Germany’s second-largest lender, Commerzbank, has unveiled plans to cut 3,900 full-time positions by 2028 as part of a broader strategy aimed at strengthening its financial position and maintaining independence in the face of takeover speculation.
The job reductions will primarily affect positions in Germany, particularly in back-office and corporate center functions.
Despite the cuts, the bank’s overall workforce will remain stable at approximately 36,700 employees due to planned hiring in other areas, including international locations such as Bulgaria, the Czech Republic, and Malaysia. Commerzbank has emphasized that job reductions will be achieved through natural attrition, re-skilling programs, and early retirement options, rather than forced layoffs.
The restructuring plan comes with an anticipated cost of around €700 million ($730 million) before taxes in 2025. However, Commerzbank expects a net profit of €2.4 billion for that year, following these restructuring charges. Looking ahead, the bank has set ambitious financial targets, aiming for a net profit of €4.2 billion by 2028, a 64% increase from the previous year. It also seeks to improve its cost-to-income ratio to around 50% from the current 59%.
Commerzbank reported revenue of €11.1 billion in 2024, up from €10.46 billion in 2023, and recently announced a share buyback program worth €400 million, along with an increased dividend payout.
The restructuring plan is seen as a move to strengthen Commerzbank’s position as an independent entity following speculation about a potential takeover by Italian lender UniCredit. The Italian bank currently holds a direct 9.5% stake in Commerzbank, along with an additional 18.5% stake through derivatives.
UniCredit CEO Andrea Orcel has expressed optimism about the potential benefits of a merger, arguing that a combination of the two banks could create significant value for both institutions and the broader European financial sector. However, Commerzbank’s leadership, German government officials, and labor representatives have opposed such a deal, citing concerns over job losses and national financial stability.
Commerzbank’s restructuring efforts and strong financial performance have reassured investors, with its stock price rising nearly 50% in recent months. Analysts have responded positively to the bank’s strategic update, with Deutsche Bank calling the new targets “bullish” and RBC describing them as “punchy.”
CNBC, Bloomberg, Reuters, and the Financial Times contributed to this report.
