Report: Commerzbank to cut 9,000 jobs as part of shakeup

Commerzbank's new chief executive is planning a 1-billion-euro (1.1-billion-dollar) makeover of Germany's second biggest bank, including slashing the lender's workforce by about a fifth, according to a media report on Tuesday.

Martin Zielke, who took over as head of Commerzbank in May, is to announce that he is cutting 9,000 jobs next year as part of a four-year plan, the German business daily Handelsblatt reported.

The Frankfurt-based bank currently has a global workforce of about 50,000. Commerzbank declined to comment on the report.

Quoting finance industry sources, Handelsblatt said it remains unclear whether the cuts will be the result of redundancies or other methods.

Under the Commerzbank chief's restructuring plan, bank shareholders will also be called on to forego their dividend payment this year.

Instead, Zielke wants to boost the bank's investment in digitization and business growth opportunities.

His new strategy is due to be discussed by the Commerzbank board on Wednesday and Thursday before being unveiled to the public on Friday.

The German government bailed out Commerzbank as the ripples from the global financial crisis spread to Germany about seven years ago. Berlin still has a 15-per-cent stake in the bank.

The Commerzbank report follows a turbulent time for the bank's rival Deutsche Bank, which is Germany's biggest bank.

German Chancellor Angela Merkel refused to comment Tuesday on the possibility of a government bailout for Deutsche, whose shares slumped this week following a media report that it had told Berlin it might request the government to throw it a financial lifeline.

The US Department of Justice this month threatened the Frankfurt-based Deutsche with a 14-billion-dollar fine to settle a fraud investigation involving the sale of mortgage-backed securities in the run-up to the 2008 financial crisis.

The fine comes in the wake of a string of costly lawsuits that have hit the bank. Deutsche denied on Monday that the bank had approached Berlin for aid.

However, Merkel would only say that Deutsche "is a part of German banking and finance system, and that of course we hope that all companies experience a positive development, even if they are facing temporary difficulties."

Deutsche Bank shares bounced back on Tuesday after a top US Justice Department official said that the bank could reduce the penalty if it was prepared to co-operate with the authorities.

Last update: Tue, 27/09/2016 - 17:28

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