Commerzbank Ends Equities Trading in Nod to Rival Turnaround


Commerzbank AG will end its own equity trading and research as Chief Executive Officer Manfred Knof embarks on a major restructuring that increasingly resembles the turnaround effort at competitor Deutsche Bank AG.

Commerzbank will instead offer the services to its clients through cooperations with other providers, Knof, a former Deutsche Bank executive, said Thursday as he outlined a cost-cutting program that’s designed to stretch through 2024. He didn’t say by when he plans to have that cooperation in place.

The move mirrors a decision by Deutsche Bank CEO Christian Sewing in 2019, when he announced the lender’s biggest overhaul in two decades. Knof’s plan also includes other key planks of the rival’s strategy, including headcount reductions, a focus on German clients and the suspension of dividends for several years to pay for the restructuring.

Deutsche Bank’s share price has risen 23% since Sewing presented that strategy amid a boom in debt trading that has led to strong revenue growth in the investment banking division. Commerzbank’s stock price has lost 22% in the same period.

Commerzbank’s move to shutter equities trading is part of a broader effort to cut back its corporate clients division, which made a pretax loss of 458 million euros last year. Unit head Michael Kotzbauer has announced he will sever relationships with most clients without a link to Germany as he slashes headcount and pivots away from foreign operations toward the small and medium-sized companies in the bank’s home market.

The lender will also trim its other investment banking offerings and offer advice on acquisitions and equity capital raisings only to “clients with a corresponding need.” It will also eliminate the division’s credit solutions unit as it reduces business with institutional clients.

©2021 Bloomberg L.P.

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