Commerzbank to shore up capital base

LONDON (ShareCast) - One off gains put a positive sheen on the fourth quarter results from German banking titan Commerzbank (Other OTC: CRZBF.PK - news) but Greek debt impairments remain a bugbear for the company. The bank reported a rise in fourth quarter profit to €316m, from the prior year's €257m, though earnings were boosted by a one-off gain of €735m due to the repurchase of hybrid equity instruments. Pre-tax operating profit actually fell 36% to €163m. In addition, the German bank noted that it wrote down its Greek bond holdings by €700m but total peripheral sovereign exposure remains at €12.3bn. Furthermore, the DAX index (Xetra: ^GDAXI - news) constituent has decided to increase its share capital by 10% via the conversion of certain hybrid instruments into shares. The company expects the transaction to increase capital by more than €1bn. Commerzbank currently leads the losses on the DAX as it plunges 3.38% to €2.00. JM