Steady growth keeps Commerzbank restructuring 'on track'

Germany's second-largest lender Commerzbank on Tuesday reported steady growth in the first quarter, saying that it would press on with far-ranging restructuring plans over the rest of the year.

Net profit increased 28.4 percent to 217 million euros ($237 million) between January and March compared with the same period last year, the bank said in a statement.

But the group's revenues grew more slowly, edging up 2.2 percent to reach almost 2.4 billion euros, while operating, or underlying profit rose 11.3 percent to reach 314 million.

Revenues would have grown faster had it not been for "significant positive one-off effects" in the first three months of last year, the statement noted.

Commerzbank had a "good start to the new year and achieved a decent operating profit in the first quarter," chief executive Martin Zielke said.

The lender's restructuring drive, which will see it focus more on retail and business customers, was "on track", he added.

"It is also clear that it will take some time for our growth to be sufficient to significantly outweigh the burden of the negative interest rate environment," Zielke said.

Like other European banks, Commerzbank faces headwinds from the European Central Bank's ultra low interest rate policy, designed to encourage more lending to the real economy.

Last year net profits plunged 74 percent last year to 279 million euros.

The group reported that most of its first quarter revenue growth came from higher commissions as clients traded more securities with the bank.

Meanwhile, it had to set aside more cash in provisions to cover the risk of loans not being repaid, at 195 million euros compared with 148 million in the first quarter last year.

The bank is especially exposed to clients in Germany's struggling shipping sector, but said that its ratio of non-performing loans was relatively low at 1.5 percent.

Commerzbank said it had increased its core capital ratio -- the size of the buffer it keeps on hand to weather financial shocks -- to some 12.5 percent, up 0.5 percentage points from the first quarter in 2016.

Looking ahead to the full year, the lender continued to offer no forecast, saying only that it would "further strengthen its market position" while focusing on its restructuring plans.