Commerzbank to axe 9,000 jobs to cut costs

frankfurt — Commerzbank aims to cut around 9,000 jobs in the next few years and will scrap its 2016 dividend as part of efforts to reduce costs in the face of negative interest rates, a source close to the bank’s supervisory board said on Tuesday.

The job cuts will be spread over the next few years up to 2020, but the size of the cull, representing nearly a fifth of the workforce at Germany’s second biggest bank, implies that compulsory layoffs cannot be ruled out, the person said.

“This is much more radical than previous measures,” the person said. The revamp is estimated to cost around €1 billion ($1.12 billion) and Commerzbank plans to eliminate its 2016 dividend to help pay for it, the person said.

Commerzbank declined to comment. Squeezed by the European Central Bank’s interest rates, German banks have been seeking ways to boost revenue by passing on costs to corporate customers and increasing fees for retail depositors, but profit margins remain thin.

That leaves cost cutting high on the agenda.

Commerzbank Chief Executive Martin Zielke is due to present the plan to Commerzbank’s supervisory board this week and expects to unveil it publicly on Friday, sources familiar with the situation have told Reuters previously.

Speculation about job losses has grown in recent weeks as Zielke neared completion of his strategy review. — Reuters