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Commerzbank posts $3.3 billion fourth-quarter loss amid major restructuring

FRANKFURT (Reuters) – Germany’s Commerzbank said on Thursday its net loss deepened to $3.3 billion in the fourth quarter, as the lender undergoes a major restructuring and deals with the fallout of the COVID-19 pandemic.

The bank also said it would swiftly implement plans to cut 10,000 jobs and close hundreds of branches, and would strive for an operating profit in 2021.

Commerzbank hopes the revamp will revive its fortunes, as it struggles to boost profits amid 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 net loss of 2.70 billion euros ($3.27 billion) in the quarter 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 Commerzbank Chief Executive Manfred Knof finalised plans for a radical overhaul and a month after he took the reins of Germany’s No. 2 bank.

“We want to be sustainably profitable and shape our own destiny as an independent force in the German banking market,” Knof said.

The CEO is due to make his first public appearance at a news conference on Thursday.

While the bank plans to cut one out of three jobs in Germany, 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)

(Reporting by Tom Sims and Patricia Uhlig; Editing by Riham Alkousaa, Kirsti Knolle and Uttaresh.V)

Read the original article on Business Insider

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