Photographer: Sven Hoppe / photo alliance through Getty Images
Photographer: Sven Hoppe / photo alliance through Getty Images
Commerzbank AG will post an initial loss of nearly 2.9 billion euros ($ 3.5 billion) for 2020 after tying large writedowns to the pandemic and restructuring costs for a major cost-cutting program.
The lender will also report an operating loss of 233 million euros for last year, which “clearly reflects the liabilities of coronavirus pandemic,” the Frankfurt-based company said in a pre- earned reported Wednesday. The loss includes previously announced costs of more than 800 million euros for cost cuts and a loss of goodwill of about 1.5 billion euros.
Commerzbank outlined some of its new strategy last week after Bloomberg statement on the plan. Developed by Chief Executive Manfred Knof and Chairman of the Board Hans-Joerg Vetter, the program is designed to shed around a quarter of the workforce to bring about a likely increase in equity to around 7% by 2024 .
The board of directors of Commerzbank AG said it will support the turnaround plan, and released more details Wednesday. They said the program will include cutting its foreign presence to less than 40 countries from about 50.
“Our new strategy creates a strong foundation for a stable and profitable Commerzbank,” Knof said in the statement. “The proposed reductions are very painful. We will implement this program rigorously and consistently but also in a fair and respectful manner. ”
The bank had been working on a new strategy for more than a year, but a plan for its collapse fell in August when former CEO Martin Zielke and then-Chairman Stefan Schmittmann resigned amid heavy criticism. from investors. The board then nominated Vetter as its new chairman, who then hired Knof to lead the next turnaround effort. Knof joined in January.