Commerzbank set to cut more jobs and branches, says board member
Commerzbank is set to announce “considerably” more branch closures and job cuts when it lays out its strategy review in August, a member of the German lender’s supervisory board said today.
Stefan Wittmann, who represents labor on the supervisory board and is a trade union secretary at the Verdi union, also criticized a public campaign for change that top investor Cerberus launched last week.
Cerberus wants two board seats as well as cost cuts and a strategy shift at Germany’s second-biggest bank. Commerzbank has already rejected the demand for the board seats. “Cerberus’ approach is rude and inappropriate,” Wittmann told Reuters.
Commerzbank – which last year announced plans to cut thousands of jobs – is currently in the process of identifying more cost cuts and will announce plans when it releases second quarter earnings in August.
“There will be considerably more branch closures and more job losses than previously announced,” Wittmann said.
Last year the bank said it would cut the number of branches to around 800 from 1,000. It also said it would cut 4,300 jobs in some places but add 2,000 jobs in “strategic areas,” a net fall of 2,300 full-time positions, equivalent to about 5.7 per cent of its workforce.
Commerzbank, which is still partially owned by the state after a bailout during the 2008-2009 financial crisis, warned last month that its target for turning a profit in 2020 now seems “very ambitious” after it made a loss in the first quarter as the impact of the coronavirus pandemic drove up loan loss provisions.
In a letter to Commerzbank’s chairman last week, Cerberus called on the lender to appoint two of its nominees to the supervisory board, cut costs and adopt a new strategy.
Shares in Germany’s second-biggest bank have fallen about 60 per cent since Cerberus bought a five per cent stake in 2017.
The investor, describing Commerzbank’s performance as “disastrous”, demanded it appoint two “highly qualified individuals to be identified by us” to its supervisory board.
Commerzbank has been contacted for comment. Shares in the lender fell over two per cent in morning trading.