Commerzbank, based in Frankfurt, said it lost ⁈illion ($1.6 billion) in the July-September period, nearly four times the ⁈llion it lost in the third quarter of 2008.

However, net interest income, one measure of revenue, rose 46 percent to ⁈illion from ⁈illion.

The results were in line with preliminary estimates released earlier this week.

The company increased its loan loss provisions in the third quarter _ to ⁈illion from ⁈llion a year earlier _ and expects to do so again for the rest of the year and into 2010, as it braces for more bankruptcies and rising unemployment.

Loan loss provisions in the first nine months of the year amounted to ⁈illion, up from ⁈illion in the year-ago period. By the end of September, Commerzbank's loan default portfolio stood at ⁈illion.

Commerzbank, the country's second biggest lender after Deutsche Bank AG, said it had exceeded its funding target for the current year and that it had reduced its refinancing needs for 2010.

It was also able to reverse four quarters of operating losses, posting an operating profit of ⁈llion.

It said that as a result of normalizing financial markets, it had returned some ⁈lion in unused guarantee commitments from the German government's bailout package.

Commerzbank took part in the German government's financial-sector bailout program and is around 25 percent owned by the government.

"We were also able to especially reduce risks further as could be seen in the lower levels of risk-weighted assets and total assets in the portfolio restructuring unit, corporate and markets and asset based finance segments," Martin Blessing, the bank's chief executive wrote in his note to shareholders.

"Our efforts and the overall improvement in our situation were also reflected in price rises in the capital market in the third quarter, not only for the fixed-income products we issued but also in our rising share price," Blessing said.

The bank's net loss for the first nine months stands at ⁈llion, compared with nine-month net income of ⁈llion in 2008.

Shares of Commerzbank were 3.5 percent lower at ⁈n Frankfurt morning trading.

___

On the Net:

http://www.commerzbank.com