Commerzbank to cut 3,900 jobs, mainly in Germany, as it fends off UniCredit
The situation tests the country’s ability to prevent its financial centre from losing one of its few remaining big commercial lenders
COMMERZBANK on Thursday (Feb 13) said it would cut 3,900 jobs and unveil more ambitious financial targets as part of a strategic revamp designed to head off UniCredit’s advances for a tie-up between the German and Italian lenders.
The job cuts, mainly in Germany and expected to take place by 2028, will be accompanied by hiring outside the country, meaning the bank’s full-time positions will remain steady at 36,700, Commerzbank said.
For months, the German lender’s management, under the leadership of CEO Bettina Orlopp, has been working on the strategy update that she said would reveal the “significant value potential” of the bank.
The battle for Commerzbank, which pits one of Italy’s largest banks against the German establishment, has become a test case of Germany’s ability to fend off foreign suitors and prevent its financial centre from losing one of its few remaining big commercial banks.
Commerzbank, the nation’s No 2 bank, is hoping that its raft of announcements on Thursday will convince its investors that it can thrive as an independent company.
The lender, which is partly state-owned and has labelled UniCredit’s moves as hostile, said it would incur 700 million euros (S$984.8 million) in restructuring charges in 2025.
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It also said it would raise some of its 2027 targets.
It now aims for a net profit of 3.8 billion euros in 2027, up from a previous goal of 3.6 billion euros. In addition, it is targeting a cost-to-income ratio of 53 per cent in 2027, up from 54 per cent previously.
Its strategy update follows a better-than-expected 20 per cent increase in full-year net profit, a result the bank believes illustrates the success of its turnaround in recent years.
“This provides us with a strong basis for the years to come,” Orlopp said.
Andrea Orcel, the CEO of UniCredit, shocked Germany’s corporate and political establishment last year when his Italian bank – also that nation’s No 2 – snapped up a hefty stake in Commerzbank and began pressing for a tie-up in the most ambitious attempt yet at a pan-European bank merger.
The job cuts will come through natural fluctuations and early retirements, Commerzbank said – a move that avoids unsettling the remaining staff while underlining the bank’s willingness to sacrifice some to avoid even worse cuts under UniCredit.
Both lenders said they were on the hunt for targeted acquisitions and would focus on strategic partnerships.
That contrasts with big deals in the works in Spain, Italy and elsewhere. The CEO of Dutch lender ING, Steven van Rijswijk, told Reuters he was looking for acquisition opportunities, potentially joining a wave of takeovers sweeping Europe.
UniCredit’s Orcel, who has long considered a tie-up with Commerzbank, said a combination of the two banks would be the best possible outcome, adding that any offer could still be months away. He has not ruled out walking away from an agreement.
Commerzbank’s management, employees and the nation’s chancellor, Olaf Scholz, have all spoken against a potential takeover, but at least one big investor and some business leaders favour talks.
Political defiance remains strong. Boris Rhein, the premier of Commerzbank’s home state of Hesse, told a gathering of Germany’s financial elite on Monday that UniCredit needed to give up.
“Nobody wants what you are doing. Withdraw!” he said.
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