Commerzbank shares fall sharply after negative rates hit quarterly revenues

Net income fell 32% to reach €342m over the three months ending in June as revenues slipped by 8.4% to €2.231bn.

Commerzbank attributed the decline in revenues - which it expected to continue - mainly to the negative interest rate environment and caution on the part of customers in the wake of "adverse developments" on the macroeconomic and geopolitical front.

"The Bank expects the negative rate environment and the adverse markets to further weigh on revenues," management said in a statement.

The second quarter decrease came despite a fall in the amount of loan loss provisions from €438m to €335m, with the ratio of non-performing loans printing at 1.4%.

Expenses, meanwhile, were almost unchanged on an operating basis at €1.702bn, versus €1.737bn in the year-ago period.

Frankfurt-based Commerzbank highlighted the NPL figure, explaining that it was the result of the "high quality" of its loan book and the stability of the German economy.

For the first six months of 2016 net profits were down by 42% to €372m.

By quarter end, the bank´s common equity Tier 1 ratio was at 11.5% in comparison to 10.5% at the close of the previous year.

As of 13:02 BST stock in Commerzbank was retreating 7.97% to €5.27.