LONDON - Commerzbank, the second largest lender in Germany, is planning to cut up to 6000 jobs in a bid to increase profits, the latest European bank to announce restructuring plans in recent months.
The German bank said on Thursday that it expected to cut between 4,000 and 6,000 jobs by 2016, or roughly 7 to 10 percent of its total work force.
The layoffs will affect Commerzbank’s global operations, particularly its retail division that expanded rapidly over recent years, according to a person with direct knowledge of the matter, who spoke on the condition of anonymity because he was not authorized to speak publicly.
In the wake of tougher capital requirements, sluggish economic growth and growing concerns about risky trading activity, several European banks have announced efforts to reduce their work forces, shed unwanted assets from their balance sheets and boost capital reserves.
Last October, the Swiss financial giant UBS said that it would cut 10,000 jobs in its investment ank in a move to reduce exposure to risky trading activity and to focus on its wealth management division.
Barclays, which will unveil its own restructuring plan on Feb. 12, also started consulting with staff in its investment banking unit this week over potential layoffs.
The expected job cuts at the British bank could result in up to a 10 percent reduction, or around 2,000 jobs, in the division, according to two people with direct knowledge of the matter, who spoke on the condition of anonymity because they were not authorized to speak publicly. On Thursday, the British bank started to reduce its investment banking staff in Asia by 15 percent, or 70 jobs, as part of the restructuring plan, according to one of the people.
On Jan. 17, the firm’s new chief executive, Antony Jenkins, told staff that they should leave the bank if they did not want to help rebuild its reputation. Barclays agreed to a $450 million settlement with U.S. and British authorities last year over the manipula! tion of the London interbank offered rate, or Libor.
The layoffs at Commerzbank follow efforts by the bank’s chief executive, Martin Blessing, to offload some of the firm’s 160 billion euros, or $213 billion, of so-called non-core assets like shipping and real estate investments. The bank also is trying to reduce its exposure to European sovereign debt amid the ongoing volatility in countries like Spain and Greece.
The German bank said it would start negotiations with employee unions in early February to decide on the final number of layoffs.
Commerzbank received an 18.2 billion euro bailout from the German government in 2008 after its mis-timed acquisition of a rival German bank, Dresdner, for 5.5 billion euros at the height of the financial crisis. As part of the deal, the German government still owns a 24 percent stake in Commerzbank.
Shares in Commerzbank bank rose less than 1 percent in morning trading in Frankfurt.
European banks have been struggling through a seriesof recent financial scandals, mounting demands to increase capital reserves, and growing political pressure to increase lending to stimulate local economies.
The Continent’s major financial institutions will begin reporting earnings next week, and analysts will be waiting to see if they will follow UBS’s lead in announcing major changes in response to these pressures.
‘‘We believe that UBS has kicked off the much-awaited industry restructuring, even if each bank takes a different path,’’ Citigroup banking analysts told investors in a research note.
Neil Gough reported from Hong Kong
