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German bank beats estimate

COMMERZBANK AG, Germany's second-largest bank, had a narrower-than-expected loss in the fourth quarter and said it made a "good start" to 2009.

The net loss was 809 million euros (US$1.02 billion), compared with a profit of 201 million euros a year earlier, the Frankfurt-based firm said yesterday in a statement. That beat the median estimate of 12 analysts surveyed by Bloomberg News of a loss of 851 million euros.

Chief Financial Officer Eric Strutz said the bank, which is integrating newly acquired Dresdner Bank, "had a good start in January" driven by net interest income and trading profit.

The company, which isn't paying bonuses for 2008 after it was forced to seek 18.2 billion euros in capital from the German government amid the credit crunch, expects a "very difficult year."

"This year will be very challenging because of the integration of Dresdner and the economic slowdown," said Manfred Jakob, a Frankfurt-based analyst at SEB AG. "Commerzbank couldn't dodge the financial crisis."

Commerzbank, which has plunged 89 percent since the start of 2008, gained 12.5 cents, or 4.4 percent, to 2.95 euros as of 9:25am yesterday in Frankfurt, valuing the company at 2.6 billion euros.

The integration of Dresdner Bank is proceeding "according to plan," Strutz said. Commerzbank won't pay bonuses to employees or management board members for 2008, he confirmed.

Commerzbank reported writedowns of 334 million euros on asset-backed securities in the quarter, the bank said in a presentation on its Website.

The world's largest financial-services companies have racked up more than US$1 trillion of losses and writedowns on credit-related assets in the worst financial crisis since the Great Depression, according to Bloomberg data.

Commerzbank also said it won't pay a dividend for 2008 after paying 1 euro a share for the previous year.


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