Commerzbank AG (CBK.DE) today reported that its profits for Q1 dropped by a massive 54% as compared to the figures reported in a similar period last year. The ban blamed the significant drop in profits on lower revenues and suspended businesses as the company battles to stay afloat.
The German lender’s performance is a reflection of the challenging environment in which German banks are operating as the country’s economic growth stagnates. The bank recently terminated merger negotiations with Deutsche Bank another troubled German bank as it became clear the deal would be too complicated to execute and generate cost savings.
The future outlook for the German bank as well as other European lenders looks shaky amid the sluggish economic growth and the ongoing US-China trade war, which could easily trigger a global recession. It remains to be seen whether the bank’s profits shall recover in the second quarter, but this largely depends on whether the domestic and global economic conditions shall improve.