Commerzbank Sticks With Target as Virus Impact ‘Unforeseeable’

(Bloomberg) --

Commerzbank AG said it’s too early to quantify the impact of the coronavirus pandemic on the economy and its own outlook for the year.

In its annual report published Friday, the bank kept its forecast for a profit this year, while warning of numerous risks that “could affect the 2020 profit forecast to a considerable, though not reliably quantifiable, extent should events take an unfavorable turn.”

“These include the geopolitical situation, which continues to be marked by great uncertainty, and increased global economic risks –- especially against the background of the as yet unforeseeable economic impact of the coronavirus,” Commerzbank wrote.

The bank, which has long struggled with poor profitability, is among the hardest hit in Europe by a stock selloff that has cut its market value in half over the past month. The lender is heavily exposed to Germany’s export-dependent small- and mid-sized companies, as well as to Italian debt. Chief Executive Officer Martin Zielke is trying to come up with more cost cuts after investors privately lambasted his current targets.

Commerzbank feels “very comfortable” about its capital buffers and liquidity, Chief Financial Officer Bettina Orlopp said at a conference on Thursday. Some companies have begun to draw down unused credit lines, she also said.

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