Commerzbank surges as it swings to profit, announces dividend

Shares in German lender Commerzbank surged on Friday as it swung back to a profit in the fourth quarter and announced a dividend.

Profit in the fourth quarter came in at €187m (£145m) compared with a €280m loss in the same period in 2014, as revenue rose to €2.23bn from €1.85bn.

Profit was ahead of consensus of €160m and the bank proposed a dividend of 20 cents per share for the 2015 financial year.

The lender's 2014 earnings had been hit by a €1.45bn settlement with US authorities for banking violations.

Commerzbank said it cut loan risk provisions in 2015 to €696m, from €1.14bn the year before.

Chief executive Martin Blessing, who is due step down from his role in October, said: “2015 has shown that our strategy is right and that the implementation has been successful. For the first time in five years we have attained a net profit of more than €1bn and have seen further significant strengthening of our capital base.”

Commerzbank said it expected a "moderate increase in loan loss provisions due to lower recoveries from impaired loans”.

“From today's perspective we expect a slight increase in net profit in comparison with this year's result," it said.

At 0833 GMT, Commerzbank shares were up 13% to €7.29.