Commerzbank attracts retired employees

UIn order to complete the 4,300 gross job cuts announced in September 2019, Commerzbank is now making new offers to its 33,700 employees in Germany. Anyone who works in one of the 200 branches that will remain closed after Corona will be able to benefit from the severance pay. And in the future, employees will be able to sign a partial retirement contract at the age of 55, provided they retire at the age of 63. To encourage them to retire early, Commerzbank offers employees a special payment. CFO Bettina Orlopp expects around 1000 employees to answer.

Declining price based on quarterly data

On Thursday, Orlopp reported in a conference call that Commerzbank had recorded a net loss of € 69 million in the third quarter, due to the first unpaid loans due to Corona, but also because it had booked € 139 million in costs for the new program. partial retirement. A further 62 million euros were incurred for downsizing and material costs in the 200 branches that remained closed. The effort for these closures will pay off in two to three years, Orlopp said. Commerzbank’s share then dropped 6 percent on Thursday to less than 4 euros.

The new partial retirement program will be more expensive for Commerzbank than the one that expired only in the second quarter and aimed at employees aged 57 and over. 800 – and not 1000 as hoped – the employees agreed to first go into active partial retirement and then passive. Half of the salaries are paid during the entire partial retirement period. The bank can record full salaries in the first phase of partial retirement, so that there are no more personnel costs in the second phase, which can be an advantage. To attract partial retirement with special payments, he spent € 100 million in the first program, which is € 125,000 per employee. Now he is dealing with 139,000 euros for a partial pension contract.

Commerzbank is likely to tighten up its job cuts in the coming year. According to reports, the board of directors plans to cut at least 10,000 jobs by 2023. The plans are pending because just prior to the announcement, CEO Martin Zielke and supervisory board chairman Stefan Schmittmann made their placed simultaneously. New CEO Manfred Knof will only be authorized by his previous employer, Deutsche Bank, to start Commerzbank in January. Orlopp announced Thursday that key strategy data will now be presented in the first quarter of 2021. Orlopp said it was important that employees were clear about this.

Orlopp comes out of disappointment?

After all, it’s not just a matter of how further scaling is organized. Important executives such as Jenny Friese and Kerem Tomak take their initiative when they receive offers from competitors. Since she herself had been swapped as the new CEO, Orlopp was also asked if she would leave Commerzbank in disappointment. She is very pleased with her position as CFO and is looking forward to working with the new CEO, Orlopp calmly replied.

The bank’s economic situation remains tense. After nine months there was a loss of 162 million euros. It could be even more: Orlopp believes it is “conceivable” that additional restructuring costs will occur in the fourth quarter. And from January on, he doesn’t expect a tsunami of bankruptcies, but he does expect some smaller corporate loan clients to not survive the repeated lockdown.

Increase the risk provision

Orlopp wants to put loan defaults on the 2020 balance sheet as a risk cover, provided they become apparent by mid-February 2021. This is one reason some equity analysts estimate Commerzbank will make up more than 1.3-1 , € 5 billion of risk provisions previously planned by the Board of Directors for 2020 as a whole. So far, after € 272 million was added in the third quarter, there are now € 1.1 billion of risk provisions on the balance sheet after nine months.