Commerzbank's new CEO plans 10,000 job cuts

FRANKFURT: Commerzbank's new chief executive, Manfred Knof, wants to cut 10,000 jobs and close hundreds of branches as part of a strategy revamp announced just weeks after he took on the top job at Germany's second-biggest bank.

The bank's management hopes the overhaul plans revealed on Thursday will revive the fortunes of the partly state-owned group, which has struggled to boost profits amid executive reshuffles and strategy zig-zags. The has bank never fully recovered after a state bailout during the last financial crisis.

"We will thoroughly reduce complexity and cut costs. Our goals are very ambitious," Knof said in a statement.

The plan to reduce the workforce by around a quarter and cut the network of branches from 800 to 450 by 2024 will be finalised by Feb. 3, the bank said.

Commerzbank said the plans were still up for debate by the supervisory board and needed final management approval but were disclosed after media reports earlier in the day.

The bank's shares were up 4.8% in late afternoon trading.

The overhaul has been long in the making, with discussions about major job cuts taking place earlier last year. But talks were then put on hold by the sudden resignation of the bank's chief executive and supervisory board chief.

With Knof in place since the start of the month, bank executives have started to prepare for the overhaul.

Knof, a lawyer by training, joined the bank on Jan. 1. He spent the bulk of his career at insurer Allianz before joining Deutsche Bank in 2019, where he was been head of retail operations in Germany.

"Commerzbank needs to undergo a fundamental transformation," Knof wrote to staff upon his arrival, a memo seen by Reuters showed.

The bank has had a turbulent time over the past two years, with on-again-off-again talks to merge with rival Deutsche Bank and then to sell a big Polish subsidiary.