Commerzbank

The Commerzbank of AG (Commerzbank AG) - conducts the activity in the financial market since 1870, rendering all types of commercial services for natural and legal entities.

Performance indicators

2020: Net loss - 2.87 billion euros, revenue - 8.19 billion euros

Commerzbank in 2020 received revenue at the level of 8.19 billion euros, which is less than a year ago in 8.64 billion euros. The bank said revenue remained "stable" partly due to a 9% increase in net commission income amid strong securities-related business.

At the end of 2020, Commerzbank recorded a net loss of 2.87 billion euros, while a year earlier the bank's net profit was measured at 585 million euros. Losses of the financial group were the highest since at least 2006, notes. Bloomberg

The bank's monetary losses are largely due to a large-scale restructuring, for which about 814 million euros were spent in 2020. The total cost of this program is estimated at at least 1.8 billion euros.

Commerzbank received the largest losses since 2006

In addition to restructuring costs, the bank's financial performance was negatively affected by the impairment of goodwill and write-offs (because of this, the bank did not count 1.6 billion euros) related to the impact of the COVID-19 coronavirus pandemic, the press release said. According to Commerzbank forecasts, in 2021, spending on eliminating the negative consequences of the pandemic will exceed 0.5 billion euros.

At the same time, the level 1 capital adequacy indicator (CET 1) at the end of 2020 rose to 13.2% compared to 13.4% a year earlier.

In 2020, Commerzbank's administrative expenses amounted to 6.16 billion euros, a decrease of 2.4% compared to the previous year, when costs amounted to 6.31 billion euros. This decline in the bank was associated with "effective cost management." The report notes that the number of Commerzbank employees in 2020 decreased by about 900 full-time employees. In 2021, layoffs will continue, as well as the closure of branches - it is expected that by the end of December the bank will have 190 fewer branches than by December 31, 2020.^[1]

History

2022: Termination of activities in Russia

Main article: Commerce Bank

On March 12, 2022, it was announced that against the backdrop of Russia's special operation in Ukraine, Commerzbank ceases operations in Russia.

2021: Separation of 10,000 employees, closure of 50% of branches

At the end of January 2021, the German bank Commerzbank announced the beginning of a strategic restructuring, in which by 2024 the company will lay off up to 10 thousand employees and close 340 branches in Germany.

As of January 2021, Commerzbank employs about 48,500 employees worldwide. However, the bank's administration warned that its domestic market will suffer greatly: every third job in Germany will be reduced.

The number of branches in Germany will decrease from 790 to 450 as a result of the administration's desire for savings, which, according to the bank, puts "profitability above growth."

Commerzbank plans to lay off 10 thousand employees and close half of the branches

The business restructuring plan is promoted by Commerzbank CEO Manfred Knough, who took this position in September 2020. The bank said it will make changes "as soon as possible." By 2024, the bank's costs are expected to decrease by 1.4 billion euros ($1.7 billion), or about 20%.

We want to focus on the strengths of Commerzbank and ensure its high performance in the long term, "said CEO Manfred Knof in a statement. - To achieve this, we will simplify the structure and reduce costs.

Commerzbank's total restructuring costs will amount to 1.8 billion euros, of which 0.8 billion have already been budgeted for in 2020. The financial institution does not plan to borrow funds for this purpose.

Commerzbank also said in a statement that the bank will negotiate with employees in order to agree on fair and, as far as possible, socially responsible decisions during the reduction of staff.

At the same time, Commerzbank intends to digitize and automate its business processes. Over the next four years, Commerzbank invests 1.7 billion euros in IT.^[2]

2020

Appointment of Manfred Knough as CEO

At the end of September 2020, it became known that Manfred Knough will become the new CEO of Commerzbank. Prior to that, he headed the German retail bank Deutsche Bank. More details here.

Closure of 200 out of 1000 offices due to COVID-19

On August 14, 2020, it became known that Commerzbank decided to permanently close 200 of the 1000 branches that ceased operations in early 2020. This decision is related to the crisis caused by the COVID-19 coronavirus pandemic, and is part of a plan to eliminate a fifth of the bank's branches.

According to information from sources familiar with Commerzbank's plans, the bank's staff learned about the news on August 14.

The retiring CEO of Commerzbank, Martin Zilke, in 2020 announced a new cost-saving program, which involved the closure of approximately 200 branches from the existing network, where there are 100 branches. This plan was expected to be implemented by the end of 2023, but the last decision of the manager will significantly accelerate the implementation of this task. Martin Zilke promised to keep online services available for customers, as people increasingly stop their choice at online banking.

Commerzbank permanently closes 200 out of 1000 branches due to COVID-19

According to Bloomberg, Commerzbank will resume operations of 150 other branches in the coming weeks. Thus, the total number of open branches of the bank will reach 600, the remaining 200 branches will open later.

In early July 2020, Martin Zilke announced his intention to resign as CEO of Commerzbank. The decision is related to criticism of Zilke's policy by the bank's main shareholders, in particular BlackRock and Cerberus Capital Management. At Cerberus, Commerzbank's activities are described as "catastrophic."

Ill-conceived and poorly implemented attempts by the leadership to prevent the collapse of Commerzbank indicate a high level of negligence and arrogance, which we are no longer ready to put up with, "Cerberus noted.

New Chairman of Commerzbank Supervisory Board Hans-Jörg Fetter in search of a new CEO. Cilke said he will leave by the end of 2020 or earlier when a successor is found.^[3]

Dismissal of board chairman and chief executive officer due to dissatisfaction with their strategy

At the end of June 2020, the chairman of the board and the executive director of Commerzbank left the company due to growing dissatisfaction with their strategies. More details here.

2018: Theft from a Russian woman 4.6 million euros from a cell in Munich

In January 2020, a trial is underway in a Munich court in the case of the theft of money from the bank cell of a Russian woman, where she had 32 million euros.

The case concerns the contribution of Russian Evgenia B., who on November 29, 2016 left 32 million euros in seven cells at the Commerce Bank branch in Munich. In March 2018, it turned out that 4.62 million euros had disappeared from one cell.

There are seven suspects in the theft. It is known that among the suspects there is an employee of the bank who helped the Russian woman reserve cells and dissuaded from saving insurance. At least three other bank employees participated in this process, as well as the head of the branch who was supposed to authorize the transaction.

The investigation believes that this is a theft carried out by a group of persons by conspiracy. An employee of the bank provided attackers with information about the cells, they also opened an account and a cell in the bank in order to have access to the vault. As a result, between December 2017 and March 2018, two of this group withdrew money from the bank, which law enforcement agencies have not yet been able to find.

2010

8 million corporate clients in 40 countries

In 2010, more than 8 million corporate clients in 40 countries of the world use the bank's credit programs, realizing their business development goals and needs.

IT Virtualization

In 2010, to manage information assets, the company built an IT infrastructure with a dynamic distribution of physical resources at various remote sites. More than sixty percent of all hardware is consolidated and consolidated using virtualization technology managed by VMware ESX Server, where 20 mission-critical servers with continuous workload have been deployed with freed resources.

Notes