Commerzbank to sink 610 million euros into job cuts

FRANKFURT AM MAIN: Germany's second-largest lender Commerzbank said Monday it will set aside 610 million euros the final quarter of 2020 to cover sweeping job cuts as it restructures its operations.

Like its crosstown rival Deutsche Bank, Frankfurt-based Commerzbank is slashing thousands of roles as customers switch to online banking and cashless payment options, reducing the need for bricks-and-mortar branches.

The troubled lender has reached an agreement with its works council to reduce 2,300 positions between 2021 and 2024, the managing board said in a statement.

As a result, Commerzbank will book 610 million euros ($744 million) in additional provisions in the fourth quarter, the statement said.

The restructuring will have a "correspondingly negative impact on the net result" in the fourth quarter, it added.

Commerzbank had already set aside 200 million euros for restructuring in the third quarter, with the new plans bringing the total job cuts announced in 2020 to 2,900.

The lender posted a 69 million euro net loss in the third quarter, during which it closed 200 branches.

At the end of September, the bank had 39,600 employees.

Commerzbank said it would likely end the year with a net loss for the first time since 2009.

Shares in Commerzbank fell on Germany's MDAX index, down 0.9 percent at 1200 GMT, compared with a rise of 1.0 percent in the index as a whole.

The task of getting the bank back on track will fall to its new boss from the start of 2021, Manfred Knof, a defector from Deutsche Bank.

He will replace Martin Zielke, who resigned in July after being criticised by its second-biggest shareholder, investment house Cerberus.