Commerzbank’s net profit jumped 28 per cent in the first quarter as Germany’s second largest lender benefited from a one-off effect in its run-down unit.

In the three months to the end of March, Commerzbank said that its net income came in at €217m, up from €169m in the same period a year earlier. Analysts had expected the bank, which is in the middle of a big restructuring programme, to earn just €107m, according to a Reuters poll.

In Commerzbank’s private clients and small businesses division, operating profits fell 30 per cent to €194m, due in part to higher regulatory costs. Meanwhile, in its corporate clients division, which houses its core Mittelstandbank and its investment bank, earnings fell 11 per cent to €250m, as revenues declined 5 per cent.

However, these effects were mitigated by a one-off €68m gain on a hedging exposure in Commerzbank’s public finance business, which helped the bank’s wind down unit to cut its losses to €33m, down from €119m last year.

Martin Zielke, chief executive, said that the bank had made a “good start” to the year, but added that it was “clear that it will take some time for our growth to be sufficient to significantly outweigh the burden resulting from the negative interest rate environment”.

Commerzbank’s core tier one capital ratio, a closely watched measure of financial strength, climbed slightly from 12.3 per cent at the end of December to 12.5 per cent at the end of March.

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