Frankfurt - Commerzbank AG posted a fourth-quarter net loss of 809 million euros (1.02 billion dollars) on the back of higher provisions for bad loans and warned that Germany's biggest bank faced a tough year.

The loss in the final three months of 2008 compared to a 201 million profit in the same period in 2007 came after loan loss provisions rose to 638 billion euros.

"The fourth quarter was one of the most difficult ever for Commerzbank," said the bank's chief, Martin Blessing.

Announcing the results, Commerzbank said its employees and board members would not receive a bonus for 2008.

But the bank said that it would have to reward employees individual extra payments reflecting the contribution they made to the company and as a result of salary agreements.

Despite the bank's trading business enjoying a good start to 2009, Commerzbank finance director Eric Strutz said: "But we must be realistic: 2009 will once again be a difficult year.

"We will face further economic charges, which will however decrease in 2010", Strutz said.

For the full-year 2008, Commerzbank reported a net profit of 3 million euros, compared with a net profit of 1.9 billion euros run up in the full year 2007. (dpa)