Commerzbank Aktiengesellschaft (CZB)
Commerzbank Aktiengesellschaft: Commerzbank releases cornerstones of new
strategic programme Commerzbank 5.0
20-Sep-2019 / 15:08 CET/CEST
Dissemination of a Regulatory Announcement, transmitted by EQS Group.
The issuer is solely responsible for the content of this announcement.
In light of the current media coverage on its strategy, Commerzbank AG today
announces: The Board of Managing Directors has developed a draft of its new
strategy 'Commerzbank 5.0' and submitted it to the Supervisory Board for
consideration. The draft will be discussed with the Supervisory Board on 25
and 26 September 2019 and then presented at press and investor conferences.
The Board of Managing Directors and the Supervisory Board have not yet taken
decisions on any items of the draft strategy.
With its new strategic programme, Commerzbank is enhancing the long-term
sustainability of its business. In the segment Private and Small Business
Customers, Commerzbank will focus on the expansion of its mobile banking
capabilities and the possible merger of comdirect bank Aktiengesellschaft
('Comdirect') into Commerzbank. The Bank's branch network remains a pillar
of Commerzbank's strategy. In the Corporate Clients segment the Bank intends
to strengthen its distribution capability, also in particular with
corporates in the Mittelstand (SME) segment. As part of its strategy,
Commerzbank is planning to invest significantly in technology. The draft
strategy foresees total investments of around 1.6 billion euros. Investments
in digitalisation, IT infrastructure and growth account for an estimated 750
million euros of this, while restructuring costs in connection with
necessary headcount reduction and planned modifications to the branch
network account for the remaining 850 million euros. The Bank will retain a
nationwide presence in Germany with around 800 branches, which reflects a
reduction of 200 compared to today.
A further Group-wide headcount reduction is regrettable but inevitable. An
estimated additional 4,300 full-time positions would be shed across the
Group. The planned increase of around 2,000 full-time positions in strategic
areas would take the anticipated net Group-wide headcount reduction to
around 2,300 full-time positions. The details will be worked out over the
next few months in consultation with the employee representative committees.
The aim would be to implement the planned headcount reduction as socially
responsible as possible.
*Investment capacity to be strengthened by the sale of the majority stake in
mBank*
The draft strategy foresees the sale of Commerzbank's majority stake in
mbank S.A. ('mBank'). This would allow the Bank to generate the financial
resources enabling a faster implementation of its strategy and the
associated investments. The sale would result in a marked reduction in
risk-weighted assets by around 17 billion euros and a release of equity
capital at Commerzbank. The planned sale of mBank would be subject to
regulatory approvals.
*Planned purchase offer for comdirect bank Aktiengesellschaft*
As the business models of Commerzbank and Comdirect become more closely
aligned on the back of progressive digitalisation, the draft strategy also
envisages the merger of Comdirect into Commerzbank. Against this background,
Commerzbank is considering making a purchase offer to Comdirect's
outstanding shareholders under usual conditions. According to the draft
strategy, Commerzbank would offer Comdirect's shareholders a premium of
presumably 25 percent on the unaffected Comdirect share price. The Bank
currently already holds an 82 percent stake in Comdirect.
*Medium term targets by 2023*
The further development of the strategy is intended to help the Bank achieve
additional growth in customers and assets, and higher revenues by 2023, even
if the market environment continues to deteriorate. Commerzbank would aim
for a cost level in 2023 of around 600 million euros lower than in the
current year. This would result in a cost base of no more than 5.5 billion
euros in 2023 following the sale of mBank. After the implementation of its
strategy, the Bank is targeting a Return on Tangible Equity of more than
four percent in the medium-term. The capital ratio is set to remain at 12 to
13 percent. In conjunction with the targeted Return on Tangible Equity, this
should enable the Bank to pay regular dividends.
*****
*Press contact*
Margarita Thiel +49 69 136-46646
*****
About Commerzbank
Commerzbank is a leading international commercial bank with branches and
offices in almost 50 countries. In the two business segments Private and
Small Business Customers and Corporate Clients, the Bank offers a
comprehensive portfolio of financial services which is precisely aligned to
its clients' needs. Commerzbank finances approximately 30% of Germany's
foreign trade and is the leading finance provider for corporate clients in
Germany. Due to its in-depth sector know-how in the German economy, the Bank
is a leading provider of capital market products. Its subsidiaries Comdirect
in Germany and mBank in Poland are two of the world's most innovative online
banks. With approximately 1,000 branches, Commerzbank has one of the densest
branch networks among German private banks. In total, Commerzbank serves
more than 18 million private and small business customers, as well as more
than 70,000 corporate clients, multinationals, financial service providers,
and institutional clients worldwide. In 2018, it generated gross revenues of
EUR8.6 billion with approximately 49,000 employees.
*****
*Disclaimer*
This release contains forward-looking statements. Forward-looking statements
are statements that are not historical facts. In this release, these
statements concern inter alia the expected future business of Commerzbank,
efficiency gains and expected synergies, expected growth prospects and other
opportunities for an increase in value of Commerzbank as well as expected
future financial results, restructuring costs and other financial
developments and information. These forward-looking statements are based on
the management's current plans, expectations, estimates and projections.
They are subject to a number of assumptions and involve known and unknown
risks, uncertainties and other factors that may cause actual results and
developments to differ materially from any future results and developments
expressed or implied by such forward-looking statements. Such factors
include the conditions in the financial markets in Germany, in Europe, in
the USA and other regions from which Commerzbank derives a substantial
portion of its revenues and in which Commerzbank holds a substantial portion
of its assets, the development of asset prices and market volatility,
especially due to the ongoing European debt crisis, potential defaults of
borrowers or trading counterparties, the implementation of its strategic
initiatives to improve its business model, the reliability of its risk
management policies, procedures and methods, risks arising as a result of
regulatory change and other risks. Forward-looking statements therefore
speak only as of the date they are made. Commerzbank has no obligation to
update or release any revisions to the forward-looking statements contained
in this release to reflect events or circumstances after the date of this
release.
ISIN: DE000CBK1001
Category Code: MSCU
TIDM: CZB
LEI Code: 851WYGNLUQLFZBSYGB56
Sequence No.: 20807
EQS News ID: 877443
End of Announcement EQS News Service
(END) Dow Jones Newswires
September 20, 2019 09:08 ET (13:08 GMT)
