Commerzbank, one of Germany’s largest retail banks, plans to cut 4,000 – 6,000 jobs by 2016 in an attempt to curb losses in its domestic retail business.
Commerzbank is not alone in implementing severe staff cuts: the 2012 High Fliers survey found that accountancy and banking industries suffered the largest lay-offs last year, with graduate intakes being reduced by 1,200 places.
Low interest rates and poor demand for bank products meant Commerzbank’s retail operations haven’t delivered profits. Competition has also been stepped up by local mutual and savings banks, online rivals, and Deutsche Bank.
The 25% government-owned Commerzbank plans to invest about €1 billion in retail banking and aims to increase retail operating profits to €500 million – still only half what the bank hoped to be earning this year from retail banking, according to its plans after its takeover of the rival Dresdner Bank in 2008.