The German financial institution is looking for to bolster its monetary power as Italy’s UniCredit vies for a takeover.
Commerzbank introduced on Thursday it could lower 3,900 full-time positions by 2028 in a bid to spice up its monetary stability.
The financial institution nonetheless added that hiring will happen in different “chosen areas”, which means the worldwide variety of full-time staff will stay fixed at 36,700.
The layoffs will predominantly have an effect on workers in Germany, whereas hiring will happen in cheaper places.
Commerzbank’s announcement was communicated in a monetary replace on Thursday, following the financial institution’s publication of full-year earnings two weeks in the past.
Germany’s second-largest financial institution introduced in a file web revenue of €2.68bn in 2024, an annual enhance of about 20%.
Revenues rose by 6% to €11.11bn, partially pushed by development in web fee earnings by 7% to €3.64bn. Internet curiosity earnings additionally remained robust.
The redundancy warnings come as Commerzbank is looking for to fend off a hostile takeover bid from Italian lender UniCredit.
Partially by means of derivatives, UniCredit has constructed a 28% stake within the German lender, though Commerzbank’s administration is in opposition to a full-blown takeover.
Each German banking officers and politicians concern {that a} merger may result in job cuts and hinder lending to small and medium-sized companies.
Chancellor Olaf Scholz, on the finish of final yr, criticised efforts “to aggressively purchase stakes in corporations with none cooperation, with none session, with none suggestions”.
Andrea Orcel, CEO of UniCredit, mentioned on Tuesday that the financial institution would launch a proper takeover bid as soon as Germany had appointed a brand new authorities, following elections on the finish of the month.
If Commerzbank can strengthen its enterprise prospects earlier than then, the lender will discover it simpler to withstand a takeover.
The agency introduced on Thursday that it’s aiming to attain a web revenue of €4.2bn in 2028, together with a return on tangible fairness of 15%.
It mentioned its cost-income ratio is predicted to enhance to round 50% in the identical yr, in comparison with final yr’s 59%.
outcomes for 2025, Commerzbank predicts a revenue decline to €2.4bn resulting from restructuring prices equal to €700 million.
The financial institution is nonetheless seeking to increase dividends and shareholder payouts.
Based mostly on 2024 earnings, the lender is proposing a dividend of €0.65 per share, up from €0.35 final yr.
Commerzbank plans a payout ratio of greater than 100% over the 2025 to 2028 interval, after the deduction of restructuring prices and Extra Tier 1 (AT 1) bond coupons.
In a separate launch on Thursday, the German lender introduced that it had launched a strategic partnership with Visa.
Commerzbank prospects will primarily obtain Visa debit and bank cards, which the lender argued will “make purchasing overseas and on-line even simpler for the financial institution’s prospects”.