Germany’s Commerzbank is undergoing a significant transformation, adjusting its workforce and financial strategy to strengthen its position in the European banking sector. The bank recently announced plans to cut 3,900 full-time jobs by 2028 while expanding in key international markets. Despite these layoffs, Commerzbank’s total workforce will remain stable at around 36,700 employees. CEO Bettina Orlopp emphasized that the process would be handled responsibly to maintain employee morale.

This restructuring is part of Commerzbank’s broader efforts to improve efficiency and profitability. While job reductions are often challenging, the bank’s leadership remains optimistic about its future under this new model.

Commerzbank has raised its financial targets, projecting revenue of 3.8 billion euros by 2027—an increase from its earlier estimate of 3.6 billion euros. It has also set a new goal of 13.6% return on tangible equity, surpassing the previous aim of 12.3%. The restructuring will require an estimated 700 million euros in costs by 2025, but the bank remains confident in its overall growth trajectory.

Despite these restructuring expenses, Commerzbank expects a net profit of 2.4 billion euros over the coming years. To reward investors, the bank has committed to a payout ratio exceeding 100% between 2025 and 2028. Additionally, it plans to repurchase 400 million euros in shares and has raised its dividend to 0.65 euros per share, up from 0.35 euros the previous year.

Financially, Commerzbank has been performing well. In 2024, it reported a record annual net profit of 2.68 billion euros, representing a 20% increase from the previous year. Total revenue rose to 11.1 billion euros, reinforcing the bank’s upward momentum. Analysts, including those from Deutsche Bank, have shown confidence in Commerzbank’s performance, describing its financial targets as ambitious but achievable. The stock market reflects this positive sentiment, with Commerzbank’s share price rising 21.8% year-to-date and gaining 1.6% on the day of the announcement.

Alongside its restructuring, Commerzbank faces speculation about a potential takeover by Italy’s UniCredit. Currently, UniCredit holds a 9.5% direct stake in Commerzbank, with an additional 18.5% held through derivatives. This has fueled discussions about a possible cross-border acquisition.

While Commerzbank has not dismissed the idea of a merger, German Finance Minister Jörg Kukies has voiced opposition, calling UniCredit’s approach aggressive and opaque. At the same time, UniCredit CEO Andrea Orcel has hinted that a merger could create significant value for both banks and the broader European economy.

CEO Bettina Orlopp has acknowledged UniCredit’s presence as an investor and described it as acting somewhat like an activist shareholder. However, she has been clear that if UniCredit intends to pursue a deal, it must present a formal financial proposal.

Commerzbank’s latest moves reflect a bank in transition, balancing job adjustments, ambitious financial goals, and potential external pressures from a takeover attempt. While cutting jobs is always a difficult decision, Commerzbank’s strategy of focusing on international expansion and shareholder returns suggests confidence in its ability to grow in the changing banking landscape.

As Commerzbank moves forward, the potential UniCredit takeover remains a key point of interest. Whether this situation leads to a full merger or remains an investor relationship will depend on decisions made by the bank’s leadership, its shareholders, and financial regulators in the months ahead.