Commerzbank shareholder calls for 7,000 job cuts
Cerberus Capital Management, a shareholder in German bank Commerzbank, has called on the the bank to cut 7,000 jobs.
According to Reuters sources, Cerberus, which owns a 5% share, wants to reduced personnel costs in a shakeup.
Commerzbank employs around 48,000 people. A cut of 7,000 would lose 14% of its workforce their jobs.
Cerberus has been a vocal shareholder in the bank. Earlier this month it demanded two seats on the board.
The firm claimed that Commerzbank’s management is focused on unprofitable growth. It also hinted at a potential shareholder revolt. Commerzbank refused its demands.
Cerberus revealed its 5% stake back in 2017, and since then Commerzbank’s shares have lost more than half their value.
According to Bloomberg sources, Commerzbank has twice rejected proposals from Cerberus for consulting services via its advisory arm, Cerberus Operations Advisory Company.
The UK’s Financial Conduct Authority (FCA) fined Commerzbank’s London branch £37.8 million last month for failures in its anti-money laundering (AML).
The regulator states that while Commerzbank London was aware of these weaknesses, it “failed to take reasonable and effective steps” to fix them despite the FCA raising its concerns with the bank.
According to a filing from the regulator, Commerzbank London failed to conduct timely periodic due diligence on its clients, which resulted in “a significant number of existing clients” unchecked.
1,772 clients were overdue updated due diligence checks. Some of these clients were able to continue banking with the London branch.