Commerzbank Agrees to Cut 5,200 Jobs to Increase ProfitNicholas Comfort
Commerzbank AG, Germany’s second-largest lender, said it plans to eliminate about 5,200 jobs by 2016 to bolster profit.
The company’s works council approved the elimination of 3,900 positions, Frankfurt-based Commerzbank said today in an e-mailed statement. That comes on top of 500 job losses planned at German and non-German subsidiaries and 800 mostly at a unit that’s selling assets to raise capital and meet requirements for state aid the bank took in 2008, according to the statement.
Banks are reducing headcount to buoy earnings after the financial crisis and its aftermath lowered demand for their products and stricter capital requirements made some businesses unprofitable. Western European financial firms have unveiled almost 60,000 job cuts so far this year after about 55,000 in 2012, according to data compiled by Bloomberg. Commerzbank first announced a plan to eliminate 4,000 to 6,000 positions in January.
“We have found a way to achieve considerable cost reductions, on the one hand, while securing our competitiveness and earnings power through investment, on the other,” Ulrich Sieber, the management board member responsible for human resources, said in the statement. “It is our objective to implement these job cuts without enforced redundancies.”
Commerzbank rose 0.2 percent to 7.55 euros in Frankfurt trading, and has declined 28 percent in the past 12 months.
The bank, which got an 18.2 billion-euro state bailout during the financial crisis, completed its fifth capital increase in four years last month to help repay the government. The company is eliminating staff and winding down real estate and shipping assets to try to revive profit after posting net losses in the past two quarters.
Commerzbank employed 54,068 people, including 42,101 in Germany, at the end of March, according to its first-quarter earnings statement.
About 1,800 of the 3,900 jobs approved for elimination are located at Commerzbank’s retail bank, according to the statement. The lender said it is also adding 1,000 positions to reach its strategic goals.