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Commerzbank profit rises by 15%

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07/11/13

Germany’s Commerzbank says third-quarter net income rose by 15% to €77 million ($104 million). The bank has recently cut costs and taken on fewer losses on shaky investments set aside for disposal.

The figure managed to exceed estimates produced by analysts for €44 million in net income. Shares in the bank jumped 9.4% to €10.19 and led Germany’s DAX blue-chip index in morning trading in Europe.

The bank’s non-core assets division cut losses to €272 million from €477 million a year ago. The division is winding down the bank’s commercial real estate and shipping loans. In order to counter the anti-competitive effect of state aid that it received from the Germany government when it was bailed out in 2009, Commerzbank was required to leave some lines of businesses under European Union rules.

Earnings were held back due to lower income trading securities as well as larger losses for loans that were not being repaid.

Commerzbank, which is still part-owned by the German government, said it was making progress by letting go of risky investments and increasing its capital buffers.

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