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Profit Tumbles At Private Client Business Of Germany's Commerzbank
Max Skjönsberg
10 August 2012
The private client division of Commerzbank, one of Germany's biggest lenders, reported an operating profit of €126 million ($155 million) for the first half of the year, down from €195 million for the same period in 2011. The private client arm incorporates the bank's wealth management business in Germany and international private wealth business in Luxembourg, but also other aspects of retail banking. The bank said the profit fall was a result of "lower interest and commission income in the wake of the lowered deposit margins and ongoing low customer activity in the securities business". "All in all the operating profit in the private customers segment is not satisfying," said chief financial officer Stephan Engels. "Due to synergies realised from the takeover of Dresdner Bank and active cost management, costs have been developing as planned. But given that revenues remained below expectations due to the market environment, we will advance the strategic development of the segment." Across its operations, the bank made an operating profit of €1 billion in the first half of 2012, down from €1.2 billion in the same period last year. This year, €584 million of the profit was achieved in the first quarter of the year and the remainder, €451 million, in the second quarter. At the end of last month, the asset and wealth management segment of Deutsche Bank, Germany's largest bank, logged pre-tax income in the second quarter of €35 million, sliding by 85 per cent on the year, while net revenues fell 9 per cent to €891 million.