Wall Street Journal
November 5, 2011
Commerzbank AG swung to a third-quarter loss, fueled by a large write-down on its Greek sovereign-debt holdings, and warned that financial turmoil across the euro zone would force it to miss its 2012 profit target.
Germany's second-largest bank by market capitalization also warned it will stop offering new loans outside Germany and Poland, the first sign of a potential credit crunch as European banks scramble to meet new European Union capital requirements.
Commerzbank, which is viewed as a proxy for the health of the broader German banking industry, posted a net loss of €687 million ($949.6 million) in the quarter ended Sept. 30, compared with a net profit of €113 million in the year-earlier quarter.
The loss largely was attributable to Commerzbank's write-down of €798 million on its Greek debt holdings. In the second quarter, the bank took a €760 million write-down on Greek debt. The German lender now holds Greek sovereign debt valued at €1.4 billion. Its sovereign exposure to Spain is €2.8 billion; Italy, €7.9 billion; and Portugal, €900 million.
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