NEWS UPDATE
EQUITIES
Commerzbank exits equity trading business under major restructure plans
Under Strategy 2024 , Commerzbank plans to cut 10,000 full time employees in a bid to save € 1.4 billion in the next three years .
Commerzbank has confirmed plans to shut down its equity sales trading business as part of radical restructure plans that will see the loss of 10,000 full time employees by 2024 .
Speaking on the bank ’ s Capital Markets Day , Commerzbank CEO Manfred Knof outlined plans to wind down the equity business and streamline its product portfolio to reduce ‘ costly complexity ’.
“ We have already started to review each and every client relationship on its return profile ,” Knof stated . “ In future , we will only deploy capital in client relationships that provide us with a decent return .”
Commerzbank ’ s ambitious restructure plans , known as Strategy 2024 , include cost savings of € 1.4 billion by 2024 with 10,000 full time jobs cut and the closure of 30 % of its business locations globally . It will look to become a more digital bank with sustainability at the centre of its strategy .
“ We all want to make Commerzbank strong , efficient and sustainably profitable again ,” Knof , who became CEO of the bank in September , added . “ By implementing our strategy , we believe Commerzbank can become the digital advisory bank for Germany . Implementing this program is my mission .”
Commerzbank is the latest to pull out of equity trading following other
institutions such as Deutsche Bank and Macquarie , as years of declining equities commissions and regulatory changes have seen the business become far less profitable for smaller players .
Deutsche Bank decided to close its electronic equities trading and prime brokerage businesses and transfer its clients to BNP Paribas in a major deal outlined in July 2019 . Similarly , Australia ’ s Macquarie confirmed it would reduce its domestic cash equities presence in Europe to focus on Asia with plans to combine its trading and research services with Kepler Cheuvreux .
In March 2019 , Commerzbank and Deutsche Bank confirmed that they were officially in talks regarding a possible merger following months of speculation . While the merger never fully materialised , critics at the time claimed that combing the two struggling institutions would only create a larger problem for the German banking industry .
Commerzbank completed a deal more recently with Societe Generale in May and sold its equity markets and commodities division , including the manufacturing and market making of flow and structured products , and the asset management and ETF franchises , to the French bank . The transaction did not include Commerzbank ’ s cash equity brokerage and commodities hedging business .
Issue 67 // thetradenews . com // 11