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Commerzbank is cutting thousands of jobs to fend off an unwanted takeover from Italy’s UniCredit, according to people familiar with the matter.
The plans, which have not yet been formalized, were expected to be unveiled to the Labor Council in the coming weeks, two of the people said. A person familiar with the discussions told the Financial Times that the number could be “in the low thousands”.
The German lender’s new chief executive, Bettina Orlop, will present an updated strategy on February 13 to show the bank itself can improve shareholder profits and payouts.
UniCredit, led by chief executive Andrea Orsel, has made a position Commerzbank It is likely to make it the bank’s largest shareholder if it gets regulatory approval.
Orcel Commerzbank has made no secret of its ambitions, including a complete takeover of its German rival.
Commerzbank’s investors generally support a deal – with the exception of the German government, which retains a 12 percent stake after selling a 4.5 percent holding to UniCredit last year.
Analysts estimate that a tie-up would result in billions of euros in cost savings, as the enlarged bank cuts out duplicate functions.
There has been potential for an important point of resistance from both unions and the government UniCredit to wield the ax in Germany, where it already has a German subsidiary, HypoVereinsbank (HVB).
Commerzbank unions have warned that a takeover of UniCredit could put 15,000 jobs on the line – an issue that has taken on an added level of political sensitivity ahead of Germany’s federal election due next month.
The prospect of inducing cuts for Commerzbank without taking over the Italian bank would mark another chapter in its protracted restructuring.
Commerzbank has already cut thousands of jobs and closed almost half of its 800 branches from 2021, when former chief executive Manfred Knopf launched a turnaround effort.
The changes have helped boost operating profits and triple the bank’s share price over the past three years, and in 2023 it launched the first share buyback program in its history.
But UniCredit’s stakebuilding has put added pressure on the German bank to prove it can deliver better profits and value for shareholders as an independent company than as part of the Italian bank empire.
Germany’s second-largest listed bank has struggled to cope with higher costs than rivals including HVB Orlopp has already raised Commerzbank’s performance targets since the UniCredit approach in September.
Even some insiders doubted that Commerzbank could hope to present a distinct case that would give shareholders more value than a merger, given the potential synergies involved in a deal.
A person with knowledge of the matter suggested that Orlopp now plans to accelerate a further restructuring that was previously seen as an option for the future.
Another person familiar with the discussions indicated that job losses could be driven by digitization, particularly through the adoption of artificial intelligence, with IT functions potentially “closer” to other European countries outside of Germany.
Commerzbank said the strategy update, due to be presented with its full-year results next month, was still being developed, and “we cannot pre-empt upcoming discussions in the management and supervisory boards”.
