Commerzbank Securities, the investment banking arm of the German bank, plunged from a €120m ($144m) first quarter profit to a €47m second quarter loss as initial public offerings dried up and bond markets shrank.

Klaus-Peter Mueller, Commerzbank chief executive, said he expected "difficult conditions" in the second half and while 2004 targets are within reach, "we need the support of the markets to achieve them," he said.