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New Commerzbank CEO Knof: Something with numbers


At Allianz he was considered a savvy saver, at Deutsche Bank he only gave a brief guest appearance: Is Manfred Knof the right person to restore the ailing Commerzbank?

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Manfred Knof (archive photo): Close employees at Deutsche Bank are amazed at how little he is able to guide his own people through difficult times with "soft skills"

Photo: Sepp Spiegl / imago images / sepp spiegl

Admittedly, it is not as if the future of the German economy depends on who is the CEO of Commerzbank.

The yellow institute is a shadow of the past, hardly earns any money and in 2018 had to make way for a certain Wirecard AG in the German share index (Dax).

The employees are tired of saving rounds and job cuts, which nevertheless never went far enough to turn the second largest bank in the country into an attractive investment again.

In addition, there was the lack of prospects, which hardly anyone embodied better than Martin Zielke, the outgoing CEO.

In order to escape the permanent misery, he wanted to submit to Deutsche Bank of all places in 2019.

He offered the much larger rival the merger in order to collect a rebuff after weeks of explorations.

Zielke looked like a helpless ninth grader who gets a basket from his beloved in the schoolyard and convulsively gives the impression that life alone is better anyway.

It was logical that the major shareholder Bund (just under 16 percent) and the US financial investor Cerberus (a good 5 percent) saw off Zielke and the invisible supervisory board chairman Stephan Schmittmann in the summer.

What can the new one do?

Since Saturday evening it has been clear who will follow the luckless and ambitious Zielke at the turn of the year.

It's Manfred Knof, who has been Head of Private Customers at Deutsche Bank since August 2019.

Nobody will be sorry that they split up there so quickly: Knof never got warm with the group management around Christian Sewing, he certainly has not made himself irreplaceable at Deutsche Bank.

It is questionable what message the Personnel Knof sends out.

Despite all the dreariness that Commerzbank exudes, it is still the second most prestigious job in the German financial world after the Deutsche Bank chief position, which Sewing currently holds.

The answer to this question is easy and difficult at the same time.

Difficult because Knof will not take up his position until January 1, 2021 and, like everyone new to the job, deserves a leap of faith.

Easy, because it is hard to see what Knof actually uses to justify this leap of faith.

In any case, it cannot be his previous career in banking.

What does a bank CEO need?

Roughly speaking, three characteristics: expertise, decisiveness, empathy.

With at least two of the three characteristics, however, it is not evident that Knof has enough of them.

At best to do with the banking business marginally

Expertise, for example: Before his stint at Deutsche Bank, Knof was a manager at Allianz for decades.

Both insurance and banking have something to do with numbers, but that's about it.

An insurance manager does not have to make tricky and risky credit decisions and, like bankers, constantly clean the customers' door to sell them all kinds of services.

Anyone who changes from one industry to the other quickly realizes that there is little in common. 

In his career, before he switched to Deutsche Bank, Knof had only marginally involved in the banking business: for a short time he was Head of Sales Germany South in Personal Banking at Dresdner, which once belonged to Allianz before it was taken over by Commerzbank.

But that's it, as far as known.

At Allianz, Knof was, after all, a savings fox.

Of course, he only got to know real shortages when he switched to Deutsche Bank.

So he had to bury his plan to regularly inform the staff in the branches via video conference and to digitize the staff magazine - the rotten IT of the bank was hopelessly overwhelmed.

Saving alone will not be enough

He missed an opportunity to otherwise fraternize with the workforce of the subsidiary Postbank: He skipped the obligatory carnival party at Bonn headquarters, an absolute must.

His role backwards in the planned move of the Postbank within Bonn also caused annoyance.

The 3,000 employees there are spread across nine buildings, and from 2021 they are all to move into the "Neuer Kanzlerplatz" complex.

Knof questioned the project at times for cost reasons, before he had to admit that there was no alternative to moving because the buildings previously occupied by Postbankers were partly being demolished.

Close employees at Deutsche Bank are still amazed to this day how little he is able to guide his own people through difficult times with "soft skills".

