- Blessing's contract is due to run through October 2016
- CEO says bank is on track to becoming "sustainably successful"
Martin Blessing, who led Commerzbank AG for seven years, won’t extend his contract when it expires in 2016, becoming the latest chief executive officer to join an unprecedented wave of management changes at Europe’s banks.
The CEO’s term is due to run until October, and he was offered an extension but declined, the Frankfurt-based bank said in a statement Sunday.
“It is now time for me to embark on a new chapter in my professional life,” Blessing said in the statement. He didn’t elaborate on what he’ll do next.
Blessing, 52, led the firm during a 18.2 billion-euro ($20.1 billion) bailout in the financial crisis and orchestrated its subsequent overhaul. He proved to be one of the most resilient bank CEOs in Europe, remaining at the top of the firm through an ill-fated takeover and a writedown on Greek debt. He has sold stock on multiple occasions to bolster capital, cut jobs and disposed of soured loans. He follows CEOs at Deutsche Bank AG, Barclays Plc and Credit Suisse Group AG who have left their roles in recent months.
"We have overcome the major challenges of the financial crisis or will do so in the coming months," Blessing said. "We are also clearly on track to reclaiming our position as a sustainably successful bank."
Commerzbank has disposed of unwanted assets more quickly than planned and has raised a goal the CEO set in 2012 for the company’s capital strength. At the same time, Blessing, who got his first bonus last year since 2007, said as recently as September that the low interest rate environment has made reaching Commerzbank’s profitability target more difficult.
While Commerzbank has repaid the loans it received in its two-part rescue by taxpayers in 2008 and 2009, the German state still owns about 16 percent stake of the lender. The company has said it is on course to pay a dividend for this year, its first in eight years. Still, the shares have dropped 8.8 percent this year, compared with a 1.6 percent gain in the benchmark STOXX Europe 600 Banks Price Index.
Supervisory Board Chairman Klaus-Peter Mueller, who was CEO before Blessing, said in a statement he had hoped to extend the contract and that the CEO’s commitment to serve out his term will allow the bank to “organize a coordinated process for the nomination of a successor."
Commerzbank has seven management board members including Blessing. The company’s biggest businesses are consumer banking, which is overseen by Martin Zielke, and the Mittelstandsbank, which caters to corporate clients and is run by Markus Beumer.
Blessing, who earned a master’s degree in business administration from the University of Chicago in 1988, comes from a family of bankers. His father, Werner Blessing, was on the management board of Deutsche Bank; grandfather Karl was a former president of the Bundesbank; and wife Dorothee leads JPMorgan Chase & Co. in Germany, Austria and Switzerland.
Commerzbank reports third-quarter earnings on Monday. The company will probably say operating profit fell 7 percent to 319 million euros in the period from a year earlier, according to the average of four analyst estimates compiled by Bloomberg.