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March 1, 2021

Commerzbank to retreat from Hong Kong, Luxembourg and Hungary

By Verdict Staff

German lender Commerzbank is reportedly looking to exit Hong Kong, Luxembourg, and Hungary as part of its restructuring plan.

The plan will reduce the bank’s global network to around 1,300 from the current 1,600 units, Bloomberg reported citing an internal memo of the Commerzbank.

As a part of the restructuring plan, the bank will transfer Asia operations to the Singapore office, while branch in Dubai will continue to operate as a representative office.

Additionally, the German bank will close branches in Barcelona, ​​Bratislava, and Brussels, along with representative offices in Azerbaijan, Georgia, Indonesia, Iraq, Kazakhstan, Lebanon, Malaysia, Serbia, and Venezuela by 2024, the report added.

Commerzbank divisional board member for institutionals Nikolaus Giesbert stated in the memo: “We have analysed exactly what the key trade corridors for the German economy are.”

“We will continue to have a strong presence there — in other words, primarily in Europe, Asia and the U.S. We will also maintain our presence in important regions such as Africa.”

The bank is also planning to divest its subsidiary in Brazil and open a representative office.

Usually, the bank oversees operations in representative offices with three to four employees.

Luxembourg branch is the largest unit to be shut with around 200 staff, which will be relocated to Germany in the future.

As a result of trimming global network, the bank’s earnings are expected to be decreased up to EUR300m in the coming years.

Earlier this month, Commerzbank finalised plans to cut 10,000 jobs and close hundreds of branches as part of its cost reduction and digitisation strategy.

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