Commerzbank eyes at least 5,000 job cuts
Commerzbank AG’s management is eyeing cuts of at least 5,000 jobs, or more than 10% of its workforce, and eliminating one of its units as part of a broader overhaul to address weak profitability amid low interest rates and sluggish market client activity, people familiar with the matter said.
Germany’s second-largest lender by market capitalization is still fine- tuning the plans to be announced at the end of next week, when new Chief Executive Martin Zielke plans to unveil a new strategy, these people said.
Mr. Zielke, who succeeded Martin Blessing earlier this year, plans mainly to slash back-office staff, one of these people said.
Commerzbank’s unit that caters to midsized-clients, one of its four core operations, will be dissolved under the new strategy, according to two people familiar with the matter.
One of these people said that smaller clients, those with annual revenues of up to EUR5 million, will be transferred to its retail-banking unit. Larger clients will be shifted into Commerzbank’s investment banking activities, this person said.
The cuts are similar to those at many other European banks, which have been retrenching following the financial crisis. Since then, many banks are battling with low interest rates, sluggish client activity and tougher rules.
In its strategic review, Commerzbank in August held preliminary discussions with larger German rival Deutsche Bank AG DB, +2.52% about a tie-up, before concluding it wasn’t viable, people familiar with the matter said earlier.
Mr. Zielke’s predecessor, Mr. Blessing, last year also reviewed such a move but shelved it, one of these people said.
Source: MarketWatch
