Commerzbank loses execs as corporate unit struggles

Bloomberg

Commerzbank AG is replacing two top executives as progress in Chief Executive Officer Martin Zielke’s turnaround plan remains uneven.
Michael Reuther, who heads the corporate clients unit, will leave when his term expires next September, while Chief Operating Officer Frank Annus-cheit is stepping down at end of the year for health reasons. The changes touch on two key pieces of the bank’s strategy: the business of lending to the small and medium-sized companies that are the backbone of the German economy, and the internal processes that it wants to simplify and modernise.
Reuther’s unit in particular has been struggling amid intense competition and low interest rates, forcing the bank to say it may miss a revenue target. The 59-year-old has criss-crossed the country’s provi- nces by car, adding more than 3,000 new clients in the first nine months of the year. But those clients have yet to translate into revenue, turning the division into the biggest single headache for Zielke as he enters the second half of a four-year turnaround plan stret- ching until the end of 2020.
“I am sorry to learn of Michael Reuther’s decision but I respect it,” Zielke said in a statement. “He has made very good progress with the reorganisation of the corporate clients business.”
Speculation about a merger of Commerzbank and cross-town rival Deutsche Bank AG re-emerged over the past year as both struggle to compete, and buyout firm Cerberus Capital took a stake in both lenders.
Global banks have been competing for business with companies in Europe’s largest economy, hurting margins already squeezed by low interest rates. Many of these companies are also exposed to a slowdown in global trade.
While client acquisition at Reuther’s unit is ahead of target, revenue from corporate clients has shrunk in six out of seven quarters since the clock on the plan started ticking down in 2017.