"The implementation of our strategy is advancing well. We are growing and making progress at simplifying and digitalizing the bank," chief executive officer (CEO) Martin Zielke commented on the development on Tuesday.
"Our growth initiatives are already working, although it will take some more time until their full effect is felt," Zielke added.
Exemplifying an area that had not yet witnessed the reversal of commercial fortunes desired by Commerzbank, corporate banking revenue continued to decline as the division struggled under the pressure of intense competition.
The looming exit of Britain from the European Union (EU) has led many banks to relocate to Germany where they are increasingly vying for customers with local financial institutes. As a consequence, the earnings outlook for 2018 was adjusted slightly to account for resulting risks to corporate banking performance.
Nevertheless, Commerzbank announced that it would still pay out a dividend of 20 cents per share in 2018. The show of confidence marks the first time since 2015 and only the second time since the 2007/08 financial crisis that profits have been forwarded to investors.
Commerzbank made international headlines back in 2008 when it had to be rescued with a partial nationalization by the German government during the global financial crisis.
The institute recently said that it would lower its headcount of around 36,000 by 7,300 positions until 2020 as part of an ambitious reform program.
