5 Nov 2011

Loss reported by German bank due to Greek debt

6:38 am on 5 November 2011

Commerzbank has reported a loss for the July - September quarter after taking further writedowns on Greek debt.

Germany's second largest bank reported a third-quarter net loss of 687 million euros ($US949 million), compared with a profit of 113 million euro a year ago.

The bank took a 798 million euro hit on its Greek assets.

Commerzbank is heavily exposed to Greek debt, as are French banks.

It is 25% owned by the German government.

Commerzbank also said that it would cut its lending in the eurozone as it tries to hit new capital requirements.

Politicians agreed in Brussels last month that banks will have to accept losses of 50% on their holdings from Greece. Banks will also have to take on more capital to protect themselves from any future defaults.

On Thursday, BNP Paribas, the biggest bank in France, revealed a 72% drop in profits, to 541 millio euros, after cutting its exposure to sovereign debt.

Franco-Belgian bank Dexia and US broker MF Global have both collapsed in the past month due to exposure to the crisis.