Bank / Credit Union

More cuts planned for Germany's Commerzbank

photo provided by iStock

June 15, 2020

More branch closings and staff cuts are planned for Germany's Commerzbank after cutting thousands of jobs last year. The bank plans to discuss "considerably" more cuts to branch offices in August when it reports earnings for Q2, according to a Reuters report.

U.S. investor Cerberus, which has a 5% stake in the bank, has called for Commerzbank to create a new business strategy and is demanding two seats on the Commerzbank board be awarded to Cerberus' nominees. Commerzbank has refused the demands. Stefan Wittmann, a representative of Germany's labor union, Verdi, criticized Cerberus' demands stating in the report, "Cerberus' approach is rude and inappropriate."

Shares in Commerzbank have fallen about 60% in the past year due to low interest rates and competition. The bank has also warned its target for making a profit in 2020 is "very ambitious" after losses in Q1 due to the impact of the coronavirus pandemic.

In a letter to Commerzbank's chairman, Cerberus described Commerzbank's performance as "disastrous" and said shareholders would be highly supportive of  "significant change" to the supervisory board, management board and overall business strategy.