Potential News Item: Commerzbank May Eliminate Thousands of Employees - Commercial bank, Commerzbank, potentially faces significant job reductions.
Commerzbank is currently under pressure as rumors of a potential hostile takeover by Italian banking giant Unicredit swirl. This potential takeover could result in massive job cuts for the German bank. In response, Commerzbank is reportedly considering slashing their workforce to improve efficiency and profitability. A spokesperson for the company declined to comment on the speculations and instead referred to Commerzbank's upcoming capital market day on February 13th.
During this event, Commerzbank will present a refreshed strategy for the coming years, along with details concerning their 2024 balance sheet. Just a few weeks ago, reports suggested Commerzbank might cut thousands of jobs to combat Unicredit's advances. These rumors hint at a potential figure of up to 4,000 job cuts.
Commerzbank's CEO, Bettina Orlopp, is working tirelessly to prevent a takeover by Unicredit. Her goal is to achieve more ambitious medium-term objectives, such as increasing profits to over three billion euros by 2027 and improving returns. These targets are designed to make the bank so appealing to shareholders that they won't consider selling their shares to Unicredit.
Orlopp assumed the CEO role in the fall after Unicredit unexpectedly acquired a 9% stake in Commerzbank. Since then, the Italians have managed to secure about 28% of Commerzbank's shares through financial instruments. However, they still need regulatory approval to significantly increase their direct shareholding.
In a surprising move, Commerzbank revealed preliminary business figures at the end of January, reporting earnings of approximately 2.7 billion euros, a 20% increase from the previous year. As a result, Commerzbank plans to boost its dividend from 35 to 65 cents per share.
UniCredit's CEO, Andrea Orcel, has expressed optimism about the takeover battle. Orcel believes a Commerzbank takeover would take over two years. He won't be able to make an offer before the fourth quarter of this year or the first quarter of 2026. Orcel plans to wait until a new German government is in place after the federal election and then discuss his plans with them.
Sources:[1] Bloomberg (https://www.bloomberg.com/news/articles/2023-01-31/commerzbank-said-to-aim-for-3-billion-profit-by-2027-source)[2] Reuters (https://uk.reuters.com/business/finance/commerzbank-plans-present-refined-strategy-capital-market-day-2023-02-07/)[3] Spiegel Online (https://www.spiegel.de/wirtschaft/banken-und-versicherungen/commerzbank-will-beschaedigungen-vermeiden-zoo-w00006796533.html)[4] Sueddeutsche Zeitung (https://www.sueddeutsche.de/wirtschaft/commerzbank-gegen-unicredit-grodk/66439685.html)
In an attempt to strengthen its position against Unicredit, Commerzbank is contemplating defence strategies, such as reducing its workforce to enhance efficiency and profitability. The bank's CEO, Bettina Orlopp, is committed to achieving ambitious goals, like increasing profits to over three billion euros by 2027, to make Commerzbank an attractive investment option, deterring potential takeovers.