Germany’s second-largest lender, Commerzbank, announced plans on Thursday to cut 3,900 full-time jobs by 2028 as part of its latest strategic overhaul. The job reductions will primarily affect positions in Germany, although the bank intends to expand staffing in selected international locations, maintaining a stable global workforce of 36,700 employees. Commerzbank projects restructuring costs of approximately €700 million ($730.7 million) before tax in 2025, while targeting a net result of €2.4 billion for the year after accounting for these charges.
The bank also outlined plans to distribute more than 100% of its profits over the 2025-2028 period through dividends and share buybacks, excluding restructuring costs and Additional Tier 1 (AT1) bond payments. In its financial performance update, the lender reported €11.1 billion in revenue for 2024, marking an increase from €10.461 billion in 2023. Earlier this month, Commerzbank disclosed record annual earnings ahead of schedule, in compliance with German legal requirements on significant capital returns.
The bank posted a net profit of €2.68 billion ($2.78 billion) for 2024, exceeding market expectations. Alongside this performance, it announced a €400 million share repurchase plan and an increased dividend payout of €0.65 per share, up from €0.35 per share the previous year. The restructuring announcement comes amid ongoing speculation about a potential cross-border takeover by Italy’s UniCredit, which unexpectedly increased its stake in Commerzbank last year.
UniCredit currently holds a direct 9.5% stake in Commerzbank, with an additional 18.5% via derivatives, prompting concerns about its strategic intentions. The German government has expressed opposition to any such merger, with Finance Minister Jörg Kukies criticizing UniCredit’s approach as “very aggressive, very opaque” in an interview with the media. The possibility of consolidation between the two banks remains uncertain, with UniCredit CEO Andrea Orcel maintaining that Commerzbank represents an investment opportunity rather than an imminent takeover target.
Speaking to the media following UniCredit’s fourth-quarter earnings report, Orcel emphasized the potential value of a merger, arguing that a combination of the two banks would create significant benefits for stakeholders and for the broader European banking sector. Commerzbank’s restructuring initiative and financial targets signal its intent to reinforce its independence amid ongoing industry consolidation discussions. The bank’s leadership remains focused on executing its strategic plan while navigating shareholder expectations and geopolitical sensitivities in the European banking landscape. – By Eurowire News Desk.
