* Q2 profit down 21%, but better than expected
* CFO says good progress on strategy review
* Search for new CEO ongoing (Updates with CFO comments, analyst, shares)
By Tom Sims and Hans Seidenstuecker
FRANKFURT, Aug 5 (Reuters) – Commerzbank expects a writedown on loans to collapsed payments firm Wirecard and fallout from the coronavirus crisis to result in a loss for the year, compounding the challenges already facing Germany’s second-largest bank.
The partly state-owned bank, which has been targeted by activist U.S. private equity fund Cerberus, is trying to regain its footing after the exit last month of its CEO and chairman and years of setbacks since the financial crisis.
Commerzbank said in a statement on Wednesday that given provisions and charges for restructuring it anticipated a loss for the full year. The bank had previously said its goal of turning a profit in 2020 was “very ambitious”.
The 150-year-old bank’s grimmer outlook follows a 21% fall in net profit in the second quarter and an increase in expectations for charges for credit losses for the full year.
“The effects of the coronavirus pandemic and the ongoing difficult economic conditions have persisted in the year to date and continued to have a significant impact,” Commerzbank said.
Net profit in the April-June quarter of 220 million euros ($260 million) was down from 279 million a year earlier, but was above a consensus forecast of 95 million and saw Commerzbank’s shares rise by 4.3% to 4.74 euros at 0856 GMT.
Analysts at Jefferies said the second quarter is likely to be the only profitable one after Commerzbank said provisions for credit losses had risen to 469 million euros from 178 million.
Some 175 million euros related to Wirecard, which collapsed last month after an accounting scandal.
Commerzbank, which was already under pressure to change from Cerberus, was left leaderless last month when CEO Martin Zielke and supervisory board chairman Stefan Schmittmann stepped down in a move they said would give it a fresh start.
Although Hans-Joerg Vetter, the retired chief of a German regional bank, was elected this week as its new chairman, the search for a CEO is still in progress.
Commerzbank’s chief financial officer Bettina Orlopp, who sources say is a candidate for the CEO job, said that a review that would see further cost cuts had “progressed very well”.
Staff cuts, branch closures and streamlining of the Commerzbank’s international operations are under discussion.
Orlopp declined to comment on the CEO job. (Reporting by Tom Sims and Hans Seidenstuecker; editing by Michelle Martin, Jason Neely and Alexander Smith)
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