Writedown worries have heavily dented Commerzbank shares

Germany's second biggest bank made a net profit of 1.9bn euros, up 19.5% on 2006, and what analysts had expected.

Incoming boss Martin Blessing has earlier stated that Commerzbank blundered in not getting rid of its sub-prime mortgages investment.

Its losses included 248m euros in the last three months of a year.

"We kept our word and met or exceeded our targets, despite the enormous challenges," said current chief executive Klaus-Peter Mueller who will step down later this year.

Fears about the size of Commerzbank's subprime bill has sent its shares about 40% lower over the past six months.