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Commerzbank has promised investors a 64 per cent surge in profits by 2028 as it axes one in six jobs in Germany in its fight against an unwanted takeover attempt by Italian rival UniCredit.
Germany’s second-largest listed bank is aiming for net profits of €4.2bn and a cost-income ratio of “around 50 per cent” in 2028, compared with €2.7bn and 59 per cent respectively last year. It is targeting growth mainly in its corporate business with Mittelstand clients, while also investing in IT infrastructure and artificial intelligence.
The bank previously raised its targets last September after UniCredit built a 21 per cent stake, which the Italian lender has since raised to 28 per cent using derivatives. The German government and trade unions have spoken out against a merger with UniCredit, fearing heavy job cuts.
UniCredit’s chief executive Andrea Orcel said on Tuesday that a decision on a formal takeover bid would be taken after the formation of a new German government. Germany will hold general elections on February 23.
Commerzbank’s standalone strategy includes axing 3,900 positions by 2028, mainly back-office staff in Germany, through early retirement. This will be offset by hires in cheaper locations overseas, keeping its overall headcount stable at 36,700.
The bank said it would spend about €700mn on cost-cutting this year.
https://www.ft.com/content/c504a9b1-4dd2-43b8-8261-f46fdf37271d
