- CEO Martin Blessing agrees to step down six months early
- Commerzbank also names first woman to management board
Commerzbank AG, Germany’s second-largest bank, chose Martin Zielke, the insider who overhauled its consumer-banking unit, to succeed Martin Blessing as chief executive officer. The shares rose while lenders across Europe declined.
Zielke, 53, will take over when Blessing’s term ends on April 30, the Frankfurt-based bank said in a statement after its supervisory board met on Sunday. Blessing, 52, and the company agreed “amicably” for him to leave six months early, the lender said.
Blessing said in November he wouldn’t extend his contract after helping to restructure the lender following its 18.2 billion-euro ($20 billion) rescue by German taxpayers during the global financial crisis. Under his leadership, the bank has boosted returns by shrinking its pile of delinquent shipping and commercial real-estate loans, while Zielke’s unit cut jobs.
“This is positive news,” Philipp Haessler, an analyst at Equinet AG in Frankfurt with a buy recommendation on the shares, said in a note to clients. Haessler said he expects Zielke “to follow Commerzbank’s current strategy focusing on retail and SME banking.”
The shares rose as much as 2.2 percent in Frankfurt trading, gaining 0.8 percent to 8.15 euros as of 10:36 a.m. in Frankfurt. The Bloomberg Europe Banks and Financial Services Index slipped 0.9 percent. Commerzbank has climbed almost 30 percent since announcing the resumption of dividends on Feb. 12 after an eight-year hiatus.
Zielke, a 14-year Commerzbank veteran and member of the management board since 2010, is credited with turning around the consumer business, adding more than 800,000 new customers on a net basis since embarking on a restructuring in 2013.
Although he has trimmed the bank’s retail network, reducing the cost-income ratio at the private clients unit by 8 percentage points during the overhaul, he has defended the branch structure. The operating return on equity for the business climbed to 18.8 percent from 11.5 percent during his tenure at the helm. He also served as finance chief of the Eurohypo AG mortgage unit and worked under previous Chief Financial Officer Eric Strutz.
“Zielke has a long and extensive experience in the private and corporate customer businesses, and in the finance function,” Klaus-Peter Mueller, the bank’s supervisory board chairman, said in the statement. “He managed the turnaround of the bank’s private-customer business in an impressive manner.”
Commerzbank beat analyst estimates with fourth-quarter net income of 187 million euros, following a loss of 280 million euros a year earlier. Profit at the consumer unit, overseen by Zielke, almost doubled to 160 million euros in that period.
While the shares have fallen about 15 percent this year, they have fared better than larger German rival Deutsche Bank AG’s, which has dropped more than 20 percent. The company is battling the fallout from record-low interest rates, which forced it last month to scrap key profitability targets for this year.
Commerzbank named consumer banker Michael Mandel, 49, to take over Zielke’s position as head of the retail-banking unit. Commerzbank also appointed Bettina Orlopp, 45, to the management board to oversee compliance, human resources and legal issues.
Orlopp, a divisional board member for group development and strategy, will be the first woman on the bank’s management board.
While Commerzbank has repaid the loans it received in its rescue by taxpayers in 2008 and 2009, the German state still owns about 16 percent of the lender. The company plans to pay a dividend of 20 cents a share for 2015, its first payout since 2007.
The bank’s choice of an internal candidate follows decisions by larger European competitors Barclays Plc, Credit Suisse Group AG and Standard Chartered Plc last year to name outsiders as their CEOs to drive change.
Commerzbank conducted interviews with internal and external candidates as it sought to conclude the selection process by the annual shareholder meeting in April, Mueller said in a note to staff last month. Markus Beumer, who runs the Mittelstandsbank unit that caters to corporate clients, was also regarded as a potential CEO because he runs the company’s second-largest division in terms of revenue.
Naming Zielke CEO doesn’t reflect a shift in focus to consumer banking as his background shows he can develop the wider bank, Mueller said in a note to staff on Sunday, which was seen by Bloomberg. Still, “he has convincingly demonstrated that he is willing and able to devise and successfully implement change” where needed, Mueller said.
Zielke started his career at Deutsche Bank in 1983, before joining Dresdner Bank AG seven years later. He joined Commerzbank in 2002.