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FINANCE

Germany’s Commerzbank to cut 10,000 jobs and close 340 branches

Germany's second-largest lender Commerzbank said Thursday it will cut 10,000 jobs and close 340 branches by 2024 as it grapples with a switch to online banking and cashless payment options.

Germany's Commerzbank to cut 10,000 jobs and close 340 branches

The cuts will affect one in three jobs in Germany, the Frankfurt-based lender said in a statement.

“As part of a wide-ranging digitalisation, the bank will substantially reduce its branch network from the current level of 790 to 450,” it said.

“Compared to the figures expected for 2020, costs will be reduced by €1.4 billion or around 20 percent by 2024.”

Like its crosstown rival Deutsche Bank, Commerzbank had already announced thousands of job cuts as it struggles to adapt to a reduced need for bricks-and-mortar branches.

The troubled lender had already announced 2,900 job losses over the course of 2020 and said in December it was booking €610 million in additional provisions to finance the cuts.

It was not clear whether these job cuts were included in Thursday's figure.

The lender posted a €69 million net loss in the third quarter of 2020, during which it closed 200 branches.

READ ALSO: Germany's Commerzbank to slash 4,300 jobs

At the end of September, it had 39,600 employees.

Commerzbank said it would likely end the year with a net loss for the first time since 2009.

The task of getting the bank back on track will fall to its new boss from the start of 2021, Manfred Knof, a defector from Deutsche Bank.

The proposed cuts will be discussed at a supervisory board meeting in February, it said.

Commerzbank “intends to focus and digitalise its business model, considerably reduce costs in all areas, and significantly increase its profitability by 2024,” it said.

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BANKING

German online bank N26 shutters US service

German online bank N26 said Thursday it was closing its operation in the United States next year, as regulators in Europe place the "fintech" start-up under increased scrutiny.

The N26 logo on a bank card.
The N26 logo on a bank card. Photo: picture alliance/dpa | Christophe Gateau

N26’s 500,000 customers in the US would be able to use their services until January 11th, 2022, the bank said in a statement, after which it would cease to operate in a market it first entered in 2019.

Instead the Berlin-based operation would “sharpen its focus on its European business”, where it already operates in 24 countries and is exploring expansion into more eastern European markets.

N26 said it would also look to launch new “investment products in the coming year” to sit along side its current account service.

Founded in 2013, N26 offers free, online-only banking services to around seven million clients and is one of Germany’s most high-profile financial technology or “fintech” firms.

In October, the bank raised $900 million from private investors, and announced a plan to hire a further 1,000 employees to reinforce its product development, technology and cybersecurity teams.

READ ALSO: German online bank N26 to create 1,000 jobs

At home, N26 has been in the crosshairs of the German banking watchdog BaFin since 2018 after a local news media investigation found that it was possible to open account with forged IDs.

Earlier in the month, the regulator said it was upping its oversight operations at N26, appointing a special representative to monitor the bank’s progress towards solving issues in “risk management with regard to IT and outsourcing” identified by BaFin.

The regulator also limited the number of new customers N26 could take on to 50,000 a month until the shortcomings were addressed.

N26 was already being monitored by BaFin over failures in the start-up’s anti-money laundering system.

BaFin issued N26 with a 4.25-million-euro ($4.8-million) penalty earlier this year in connection with around 50 “suspicious transactions” the bank failed to report promptly enough.

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