STATE-OWNED Bayerische Landesbank said yesterday that it finally swung to a pretax profit in the second-quarter after a string of weighty writedowns related to risky subprime investments had kept the company deep in the red for months.
The Munich-based bank, which did not break down its net profit or provide year-ago comparison figures, said it earned 140 million euros (US$207.9 million) in pretax profit from April to June even as it reported writedowns of 286 million euros.
But the figure was still better than the first quarter, when the bank reported a pretax loss of 770 million euros amid writedowns totaling 1.1 billion euros.
For the first six months, BayernLB reported a 630-million-euro pretax loss compared with a profit of 1 billion euros from January to June last year. Net interest income rose 18.5 percent to nearly 1.3 billion euros compared with 1 billion euros the year before.
Despite the improvement, bank chief executive Michael Kemmer warned that progress in maintaining profitability remained a balancing act.
"We are not quite out of the woods yet, but we can feel more solid ground under our feet again," he said in a statement.
"The figures for (the second quarter) show that BayernLB is on the right track with its optimized business model."
Kemmer said the bank was still working on expanding its operations in central and southeastern Europe by increasing its small and medium enterprises and retail segment to bolster its operations.