Commerzbank posted a better-than-expected 6.4 per cent rise in second-quarter net profit today, helped by tax revenue but it took more writedowns and again warned its 2008 profit could drop.
The German lender reported net profit of €817 million ($1.3 billion), above the €311 million average forecast in a Reuters poll of 18 analysts.
"Our outlook from May remains unchanged. Due to the continuing market volatility, we reiterate that - without accounting for the tax gain - it could be very difficult to reach the good result of the previous year in 2008," chief financial officer Eric Strutz said.
Mr Strutz added that the goal remained to achieve a return on equity after tax of more than 15 per cent.
Commerzbank's operating profit rose 11.3 per cent to €484 million. Adjusted for one-off items, operating profit advanced to €908 million, it said.
Its commercial real estate segment took an impairment charge of €119 million for its portfolio of US residential mortgage-backed securities and a one-off loan loss charge of €250 million.
Commerzbank is seen as the favoured candidate for a merger with Allianz's Dresdner Bank, which would create a new national banking champion alongside the country's biggest lender, Deutsche Bank.
Commerzbank and Dresdner have been looking at each other's books but a quick deal is not on the cards, sources familiar with the situation told Reuters this week. Its results statement did not mention a transaction.
Commerzbank's shares are down over 16 per cent so far this year, less than the DJ Stoxx index of European banking shares, which is down almost 30 per cent.