German lender Commerzbank has finalised plans to cut 10,000 jobs and close hundreds of branches as part of its latest cost reduction and digitisation strategy.

The latest overhaul comes barely a month after Manfred Knof took over the reins of the bank.

By 2024, the bank intends to cut nearly a quarter of its full-time employees and its branch network will be brought down to 450 from 790.

Knof said it is a necessary ‘bitter pill’ and added that “our new strategy creates the prerequisites for a sustainably profitable Commerzbank.”

The portfolio manager of one of the top 10 investors in Commerzbank, Andreas Thomae, said: “Knof is trying to make the bank fit enough to stand alone on its own feet.”

Other big shareholders in the bank such as the German government, regulators and the US private equity company Cerberus also supported the decision.

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Commerzbank also announced that it expects to post a net loss of nearly €2.9b for 2020, compared to profit of €585m a year earlier.

The bank will announce its complete financial results on 11 February 2021.

The restructuring is expected to bring in €1.4bn or around 20% reduction in costs by 2024.

The restructuring expenses could total up to €1.8bn and they will be funded from the bank’s existing funds. It had also set aside a provision of €800m in the financial year 2020 to cover for a substantial portion of the restructuring expenses that it would incur.

Last month, the bank decided to allocate €610m to cover for 2,300 planned job cuts that are expected to take place between this year and 2024.