After posting a profit at the beginning of the year, Commerzbank slipped into the red in the second quarter. The reasons are group restructuring expenses and depreciation for a major project that has been discontinued.
In sum, the bank incurred 527 million euros from April to June, the institute announced. A year ago, the institute earned 183 million euros in the same period.
The operating result in the last second quarter amounted to 32 million euros. Analysts had expected an operating result of 56 million euros and a combined loss of 504 million euros. For the full year, Commerzbank, its largest German state shareholder, continues to expect a positive operating result.
CEO Manfred Knauf, who has been in office since January 1, expressed his satisfaction: “We delivered a strong operational result in the first half of the year. Implementation of the strategy is on track.”
Huge job cuts in Germany
Knof is currently working on a major restructuring of Commerzbank. 240 branches in Germany will close this year. After the group restructuring is completed, 450 of the 790 branches will be left. By the end of 2024, the Executive Board wants to reduce the number of full-time jobs across the group from about 39,500 to 32,000. Every third job is lost in Germany. Entire departments have been closed or outsourced.
Management aims to reduce total costs to 5.3 billion euros by the end of 2024. This will be about 20 percent lower than it was in 2020. But the renovation costs. The cost situation is already tense, for example due to reimbursement of fees to customers.
The loss in the second quarter is also due to the fact that the bank had to write off about 200 million euros because the financial institution decided to stop outsourcing securities processing.
