Commerzbank has announced its plans to cut 10,000 jobs and close around 340 branches in Germany by 2024, as part of its restructuring programme.
The bank said that its transformation is aimed at combining the benefits of a fully digitalised bank with personal advice, consistent customer focus, and sustainability.
Also, it intends to significantly reduce the costs and substantially increased the profitability by 2024, to further strengthen its position as the Bank for the German Mittelstand.
Commerzbank board of managing directors chairman Manfred Knof said: “We want to focus on Commerzbank’s strengths and secure its strong performance for the long term.
“To achieve this, we will thoroughly reduce complexity and cut costs. Our goals are very ambitious, but we will do everything necessary to achieve them. Thereby, the Bank will create value for customers, employees, shareholders, and society as a whole.”
Commerzbank said that its decision to reduce around 10,000 full-time jobs as part of the restructuring programme would affect every third job in Germany.
The bank intends to work with employee representatives to agree on fair and socially responsible solutions for the reduction in workforce.
It is working towards a rapid agreement on the planned reduction in the workforce with the ‘Works Council’, to implement the transformation soon.
Commerzbank is also planning to reduce the branch network and expand its digital offerings for customers, as part of its extensive digitalisation programme.
The bank will reduce the number of branches from the current 790 to 450 locations, closing 340 branches across Germany.
Along with job cuts and branch closures, the bank intends to simplify, digitalise and automate its business processes, with a total of €1.7bn investment in its IT, over the next four years.
With the restructuring plan, Commerzbank targets a return on equity (RoTE) of 6.5% to 7% for fiscal 2024, and cost-reductions of €1.4bn or nearly 20% compared to 2020.
The bank estimates the restructuring expenses a total of €1.8bn, which will be fully financed with existing funds. It has already allocated €800m to partly cover the restructuring expenses in fiscal 2020, and further €100m in provisions from 2019.
