Commerzbank shares have fallen after the German lender predicted lower than expected first quarter earnings. As Hayley Platt reports, it makes the new CEO's job that bit harder
It's beginning to look like a trend - Commerzbank has followed the pattern set by its U.S. rivals. Here at its AGM, Germany's second-biggest lender expects first quarter earnings to be below the last quarter, largely because of low interest rates and market volatility. Commerzbank's shares dropped 4 percent after the warning - it was the biggest faller on Germany's Dax. (SOUNDBITE)(English) CIBC, HEAD OF FX STRATEGY, JEREMY STRETCH, SAYING: "The problem for a number of these banks is of course the weakness that we've seen in both the economic activity but also in terms of corporate and trading activity over the last month, so whilst there may well be better times ahead I think it's going to be difficult for the profit numbers this year to match expectations of last year." That doesn't make Martin Zielke's job any easier - he's taking over as CEO next month when another Martin, Martin Blessing, steps down. He steered the lender through its takeover of Dresdner Bank in the midst of the financial crisis and a government bailout that followed. (SOUNDBITE) (German) COMMERZBANK CEO, MARTIN BLESSING, SAYING: "In the last eight years we've been through a lot together, ups and downs. They were mostly exceptional years that required very tough financial and strategic measures. It's clear to me that not all decisions had your approval. I know, we demanded a great deal from you." The bank is now back in profit and paying a dividend. And Zielke's promotion from head of retail banking is generally welcomed. He's added revenue, customers and products to his division while keeping costs low. Doing the same for the rest of the bank is the challenge now.