FRANKFURT: Germany’s Commerzbank reported a $3.3 billion fourth-quarter loss on Thursday, sinking further into the red as it continued a major restructuring and dealt with the fallout of the COVID-19 pandemic.
Commerzbank’s shares fell nearly 7% as Germany’s No. 2 bank said revenue would decline in 2021 and that it was not yet able to predict if it would be back in the black this year.
Manfred Knof, in his first public appearance since taking over as CEO last month, said there would be no management bonuses for 2020. He said he would swiftly implement previously announced plans to cut 10,000 jobs and close hundreds of branches in the hope that the bank can stand on its own two feet.
“Commerzbank should remain independent. That is my mission,” Knof told journalists.
Commerzbank hopes the revamp will revive its fortunes, as it struggles to revive profits after management reshuffles and strategy flip-flops. It has never fully recovered after a state bailout during the last financial crisis more than a decade ago.
The bank was in talks with Deutsche Bank two years ago for a potential merger, but the discussions were called off.
The fourth-quarter net loss of 2.70 billion euros ($3.27 billion) compares with a loss of 97 million euros a year earlier. The bank had already disclosed that it lost nearly 2.9 billion euros for the full year.
The results come a week after Knof finalised plans for a radical overhaul.
The bank’s shares were down 6.9% at 5.056 euros by 1115 GMT.
Jefferies said that the bank’s plans to complete 80% of redundancies by 2023 was slower than its analysts had hoped.
Commerzbank’s share price had recovered after hitting a record low of 2.804 euros on March 16, 2020.
While the bank plans to cut one out of three jobs in Germany, it said on Thursday that it will add 2,500 jobs outside the country, primarily in eastern Europe, in an effort to cut costs for external service providers. It will also expand headcount at its Polish unit mBank.
Commerzbank said that depending on the course of the pandemic, it expects provisions of between 800 million euros and 1.2 billion euros in 2021. That compares with 1.75 billion euros in 2020.
($1 = 0.8246 euros)
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