Commerzbank to significantly increase profitability through deep restructuring and comprehensive digitalisation

DJ Commerzbank to significantly increase profitability through deep restructuring and comprehensive digitalisation

Commerzbank Aktiengesellschaft (CZB) 
Commerzbank to significantly increase profitability through deep restructuring and comprehensive digitalisation 
28-Jan-2021 / 15:33 CET/CEST 
Dissemination of a Regulatory Announcement, transmitted by EQS Group. 
The issuer is solely responsible for the content of this announcement. 
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- Commerzbank announces cornerstones of its new strategy, resolution by Board of Managing Directors planned for 3 
February 2021 
- Overall headcount reduction of 10,000 full-time equivalents (FTEs) intended 
- Reduction of number of branches to 450 
- Reduction of cost base by EUR1.4 billion targeted for 2024 compared with 2020 
- Return on Tangible Equity (RoTE) of 6.5% to 7% targeted for 2024 
- CEO Manfred Knof: 'We will focus on our strengths and consistently restructure.' 
Commerzbank intends to launch an in-depth restructuring programme. As part of its transformation, the Bank strives to 
combine the benefits of a fully digitalised bank with personal advice, consistent customer focus, and sustainability. 
Costs are to be significantly reduced and profitability substantially increased by 2024.This will enable Commerzbank to 
further strengthen its leading position as the Bank for the German Mittelstand and as a strong partner for 
approximately eleven million Private and Small-Business Customers. 
The Bank's Board of Managing Directors has submitted a draft of the new strategy programme to the Supervisory Board. 
The Supervisory Board meeting in which this proposal is due to be discussed is scheduled for 3 February 2021. After 
that the strategy is to be decided upon by the Board of Managing Directors. So far, no decisions have been taken on any 
item of the strategy programme. The early publication of planned cornerstones is a consequence of the current media 
coverage. 
Manfred Knof, Chairman of the Board of Managing Directors of Commerzbank AG: 'We want to focus on Commerzbank's 
strengths and secure its strong performance for the long term. To achieve this, we will thoroughly reduce complexity 
and cut costs. Our goals are very ambitious, but we will do everything necessary to achieve them. Thereby, the Bank 
will create value for customers, employees, shareholders, and society as a whole.' 
The strategy programme builds on the following key levers: 
  . Going forward, the Bank will consistently put profitability before growth, for example when it comes to the 
    efficient use of capital or adequate pricing of products and services. 
  . As part of the Group's restructuring, there will be a significant headcount reduction. By 2024, Commerzbank will 
    reduce approximately 10,000 full-time equivalents in gross terms. In Germany, will affect every third job. 
    Commerzbank will work with employee representatives to agree fair and - as far as possible - socially responsible 
    solutions for the headcount reduction. The Bank is working towards a swift agreement on the planned headcount 
    reduction with the Works Council to launch implementation as soon as possible. 
  . As part of a wide-ranging digitalisation, the Bank will substantially reduce the branch network and significantly 
    expand its digital offerings for customers. The number of branches is to be reduced from the current level of 790 
    to 450 locations across Germany. At the same time, the Bank will simplify, digitalise and automate its business 
    processes. To achieve this, Commerzbank will invest a total of EUR1.7 billion in its IT over the next four years. 
  . Furthermore, the Bank will accelerate its cultural transformation with the objective to strengthen a 
    success-oriented performance culture. 
Sustainability will play an even more central role across all business activities going forward. Commerzbank intends to 
commit to ambitious targets. A corresponding strategy will be presented in the near future. 
Cost reductions of EUR1.4 billion targeted 
As a result of the restructuring, Commerzbank targets a return on equity (RoTE) of 6.5 to 7 per cent for the financial 
year 2024. Compared to the figures expected for 2020, costs will be reduced by EUR1.4 billion or around 20 per cent by 
2024, while revenues are expected to remain stable. At the same time, revenues are expected to remain largely stable - 
excluding further growth of mBank. Commerzbank is anticipating restructuring expenses totalling EUR1.8 billion, which 
will be fully financed with existing funds. The restructuring expenses will be fully booked in the current financial 
year. A provision of EUR0.8 billion was already set aside in the financial year 2020 to cover a substantial proportion of 
the restructuring expenses that will be incurred. In addition, there are further EUR0.1 billion in provisions from 2019. 
Despite of the significant restructuring, the Bank targets a Common Equity Tier 1 ratio (CET 1) which is at least 200 
to 250 basis points above the minimum regulatory requirements (MDA). This will enable Commerzbank to retain its 
resilience while efficiently managing its capital. 
As part of the Group, mBank will continue its growth strategy. 
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Subject to a positive decision by the Board of Managing Directors, Commerzbank will present details of the strategy and 
concrete measures and targets for the years 2021 to 2024 at the annual results press conference on 11 February 2021. A 
capital markets day will also be held for investors on the same day. Journalists will be able to follow this online on 
the Commerzbank website after having registered in advance. 
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Press contact 
Margarita Thiel [phone] 
Sascha Ullrich [phone] 
Erik Nebel [phone] 
Maurice Farrouh [phone] 
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About Commerzbank 
Commerzbank is a leading international commercial bank with branches and offices in nearly 50 countries. The Bank's two 
business segments - Private and Small-Business Customers and Corporate Clients - offer a comprehensive portfolio of 
financial services precisely tailored to their customers' needs. Commerzbank transacts approximately 30% of Germany's 
foreign trade and is the market leader in German corporate banking. The Bank offers its sector expertise to its 
corporate clients in Germany and abroad and is a leading provider of capital market products. Its subsidiary mBank in 
Poland is an innovative digital bank. The integration of Comdirect enables Commerzbank to combine the services of one 
of Germany's most advanced online banks with a personal advisory offering at local level.The Bank serves around 11.6 
million private and small-business customers nationwide and over 70,000 corporate clients, multinationals, financial 
service providers, and institutional clients worldwide. Its Polish subsidiary mBank S.A. has around 5.7 million private 
and corporate customers, predominantly in Poland, but also in the Czech Republic and Slovakia. In 2019, Commerzbank 
generated gross revenues of EUR8.6 billion with approximately 48,500 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. 
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ISIN:          DE000CBK1001 
Category Code: MSCU 
TIDM:          CZB 
LEI Code:      851WYGNLUQLFZBSYGB56 
Sequence No.:  92520 
EQS News ID:   1164160 
 
End of Announcement  EQS News Service 
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(END) Dow Jones Newswires

January 28, 2021 09:33 ET (14:33 GMT)