Rating Agency Moody’s thinks Commerzbank could rack up further losses of almost 7 billion euros this year and next as the global crisis hits loans and this could threaten Commerzbank’s rating.
Moodys’ warns that writedowns on loans that went unpaid as well as mounting credit risk could burn through the banks’ capital cushion. Moody’s Chief Analyst Katherine Barten told Reuters “The pressure points for Commerzbank are loan exposure in central and eastern Europe and its commercial real estate portfolio” adding “we expect further losses which could be as high as 6.8 bln euros over the next 18 months.”
The analyst says it would help the bank if the German government were to increase its shareholding from its current 25%.
