Commerzbank, Germany's second-biggest bank, said Thursday it expected net profit in the second half of the year to be lower than in the first, with no end to the eurozone debt crisis in sight.
"We still do not expect the macro-economic and market environment to stabilise in the second half of 2012. Against this background, we expect net profit in the second half of the year to be below the net profit of the first six months," Commerzbank said in a statement.
Commerzbank said its January-June net profit amounted to 644 million euros ($797 million), down 36 percent from a year earlier.
In the second quarter alone, net profit was down by 25 percent from the preceding three months at 275 million euros.
Operating profit was down 13.7 percent at 1.04 billion euros in the first half and declined by 22.8 percent quarter-on-quarter to 451 million euros in the April-June period.
"This was due in particular to the further decreased market interest rate level and declining customer activity," Commerzbank said.
Second-quarter net interest income -- the difference between interest earned and interest paid -- fell 6.7 percent to 1.33 billion euros and net commission income dropped 10.2 percent to 757 million euros.
The bank also increased the provisions it set aside for bad loans to 404 million euros in the second quarter from 212 million euros in the first.
Chief executive Martin Blessing said that in the current environment the bank's priority was to reduce risks and strengthen its capital base.
"In the past six month s... we have succeeded in doing this," he said.
As of June 30, Commerzbank had 2.8 billion euros more core capital than required by the European Banking Authority.
"As a result, we are well prepared for the difficult market conditions," Blessing said.
Investors were not so convinced and Commerzbank share were little changed at the start of trade on the Frankfurt stock exchange Thursday in a generally firmer market.
