Commerzbank Unveils Ambitious Strategy, Trims Workforce to Counter UniCredit Merger Bid
Commerzbank has announced significant changes to its business strategy, including a workforce reduction of 3,900 positions, to deter UniCredit's persistent merger proposal.
Job Cuts and Hiring
The job cuts, primarily affecting Germany, will be implemented through natural fluctuations and early retirements. Despite the layoffs, the bank's overall full-time employee count will remain stable at 36,700 due to targeted hiring outside Germany.
Financial Targets
Commerzbank has revised its financial targets upward:
* Net profit target increased to €3.8 billion for 2027 (from €3.6 billion)
* Cost-to-income ratio target improved to 53% for 2027 (from 54%)
Strategy Update
The strategy update follows Commerzbank's strong financial performance in 2022, with a 20% increase in net profit. CEO Bettina Orlopp believes the bank has "significant value potential" and is well-positioned to thrive independently.
UniCredit's Merger Proposal
UniCredit's CEO, Andrea Orcel, has expressed interest in merging with Commerzbank. However, Commerzbank's management, employees, and the German government have all voiced opposition to the proposal.
Targeted Acquisitions and Strategic Partnerships
Instead of pursuing large-scale mergers, Commerzbank plans to focus on targeted acquisitions and strategic partnerships to enhance its business.
Political Opposition
Political support for Commerzbank's independence remains strong. The premier of Hesse, Boris Rhein, has urged UniCredit to abandon its merger aspirations.
Conclusion
Commerzbank's strategy update is designed to strengthen its position as an independent financial institution and fend off UniCredit's merger bid. The job cuts, financial target revisions, and strategic initiatives aim to enhance the bank's profitability and competitiveness.