Commerzbank has revealed its cost cutting plans after the weekend purchase of Dresdner Bank.
It is aiming to reduce costs by two billion euros, slashing 9,000 jobs, focusing particularly on the poorly performing investment bank Dresdner Kleinwort.
Commerzbank’s Chief Executive Martin Blessing said: “With this merger of the second and third largest German high street banks, we’ve created a market leader. Commerzbank has strengthened its claim to being the leading bank in Germany.”
The bank will be bigger than Germany’s current number one Deutsche Bank, with 11 million customers and 13% of market share. More than a third of the combined group’s branches will be closed- reducing the total to 1,200.
Commerzbank said consolidation is necessary, particularly in Germany, for stability and strength in troubled times but the bank employees don’t see it that way:
One worker said: “People are panicking. I mean if you think that 9,000 jobs are going, then you start to panic. But the details of who will go and how have still to be arranged and negotiated with the unions.”
Commerzbank is buying its competitor from Allianz, Europe’s biggest insurer, for 9.8 billion euros, a fraction of the 24 billion Allianz paid for it in 2001.
Much of the purchase price will be in the form of shares. Investors gave the deal a thumbs down and Commerzbank’s stock tumbled 10.2%.