Commerzbank to Cut Thousands of Jobs as Part of New Strategy

Date : 09/20/2019 @ 2:10PM
Source : Dow Jones News
Stock : Comdirect Bank AG (COM)
Quote : 12.44  0.16 (1.30%) @ 4:35PM

Commerzbank to Cut Thousands of Jobs as Part of New Strategy

Comdirect Bank (XE:COM)
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   By Cristina Roca 
 

Commerzbank AG (CBK.XE) said Friday that its management board has submitted a draft of its new strategy, including thousands of job cuts and restructuring charges, to its supervisory board.

Commerzbank said it will invest a total of 1.6 billion euros ($1.77 billion) in its new strategy. About EUR750 million will be invested in digitalization, IT infrastructure and growth, while around EUR850 million will amount to restructuring costs.

As part of the restructuring, the bank will close 200 branches in Germany. It will cut about 4,300 full-time jobs across the bank and add 2,000 full-time positions in strategic areas, bringing its total headcount down by about 2,300, it said.

Furthermore, Commerzbank will sell its majority stake in mBank SA (MBK.WA), which will reduce its risk-weighted assets by around EUR17 billion, the German bank said.

Commerzbank will also consider making a purchase offer to outstanding shareholders of Comdirect Bank AG (COM.XE), of which it already holds 82%, in order to merge it into the company. In this case, Commerzbank said it would offer Comdirect shareholders "a premium of presumably 25% on the unaffected Comdirect share price."

Commerzbank said the strategy will aim to help it achieve "additional growth in customers and assets, and higher revenues by 2023, even if the market environment continues to deteriorate." It also targets a cost base of no more than EUR5.5 billion in 2023 following the sale of Mbank.

Commerzbank aims for a return on tangible equity, or RoTE, of over 4% in the mid-term once the strategy is implemented, and expects its capital ratio to remain at 12%-13%.

Assuming RoTE and capital ratio are on-target, Commerzbank should be able to pay regular dividends, it said.

 

Write to Cristina Roca at cristina.roca@dowjones.com; @_cristinaroca

 

(END) Dow Jones Newswires

September 20, 2019 09:55 ET (13:55 GMT)

Copyright (c) 2019 Dow Jones & Company, Inc.


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