Commerzbank to write off 1.5 billion euros in goodwill, increases risk provisions

FILE PHOTO: A company logo is pictured at the headquarters of Germany’s Commerzbank AG during the annual results news conference in Frankfurt, Germany, February 13, 2020. REUTERS/Ralph Orlowski

FRANKFURT (Reuters) – Commerzbank said on Friday it would write off existing goodwill of 1.5 billion euros ($1.84 billion) and also increased its risk provisions related to the coronavirus pandemic.

The charges will be taken for the 2020 financial year, the bank said. They suggest the bank will post a larger loss than analysts had been expecting.

The bank said that the goodwill writedown was “due to deteriorating market parameters,” including low interest rates in the euro area and Poland, where it has a presence.

The bank is working on a strategy update under new leadership in an effort to improve profitability.

The German lender’s chief executive, Manfred Knof, has warned that the bank “needs to undergo a fundamental transformation”.

($1 = 0.8169 euros)

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