FRANKFURT (Reuters) – Commerzbank said on Friday it wanted to cut 2,300 jobs and reduce the number of branches in a strategy overhaul, after the German lender’s attempt to merge with Deutsche Bank failed.
FILE PHOTO: The headquarters of the Commerzbank are pictured before the bank’s annual news conference in Frankfurt, Germany, February 8, 2018. REUTERS/Ralph Orlowski/File Photo
The bank, partly owned by the German government after a bailout and struggling to generate profits, also aims to sell a stake in its Polish subsidiary mBank and absorb its Comdirect online brokerage unit.
Commerzbank said the strategy review would involve investment of 1.6 billion euros, with 750 million euros going into new technology and the rest earmarked for restructuring.
The bank said the draft measures would be discussed at a meeting of the supervisory board on Sept. 25 and 26. It said no final decision had yet been taken.
Shares in Commerzbank, which has been reviewing strategy in recent weeks, were 1% higher in mid-afternoon trade. The stock was ejected from the blue-chip DAX index last year, showing the challenge facing banks in Europe’s biggest economy.
The bank said it would cut 4,300 jobs in some places but add 2,000 jobs in “strategic areas”, so the group headcount would fall in total by about 2,300 full-time positions. It currently employs about 40,700 people.
It aims to trim the number of branches by 200 to about 800.
The sale of its 69.3% stake in mBank has a market value of more than 2 billion euros ($2.2 billion). Commerzbank said the proceeds would enable “a faster implementation of its strategy and the associated investments”.
The bank, which owns 82% of Comdirect, foresees offering a 25% premium for shares it doesn’t hold. Comdirect shares jumped 25%.
Germany’s banks have been battling a legacy of bad debts, bloated headcounts and fines a decade after the global financial crash. Commerzbank has already been reducing staff and is trying to cut back-office work to restore profitability.
Reporting by Tom Sims and Hans Seidenstuecker; Editing by David Evans and Edmund Blair