Commerzbank, Germany’s second-largest bank, raised its provisions against loan losses to more than €1bn ($1.48bn) in the third quarter of the year as it tackled the likely cost of its exposure to the weak economies of eastern Europe and the battered property sector.

The bank, which will make a loss this year after its troubled acquisition of Dresdner Bank amid the financial crisis, also drew attention to the challenging economic environment for small and mid-sized companies in Germany.