Frank Siebelt, Tom Sims

FRANKFURT (Reuters). Germany’s Commerzbank, DE: posted a stronger-than-expected 3Q net profit on Thursday. They also forecast a profitable year and defied analysts predictions that it would lose 2021.

Lower costs and a lower level of provisions to offset the effects from the pandemic were key factors in the quarterly results.

Commerzbank reported a net profit of 467 million euros (403 million euro) for the third quarter, compared to a loss in 2016 of 60 million. Analysts were expecting a profit at 253 millions euros.

Germany’s number 2. Manfred Knof is the Chief Executive of Germany’s No. The bank is undergoing a restructuring of 2 billion euros that will see hundreds of branches close and 10,000 jobs eliminated in order to return to profitability.

Knof explained that, “despite restructuring expenses”, Knof expects to achieve a positive net results for the whole year.

Analysts had predicted that the bank would post losses of over 100 million euros in 2021, and then only make a profit next year. Restructuring costs caused a sharp loss of 2.9 Billion Euros at the bank in 2020.

Commerzbank’s past few years have been difficult. Talks for a merger with Deutsche Bank (DE) was rejected and the Premier of German Blue-chips was removed from it. Cerberus was a significant investor and launched a campaign of change last year. It prompted changes in leadership as well as plans to make drastic job reductions.

Commerzbank is still partly owned by the government after it was rescued from the financial crisis a decade earlier. It has suffered losses of approximately 2 billion Euros between 2009 and last year.

($1 = 0.8633 euros)