The Commerzbank, Germany's second-largest private bank, has announced significant structural changes amid pressure from Italian banking giant UniCredit, which is seeking to increase its stake and possibly acquire the bank. The bank plans to cut approximately 3,900 full-time positions by 2028, with about 3,300 job losses occurring within Germany itself, particularly at its Frankfurt headquarters. The move is seen as part of Commerzbank's strategy to assert its independence and improve profitability during what is shaping up to be a fierce fight against UniCredit's growing influence.
Despite achieving record profits of around €2.7 billion last year, Commerzbank's leadership under CEO Bettina Orlopp has opted for aggressive restructuring to prepare for future challenges. Orlopp stated, “We have established a strong starting point and can now leverage market opportunities and technological advancements.” This structural overhaul is aimed not only at streamlining operations but also at ensuring the bank can fend off takeover attempts by enhancing its financial performance and operational efficiency.
The planned job cuts focus heavily on administrative and back-office roles, which are largely situated within the bank's central operations. Specifically, Commerzbank intends to adapt to the changing demographic of its workforce and leverage natural employee turnover as part of its transition strategy. “To manage this transformation socially responsibly, Commerzbank is primarily relying on demographic change and natural turnover,” the bank stated. It is anticipated the overall workforce count will remain stable at around 36,700 globally, as new jobs are expected to be created at international sites, including the bank's Polish subsidiary, mBank.
The urgency of this action is underscored by the growing stakes held by UniCredit, which has increased its ownership to about 28% since last autumn. Shareholder unrest and heightened scrutiny from both market analysts and political leaders have added to the pressure. Boris Rhein, the Hessian Minister President, expressed concerns by stating, “Key CEOs in this country have great worries if there is to be a takeover,” emphasizing fears over decision-making power relocating outside of Germany.
To counteract the costs associated with the job cuts, estimated at approximately €700 million this year alone, Commerzbank is setting ambitious financial targets. The bank aims to increase its profitability to €4.2 billion by 2028 and plans to reward shareholders with substantial returns, marking payouts of over 100% of net profits for 2025 and proposing up to 100% through 2028, subject to favorable conditions. These bold profit projections are part of Commerzbank’s strategy to demonstrate its capacity as a self-sustainable institution.
The restructuring signifies not just job losses but also Commerzbank's broader ambition to reposition itself competitively amid shifting market dynamics. Orlopp's insistence on strengthening the bank’s standing is driven by the belief it can outperform under rigorous strategies positioned against the encroaching international competition embodied by UniCredit.
The mounting pressure from UniCredit has prompted Commerzbank’s management and employees to rally together against what they perceive as hostile takeover attempts, affirming their commitment to maintaining the bank's independence. The federal government, which previously injected taxpayer funds to stabilize the bank during the financial crisis, also holds around 12% of shares, additional motivation to resist foreign control and protect local interests.
These developments have created considerable unease among employees, many of whom rely on the job security Commerzbank has traditionally offered. The impending cuts, combined with the uncertain future due to UniCredit's ambitions, lead to questions about the local job market's resilience and the financial sector's stability. Commerzbank is underlining its need to remain agile and responsive at this important juncture.
While the German banking sector faces increased pressure for modernization and efficiency, Commerzbank’s actions reflect broader trends within the industry. Banking institutions worldwide are grappling with structural changes, adapting to digital transformations and competitive pressures from more nimble fintech firms. Commerzbank's emphasis on aligning its operations to these trends indicates its strategic intent to not only survive but thrive.
With the clock ticking on the potential takeover by UniCredit, Commerzbank is not solely focused on job cuts but is also committed to strategically enhancing its operations for the future — one where it not only competes but also asserts its identity and independence on the global banking stage. The bank's upcoming actions and strategies will undoubtedly be closely watched by industry analysts and investors, as they will reflect not only the resilience of Commerzbank but also set precedents for the wider European banking sector.