Commerzbank AG (CBK.XE, CRZBY) manager Markus Beumer Tuesday said it is now "almost irrelevant" whether Greece's debt will be slashed by a voluntary haircut or a messy default.
Beumer is responsible for the bank's business with mid-sized corporate clients.
The relief provided by the so-called private sector involvement, or PSI, wasn't enough to sufficiently cut Greece's debt burden as public-sector lenders hold more than 50% of the country's debt, Beumer said at a panel discussion of consulting agency FTI Consulting in Frankfurt.
"This would only buy us about four years time," he said.
Beumer added that Commerzbank's core bank is expected to make a profit of "over EUR4 billion this year" but the overall group's results will be negatively impacted by the debt crisis.
Commerzbank last year scrapped its 2012 pre-tax profit target of EUR4 billion for the whole group due to the single-currency bloc's crisis and the bank's heavy exposure to periphery countries.
Under the voluntary PSI program, private creditors of Greece forego half of their debt holdings and roll some of the remaining debt into longer-dated maturities. This would slash the country's debt by roughly EUR100 billion ($131 billion) to EUR260 billion. Many bank managers demand the European Central Bank and other public creditors take part in the relief program.
Beumer added that Portugal and Ireland already are being discussed as needing a similar debt-relief program as well.
"Ireland is incredibly reliant on real estate business," he said. "We would enter into a global recession should the crisis spill over to Italy," Beumer added.
The European Central Bank's three-year liquidity facility, with which the ECB injected almost EUR500 billion into the market, seems like a straightforward "bailout" for banks, he said.
The latest data from Germany's Bundesbank don't suggest a credit crunch in Germany, he said, pointing to companies' working capital management and below-peak capacity utilization levels.
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