Commerzbank wields axe in cost-cutting drive

24th January 2013, Comments 0 comments

Commerzbank, Germany's second-biggest bank, said on Thursday it is looking to axe more than 10 percent of its workforce over the next three years as it tots up the toll of the financial and sovereign debt crisis.

"As part of our strategic agenda announced in November, Commerzbank ... is assuming that 4,000-6,000 jobs will be cut group-wide by 2016," a company spokeswoman told AFP.

The exact number would be determined in talks with unions and labour representatives set to begin in February, she said.

On September 30, 2012, Commerzbank's total workforce numbered 56,287.

The spokeswoman said it was too early to say where exactly the axe would fall.

But insiders said all areas would be affected, even if it was likely to be the retail division -- its high-street branch network -- that bears the brunt of the cuts.

The number of branches was boosted sharply when Commerzbank took over rival Dresdner Bank in 2008 and the bank had already set a target of cutting 9,000 jobs in the division by thinning out the network.

While that goal has nearly been achieved, the harsher environment engendered by the long and debilitating financial and sovereign debt crisis means further blood-letting has become necessary.

Announcing a strategic reorientation back in November, chief executive Martin Blessing had said Commerzbank must face up to the challenges and "new normality" in the industry.

Above all, Commerzbank would seek to "reposition itself both strategically and operationally in the private customers business," he said at the time, adding that "massive cuts" in personnel costs were inevitable.

Blessing pledged that the branch network would become more flexible and the Commerzbank aimed to become a "multi-channel" bank offering customers products and services "anywhere and at any time".

Insiders say that among the topics under discussion between management and employee representatives would be longer opening hours.

Given the complexity of the issues, however, negotations were expected to be long and protracted.

On the Frankfurt stock exchange, Commerzbank shares were initially among the biggest losers following the announcement, but turned back into positive territory later in the session, adding 0.43 percent in a stagnant to slightly softer market.

Commerzbank had to be bailed out by the state in 2009 and is still partly state-owned.

But it does not appear to be the only bank mulling job cuts.

According to a report in the daily Frankfurter Allgemeine Zeitung on Thursday, Munich-based HypoVereinsbank, which is owned by Italy's UniCredit, is considering cutting 600 jobs this year, particularly in its retail banking division.

A spokesman for HypoVereinsbank declined to comment on the report.

Germany's biggest lender, Deutsche Bank, is also looking to save billions of euros a year by 2015, including slashing personnel costs.

Last July, Deutsche Bank said it had decided to "reduce headcount predominantly outside of Germany by approximately 1,900 positions," of which 1,500 would be axed in its corporate banking and securities division.

© 2013 AFP

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