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Germany’s Commerzbank to slash 4,300 jobs

Germany's second-largest lender Commerzbank said Friday it plans to cut the equivalent of 4,300 full-time posts, one-tenth of its workforce, and shutter 200 branches in a fresh bout of restructuring.

Germany's Commerzbank to slash 4,300 jobs
Commerzbank at its headquarters in Frankfurt. Photo: DPA

On top of the job cuts — which bosses say will be partly offset by 2,000 new hires in other areas — Commerzbank also aims to sell its majority stake in Poland's mBank to bring in some of the cash needed for its plans.

Like other major European banks, Commerzbank has gone through successive rounds of restructuring as it battles headwinds like sector-wide overcapacity and low interest rates, announcing in 2016 it would shed 9,600 jobs in four years.

In recent months, rival Deutsche Bank has announced up to 20,000 job cuts, HSBC
4,000, and France's Societe Generale 1,600.

READ ALSO: Deutsche Bank could slash up to 20,000 jobs

Commerzbank will buy out the remaining third-party shareholders in subsidiary Comdirect, of which it already owns 82 percent.

The scheme has yet to be signed off by the bank's supervisory board, the lender added.

“With its new strategic programme, Commerzbank is enhancing the long-term sustainability of its business,” the Frankfurt-based firm said.

If approved by the supervisory board, its latest moves would cost around 1.6 billion.

Shares in Commerzbank were up 1.3 percent on the day, trading at 5.77
by around 3:30 pm in Frankfurt.

The stock has struggled to convince investors this year, falling to lows around 4.72 after reporting falling profits in the second quarter but gaining ground since then.

Deutsche Bank and Commerzbank have previously discussed a merger, an idea which was rejected by unions, saying it would only generate greater instability amid the turmoil both banks are already experiencing.

READ ALSO: '10,000 jobs in grave danger': Unions warm of Deutsche-Commerz merger

 

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FINANCE

German watchdog steps up monitoring of popular N26 online bank

Germany's financial watchdog on Wednesday ordered online bank N26 to step up "internal controls and safeguards" to prevent money laundering and terrorist financing, and said it was appointing a special representative to monitor progress.

German watchdog steps up monitoring of popular N26 online bank
An N26 card. Photo: Wikimedia Commons

Bafin’s announcement marks an escalation of previous warnings to the popular Berlin start-up, which has come under fire in the past for not properly verifying the identities of new customers.

“Bafin ordered N26 Bank GmbH to rectify deficiencies both in IT monitoring and in customer due diligence,” the regulator said in a statement.

N26 “is required to ensure that it has the adequate personnel, technical and organisational resources to comply with its obligations under anti-money laundering law,” it said.

A “special commissioner” would oversee the company’s efforts, Bafin added. Founded in 2013 and known for its transparent debit cards, digital bank N26 is one of Germany’s most high-profile financial technology or “fintech” firms and now has seven million customers in 25 countries.

Its rapid growth has rested in part on fast-track identity procedures for new customers.

READ ALSO: What is the digital German bank N26 that’s about to hit a million users?

In 2019, German business weekly WirtschaftsWoche said it had managed to open accounts using forged IDs.

N26 on Wednesday pledged to “work closely” with Bafin and the special representative.

It said it had already significantly increased measures to prevent money laundering in recent years, “but we recognise that more must be done in this area”.

The coronavirus crisis had contributed to a spike in fraudulent online transactions worldwide, N26 added, “increasing the demands placed on banks in the fight against crime”.

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