Germany’s second-largest lender Commerzbank on Thursday reported a third-quarter net loss of €69 million after provisions against a coronavirus-hit economy and a restructuring that will close branches and cut jobs.

Operating profit dropped nearly two-thirds to €168 million, weighed down by risk provisions on its loan portfolio that doubled in a year due to the pandemic.

Risk provisions on its loan portfolio doubled in a year due to the pandemic

“We have a stable customer business and a strong capital position,” finance chief Betina Orlopp said, adding that this “represents a good basis for future impacts arising from the coronavirus crisis”.

“We have paved the way for further cost savings,” Orlopp added.

Commerzbank, like its crosstown rival Deutsche Bank, is cutting thousands of jobs as it looks to restructure. It is shutting 200 branches as consumers pivot to contactless spending and online accounts, and cutting as many as 10,000 jobs. This resulted in €201 million of charges from restructuring, driving third-quarter earnings into loss. 

The third-quarter net loss of €69 million compared with a profit of €297 million for the same period last year.

Commerzbank also confirmed that it expects to end the year with a net loss, which would be the first since 2009. Last year, it posted a net profit of €644 million.

The task of getting the bank back on track will fall to its new boss from the start of 2021, Manfred Knof, a defector from Deutsche Bank. He will replace Martin Zielke, who resigned in July after being criticised by its second-biggest shareholder, investment house Cerberus.