In his new job, too, it depends on soft factors such as empathy, because saving alone will not be enough - Commerzbank urgently needs more income, i.e. sales.

What remains is the decisiveness.

She is said to Knof, he even hangs the label "Sanierer".

It is never really measurable whether this ascription is justified.

What is luck or coincidence?

What did the predecessor already initiate?

And what rightly goes into the account of a manager who prides himself on being a go-getter?

Filling in these narrative spaces is the job of press officers and rifle spanners, the next few days will tell.

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Commerzbank branch in Frankfurt am Main

Photo: Bloomberg / Bloomberg via Getty Images

It will be just as interesting to see how the two internal candidates who received nothing will behave.

In any case, CFO Bettina Orlopp and corporate client boss Roland Boekhout should be upset to the maximum that Knof of all people is put in front of their noses.

After all, Knof seems to tick like the new chairman of the supervisory board, Hans-Jörg Vetter.

The Swabian first restructured the Bankgesellschaft Berlin, then the Landesbank Baden-Württemberg (LBBW) and in his new office already let it be known that he will not limit himself to the role of the supervisory uncle.

From a corporate governance point of view, this is a sensitive point: after all, the CEO should not be a vicarious agent of the Supervisory Board who is bound by instructions.

Conversely, the chairman of the supervisory board should control the chief executive and not himself, which would be the case if the CEO was only his decal.

Politicians don't seem to mind.

Like Knof, Vetter owes his job to the federal government and, above all, to Finance State Secretary Jörg Kukies.

Berlin has been Commerzbank's largest shareholder since the financial crisis.

Ex-Goldman Sachs banker Kukies, on the other hand, likes the role of the mastermind who is reorganizing the rugged German banking industry.

more on the subject

Business figures in the Corona quarter: Deutsche Bank is scratching the profit zone

Kukies has already orchestrated the merger negotiations between Commerzbank and Deutsche Bank, and now he has got Vetter and Knof at the helm of the semi-public Commerzbank.

He ignored Cerberus, the allegedly cunning investor.

The New Yorkers were allowed to chase away Zielke and Schmittmann with Kukies' place and plenty of noise, they had nothing to do with the search for a successor.

"Political ambition meets expertise as an investment banker," is how someone who knows Kukies up close describes his work.

So what will Vetter and his vicarious agent Knof do with Commerzbank?

Probably what the old management under Zielke and Schmittmann wanted in their last days of office: to implement the restructuring program commissioned by Kukies at the strategy consultancy Boston Consulting Group (BCG) and which has long been created.

The new Commerzbank top will save brutally, that is as clear as necessary.

10,000 jobs or more could be lost, as well as hundreds of branches.

Since the Corona crisis at the latest, the last fans of the branch strategy have also realized that the future lies in the Internet. 

Personnel with an ironic punchline?

All of this will devour billions in restructuring costs, money that Commerzbank actually needs to digest loan defaults that are rolling on it because of the corona consequences.

Of course, new income cannot be generated in this way.

It's a race to the bottom, as investment bankers aptly put it.

It is therefore not impossible for the federal government to inject more money at Commerzbank to fill capital holes when Covid-19 really strikes.

And then?

The misery cannot be prolonged forever, but the economic constraints, Kukies' design ambition and the trend in Europe to join together to form larger units at the national level speak against this;

Examples of this can currently be found in Italy and Spain.

The aim of this exercise is to sit strengthened at the negotiating table as soon as cross-border mergers are pending.

As a consequence, for Commerzbank this means that it could end up under the umbrella of Deutsche Bank.

A sale to a foreign competitor currently seems too risky.

After all, Commerzbank still finances large parts of the German middle class, and ultimately all politicians always think nationally and not European, despite all the Sunday speeches.

It would be the ironic punch line of Personnel Knof if he returned to Deutsche Bank as a result of the merger, from which he fled after a short time.

In any case, it is too late for a brilliant Commerzbank.

Icon: The mirror

Source: spiegel

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