Commerzbank announced Thursday it will cut 3,900 jobs by 2028, while pursuing a strategy overhaul that includes more ambitious financial goals. The decision comes amid growing pressure from UniCredit, which has been attempting to negotiate a merger with the German lender.
The majority of the job cuts will be in Germany, although the bank plans to offset this by hiring in other countries, keeping its global workforce stable at 36,700 employees. The restructuring is part of a broader strategy to fortify Commerzbank’s position against UniCredit’s advances, which have been labelled as hostile by the German bank.
Under CEO Bettina Orlopp, Commerzbank has been revising its strategy to demonstrate its growth potential as an independent entity. The bank hopes that Thursday’s announcements will reassure investors that it can thrive on its own, despite UniCredit’s attempts to expand its presence in the German banking sector.
The job reductions come with a hefty financial cost. Commerzbank expects to incur restructuring charges of €700 million ($730 million) in 2025. However, the bank also announced that it will increase its financial targets for 2027. It now aims for a net profit of €3.8 billion, up from the previously set goal of €3.6 billion. Additionally, Commerzbank is targeting a cost-to-income ratio of 53% for 2027, improving upon the earlier target of 54%.
Commerzbank’s strategy update follows a successful year, with the bank reporting a 20% increase in full-year net profit, exceeding expectations. Orlopp called the results a testament to the effectiveness of the bank’s turnaround efforts in recent years, providing a solid foundation for the future.
As Commerzbank fights to maintain its independence, the outcome of this ongoing battle with UniCredit may reshape the German financial landscape.
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