Commerzbank AG

Commerzbank AG (Commerzbank AG) - bank a concern - Germany has been operating in the financial market since 1870, providing all types of commercial services for individuals and legal entities.

Performance indicators

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

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

At the end of 2020, Commerzbank registered 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, Bloomberg notes.

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

Commerzbank takes biggest loss 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 missed 1.6 billion euros) associated with 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 fixed capital adequacy indicator of the first level (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 the costs were 6.31 billion euros. This decline in the bank was associated with "effective cost management." Commerzbank's headcount fell by about 900 full-time employees in 2020, the report noted. In 2021, layoffs will continue, as well as branch closures - the bank is expected to have 190 fewer branches by the end of December than by December 31, 2020.^[1]

History

2024: German government hires Rothschild to protect bank from UniCredit stake increase

In December 2024, Germany hired Rothschild & Co. to advise on the remaining stake in Commerzbank AG, after a partial sale in September was widely criticized for allowing Italian rival UniCredit to wedge into the deal.

2023

Rothschild will provide strategic guidance on how to respond to any further actions by UniCredit, the sources said. The French investment bank will also consider possible future sales of a 12% stake that Germany still owns.

By December 2024, UniCredit SpA had increased its stake in Commerzbank AG to about 28%, reinforcing Chief Executive Officer Andrea Orcela's push to acquire the German lender.

UniCredit entered into additional agreements on Commerzbank shares. As of December 17, UniCredit owns 9.5% of the shares directly and about 18.5% through derivatives.

Germany has effectively called on UniCredit SpA to sell its stake in Commerzbank AG just hours after the Italian bank announced its increase, further adding to tensions between the German lender's two main shareholders.

"UniCredit itself emphasizes that participation in Commerzbank has so far been a net investment, which can also be liquidated at any time," said Wolfgang Büchner, deputy government spokesman. "The German government expects UniCredit to seize this opportunity."

2022: Termination of activities in Russia after the outbreak of conflict in Ukraine

Main article: Commerzbank

On March 12, 2022, it was announced that against the background of Russia's special operation in Ukraine, Commerzbank was ceasing its activities in Russia.

2021: Dismissal 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.

Commerzbank has about 48,500 employees worldwide as of January 2021. However, the bank's administration warned that its domestic market would be hit hard: every third job in Germany would be cut.

The number of branches in Germany will shrink from 790 to 450 as a result of the administration's push for savings, which the bank says puts "profitability ahead of growth."

Commerzbank plans to lay off 10,000 employees and close half of branches

The business restructuring plan is being promoted by Commerzbank CEO Manfred Knof, who took up the role in September 2020. The bank said it would make the changes "as soon as possible." It is expected that by 2024 the bank's costs will decrease by 1.4 billion euros ($1.7 billion), or about 20%.

We want to focus on Commerzbank's strengths and ensure its strong performance over the long term, CEO Manfred Knof said 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 these purposes.

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 in the course of staff reductions.

In parallel, Commerzbank intends to digitize and automate its business processes. Over the next four years, Commerzbank will invest €1.7 billion in IT.^[2]

2020

Appointment of Manfred Knof as CEO

At the end of September 2020, it became known that Manfred Knof would become the new CEO of Commerzbank. Prior to that, he headed the German retail bank Deutsche Bank. Read more here.

Closure of 200 out of 1000 branches 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 liquidate 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 outgoing CEO of Commerzbank, Martin Tsilke, 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, as expected, will be implemented by the end of 2023, but the latest decision of the manager will significantly speed up the implementation of this task. Martin Tsilke promised to keep services available online for customers, as people increasingly choose online banking.

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

Commerzbank will reopen 150 other branches in the coming weeks, according to Bloomberg. 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 Tsilke announced his intention to leave the post of CEO of Commerzbank. The decision is related to criticism of Tsilke's policies by the bank's main shareholders, in particular BlackRock and Cerberus Capital Management. In Cerberus, Commerzbank's activities are characterized as "catastrophic."

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

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

Board chairman and chief executive sacked over dissatisfaction with their strategy

At the end of June 2020, the chairman of the board and chief executive of Commerzbank left the company due to growing dissatisfaction with their strategies. Read more here.

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

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

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

There are seven suspects in the theft. It is known that among the suspects there is a bank employee who helped a Russian woman reserve cells and dissuaded from insuring savings. This process involved at least three other bank employees, as well as the branch manager who was supposed to authorize the transaction.

The investigation believes that we are talking about theft carried out by a group of persons by conspiracy. A bank employee provided the attackers with information about the cells, they also opened an account and a cell in the bank in order to have access to the storage. As a result, between December 2017 and March 2018, two of this group took out 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, fulfilling their tasks and business development needs.

Virtualize your IT infrastructure

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 combined using virtualization technology running VMware ESX Server, where 20 critical servers with continuous load are deployed with freed resources.

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