Commerzbank profits plunge in 2016

Germany's second-largest lender Commerzbank booked net profits down more than 74 percent in 2016, financial results released Thursday showed, as it continues to battle through a tough restructuring.

The bank's 279 million euros ($298 million) net profit beat the 222 million forecast by analysts surveyed by Factset, but fell far short of the almost 1.1-billion-euro result it reported in 2015.

Lower profits had been on the cards for the lender since it forecast only that it would not post a loss as it released its third-quarter results last year.

At 1.4 billion euros, operating profit lost 28 percent, while revenues showed a more modest drop, falling around 4.0 percent to 9.4 billion euros.

The bank said it had set aside some 900 million euros to cover loan losses, an increase of more than 200 million over 2015 as it remains exposed to struggling shipping firms.

"We cannot yet be satisfied with the quality of our earnings," chief executive Martin Zielke said in a statement, but "we have now given ourselves the room for manoeuvre needed" for the restructuring.

Commerzbank invested some 129 million euros into restructuring expenses in 2016, as Zielke seeks to return its focus to core activities of lending to households and businesses and slash some 9,600 jobs by 2020.

The German government still holds a 15-percent stake in the lender, as it had to be rescued in the face of heavy losses in the 2008 financial crisis.

Like other German banks, it faces stiff headwinds from low interest rates and intense competition thanks to a crowded domestic market and the arrival of new digital competitors.