Commerzbank lost €4.5 billion ($6.2 billion) in 2009 as the cost of overhauling the acquired Dresdner Bank and a steep rise in loan-loss provisions took their toll on Germany’s second-largest bank.

Martin Blessing, chief executive, promised a “considerable improvement in customer-focused business” this year, including operating profits for the core parts of Commerzbank after its restructuring.

“The crisis is not yet over, although the start of 2010 has been promising with respect to our operating performance,” he said.

Following a bail-out during the financial crisis, the bank is 25 percent owned by the German government, which also lent more than €16 billion ($21.08 billion) of capital to strengthen Commerzbank’s balance sheet. There has been no “exit strategy” outlined for the government stake, with the bank expected to need support for some time to come.

Costs related to acquiring troubled Dresdner were €1.9 billion ($2.58 billion) last year, while Commerzbank also booked €768 million ($1.04 billion) of goodwill impairments linked to Eurohypo, the property and public finance unit that Commerzbank will try to sell as part of a deal with the European Commission.

Meanwhile, loan-loss provisions for 2009 were €4.2 billion ($5.7 billion) as Commerzbank counted the cost of its exposure to the German economy and to troubled markets in central and eastern Europe.

Eric Strutz, chief financial officer, said the economic environment had stabilized. “We expect loan-loss provisions to decrease again in the current year,” he said.

The full-year operating loss was €2.3 billion ($3.1 billion) compared with a €5.4 billion ($7.35 billion) loss in 2008, but Mr Blessing said the core bank — including its businesses for private customers, German business clients, central and eastern Europe and the investment banking “corporates and markets” — should make an operating profit in 2010.

“The bottom line of the whole group will only be in the black if the development of the economy and the financial markets [is] very positive in 2010 … but we will return to profitability in 2011 at the latest,” he said.

The main problems for 2010 are likely to be in Commerzbank’s asset-based finance division, which has substantial exposure to commercial property and government bonds, and the bank’s “portfolio restructuring unit” — an internal “bad bank” that is winding down some of the riskiest positions.

Commerzbank gave an indication of the potential for shocks that still existed by revealing a trading loss of €561 million ($764 million) in the fourth quarter, which it put down to continuing risk reduction and de-recognition of monoline exposures. In the third quarter it had made a trading profit of €659 million ($898 million).

The losses helped push the bank to a fourth-quarter net loss of €1.6 billion ($2.18 billion), worse than analysts had feared.

Commerzbank reduced risk-weighted assets by 17 percent to €280 billion ($381 billion) and total assets by 19 percent to €844 billion ($1.15 trillion) at the end of 2009. The bank had agreed with the European Commission that it would cut assets to €900 billion ($1.22 trillion) by 2012.

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Anglo-Australian miner BHP Billiton Ltd. on Wednesday announced it had more than doubled its first-half profit to US$6.1 billion after selling record quantities of key commodities and keeping a firm hand on its costs.

The world’s biggest miner delivered a 134 percent rise in net profit for the six months to Dec. 31, 2009, to $6.1 billion, from $2.6 billion over the same period a year earlier.

However, the result was inflated by the sale of the Ravensthorpe nickle mine in Western Australia state year for $340 million to First Quantum Minerals Ltd.

BHP closed the loss-making mine early last year.

Excluding one-offs, BHP Billion’s net profit was $5.7 billion, down 7 percent from $6.1 billion in the first half of 2008/09.

That was stronger than analysts’ expectations of $5.1 billion.

BHP Billiton said its result was “sound” given continuing volatility and uncertainty in the global economy.

“Strong sales volume growth on the back of demand recovery, particularly in the steelmaking raw materials and good cost control across the business helped to partially offset the negative impacts of lower prices and stronger producers currencies,” it said in a statement.

Its underlying earnings before interest and tax, a figure known as EBIT, were $8.5 billion for the first six months of the financial year, down from $11.9 billion a year earlier. Analysts had predicted underlying EBIT of $7.9 billion.

BHP Billiton said global economic conditions had improved over the past six months, as the United States and Europe lifted industrial output from previously depressed levels and China returned to double digit growth.

“Government stimulus measures appear to have supported the restocking activities in the developed economies and a gradual return to normalized global trade,” it said.

But BHP Billiton remains cautious about the speed and strength of the global economic recovery across the developed world.

“It appears that stimulus measures that supported the recovery have not fully addressed structural issues such as weak labor markets and excess production capacity in developed economies,” it said.

The company said a further variable would be the impact of any measures to control loan growth in China.

“It is evident that in the short term, the Chinese government will focus on containing asset inflation,” it said.

BHP said commodity markets will continue to be largely dependent on Chinese and Indian demand.

“Real commodity demand in the developed economies remains restrained and the impact of the gradual withdrawal of government stimulus will be a key driver,” it said.

“In the long term, we continue to expect strong growth in demand for our commodities,” it added.

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Standard & Poor’s has followed through on its warning and lowered Berkshire Hathaway Inc.’s long-term credit rating Thursday as the Omaha firm readies to acquire Burlington Northern Santa Fe Corp.

The ratings agency lowered Berkshire’s rating one notch to “AA+” from “AAA,” its highest designation.

S&P also removed the ratings from CreditWatch, where they were placed with negative implications in November, and called the outlook stable.

Berkshire Hathaway officials didn’t immediately respond to a request for comment.

S&P said it expects a significant part of the cash portion to come from Berkshire Hathaway’s core insurance operations, and the $26.3 billion railroad purchase will reduce the liquidity of the company’s insurance operations.

Shareholders of BNSF are scheduled to vote on the proposed acquisition Feb. 11.

The deal is expected to close by Feb. 15.

“The rating actions are based on our view that Berkshire’s overall capital adequacy, as well as that of its insurance operations, has weakened to levels no longer consistent with a ‘AAA’ rating and is not expected to return to extremely strong levels in the near term,” Standard & Poor’s credit analyst John Iten said in a statement.

“Furthermore, we expect that the consolidated liquidity position of Berkshire will be reduced from extremely strong historical levels as a result of the acquisition.”

In the ratings agency’s view, investment risk remains very high, “compounding the need for extremely strong capital and liquidity given potential investment volatility.”

With the downgrade, just four U.S. industrial companies maintain S&P’s “AAA” rating: Microsoft Corp., Exxon Mobil Corp., Johnson & Johnson and Automatic Data Processing Inc. More than a dozen U.S. financial institutions, including the Knights of Columbus and New York Life Insurance Co., hold the highest designation.

The acquisition of Burlington Northern Santa Fe, the nation’s second-largest railroad, would be the biggest ever for Warren Buffett’s Berkshire Hathaway investment company.

Berkshire Hathaway, based in Omaha, Nebraska, owns a 22 percent stake in Burlington Northern and would buy up the rest under the deal.

Berkshire shareholders last month approved splitting the company’s Class B shares 50-for-1 as part of the deal.

The split will enable Berkshire to offer even small Burlington Northern shareholders Berkshire stock as part of the acquisition of the nation’s second-largest railroad.

The stock split also made Berkshire’s Class B stock much more affordable, at roughly $69 per share, which is expected to increase Berkshire’s liquidity.

The Class A shares, which remain the most expensive U.S. stock at more than $100,000, won’t be split.

The Class A shares hold more voting rights than the Class B shares.

Berkshire Hathaway also filed documents Thursday indicating that it plans to sell $8 billion of debt to finance the acquisition using a combination of fixed-rate and floating-rate notes of various maturities.

The Class B shares fell $1.75, or 2.4 percent, to $72.61 in afternoon trading, losing 16 cents more in after-hours trading.

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