Presenting the bank’s annual results for the last time, Martin Blessing can be happy he was able to present some good news. Commerzbank’s chief executive on Friday announced a net profit of €1.1 billion, or $1.2 billion, the bank’s highest earnings since 2010.
“I am satisfied that the bank is more stable and more stress resistant than it was before the financial crisis,” Mr. Blessing told reporters on Friday.
For Germany’s second-largest bank and its investors, it marks an end to a seven-year long struggle to overcome bad loans and bad decisions. Mr. Blessing confirmed the bank would pay a dividend for the first time since 2007, and announced it was winding down a bad bank created in the aftermath of the crisis to do away with billions in failed loans in real estate and shipping, among other things.
Mr. Blessing, who will resign in October, has led the bank since May of 2008, taking over shortly before Commerzbank was plunged into the worst crisis in its history. Just before the financial crisis, he had engineered the acquisition of Dresdner Bank – an expensive merger that along with other errors was blamed for Commerzbank needing two German government bailouts totaling some €18 billion in 2008-2009.
It’s been a rough time at the top: Commerzbank achieved below-average profits the past five years, posting losses in 2009 and 2012, and cut hundreds of jobs as losses on bad loans weighed on earnings. The German government still owns around 15 percent of the bank.