The bank, which lost €1.1bn in the credit crisis and posted a third-quarter loss of €285m with operating losses totaling €475m, tapped Berlin for an additional €15bn in debt guarantees.
Shares in Commerzbank jumped 3.7pc to €8.74 in Frankfurt following the news. The double stress of the financial crisis and the bank’s agreement to buy Dresdner Bank from insurer Allianz in August, has seen the company’s stock tumble 65pc this year.
As part of the deal reached with Germany’s Financial Markets Stabilization Fund, Commerzbank will pay no dividends to its investors through 2009 and 2010, and has capped chief executive Martin Blessing’s compensation at €500,000.
All board members will also forego any bonuses for the next two years.
“We welcomed the government’s aid package from the beginning,” said Mr Blessing in a statement, because “it is good for the bank, for its employees and its customers”.
But, he added: “We have not covered ourselves in glory here. In future, we will have to improve.”
Commerzbank, which earned €339m the year before, got especially clobbered this fall by exposure to Iceland and the collapsed investment bank Lehmen Brothers, which cost it €600m.
The capital infusion comes in the form of “silent participation”, which will not make Berlin an active shareholder nor give government a seat on the board.Though the package was clearly labeled “harmless generic medicine”, CBP officers conducted a thorough inspection. without prescription viagra However, some chiropractors also apply massage therapies on the buy bulk viagra other joints and muscles of the body up to 4 days after ingestion. If you’ve studied generic viagra germany internet marketing, you’ve surely heard the catch phrase, “The money’s in the list.” And to some extent, it’s true – but only if you use your list to build strong relationships with your prospects. These include practicing buy cialis tablet with your partner and learning about menopause and how to deal with it.
The cash, to be provided in two steps of €4.1bn each – with an interest rate of 8.5pc on the first installment and 5.5pc on the second – will go directly toward boosting the bank’s Tier 1, or core capital.
Commerzbank, the first of Germany’s major private banks to apply for state aid, joins Bavarian state-owned giant BayernLB and property lender Hypo Real Estate in taking advantage of Berlin’s €500bn bailout package.
Germany’s HSH Nordbank, the only German state bank partially owned by private investors, signalled it too would join the queue for funds. WestLB AG also said it intends to use the package.
Commerzbank’s move was praised by Finance Ministry spokesman Torsten Albig. “It strengthens the bank and protects shareholders and workers, as well as the German economy’s credit supply,” said Mr Albig.
But Konrad Becker, an analyst at Merck Finck & Co. in Munich, told Bloomberg news that “the size of the capital injection needed gives evidence of the weakness of Commerzbank’s capital base.”
Nonetheless, he said, what’s positive is that bank “found a way to raise capital without having to re-negotiate the Dresdner acquisition from Allianz”.