FRANKFURT (Reuters) – Commerzbank (CBKG.DE) will announce “considerably” more branch closures and job cuts when it lays out its strategy review in August, a member of the bank’s supervisory board said on Monday.
FILE PHOTO: A company logo is pictured at the headquarters of Germany’s Commerzbank AG during the annual results news conference in Frankfurt, Germany, February 13, 2020. REUTERS/Ralph Orlowski
Stefan Wittmann, who represents labour on the supervisory board and is an official at Germany’s Verdi union, also criticized top investor Cerberus’s demands for seats on the supervisory board and other changes at Commerzbank, put forward last week.
Cerberus wants two board seats as well as cost cuts and a strategy shift at Germany’s second-biggest bank. Commerzbank has already rejected the demand for the board seats.
“Cerberus’ approach is rude and inappropriate,” Wittmann told Reuters.
Commerzbank, which last year announced plans to cut thousands of jobs, is currently in the process of identifying more cost cuts and will announce plans when it releases second quarter earnings in August.
Wittmann gave a sense of what is to be expected.
“There will be considerably more branch closures and more job losses than previously announced,” he said.
A spokeswoman for the bank declined to comment.
Last year the bank said it would cut the number of branches to around 800 from 1,000. It also said it would cut 4,300 jobs in some places but add 2,000 jobs in “strategic areas”, a net fall of 2,300 full-time positions, equivalent to about 5.7% of its workforce.
Since Cerberus bought a 5% stake in 2017, shares in Commerzbank have fallen about 60% as very low interest rates and tough competition hit the bank’s performance.
The bank, which is still partially owned by the state after a bailout during the last financial crisis, warned last month that its target for turning a profit in 2020 now seems “very ambitious” after it made a loss in the first quarter as the impact of the coronavirus pandemic drove up loan loss provisions.
In a letter on Friday to Cerberus, Commerzbank’s supervisory board rejected the investor’s demands for the board seats.
“We don’t have any vacancies,” Commerzbank’s Chairman Stefan Schmittmann said in the letter, seen by Reuters.
The outright rejection of Cerberus’ No. 1 demand is expected to further embolden the U.S. investor to continue with its push. A person close to Cerberus said: “Next steps to come”.
Reporting by Tom Sims and Patricia Uhlig; Editing by Riham Alkousaa and Susan Fenton