The phoenix plan

Commerzbank staff get the blues after DAX exit

Commerzbank DPA 1800px
Could use that jolt. Source: DPA

Unless matters improve, history’s verdict on Martin Zielke, head of Germany’s Commerzbank, may be that he was the one who oversaw the bank’s slide on the stock market. On Monday, the bank officially tumbled out of the country’s blue-chip index into the mid-cap MDAX, a level below the 30-share DAX. The second-largest lender, in effect, has been sent down to the minor leagues and is likely to stay there for some time.

This demotion, confirmed earlier this month by stock-market operator Deutsche Börse, clearly bugs Mr. Zielke. “It annoys me, and it annoys me enormously,” the 55-year-old explained in an interview on the bank’s intranet, which was obtained by Handelsblatt. “And it shouldn’t be just me, but all of us.” The ejection from the DAX should awaken the bank’s fighting spirit, Mr. Zielke said.

Commerzbank employees won’t exactly be lining up for this battle. For one thing, doubts persist whether Mr. Zielke’s strategy to beef up its private and corporate customer business will boost earnings. In his intranet communique, he again stressed that the restructuring had “absolute priority.” Among the workforce of nearly 49,000, fears are also growing that a possible merger with Deutsche Bank, its unloved rival, will cause more job cuts than the 9,600 already planned under the current revamp.

The horror scenario

Discussions about a merger of the two lenders have gathered steam in recent weeks. Finance Minister Olaf Scholz, who looks after the government’s 15.6 percent stake in Commerzbank following state bailouts in 2008 and 2009, said recently that Germany’s financial institutions aren’t weighty enough in economic terms, either at home or in Europe. Sources in the financial community say Mr. Zielke and Christian Sewing, the boss of Deutsche Bank, are open to a future merger.

Understandably, Commerzbank’s employees are horrified. According to internal estimates, a merger with Deutsche would cause another 8,000 to 10,000 job losses.

In the fall of 2016 Mr. Zielke unveiled a plan, dubbed Commerzbank 4.0, to transform the lender into a “digital technology company.” This uneasy makeover is generating plenty of fiction – in the clumsy shift of thousands of companies from one department to another, say, or in the absorption of outsourced IT tasks, a U-turn on a previous policy. Some execs are already heading for the exits. The long-standing head of the bank’s treasury operations, Thorsten Kanzler, is leaving next month following a rejuggling of responsibilities.

Rising from the ashes

In general, the restructuring and ongoing job cuts have left people feeling “very frustrated,” says Christoph Abeln, a lawyer representing a number of Commerzbank employees.

This week, Commerzbank’s management and supervisory boards will hold their annual strategy meeting in the bank’s conference center in Glashütten, not far from its headquarters in Frankfurt. Mr. Zielke has already signaled that he does not expect any fundamental changes, but hankers for a return to the premier leagues. “I simply think Commerzbank belongs in the DAX,” the bank’s boss said. “We will prove that we can rise again.”

Investors have yet to take that spirit on board. The bank’s share price is one-third off its year’s best and well below the level which would displace its successor in the DAX, web and financial services provider Wirecard.

Yasmin Osman is a financial editor with Handelsblatt’s banking team in Frankfurt, while Andreas Kröner covers banks and financial markets. Jeremy Gray, an editor at Handelsblatt Global, contributed to this article. To contact the authors: osman@handelsblatt.comkroener@handelsblatt.com

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