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Job cuts at banks close to 60,000 as Commerzbank plans to swing axe
JOB cuts announced by banks this year are approaching 60,000, almost all of them in Europe, where negative interest rates and a slowing economy prompt lenders including Germany's Commerzbank AG to step up cost reductions.
Commerzbank said last week it plans to eliminate 4,300 positions, deepening a restructuring that started three years ago. That brings the total disclosed this year to about 58,200, with roughly 90 per cent of those cuts in Europe.
The figures underscore the weakness of Europe's financial industry, which has to contend with a fragmented banking market, slowing economic growth and negative rates that have eroded income from lending for half a decade now.
Expectations that interest rates would eventually start to rise were thwarted this year when the trade war between the United States and China took a toll on the region's exports and forced the European Cen-tral Bank to push rates even further below zero.
Banks from Germany, which depends on exports more than most large economies, top the list of job cuts. Deutsche Bank AG is planning to get rid of 18,000 employees through 2022 as it retreats from a big part of its investment banking business. Lenders from Spain, the United Kingdom and France are also slashing thousands of positions to shore up profitability.
It isn't all gloom in European banking though as firms seek to add jobs to update their technology and improve compliance. Commerzbank, which had 41,486 full-time staff at the end of last year, says it plans to add about 2,000 positions in "strategic areas" as part of its overhaul. BLOOMBERG