(Bloomberg) -- Commerzbank AG is planning to cut 4,300 jobs as part of a new strategic plan that will also see the bank sell a stake in its Polish MBank unit to reduce risk and free up capital.
The bank, which had failed talks with Deutsche Bank AG on a combination earlier this year, said that further group-wide job cuts were “regrettable but inevitable,” according to a statement on Friday. The sale of MBank will reduce risk-weighted assets by about 17 billion euros ($18.7 billion), it said.
Chief Executive Officer Martin Zielke is stepping up cost reductions as he contends with a weaker economy and the prospect of even lower interest rates. The CEO had to give up many of the targets in his current turnaround plan that runs through 2020. That plan had aimed to cut headcount by 7,300, though the bank this year revised that number to less than 5,300.
Shares of the lender fell to a record low last month as Germany’s economic contraction and expectations for lower interest rates threaten to undercut Zielke’s strategy.
To contact the reporter on this story: Steven Arons in Frankfurt at sarons@bloomberg.net
To contact the editors responsible for this story: Dale Crofts at dcrofts@bloomberg.net, Christian Baumgaertel
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