Martin Zielke sometimes gets a bit chilled. The head of the Commerzbank could also announce the immediate demolition of the Frankfurt corporate tower, in parallel with the first strike of the wrecking ball, and would presumably still report this message with monotonous harmony. The man, who heads the second largest German bank since May 2016, has an incredibly balanced temperament. This allows him to pronounce even the most bitter truths as if he were reading the weather forecast. And that of last week.
This Friday, Zielke had to announce something revolutionary - in the very same headquarters, which, for all that is known, will not be demolished for the time being. Nevertheless there is a field of rubble: Zielke's strategy for Commerzbank, with whom he started as bank manager three years ago.
Roughly speaking, this strategy has so far rested on three pillars:
- Avoid branch closures
- permanent customer growth
- several brands under one roof
This strategy, for which one had once invented the somewhat silly title "Commerzbank 4.0", no longer applies. From now on it says "Commerzbank 5.0 - digital, personal, responsible".
The core components of the new line were leaked days ago, and were announced this Friday morning by Zielke. But what sounds cuddly, is a full stop the previous business alignment:
- 200 of the nearly 1000 branches will be closed
- One million "inactive" customers are thrown out
- the previously sacrosancted Poland subsidiary M-Bank is being sold and the online subsidiary Comdirect, which is always pushing for independence, will be integrated into the Group
Zielke's tone on Friday morning did not reveal the implications of this strategic U-turn. Stoically, as always, he talked to the press first about the allegedly resounding success of his old strategy (which he had just kicked into the barrel), and then lost in considerations on Buzzword topics such as digitization, sustainability and climate neutrality. Only then did he come to the really exciting points.
On the one hand, the Commerzbank boss was doing a classic PR stunt to distract attention from the fact that the new strategy is to admit that he failed with the old one. On the other hand, his appearance testifies to the lack of advice and discretion of Commerzbank. For a long time she had made herself comfortable in the shadow of the notorious scandal noodle Deutsche Bank: the integration of Dresdner Bank, acquired in 2008, had been comparatively successful and the job cuts for many years had been handled almost silently. The fact that Commerzbank earns little money and now comes along like a big savings bank was somehow hardly noticeable.
The misery of Commerzbank is now obvious
But since Zielke at the beginning of Christian Sewing, his counterpart from Deutsche Bank, merger talks had imposed more or less, the plight of Commerzbank is obvious. The costs are too high, the yields are too low, growth prospects almost nonexistent. Since the termination of the talks, the Commerzbank
Essentially, Commerzbank's business model is based on the assumption that it requires its customers to pay more for their loan interest than they have to pay depositors their deposit rates. That's why she's been lending corporate loans for years to combat conditions and luring private customers with welcome money in the hope of getting them loans and forcing them to invest in securities. And it is, after all, the obvious business purpose of a bank, only: it obviously does not work, and in view of the prospect of continued record interest rates by the European Central Bank, things are bound to get even more difficult.
imago images / STAR-MEDIA
Commerzbank CEO Martin Zielke: Bitter truths quietly pronounced
An appreciable capital market business, in order to earn something on the side, has not Commerzbank. From risky games, such as the ship financing, she has coped, albeit passed away by necessity. But now she also sells the M-Bank, which actually makes good money and whose modern branch appearance beats everything that Commerzbank has on offer. One year ago, the Polska subsidiary was to become the nucleus of a pan-European online bank offensive before the management found out that there was no money for it. So now off with it.
Of course Zielke promised in return extensive investments in the IT of the Commerzbank - whereby it is conceivable that the money must be spent first of all for making the dilapidated computer systems reasonably safe. Questionable, if there will still be money left to turn the bank into a digital technology company, as Zielke has repeatedly announced.
Shamefully low goals
In short, the situation is as comforting as it is hopeless. But typical of Germany's banks, none of which can compete internationally or is one of the digital pioneers in the industry. Unlike Deutsche Bank and Commerzbank, savings banks and Volksbanks are not exposed to the yield expectations of shareholders, which gives them air. Meanwhile, Commerzbank is competing with investors with other companies whose shares promise significantly more price gains. Not for nothing has it dropped out of the DAX index of the 30 most important German companies.
How little will be made out of the Commerzbank despite the general overhaul, Zielke clarified, when he announced a new target for the return on equity, the best benchmark for competitiveness: Commerzbank wants to reach just four percent here. This is shamefully low, but probably realistic. Perhaps it would therefore be more appropriate to merge the Commerzbank with a large savings bank and take from the stock market.
How frustrating it now has to be to work for a house like Commerzbank is made clear by CFO Stephan Engels. He prefers to move to Danske Bank in Copenhagen in the same role, which is like no other involved in money laundering suspected cases.
What a sad finding for a bank that was supposed to become a "national champion" after the will of the Federal Government through the takeover of Dresdner.
