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Commerzbank is considering cutting thousands of jobs to fend off unwanted advances from Italy’s UniCredit, people familiar with the matter said.
Plans have not yet been formalized, but are expected to be presented to the Labor Council in the coming weeks, two people familiar with the matter said. A person familiar with the discussions told the Financial Times that the figure was likely to be “in the low thousands of dollars”.
The German lender’s new chief executive, Bettina Orlop, is expected to unveil an updated strategy on February 13 that shows the bank can improve its profitability and dividends to shareholders on its own.
UniCredit, led by Chief Executive Officer Andrea Orcel, has a position within Commerzbank and could become the bank’s largest shareholder if it secures regulatory approval.
Mr. Orcel has made no secret of his ambitions for Commerzbank, which includes a full takeover of German rival Commerzbank.
Commerzbank investors generally support the deal, with the exception of the German government, which still owns a 12% stake after selling a 4.5% stake to UniCredit last year.
Analysts expect the partnership to save billions of euros in costs as banks scale up and reduce duplicative functions.
A crucial point of resistance from both trade unions and the government is the possibility of UniCredit wielding the ax in Germany, where UniCredit already has a German subsidiary, Hippoferreinsbank (HVB).
Commerzbank’s union has warned that the takeover by UniCredit could cost up to 15,000 jobs, but the issue has become politically charged ahead of next month’s German federal elections. This is an even more delicate issue.
The possibility that Commerzbank could force job cuts without being taken over by an Italian bank would mark a new chapter in its long-term restructuring.
Commerzbank has already cut thousands of jobs and closed about half of its 800 branches since 2021, when former CEO Manfred Knopf began a restructuring effort.
The changes have boosted operating profits, tripled the bank’s stock price over the past three years, and launched the bank’s first-ever share buyback program in 2023.
But UniCredit’s stake build-up puts further pressure on the German bank to prove it can deliver higher profitability and shareholder value as an independent company than as part of Italy’s banking empire. .
Germany’s second-largest listed bank is struggling to cope with higher costs than rivals such as HVB. Orlop has already raised Commerzbank’s performance targets since UniCredit’s approach in September.
Even some insiders expressed doubts about whether Commerzbank could be expected to offer shareholders a standalone case that would provide greater value than the merger, given the potential synergies involved in the deal. I am doing it.
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One of the people familiar with the matter suggested Mr. Orlop was planning to accelerate further restructuring, which had previously been seen as a future option.
Another person familiar with the discussions said digitization, particularly the introduction of artificial intelligence, could drive job cuts and could “nearshore” IT functions to other European countries outside of Germany. he pointed out.
Commerzbank said its strategic update, which is expected to be released with its full-year results next month, is still being developed and “we cannot pre-empt future discussions at the management and audit committees.”
