ABN Amro and Commerzbank, both former bailout recipients, lost money in Q1. The cause, virus-induced bad debt, is common. But a narrow focus and low profitability make them particularly exposed, says LiamWardProud
Dutch lender ABN Amro lost 395 million euros in the first three months of 2020, chiefly because of a 1.1 billion euro charge for bad debt, the bank said on May 13.
Commerzbank on the same day reported a 295 million euro loss for the first quarter of 2020, driven by 326 million euros of bad-debt charges. Those loan-loss provisions were roughly four times the amount the German lender took in the same period a year earlier. Chief Executive Martin Zielke said that Commerzbank’s revenue this year should be flat in its two core businesses of corporate and private banking, provided the Covid-19 lockdown in Germany only lasts two months, and the economy gradually recovers afterwards.
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