Commerzbank, one of Germany's leading financial institutions, announced plans to cut 3,900 full-time positions by 2028, primarily affecting its operations in Germany. Despite the reductions, the bank aims to maintain a steady global workforce of 36,700 by bolstering staffing in select international locations. This strategic move comes as part of Commerzbank's broader plan to enhance efficiency and achieve ambitious financial targets.
The bank's decision to realign its workforce accompanies a notable performance in the stock market, with shares rising by 21.8% year to date and closing 1.6% higher recently. Commerzbank reported an increase in full-year revenue for 2024, reaching 11.1 billion euros compared to 10.461 billion euros in 2023. The institution anticipates incurring restructuring costs of approximately 700 million euros ($730.7 million) before taxes in 2025. Despite these charges, Commerzbank is targeting a net result of 2.4 billion euros for that year.
Commerzbank has also set its sights on long-term growth, raising its revenue goal to 3.8 billion euros by 2027 from a previous forecast of 3.6 billion euros. In line with this ambition, the bank is aiming for a higher return on tangible equity rate of 13.6% in 2027, up from the earlier target of 12.3%. The bank plans a payout ratio exceeding 100% over the 2025-2028 period, demonstrating a commitment to rewarding shareholders.
UniCredit, an Italian banking giant, holds a significant stake in Commerzbank, with a direct 9.5% and an additional 18.5% via derivatives. Commerzbank remains in dialogue with UniCredit, which it views primarily as an investor. CEO Bettina Orlopp commented on this relationship:
"At the moment, we can only treat them as investors, and that we do, and we are very open to answer their questions." – Bettina Orlopp
Orlopp also acknowledged the possibility of further discussions regarding the potential for collaboration or structural changes:
"Beside that, we said, if we want to talk about anything else, like a combination, given that we have a situation where we have one side who has secured nearly 30% of the shares in our company, we expect kind of an outline draft of what they think they would like … to achieve with respect to the structure, with respect to the financials, and then we are also open to talks." – Bettina Orlopp
Despite these developments, the German government has expressed opposition to any cross-border consolidation between Commerzbank and UniCredit. The stance underscores the complexity of navigating international banking alliances while maintaining national economic interests.
Bettina Orlopp emphasized the importance of executing job cuts responsibly:
"We have delivered, consequently, over the past four years, what we have promised, and we intend to do that also in the coming years" – Bettina Orlopp
She further noted the importance of maintaining employee morale during this transition:
"without weakening the morale, which is actually really, really good" – Bettina Orlopp
Commerzbank disclosed its financial results for 2024 two weeks ahead of schedule as required by German law, reflecting transparency in its operations and strategic planning.
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