Despite a record profit, Commerzbank intends to cut almost 4,000 jobs. The background is the threat of a possible hostile takeover by the Italian Unicredit. In order to secure its independence, the bank wants to increase its efficiency. As part of its strategic plan up to 2028, a significant reduction in the number of jobs is planned, especially in Germany. Around 3,900 full-time positions are to be cut by the end of 2027, of which around 3,300 will be in Germany - which corresponds to a reduction of 17 percent of the German workforce, although the bank achieved record profits last year.
At the same time, Commerzbank plans to create new jobs in its Polish subsidiary mBank and at Asian locations. The global workforce is expected to remain at around 36,700 full-time employees, which is almost the same as at the end of 2004 (36,842 positions). Commerzbank CEO Bettina Orlopp emphasized that these measures are aimed at positioning the company as a permanent player in the European banking sector.
Job cuts in Germany: The headquarters and the Rhine-Main area are particularly affected
The job cuts in Germany primarily affect the headquarters in Frankfurt and other locations in the Rhine-Main area. Administrative areas such as communications, building management, the staff of the divisional boards and back office tasks, in particular the processing and administration of transactions, are particularly affected. At the end of the year, Commerzbank AG recorded a total of 19,370 full-time positions in its home market.
"In order to make this transformation process socially acceptable, Commerzbank is focusing primarily on demographic change and natural fluctuation," the bank explained. In cooperation with employee representatives, the essential foundations for a partial retirement program have already been agreed, which is to be implemented this year.
Unicredit remains stubborn with Commerzbank
Commerzbank has been under increasing pressure since Unicredit took advantage of the federal government's partial exit in the fall to invest heavily in Commerzbank. Today, the Milan-based major bank holds around 28 percent of the DAX group's shares, of which around 9.5 percent are directly in shares and almost 18.6 percent through financial instruments. Should its share rise to 30 percent, Unicredit would be obliged to make a takeover offer to the remaining Commerzbank shareholders.
Unicredit CEO Andrea Orcel has been pursuing a takeover for months. Two days before Commerzbank presented its strategy, Unicredit used its balance sheet presentation to send Commerzbank a list of questions. Among them was the provocative question: "Are the new targets realistic - especially given that the previous targets were not achieved? Or are they based on overly optimistic assumptions and the pressure to fend off a potential takeover offer?" Commerzbank CEO Bettina Orlopp replied during the strategy presentation: "I assure you that we have clear answers to all the questions our Italian competitor and investor has asked about our strategy."
There is currently no takeover offer from Unicredit. Orcel itself stated this week that such an offer could be made in the fourth quarter of 2025 or the first quarter of 2026 at the earliest.
In view of the resistance in Germany, Orcel plans to use the time to promote his takeover plans to the new federal government. The federal government, which rescued Commerzbank with billions in tax money during the 2008/2009 financial crisis, still holds around 12 percent of the institute's shares.
Commerzbank sets ambitious growth targets
The management board, supervisory board and works council of Commerzbank are also fighting against what they see as "hostile" actions by the Italian Unicredit. Bettina Orlopp, CEO since October 1, is committed to securing the bank's independence through increasing profits and ambitious return targets.
In the coming years, Commerzbank aims to significantly increase its profits and become more profitable. After a record profit of almost 2.7 billion euros last year, the bank plans to increase its surplus to 4.2 billion euros by 2028. In addition, the return on equity is expected to rise from 9.2 percent in 2024 to 15 percent in 2028. However, profits are expected to fall to 2.4 billion euros this year as the job cuts will initially entail high costs. The bank expects one-off expenses of around 700 million euros. At the same time, annual costs are expected to fall by around 500 million euros as a result of the savings.
The branch network will remain reduced to around 400 locations, and the two-brand strategy with Commerzbank and the online bank Comdirect will remain unchanged.
Shareholders should benefit from high profit distributions
The Board of Management of Commerzbank plans to reward shareholders with high profit distributions. A dividend increase from 35 cents to 65 cents per share is planned for the 2024 financial year. For 2025, Commerzbank intends to distribute more than 100 percent of its surplus to shareholders, after deducting the interest on equity-like bonds. For the years 2026 to 2028, CEO Bettina Orlopp is aiming for a payout ratio of 100 percent, although this depends on the successful implementation of the new "Momentum" strategy and the economic environment.
Commerzbank shares initially rose by up to 2.6 percent on Thursday morning before the price gains shrank again. Ultimately, the stock was one of the losers in the German stock index, with a decline of half a percent. Industry expert Anke Reingen from the Canadian bank RBC assessed management's assumptions for the coming years as optimistic, especially with regard to the development of earnings.
New partnership with credit card provider Visa
In order to achieve its profit targets, Orlopp is relying on continuously growing income, particularly from commissions, in addition to job cuts and cost reductions. While 59 percent of income was used to cover banking costs last year, this figure is expected to fall to around 50 percent by 2028. This means that in future, Commerzbank only wants to spend around 50 cents on costs for every euro of income.
The bank is planning targeted acquisitions and partnerships to increase profitability. A significant new cooperation has already been concluded with the credit card provider Visa: Commerzbank customers will in future be given priority to receiving debit and credit cards from Visa.
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