Inverted Commerz

29 September 2016 By Dominic Elliott

The German lender wants board support for cuts to 9,600 jobs and its investment bank. But Commerzbank’s 2020 return-on-equity goal of 6 pct would still destroy shareholder value, is lamer than fellow laggard Standard Chartered’s and needs heroic revenue growth.

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Commerzbank on Sept. 29 said its executives had presented a strategic plan to its supervisory board that includes 9,600 job cuts and a goal to make a return on tangible equity of at least 6 percent by 2020.

The German lender said its board was yet to take a decision, but that it wanted to hire additional staff over the next few years, taking the net loss of positions to 7,300. Commerz had 50,034 staff at the end of June.

Among other 2020 targets presented, Commerz aims to have a common equity Tier 1 capital ratio of at least 13 percent, a cost base of 6.5 billion euros, and revenue between 9.8 billion and 10.3 billion euros.

Commerzbank added that it was suspending dividend payments "for the time being" to help it pay for restructuring costs of 1.1 billion euros.

By 1323 BST, shares in Commerz stood at 5.93 euros, down 1.1 percent from the previous day's close.

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