Commerzbank CEO finalizes options to reduce 10,000 employment, shut branches

FRANKFURT (Reuters) – Commerzbank Chief Govt Manfred Knof on Wednesday finalized options to lower 10,000 positions and near hundreds of branches, a radical overhaul that arrived a thirty day period soon after he took the reins of Germany’s No. 2 bank.

The lender also declared that it would post a internet decline of nearly 2.9 billion euros ($3.5 billion) for 2020, in comparison with a profit of 585 million euros a calendar year earlier.

The bank’s administration workforce hopes the revamp will revive the fortunes of the partly point out-owned financial institution, which has struggled to boost gains amid government reshuffles and approach zig-zags. The bank has hardly ever thoroughly recovered just after a state bailout through the previous monetary disaster more than a ten years ago.

Knof, who designed community the plan’s define previous 7 days, has been speaking about particulars with the supervisory board and administration over the earlier number of times.

He has argued that the cuts have been a important “bitter pill”, even though just one distinguished labour consultant stated they were being “simply crazy”.

The CEO received the working day. Massive shareholders like the German governing administration and the U.S. personal equity enterprise Cerberus have observed the need to have for drastic measures, and regulators also assist the exertion.

“Our new approach generates the conditions for a sustainably lucrative Commerzbank,” Knof reported.

The system usually means that by 2024 the lender will lower practically a quarter of the its full-time positions – and nearly just one in 3 of its careers in Germany. The branch community will drop to 450 from 790.

The bank has had a turbulent time about the earlier two years, with on-all over again-off-all over again talks to merge with rival Deutsche Financial institution and then to promote a major Polish subsidiary.

“Knof is attempting to make the bank healthy ample to stand by itself on its individual two feet,” said Andreas Thomae, a portfolio supervisor at Deka, a prime-10 trader in Commerzbank.

These are grim instances for rank-and-file workers in Germany’s banking marketplace. Deutsche Financial institution is also shedding employees, and very low-paid out phone centre workforce have absent on strike in a shell out dispute.

The overhaul has been long in the making, with discussions about big work cuts using place previously past calendar year. But talks have been then place on keep by the sudden resignation of the bank’s chief govt and supervisory board chief.