Cerberus wants ‘far more’ than 7,000 redundancies at Commerzbank
Activist investor Cerberus reportedly wants Commerzbank to cut far more than the 7,000 jobs it is said to be mulling as part of cost-cutting plans, a source familiar with the matter told Reuters.
Earlier today it was reported that the German lender’s supervisory board was set to discuss the possibility of another 7,000 job cuts, in addition to the 4,300 redundancies already announced by Commerzbank.
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But US investor Cerberus, which is one of the bank’s largest shareholders with a five per cent stake, will push for even more redundancies to be made at Germany’s second-largest bank, a source familiar with the matter told Reuters.
Cerberus plans to present Commerzbank with a “succinct view” on measures it should take on headcount and other moves in the coming weeks, the person told the news service, adding that job cuts should be “definitely beyond” 7,000.
German newspaper Boersen-Zeitung reported today that Commerzbank is now considering closing 400 of its 1,000 German branches, double the number previously reported.
Commerzbank is under pressure from shareholders over its strategy and leadership, with activist investor Cerberus recently launching a push for change.
Cerberus has called on the lender to cut costs and overhaul its strategy, but the investor’s demand for two seats on Commerzbank’s supervisory board have been rebuffed.
Shares in Commerzbank have fallen around 60 per cent since Cerberus took a stake in the lender in 2017.
Commerzbank has already announced, and is due to announce the results of a review into potential cost cutting measures in August.
A Commerzbank spokesperson said the lender would not comment on “speculation”.
“As already announced, we plan to disclose the details of our cost project the latest with our second quarter numbers. Currently, different options and scenarios are being discussed. No decisions have been taken,” they added.
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The bank, which is still partially owned by the state after a bailout during the 2008-2009 financial crisis, announced plans to close 200 of its 1,000 branches and cut 4,300 jobs last year.
Commerzbank 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.