Commerzbank has announced a major restructuring programme which will see it cut 10,000 staff, more than a fifth of its 48,500-strong workforce, by 2024. In Germany, the cuts will affect one in three jobs at the bank. It will also reduce its domestic branch network from 790 to 450 branches, with it focusing on expanding its digital offering.
The bank, which recorded a €69m loss in the third quarter of 2020, has been struggling with profitability against a backdrop of low interest rates. For example, according to data from the Banker Database, its net operating income has remained largely flat in recent years – it stood at $9.85bn in 2015, compared to $9.02bn in 2019.
It is targeting a reduction in its cost base of €1.4bn and a return on tangible equity of between 6.5% and 7% by 2024.
Announcing the restructuring, CEO Manfred Knof, who took the helm in late 2020, said: “We will thoroughly reduce complexity and cut costs. Our goals are very ambitious, but we will do everything necessary to achieve them.”
Commerzbank’s announcement comes 18 months after Deutsche Bank, Germany’s largest bank, announced its own major restructuring programme. Earlier in 2019 the two banks had explored merging in a bid to improve their struggling profitability, however the merger was abandoned after it became clear that it would not create “sufficient benefits” relative to the risks and costs involved.
